How We Helped a Startup Save $15K in Taxes – A Case Study

When startups think about growth, they often focus on sales, fundraising, or user acquisition. But there’s one area that’s just as crucial—yet often overlooked: tax planning. Done right, it can directly impact a startup’s bottom line, freeing up capital to reinvest in the business.

At Zenithlo, we’ve seen firsthand how powerful strategic tax planning can be. In this case study, we’re going to walk you through how we helped a tech startup save $15,000 in taxes—without bending the rules or cutting corners.

This isn’t just a feel-good story. It’s a real-life example of how the right accountant, armed with knowledge and a proactive mindset, can help startups run leaner, smarter, and more profitably.

The Background: A Promising Startup, Growing Fast

The client, whom we’ll call TechNova, was a SaaS startup based in the U.S., offering productivity software for remote teams. By the time they came to us, they were in their second year of operations, had 9 full-time employees, and were generating steady monthly recurring revenue (MRR).

Their product was picking up traction. But so were their expenses.

They had just closed a small seed round, and like many startups, they were focused on scaling. What they weren’t focused on? Taxes. At least, not until it was too late.

The Problem: Missed Deductions and an Outdated Structure

When TechNova reached out to Zenithlo, they had just filed their previous year’s taxes using a basic online service. It was quick and cheap—but it wasn’t strategic.

We reviewed their return and immediately saw red flags:

• They weren’t taking advantage of R&D tax credits, despite qualifying expenses.

• Their entity structure (LLC taxed as a sole proprietorship) was costing them extra in self-employment tax.

• They were capitalizing expenses that could have been deducted in the current year.

• No depreciation strategy was being used for their newly purchased equipment.

In other words, they were leaving money on the table—lots of it.

Step 1: Reworking Their Entity Structure

One of the first things we did was analyze their business entity setup.

They were operating as a single-member LLC, which meant all of their profits were being taxed as personal income through a Schedule C—subjecting them to the full 15.3% self-employment tax rate.

Based on their revenue and projected profits, we advised them to elect S-Corporation status with the IRS. This allowed them to:

• Pay themselves a reasonable salary, which is subject to employment taxes.

• Take additional profits as distributions, which are not subject to self-employment taxes.

This switch alone saved them over $6,000 in taxes in the first year.

Step 2: Unlocking the R&D Tax Credit

Next, we looked at their research and development expenses.

TechNova had spent months refining their product, experimenting with new features, and paying developers to build and test different tools. But no one had told them that those efforts potentially qualified for the federal R&D tax credit—a powerful incentive that reduces payroll or income taxes.

We worked closely with their team to:

• Identify and document qualifying R&D activities.

• Allocate eligible salaries, contractor payments, and cloud expenses to the credit.

• File Form 6765 to claim the credit properly.

The result? A $5,400 credit that directly offset their payroll tax liability. They had no idea such a credit existed until we brought it up.

Step 3: Reviewing Capital Expenditures & Depreciation

TechNova had made some large investments in computers, office equipment, and software licenses—but they had been advised to capitalize and depreciate them over several years.

While that’s sometimes the right move, in this case, it wasn’t.

We applied Section 179 and bonus depreciation rules, allowing them to deduct the full cost of certain assets immediately, instead of over five years.

This move added an extra $2,000 deduction to their current-year expenses—reducing their taxable income and giving them a more accurate picture of their burn rate.

Step 4: Optimizing Everyday Deductions

Small tweaks can add up in a big way.

We helped TechNova maximize deductions they weren’t fully using, including:

• Home office deductions for remote team members (founders were working from home but not deducting expenses).

• Business use of personal vehicles, using the IRS standard mileage rate.

• Startup costs that were eligible for amortization but hadn’t been tracked correctly.

• Subscriptions, coworking memberships, and professional development expenses that had been ignored or misclassified.

Individually, these seemed minor. But combined? They shaved off another $1,600 in tax liability.

Step 5: Year-Round Tax Planning (Not Just April Cleanup)

One of the biggest mindset shifts we encouraged was treating taxes as a year-round strategy—not a one-time chore.

We helped TechNova set up:

• Quarterly check-ins to forecast profit/loss

• Estimated tax payments to avoid penalties

• A real-time dashboard (via QuickBooks + custom reports) to monitor expenses and tax exposure

• Payroll automation to ensure compliance as their team scaled

By staying proactive, they never had to worry about surprise bills or last-minute deductions again.

The Results: $15,000 in Tax Savings (and a Stronger Business)