Strategic Blueprint for Success: The Critical Role of Tax Planning in Businesses Over $25 Million

Building value is the primary focus for entrepreneurs, but once a business surpasses $25 million, tax planning becomes equally essential.

At this scale, taxes are no longer a background detail — they are a core determinant of how much value you retain during an exit or transition. Preserving wealth requires more than good fortune. It demands precision, structure, and a strategy aligned with your long-term goals.

Decoding the Tax Game

Assuming your value drivers are established and prospective buyers are in place, the next step is understanding the tax implications of your deal structure. Whether your business is a C Corp, S Corp, or partnership, the mechanics of entity sales versus asset sales introduce significant complexity. Some owners may prefer simplicity and choose to pay their taxes all at once, but that simplicity can dramatically reduce long-term value. The goal is to structure the transaction intelligently, weighing both immediate outcomes and multigenerational impact.

A Real-Life Tax Planning Scenario

Consider a recent client who paused their exit after receiving a confusing, poorly structured tax plan. They were drawn to donor-advised funds, but the tax implications weren’t fully explained. After stepping back, they explored options such as private foundations, which offer greater control and long-term flexibility. The lesson is clear: transparency and understanding matter. Tax strategies only work when the owner fully grasps how they support their objectives.

Philanthropy as a Strategic Lever

Philanthropy is often underrated, yet it can be a cornerstone of advanced tax planning. When structured correctly, it reduces income tax, mitigates capital gains, and provides significant estate tax protection. For owners with high-value companies, these tools don’t just support charitable causes — they align legacy, liquidity, and long-term wealth preservation. In many ways, philanthropic planning functions like a strategic extension of an IRA, allowing for continued oversight while capturing tax advantages.

Challenges and Triumphs

Tax planning grows in complexity as wealth grows. One client who exited in 2015 now faces substantial tax implications tied to their newfound wealth. While challenging, these issues stem from a successful outcome and can be solved with thoughtful structuring. It’s a reminder that advanced tax planning is not a one-time exercise. It evolves with your assets, your goals, and the changing regulatory landscape.

A Dynamic Value Driver

Within businesses over $25 million, tax strategy becomes more than a housekeeping task — it becomes a realized value driver. It influences valuation, liquidity, and what ultimately remains in the owner’s hands. The most effective plans integrate tax strategy early and revisit it often, ensuring every decision serves the broader narrative of wealth preservation.

If your business has reached this stage and you’re unsure where to begin, we’re here to help. Let’s discuss the tools and structures available to make your next chapter both tax-efficient and strategically sound.