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How do you maximize deductions in your business? In this episode of the Small Business Tax Savings Podcast, Mike explores the core concept of deducting ordinary and necessary expenses as pre-tax spending, rather than after-tax spending.
Mike provides an overview of various deductible expenses, including contract labor or outside services and insurance premiums. Before paying contractors, he advises a W9 from the m and sends 1099 at year-end.
Mike covers various business expenses that are deductible, including life insurance for employees (if the company is not a beneficiary), interest on loans and mortgages, repairs and maintenance, taxes and licenses, and wages and salaries for employees. Mike emphasizes the importance of turning after-tax spending into pre-tax spending and ensuring that expenses are ordinary and necessary in your line of business.
Tune in now so that you won’t miss out on the opportunity to grow your business while saving on taxes!
[00:00] Maximizing Business Deductions
- Today’s episode is about maximizing deductions in business
- Mike provides an overview of various deductible expenses, including contract labor and insurance premiums
[01:07] Understanding Business Expenses
- What are examples of deductible expenses?
- Life insurance
- Interest in business expense
- Repairs and maintenance expenses
- Taxes and licenses related to business
- Sales tax collected from buyers must be included in gross receipts
- Wage and salaries for employees
- Maximizing deductions is about running after-tax spending into pre-tax spending
[12:00] How To Lower Your Tax Liability And Saving Money
- Business expenses must be ordinary and necessary in your line of business
- Other general expenses include bad debts, bank service charges, commissions and fees, education and training for business-related continuing education, legal and professional services
- Not getting greedy with deductions and doing the “sniff test” to ensure the legitimacy
[13:24] Closing Segment
- Mike encourages listeners to check out the ultimate guide to maximizing business deductions and write-offs for full documentation requirements
- Final Words
Key Quotes
“If you have an employee or if they get to the phase where they would be categorized as an employee, that's going to be separate. That's going to be recorded in their wages and salaries.” – Mike Jesowshek
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Podcast Host: Mike Jesowshek, CPA - Founder and Host of Small Business Tax Savings Podcast
Join Our Tax Minimization Program: https://www.taxsavingspodcast.com/tax
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Podcast Website: https://www.TaxSavingsPodcast.com
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To find out more on this topic and many others visit our website at www.TaxSavingsPodcast.com. You can also give us a call at 844-327-9272 or send your questions to us at: Ask@TaxSavingsPodcast.com
