Throughout this season of Stride Live, we’ve received dozens of questions from MSP owners about tax planning, accounting, retirement planning, and preparing their businesses for growth. Rather than answer them one at a time, Casey Seaborn and Morgan Holmes, CPA/PFS, dedicated an entire episode to tackling the most common questions during a live Ask Me Anything session.
From navigating multi-state tax compliance to understanding S-corporation distributions, retirement planning, and preparing your financials for a future sale, the conversation focused on practical strategies MSP owners can use to make more informed financial decisions.
Here are the biggest takeaways from the discussion.
1. Growth Can Create New Tax Obligations You Don’t See Coming
As MSPs expand into new markets, tax compliance becomes more complicated. Hiring remote employees, opening locations in new states, or serving customers across state lines can create filing obligations that many business owners don’t realize they have.
Morgan explained that while some states still rely on physical presence to establish tax nexus, many have adopted economic thresholds or market-based sourcing rules. Sales tax treatment also varies significantly by state, particularly when it comes to software, SaaS, and managed services.
2. Build Financial Statements That Help You Make Better Decisions
One of the questions Casey hears most often is whether MSPs should use cash or accrual accounting.
Morgan recommends maintaining your books on an accrual basis because it provides a more accurate picture of your business throughout the year. While your tax return may still qualify for cash-basis reporting, accrual financials give you better visibility into profitability, outstanding obligations, and overall financial performance.
Pro Tip: Your financial statements shouldn’t just help you file taxes. They should help you run your business with confidence.
3. Understanding Profitability Starts with Proper Cost Allocation
For many MSPs, labor is the largest cost of delivering services. If payroll isn’t properly allocated between Cost of Goods Sold (COGS) and operating expenses, it becomes difficult to understand true gross margins or evaluate whether your services are priced appropriately.
Morgan recommends aligning labor costs with the revenue they support so each service line accurately reflects its profitability.
4. Focus on Tax Strategies, Not Just Tax Deductions
When most business owners think about tax savings, they often focus on individual deductions. Morgan encouraged a broader approach by looking at how multiple strategies work together.
Some of the planning opportunities discussed included:
- Section 179 depreciation
- Bonus depreciation when appropriate
- Qualified Business Income (QBI) deductions
- State pass-through entity tax elections
- Retirement plan contributions
Rather than searching for one more deduction at year-end, focus on building a tax strategy that supports your overall business goals.
5. Retirement Planning Can Be One of Your Best Tax Strategies
Retirement planning isn’t just about preparing for the future. It can also create valuable tax savings today.
Morgan explained that employer retirement contributions made through an S-corporation can generate deductions at the business level while helping owners maximize retirement savings beyond employee contribution limits. Depending on your goals, options like Solo 401(k)s and defined benefit plans may provide additional planning opportunities.
Pro Tip: The earlier retirement planning becomes part of your tax strategy, the more flexibility you’ll have over time.
6. If You Plan to Sell Your MSP, Start Preparing Now
If selling your business is part of your long-term plan, your financials should tell a clear story.
Morgan recommends separating revenue streams, accurately allocating Cost of Goods Sold, and removing personal expenses from business financial statements. Buyers want confidence in the numbers, and organized financials make it easier to demonstrate profitability and value.
Key Insight: Buyers aren’t just evaluating revenue. They’re evaluating the quality, consistency, and profitability of that revenue.
7. Don’t Wait Until December to Talk to Your CPA
Morgan closed the discussion with one simple recommendation: start planning now.
With several provisions of the One Big Beautiful Bill Act taking effect in 2026, now is the time to begin discussing tax strategy with your CPA. Early planning creates opportunities to adjust payroll, retirement contributions, entity structure, and tax payments before year-end deadlines arrive.
Final Thoughts
The questions covered during this Stride Live session all point to one common theme: proactive planning leads to better financial outcomes.
Whether you’re expanding into new states, optimizing your tax strategy, preparing for retirement, or thinking about selling your MSP, having the right financial information and a proactive plan can help you make more confident business decisions.
Watch the full replay to hear Casey and Morgan answer these questions in greater detail.
Watch the replay:
https://www.linkedin.com/events/stridelive-ama-financialq-awith7482486230987874304/theater/
About Stride Services
This Stride Live Webinar is hosted by Stride Services. Stride is a comprehensive financial solutions provider specializing in outsourced bookkeeping, accounting, tax, and advisory services for Managed Service Providers.
Learn more at: https://stride.services
If you’re interested in being a featured guest on our Live Webinars or if there’s a subject matter expert you’d like us to interview, please CLICK HERE and let us know!
