We know—it sounds backwards. Nobody likes paying taxes. There’s a reason “taxes suck” might as well be a national slogan. But here’s a fresh perspective that might just change the way you feel when you see that larger-than-expected tax bill:
Paying more in taxes can actually be a good thing.
More Taxes = More Income
If you owe more in taxes this year, it's almost always because you earned more. That’s a sign your business or personal finances are moving in the right direction.
For someone to owe a million dollars in taxes, they likely had to earn somewhere around $3 million. That’s not exactly a problem—it’s a milestone.
And yet, what’s the first thing most business owners say when they see that higher number? “How do we bring that down next year?”
It’s a fair question, but it’s missing the bigger picture. A $60,000 tax bill on $300,000 of income is a far better outcome than a $15,000 bill on $80,000 of income. The bill is bigger—but so is your opportunity, your momentum, and your options.
Would you trade income just to owe less? Hopefully not.
So instead of looking at your tax bill with dread, try reframing it. A bigger tax bill is a byproduct of bigger success. If you’re growing, scaling, selling more, and hitting revenue goals, the IRS is going to notice. That’s not a failure—it’s confirmation you’re doing something right.
Don’t Fear Higher Tax Brackets
A common myth around taxes is that earning more will push you into a higher tax bracket—and suddenly all your income will be taxed at that higher rate. Not true.
The U.S. income tax system is marginal, meaning the higher rates only apply to the income within each bracket. If you move from a 22% bracket to a 24% bracket, only the dollars that fall into that 24% range get taxed at that rate.
Yes, you’ll owe more on that extra income, but you still keep more than you give up. There is never a downside to earning more.
So if you’re turning down a bonus or client work because of tax bracket fears, you’re costing yourself real money over a misunderstanding.
Why Tax Planning Over One Year Is a Losing Game
A huge mistake people (and some accountants) make is focusing only on this year’s tax bill. But the most effective tax planning happens over multiple years.
Sometimes, paying more this year—on purpose—is actually the best move.
Let’s say you have a strong year in 2024 and anticipate higher tax rates in 2025. Instead of trying to push income out and deductions in (which is the default move), it might be smarter to:
- Accelerate income into this year (lower rate)
- Delay deductions to a future year (when they’ll offset more tax)
This might make your current tax bill bigger—but it reduces your overall tax burden across multiple years.
And that’s the game most people don’t realize they’re playing: minimize your effective rate over time, not just your tax bill in a single year.
Why Shifting Income and Expenses Doesn’t Always Save You on Taxes
If you’re on a cash basis (and most small businesses are), you might be tempted to shift income and deductions by:
- Prepaying expenses in December
- Delaying invoicing until January
But that becomes a game of whack-a-mole. Once you pull deductions from January into December, you’ve created a new baseline for yourself. You now have to play that game every single year—or risk a massive income spike that throws your books (and budget) into chaos.
There’s no long-term benefit to that. Instead, prioritize consistency, visibility, and long-term planning. Sustainable strategy beats reactionary tactics every time.
Taxes Should Inform, Not Dictate
Too many business decisions are made with tax consequences as the driving force. That’s backwards. Tax considerations should inform your decisions—not control them.
Buying an expensive vehicle you don’t need just for the write-off?
Sure, buying that $90,000 truck might lower your taxable income by that amount—but if your tax rate is 25%, that means you saved about $22,500. You still spent $67,500 net. Unless that truck is essential to your operations, you’re wasting money.
This is where a good tax advisor will tell you something hard: DON'T BUY THINGS JUST FOR THE WRITE-OFF!
Tax deductions should come from smart business decisions—not panic purchases. If you wouldn’t spend the money without the tax break, you probably shouldn’t spend it because of the tax break either.
The smarter move is to buy what you actually need and plan your tax strategy around your real business decisions—not the other way around.
Refunds Aren’t Wins
Getting a big tax refund isn’t a reason to celebrate. It means you overpaid the IRS all year long.
Your refund is not a bonus. It’s not free money. It’s literally your own money being returned—without interest—after the government held onto it for 12+ months.
In personal finance terms, a refund is:
- An interest-free loan to the government
- A sign of poor withholding or estimated payment planning
- A missed opportunity to use that money for savings, investment, or business growth.
What you should aim for is zero—a balanced return with no refund and no big amount owed. That means your tax planning worked. That means you kept control of your cash.
So, Is Paying More in Tax a Good Thing?
Nobody wants to overpay, and smart tax planning will always matter. But if your tax bill is larger this year because your income grew, that’s not something to panic over—that’s progress.
A bigger bill often means:
- Your business is scaling
- You’re earning more
- You’ve created new opportunities
- You’re building real, sustainable wealth
No one loves paying taxes—we’re not here to convince you otherwise.
But it’s time to shift the mindset: a higher tax bill can be a sign that you’re doing something right. More income. More growth. More potential.
It doesn’t mean you stop planning or stop looking for ways to reduce what you owe. It means you recognize what that bigger number really represents: success that’s worth celebrating.
So rather than fighting the existence of taxes, the better move is to understand the system, leverage it legally, and plan ahead. Because you can win the tax game—you just have to learn the rules.
Think You Might Be Overpaying?
Owing more can be a good thing—but overpaying? That’s a different story.
Here’s why so many small business owners overpay in taxes—and how to make sure you’re not one of them.
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