#597 Smart Strategies to Pay Yourself and Save Thousands

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Oct 17, 2025

Dive into smart strategies for small business owners! Learn when to switch from an LLC to an S-Corp using the $50K rule. Discover how to transfer real estate into an LLC without triggering pitfalls. Unpack the distinction between true business income and passive income like royalties. Get tips on correctly paying yourself to avoid IRS issues and explore bookkeeping secrets for tax season. Plus, maximize retirement contributions and understand self-directed IRAs. Practical insights await every entrepreneur!

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ADVICE

Do Bookkeeping Before Paying Yourself

Get your bookkeeping done before deciding how to pay yourself or distribute profits.
Track expenses and net income so you know when to change entity tax strategy.

ADVICE

File Form 8594 For Asset Purchases

If you purchased assets, file Form 8594 to allocate purchase price and match the seller's return.
Confirm allocation at closing or contact the seller to correct mismatches promptly.

ADVICE

Transfer To LLC Without Fear (Usually)

Transferring your former primary residence to an LLC for rentals usually won't trigger banks to call the loan.
If a bank objects, deed it back to your name and continue payments to cure the issue.

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Are you structuring your business the right way — or making costly mistakes that could be draining your profits? In this episode of the Main Street Business Podcast, Mat Sorensen and Mark J. Kohler team up to answer your questions on taxes, legal structures, and real-world strategies for small business success. Together, they uncover the truth about LLCs, S-Corps, and the $50K rule that determines when to make the switch.

From transferring real estate into an LLC safely to understanding what truly qualifies as business income, this discussion covers the practical steps every entrepreneur should take to protect their assets, reduce taxes, and stay compliant. You’ll also learn how to pay yourself properly, avoid due-on-sale issues, and maximize wealth through smart entity planning.

If you’re serious about building your business the right way and keeping more of what you earn, this is an episode you can’t afford to miss!

You’ll learn:

How to decide when it’s time to convert your LLC to an S-Corp — and how the $50K rule really works
How to transfer real estate into an LLC without triggering the due-on-sale clause or losing financing options
The difference between true business income and passive income (like royalties, rentals, and trading profits)
How to pay yourself correctly as a business owner — and avoid IRS red flags with payroll, draws, and distributions
Simple bookkeeping and payroll strategies to stay compliant and ready for tax season
How to use smart entity structuring to protect your assets and save thousands in self-employment taxes
Practical tips for maximizing retirement contributions through Solo 401(k)s and Mega Backdoor Roth strategies

Get a comprehensive tax consultation with one of our Main Street tax lawyers that can build a tax strategy plan with an affordable consultation that will leave you speechless!!

Here’s the link - https://kkoslawyers.com/services/comprehensive-bus-tax-consult/?utm_source=buzzsprout&utm_medium=description-link&utm_content=msbp597-smart-strategies-to-pay-yourself&utm_campaign=main-street-business-podcast

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