Although a lot of people talk about reducing income taxes, many people—even seasoned professionals—don’t appreciate how many areas of your life must be coordinated in order to truly lower income taxes for entrepreneurs. Sometimes, it is because the middle-market entrepreneurs' tax mitigation needs have outpaced their current advisors’ capabilities. 

Other times, it is because many entrepreneurs rely on bringing someone in for a “one-off” solution. But that’s the anathema to true tax mitigation planning. And other times, even qualified advisors fail to coordinate with other professionals as needed to truly serve their clients well (often due to their own hubris).

True tax mitigation planning touches on no less than 16 interrelated areas of entrepreneurs’ lives and involves seamless coordination among professionals who have their clients’ best interests at heart.

According to P.J. DiNuzzo, CPA, PFS, MSTx, MBA, and Founder and Lead Consultant of DiNuzzo Middle-Market Family Office™ and Wall Street Journal bestselling author of the books, The DiNuzzo Middle-Market Family Office™ Breakthrough: Creating Strategic Tax, Risk Cash-Flow and Lifestyle Options for Successful Privately-Held Business Owners and Affluent Families and Don’t Get Killed on Taxes: 20 of the Most Common Reasons You’re Sending Too Much Money to the IRS, “There are the sixteen areas of entrepreneurs’ lives that must be coordinated in order to truly lower their overall income tax liability.”

Below, DiNuzzo introduces the 16 interrelated areas and how they interact with middle-market entrepreneurs’ overall income tax liability.

Tax Mitigation: Middle-market entrepreneurs are either focused or unfocused regarding their tax mitigation strategies. For example, successful entrepreneurs have tax reduction planning meetings prior to year-end in order to take advantage of opportunities that expire if not addressed before the end of the year.

Private Foundation + Charitable Planning: Matching your charitable intent with customized tax deductions can help you significantly reduce your income tax liability. In conjunction with your tax strategy, this must also fit seamlessly with your family goals and values.

Wealth Planning: For starters, having your most essential financial information at your fingertips is essential for optimal decision-making. For example, having easy access to your personal financial statements as well as your business assets, liabilities, income, and expenses allows you to make the most informed decisions possible.

Financial Independence + Retirement Planning: Developing and maintaining a Financial Wellness LifePlan that includes your family’s wants and expresses your goals and can help identify several potential tax mitigation options. Ideally, a living, breathing plan that can also easily model effective and marginal taxes into every decision.

Life Insurance Planning: Optimized life insurance planning involves satisfying your risk management needs while reducing your potential income and estate tax liabilities. Exploring opportunities to fund life insurance on a pre-tax basis should be considered.

Real Estate: Matching your diversification goals with a tax strategy that meets your goals. Types of properties, equity, financing, leverage, and titling are all critical elements that need to be coordinated with your tax plan.

Investments: Creating an investment strategy that minimizes tax friction on an ongoing daily basis to help you achieve your annual goal is critical to any successful tax mitigation plan. Also instituting and maintaining a robust process and checklist you can use to evaluate future investments before they get added to your portfolio.

Alternative Investments: “It’s not what you make, it’s what you get to keep.” Before investing, be diligent that the alternative investment meets the criteria established in your investment planning. Understand gating requirements, capital calls, and the range and flavor of taxable distributions.

Tax-Managed and ESG SMA’s: These are the “core” heart and soul of your investment tax management philosophy and implementation. With them, you can take a predetermined and disciplined approach to harvesting capital gains and capital losses in harmony with your overall tax mitigation strategy and your personal and family values.

Investment Banking: To minimize taxes, you must coordinate tax mitigation objectives along with exit and succession planning.

Asset Protection Planning: Proactively structure the footer and foundation of your risk management plan and then finalize your overall asset protection strategy in harmony with your estate planning tax mitigation goals. Of course, there may be decisions made together with your tax advisor that is not based on tax efficiency but rather peace of mind.

Exit + Succession Planning: Satisfy your lifestyle, legacy, and tax mitigation goals throughout your Financial Wellness LifePlan. To maximize tax benefits, start at least one or two years prior to your projected wealth event.

Trusts + Estate Planning: Coordinate with wealth planning, Financial Wellness LifePlan, and overall tax mitigation strategy. Pros and cons of various different state and tax entities need to be considered.

Cross Border + Inbound Planning: If applicable, cross border and inbound tax mitigation planning should be closely aligned with your strategy and private client attorney and wealth planning.

Strategy + Private Client Attorney: The right general counsel and proper legal strategy has asset protection, tax mitigation, and an entrepreneur’s short-term objectives and long-term goals embedded in every decision.

Marital + Family Planning: This is arguably your most important consideration, blending the goals you have for your family and your legacy with your tax mitigation efforts.

Coordination is Key: As you can see, minimizing your aggregate income tax obligations requires coordination across numerous areas and professionals. Unfortunately, many successful closely held business owners do not have access to a team of professionals qualified and committed to doing what needs to be done for success, such as a Middle-Market Family Office.

RUSS ALAN PRINCE is the Executive Director of Private Wealth magazine ( and Chief Content Officer for High-Net-Worth Genius ( He consults with family offices, the wealthy, fast-tracking entrepreneurs, and select professionals.