Tax Mistakes That Can Destroy Your Wealth

Tax mistakes can undo years of hard work. The right legal and financial planning ensures your wealth grows—and stays in your hands.

We talk a lot about how to build wealth—start the business, buy the property, invest early.

But what doesn’t get discussed nearly enough is how quickly wealth can erode when you don’t plan for taxes. Whether it’s a surprise liability, an audit, or an inefficient structure, tax missteps are one of the fastest ways to lose momentum—or worse, lose it all.

In Episode 6 of Future in Focus, I sat down with tax strategist Mardochee Louis to talk about exactly that. We broke down the key tax traps that threaten entrepreneurs, investors, and first-generation wealth builders—and what you can do to avoid them.

Mistake #1: Treating Taxes Like an Afterthought

For many people, taxes are something you deal with once a year—reactively. But if you’re earning business income, buying or selling property, or investing in the markets, your tax plan should be just as proactive as your business or investment strategy.

Waiting until tax season to get organized means you’re missing opportunities for deductions, delaying entity planning, and risking avoidable penalties.

Start early. Build a team that understands your goals. And treat tax planning as an ongoing part of your financial life—not a once-a-year scramble.

Mistake #2: Using the Wrong Entity (or No Entity at All)

One of the most common and expensive mistakes is operating a business without a formal legal entity. Or worse, choosing an entity structure that creates unnecessary tax exposure.

Forming an LLC or electing S-Corp status isn’t just about liability protection—it’s about how your income is taxed, how you pay yourself, and whether you qualify for certain deductions.

The wrong structure can cost you thousands. The right one can save you just as much.

Mistake #3: Commingling Funds

Mixing personal and business expenses doesn’t just make bookkeeping messy—it can jeopardize your liability protection and raise red flags with the IRS.

Maintain separate accounts. Use business credit. Keep clear records. Not only does this protect you legally, it makes it easier to identify deductions and manage cash flow throughout the year.

Mistake #4: Ignoring Estimated Tax Payments

If you’re self-employed or earning non-W-2 income, you’re responsible for paying taxes quarterly. Failing to do so can lead to interest, penalties, and a painful bill come April.

This is where working with a tax professional makes a difference. A good advisor will help you estimate what you owe, time your payments, and stay ahead of shifting income.

Don’t wait for a notice to get serious. Plan like your wealth depends on it—because it does.

Mistake #5: Failing to Plan for the Next Generation

Building wealth is one thing. Keeping it in the family is another. Without proper estate and tax planning, your assets could be diminished by estate taxes, forced sales, or lengthy probate.

Trusts, beneficiary designations, and gifting strategies can dramatically reduce tax exposure—but only if they’re designed in alignment with your long-term goals.

This is where legal strategy and tax planning have to work together.

The Bottom Line

Taxes are unavoidable—but tax mistakes are not. And the people who build lasting wealth aren’t just the ones who earn the most. They’re the ones who structure their income, protect their assets, and plan ahead.

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At The Law Offices of Antoinette M. Solomon, we work alongside experienced tax professionals to help our clients make legally sound, tax-efficient decisions.

Whether you’re building a business, investing in property, or planning your legacy, we’ll help ensure your structure supports your strategy.

Schedule a consultation today and let’s protect your wealth—before the IRS comes calling.