re: How can I reduce my taxable income?

I own an LLC. For tax purposes I am treated like an S Corp by the IRS.

LLCs treated as S corporations:

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If an llc makes an election to be treated as an S corporation, the LLC's profits are subject neither to self-employment taxes nor to corporate income tax. The S corporation does need to file an 1120S tax return, however, and through this tax return the LLC's owners get taxed on their respective shares of the corporation's profit.

Note that if an llc owner works in the business, the LLC-treated-as-an-S corporation must pay a reasonable wage to the llc owner. The LLC absolutely does owe payroll taxes on these wages.

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Question. If you can't be on a payroll as a SMLLC why not add your wife to the LLC as she is active in the business?

You can elect to be treated as an S Corp but you have to make the election during a certain time window. I believe that window is presently open.