Small Business Tax Savings Podcast Listener Q&A with Mike Jesowshek, CPA
What are the different tax deductions for small businesses? In this episode of the Small Business Tax Savings Podcast, Mike explains that certain expenses are tax deductible if they are ordinary and necessary for the business and have proper documentation to support them.
Mike Jesowshek shares his insights into how businesses can claim this expense as a deductible item on their taxes.
Mike covers various questions related to business expenses, S-Corp election, payroll, and documentation needed for paying a child in the business. Mike offers advice to Matt who needs help buying a new house with more office space since he runs his business from home.
Tune in now and find out how you can save money on your taxes while growing your small business!
[00:01] Listener Q&A with Mike Jesowshek, CPA
- Paying kids under S-Corp or sole proprietorship, deducting shipping fees, and maximizing deductions for sponsoring a golf team
- Paying kids through sole proprietorship avoids withholding for social security and Medicare tax, federal unemployment, and state unemployment
- Sponsorship of a golf team can be a business deduction if it’s an advertising play with the intention to gain business from it
[05:21] Understanding Tax Deductible Expenses for Sponsors and Small Business Owners
- Sponsorship expenses must be ordinary and necessary business deductions
- Golf outings with clients are not deductible as a business expense
- Home office deductions require exclusive use for business purposes
- Personal use of home office space is not deductible
[10:52] S-Corp Payroll and Hiring Your Kids for Your Business
- Paying federal and state taxes from a business bank account is acceptable
- Event application fees for a food truck are tax-deductible expenses
- Paying a fee to run a business at a location is a business expense
- Documentation needed to pay child in business includes a job description, employment agreement, timesheet recording, and reasonable pay rate
[14:40] Closing Segment
- Mike shares that buying a new house with bigger office space for a home-based business is possible. Fluctuating income can result in a low salary with a catch-up at year-end to meet a reasonable salary
- Final Words
Key Quotes
“When we look at home office, it has to be exclusive use. So, if there is any personal use, no longer deductible, no longer able to be used as a home office unless it's a walkthrough.” – Mike Jesowshek
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Podcast Host: Mike Jesowshek, CPA - Founder and Host of Small Business Tax Savings Podcast
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