Business cash planner

Cash sitting in a business account isn't a wealth plan. Enter your balance and expenses to see how much your business actually needs as a reserve — and what your real options are for the rest.

Educational estimates — not tax or financial advice. Confirm distribution plans with your CPA and advisor.

Your numbers

Cash in business accounts$300,000

Checking, money market, or business savings — total liquid balance

$0$2,000,000

Monthly operating expenses$25,000

Payroll, rent, software, contractors — what you spend each month

$1,000$200,000

Annual net profit$200,000

Business profit before owner pay or distributions

$30,000$1,500,000

Business structure

Federal marginal tax rate

Adds 9.3% CA income tax on distributions

Cash position

Excess capital

Available beyond reserve

$200,000

You have more cash than the business operationally needs. Letting it sit earns you nothing and creates a planning gap — here are your options.

Operating reserve

3-month minimum

$75,000

4-month target

$100,000

6-month comfortable

$150,000

You have $300,000 in business accounts. Keeping $100,000 covers 4 months — the rest can work harder elsewhere.

Options for $200,000 in excess cash

Solo 401(k) — reduce taxable income first

Priority 1

Max contribution (2026)$72,000

Est. federal tax savings (32% bracket)$23,040

Your after-tax cost to contribute$48,960

Every dollar into the Solo 401(k) reduces your taxable income. This is usually the highest-return use of business cash before distributions.

Take as distributions — move to personal

Option 2

Distribution amount$200,000

Federal income tax (32%)($64,000)

CA income tax (9.3%)($18,600)

You receive after tax$117,400

S-corp distributions carry no self-employment tax — saving you approximately $28,678 vs. a sole prop taking the same amount.

Once distributed, this cash can go into a taxable brokerage, pay down personal debt, or fund a down payment. Your CPA and advisor should align on where it lands.

Leave it in the business

Option 3

Keeping excess cash in the business earns minimal return, creates retained earnings that can complicate a future sale, and gives you no benefit in personal net worth. The only time this makes sense is if you're planning a major business investment in the near term.

The coordination question

Getting cash out efficiently requires your CPA and your financial advisor to be in the same conversation. Your CPA knows the tax cost of distributions. Your advisor knows where the money should go once it's out. If those two conversations happen separately, the plan has gaps.

Estimates are illustrative. SE tax savings assume S-corp distributions are not subject to self-employment tax when reasonable compensation is being paid. Retirement contribution limits based on 2026 IRS figures. California tax rate is a simplified effective rate estimate. Consult a CPA before taking distributions or setting retirement contributions.