Using Real Estate for Tax Advantages and Cost Seg Studies

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What happens when you take a real small business owner, put them in the hot seat, and break down their tax strategy live? That’s what we’re doing in this episode.

Eric runs a successful appraisal business, pays himself through an S-Corp, and last year wrote a $50,000 check to the IRS. Did he really have to? Mike digs into Eric’s setup and reveals how simple shifts could slash his tax bill. From adjusting his salary to using the Augusta Rule, hiring kids, and planning for real estate, you’ll see how the right strategy can cut thousands off your tax bill.

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Here's What We Discussed:
(01:21) Income Breakdown
$200K profit in appraisal business, break-even martial arts school, plus wife’s part-time job.

(03:09) Current S Corp Salary Setup
Eric takes $120K-$140K salary. Mike shows how lowering it could save $8K-$9K annually.

(06:25) Why Two S Corps Cost Too Much
Running payroll twice and filing two returns is unnecessary. A smarter setup is to use one holding S Corp that owns your other businesses (but only for active businesses, not passive income like rentals.)

(09:07) Retirement Planning Made Simple
How Eric can prioritize HSA, IRA, and SIMPLE contributions to maximize tax benefits.

(10:32) How to Determine a Reasonable Salary as an S Corp
Start with 30-50% of profit, then back it up by tracking how many hours are spent on core tasks. Use labor statistics to assign hourly rates (this builds audit protection and ensures you’re not overpaying in payroll taxes).

(17:42) Maximizing Deductions You Already Have
Use an accountable plan to capture deductions you might miss. Home office, mileage, meals, and travel can all qualify when tied to business.

(21:00) The Power of a Board + Augusta Rule
Set up a board, hold meetings at home, and rent your house tax-free.

(26:40) Hiring Kids the Right Way
When to use W-2 vs. 1099 and how to turn family support into deductible expenses.

(36:15) Real Estate and REPS Strategy
How cost segregation and bonus depreciation could create six-figure deductions.

(41:58) Core vs. Advanced Tax Strategies
What every business owner should implement now and what comes next as income grows.

👉 U.S. Bureau of Labor Statistics (BLS) – https://www.bls.gov/oes


Podcast Host:
Mike Jesowshek, CPA – Founder and Host of Small Business Tax Savings Podcast
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🎙 ABOUT THE PODCAST
The Small Business Tax Savings Podcast is your go-to resource for cutting-edge tax strategies to help entrepreneurs legally slash their tax bills. Hosted by Mike Jesowshek, CPA, this show breaks down complex tax topics into clear, no-fluff insights so you can keep more of your hard-earned money.