30+ Tax Write-Offs You’ve Never Heard Of ｜ The Ultimate Tax Write Off Guide

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Sep 4, 2024

Mike Jesowshek, a tax expert specializing in small businesses, dives into the world of tax write-offs that can save entrepreneurs a significant amount of money. He highlights the crucial differences between pre-tax and after-tax spending and the advantages of choosing the right business entity, such as an S corporation, to reduce self-employment taxes. Mike also shares innovative strategies, like hiring family members and using the 14-day home rental rule, ensuring that listeners grasp the importance of effective implementation and accurate documentation for IRS compliance.

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ADVICE

Pre-Tax vs. After-Tax Spending

Understand pre-tax vs. after-tax spending to optimize deductions.
Shift after-tax expenses to pre-tax deductions whenever possible.

ADVICE

Entity Structures

Choose the right entity structure (sole proprietorship, LLC, C-corp) for your business.
An LLC offers legal protection and opens doors for S-corp status later.

ADVICE

S-Corporations

Consider S-corp status when your business profit reaches $50,000.
S-corps split income into salary and dividends, minimizing self-employment tax.

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Have you ever wondered how to maximize your tax deductions while staying on the right side of the IRS?

In this episode, Mike Jesowshek provides an in-depth guide on over 30 tax write-offs and strategies that can save businesses thousands of dollars. He emphasizes the importance of understanding pre-tax versus after-tax spending, the significance of selecting the right business entity structure, and how to effectively maximize deductions. Mike also covers strategies such as using an S corporation to reduce self-employment taxes, hiring children within a business, and setting up a board for additional tax benefits. He stresses the need to correctly implement tax strategies to ensure they remain legal and beneficial.

[00:00 - 12:24] Pre-Tax vs. After-Tax Spending, Entity Structure, and S Corporations

Mike introduces the importance of understanding tax strategies.
Optimize spending to shift after-tax expenses into pre-tax deductions.
He discusses how the business entity structure forms the foundation of your business.
Different types of entity structures: sole proprietorship, LLC, C corporation.
Choose the right entity structure to ensure proper tax benefits and legal protection.
Consider S corporation status once your business reaches a certain profit level.

[12:24 - 26:03] Maximizing Deductions

Mike breaks down the various business expenses that qualify as deductions, including advertising, contract labor, equipment, and gifts.
Regularly review personal expenses to identify potential business deductions.

[26:03 - 35:18] Accountable Plan and Setting Up a Board for Tax

Ensure proper documentation and exclusivity in home office use.
Use a board for accountability, perspective, and additional tax deductions.

[35:18 - 44:47] Additional Tax Strategies: Meals, Travel, Automobile, and Retirement Planning

Proper documentation and fair market value rental rates are crucial.
Be strategic in everyday business activities to maximize deductions.

[44:47 - 57:30] Implementation of Tax Strategies

Mike emphasizes the importance of not only learning tax strategies but also correctly implementing them.
Correct documentation and cautious implementation are key to successful tax strategies.

Direct Quotes:

"The government doesn't come knocking and let you know when you missed out on an incentive that they gave you." - Mike Jesowshek, CPA

"Every business owner should have a home office of some sort." - Mike Jesowshek, CPA

"The implementation piece is where you start to see those tax savings." - Mike Jesowshek, CPA

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Podcast Host: Mike Jesowshek, CPA - Founder and Host of Small Business Tax Savings Podcast

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