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Have you ever considered how advanced tax strategies, from customized retirement contributions to optimizing home office deductions, might lower your overall tax burden?
In this Q&A episode, host Mike Jesowshek answers listener questions on various tax topics. He covers issues ranging from retirement planning strategies, such as after‑tax contributions and Roth conversions in a solo 401(k), to the proper methods for paying oneself as a sole proprietor versus an S corporation. Mike also explains home office deductions, board meeting expenses, handling duplicate tax forms, and business entity conversions.
[00:00 - 05:02] Retirement Contributions and Solo 401(k) Options
- Mike discusses using after‑tax contributions and a Roth conversion in a solo 401(k) for high‑income earners.
- New members receive immediate access to a comprehensive suite of tax-saving tools and consultations.
[05:02 - 10:42] Owner Draws, Home Office Deductions, and Board Meeting Expenses
- Mike explains how to oneself as a sole proprietor using owner draws versus payroll for S corporations.
- Understand that taking money out of a business as an owner draws does not reduce taxable profit.
- Ensure that business spaces are used exclusively for business, and document meetings carefully when using home space.
[10:42 - 15:32] Hiring Family Members, Deducting Mileage Expenses, and Entity Conversion
- Mike discusses claiming mileage expenses when an employee uses a personal vehicle for business.
- Recognize that converting a C corporation back to an LLC may trigger taxable events; professional consultation is advised.
[15:32 - 20:17] Handling Duplicate 1099 Forms and Short-Term Rental Deductions
- Work with the issuer to correct mistakes or offset the extra reporting with a matching expense entry.
- Understand the timing of deductions and whether expenses need to be capitalized based on service start dates.
[20:17 - 27:20] S Corporation and Subsidiary Structures; Home Office with Additional Facility
- Mike details the benefits of an S corporation holding company structure for multiple LLCs and addresses home office deductions when using a separate facility.
- Proper structuring can consolidate profit and loss reporting, and the administrative office rule allows a home office deduction even when an additional business location exists.
Direct Quotes:
"If you are helping out family members, and those family members can also do some work for your business, why not get a business deduction for that help that you want to do anyways?" - Mike Jesowshek, CPA
Check out this episode’s blog post! Visit https://www.taxsavingspodcast.com/blog/tax-q-a-short-term-rentals-1099-confusion-entity-conversions-and-creative-tax-strategies
Click here to book a demo call or you can visit https://taxelm.com/demo/
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Podcast Host: Mike Jesowshek, CPA - Founder and Host of Small Business Tax Savings Podcast
Join TaxElm: https://taxelm.com/
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Small Business Tax Savings Podcast