[Mr Tonka]

It's doubtful that you can create a legitimate business and create enough expenses to offset the tax consequence by a meaningful amount between now and 12-31-14. Not impossible, but if you're asking how to do it on this forum, you probably don't already have a plan. Talk to your CPA and do it quickly. But don't get your hopes up.

You'd have to set up an S-corp or LLC that flows though to your personal tax return. That business would have to be legitimate and you'd have to create legitimate expenses to offset the taxes. But you can't create expenses without spending money.

If your "business" was say.... selling real-estate on the side while you were employed, you could create an LLC called Adobee Real-Estate, LLC. Everything you purchase for open houses; catering food, signs, cleaning services, etc.. are expenses. Your marketing, printing, fuel, etc.. are also expenses. You could also have Adobee Real-Estate LLC lease you a car there by making your vehicle an expense. Which all sounds great because you need a vehicle and fuel anyway. But... a business without revenue isn't a business, and the IRS doesn't like them. Don't mistake business without revenue for businesses with losses, big difference in IRS eyes.

Long story short, everyone gotta pay taxes. You can do things to pay less, but having an LLC or S-corps isn't a magic tax sucking device. You can do anything you want, but doing it without penalty and interest is a whole other story.