re: How can I reduce my taxable income?

Go the simple Ira route, is matching 2-3% of your one employees salary that big of a deal? Hire your wife, she starts to gain SS credits for retirement or disability as well as she gets a whole allotment for her own Ira fund. Also look at setting up an LLC to buy a building and then rent to your business if nothing else in 15 years you will have a building instead of a stack of rent recipts