Small Business Tax Savings Podcast

Paying yourself wrong can trigger IRS issues, messy books, and unexpected tax bills. In this episode, we break down exactly how LLC owners should pay themselves in 2026 based on their entity type and tax election.You’ll learn the 3 primary ways business owners get paid: owner draws or distributions, payroll, and guaranteed payments. We explain which payment methods are legally allowed for single-member LLCs, partnerships, and S corporations, and why running payroll as an owner is prohibited unless you have an S corporation election.We walk through how each method is taxed, how it shows up in your financial statements, and why owner draws do not reduce business profit even though they reduce cash. 👉 Get the Free Tax Savings Starter Kit Built for Small Business Owners:https://www.taxsavingspodcast.com/starterkit🚀 Book your free demo call today. Click here or visit:https://taxelm.com/demo/Chapters(00:45) Why Paying Yourself Correctly MattersImproper owner pay can create audit risk, illegal compensation setups, and accounting problems that surface later during tax season.(01:25) Owner Draws and Distributions ExplainedWhat an owner’s draw actually is, how it works, why no taxes are withheld upfront, and why draws don’t reduce business income.(02:55) Guaranteed Payments for PartnershipsHow guaranteed payments work in partnerships, when they’re used, how they’re taxed, and why they’re different from draws.(04:10) Paying Yourself as a Single-Member LLCWhy single-member LLC owners can only take owner draws, and why running payroll to yourself is not allowed by law.(05:05) Paying Yourself in an LLC PartnershipThe two legal options for partners.(06:00) Paying Yourself as an S Corp OwnerWhy S Corps require a reasonable salary, how payroll and distributions work together, and where tax savings come from.(07:00) How to Document Owner Pay CorrectlyHow draws hit the balance sheet, how payroll hits the income statement, and why documentation matters for audits.(09:30) What to Do Next as an LLC OwnerHow to choose the right pay method, set up a system, plan for taxes, and avoid common compensation mistakes going forward.Podcast Host:Mike Jesowshek, CPA – Founder and Host of Small Business Tax Savings PodcastJoin TaxElm: https://taxelm.com🚀 Visit:  https://www.TaxSavingsPodcast.com 🚀 Check Out TaxElm: https://taxelm.com/🚀 Join our Free Facebook Group: https://www.facebook.com/groups/taxsavings/🚀 YouTube: www.TaxSavingsTV.com👋🏼 GET IN TOUCHYou can Tweet @MJesowshek with any feedback, ideas, or thoughts about the lessons you've learned from the episodes. We want to thank you personally for tuning in 🙏🙌LEAVE A REVIEWIf you enjoy the podcast, please leave a 5-star review on Apple Podcasts or Spotify—it helps more business owners find the show ⭐🎙 ABOUT THE PODCASTThe Small Business Tax Savings Podcast is your go-to resource for cutting-edge tax strategies to help entrepreneurs legally slash their tax bills. Hosted by Mike Jesowshek, CPA, this show breaks down complex tax topics into clear, no-fluff insights so you can keep more of your hard-earned money.

Forming an LLC is just the beginning; maintaining it is where many go wrong. Mixing personal and business finances can jeopardize your liability protection. Annual compliance tasks like filings and reports are often overlooked, leading to serious issues. Understanding when to elect S Corporation status can save you on taxes. Properly classifying owner compensation is crucial to avoid costly mistakes. Additionally, proactive tax planning and legal documentation can shield your LLC from future pitfalls. Don't let your business exist only on paper!

Thinking about forming an LLC in 2026? In this episode, Mike breaks down how to set up an LLC step by step, what “free” really means, state filing costs, common mistakes to avoid, and why an LLC can act as an insurance policy for future S Corp tax savings. Perfect for new and growing business owners who want clarity without the confusion.If you want a clean, simple business setup that protects you now and gives you flexibility later, this episode gives you the roadmap without the legal confusion.👉 Get the Free Tax Savings Starter Kit Built for Small Business Owners: https://www.taxsavingspodcast.com/starterkit🚀 Book your free demo call today! Click here or visit: https://taxelm.com/demo/Chapters(01:00) Why Form an LLC in 2026The 3 core reasons business owners form LLCs. Liability protection, credibility, and flexibility for future tax planning.(02:10) Why an LLC Is an Insurance Policy for an S CorpHow an LLC allows you to elect S Corp status later and why sole proprietors do not have that option.(03:00) What “Free” LLC Setup Really MeansState filing fees, unavoidable costs, and what online “free” services actually do.(03:55) The Step-by-Step LLC Setup ProcessChoosing a business name, selecting a registered agent, drafting an operating agreement, filing with the state, getting an EIN, and opening a business bank account.(06:05) The Biggest LLC Mistakes Business Owners MakeWhy not using the LLC, mixing funds, missing renewals, and following bad internet advice cause legal and tax issues.(07:40) Bonus Tips to Strengthen Your LLCOperating agreements, separating finances, tracking expenses, and setting up bookkeeping the right way.(08:30) When to Consider an S Corporation$50,000 in profit is a common tipping point and how an LLC makes the transition easier.(09:00) Final TakeawayHow to use an LLC to protect yourself today while setting up smarter tax planning for the future.Podcast Host:Mike Jesowshek, CPA – Founder and Host of Small Business Tax Savings PodcastJoin TaxElm: https://taxelm.com🚀 Visit:  https://www.TaxSavingsPodcast.com 🚀 Check Out TaxElm: https://taxelm.com/🚀 Join our Free Facebook Group: https://www.facebook.com/groups/taxsavings/🚀 YouTube: www.TaxSavingsTV.com👋🏼 GET IN TOUCHYou can Tweet @MJesowshek with any feedback, ideas, or thoughts about the lessons you've learned from the episodes. We want to thank you personally for tuning in 🙏🙌LEAVE A REVIEWIf you enjoy the podcast, please leave a 5-star review on Apple Podcasts or Spotify—it helps more business owners find the show ⭐🎙 ABOUT THE PODCASTThe Small Business Tax Savings Podcast is your go-to resource for cutting-edge tax strategies to help entrepreneurs legally slash their tax bills. Hosted by Mike Jesowshek, CPA, this show breaks down complex tax topics into clear, no-fluff insights so you can keep more of your hard-earned money.

Kickstart your financial year with four crucial tasks every business owner must tackle in January. Discover how unfinished bookkeeping can lead to missed deductions and unnecessary stress. Learn the art of organizing tax documents to prepare for audits and strategize effectively. Mike emphasizes the importance of a financial summary document, providing a clear snapshot of assets and liabilities. Don’t forget the January 31 deadline for 1099s, and start building a proactive tax plan now to ensure a profitable and stress-free 2026!

Confused about 1099s? You're not alone! Learn the difference between 1099-NEC and 1099-MISC forms to avoid costly mix-ups. January 31 is the crucial deadline you can't miss, with penalties that add up fast for late filings. Discover who actually needs a 1099 and why the $600 rule is key. Plus, find out why card payments can take filing duties off your plate. Mike shares tips on collecting W-9s early and using software for a smooth filing process, ensuring your January is stress-free!

Celebrate the holiday season with a heartfelt thank you to the community, reflecting on nearly eight years and over 1.5 million downloads. Discover the mission to simplify tax savings for small business owners, making tax planning less stressful. Learn how to help the podcast grow by leaving reviews and sharing with fellow entrepreneurs. Dive into the Tax Savings Starter Kit for essential deductions and real case studies. Plus, explore step-by-step guidance with TaxElm to master your tax strategies in the new year!

Mark J. Kohler, an attorney and tax strategy expert, dives into crucial tax planning insights for business owners. He highlights a common mistake: the gap between knowing tax strategies and actually applying them. Mark explains true self-direction in retirement accounts and the range of investments allowed, from real estate to crypto. He discusses the importance of quarterly planning sessions and warns about the risks of prohibited transactions. Listeners will gain valuable tips to enhance their tax savings before 2026.

New business owners often face tough questions. Discover if forming an LLC is necessary for tax deductions. Learn the ins and outs of hiring your kids correctly to maximize benefits. Explore the differences between using retirement funds via ROBS and SBA loans for financing. Understand the nuances of home office deductions and the implications when selling your home. Navigate the confusing world of tax strategies with clarity and confidence.

Year-end is the critical time for business owners to secure tax savings. Key strategies include ensuring S Corp compliance, maximizing deductions through careful planning, and hiring kids in a tax-smart way. Don't forget retirement contributions and health reimbursements before deadlines! Timing strategies for cash-basis filers can enhance deductions, while tax-loss harvesting helps offset gains. Documenting everything now ensures a cleaner tax season ahead, so prioritize high-impact strategies for a productive start to the new year!

Discover how you can deduct the entire cost of new equipment in the first year thanks to updates in tax laws. Learn the distinctions between depreciation methods, including the 100% bonus and Section 179 rules. Understand the importance of a written capitalization policy to maximize deductions. Hear expert tips on timing purchases and strategies for asset depreciation to optimize tax savings. Finally, explore when to front-load deductions and how to handle large expenditures effectively.