Small Business Tax Savings Podcast

Send us a textWhat if you discovered that by embracing the new e-filing changes and understanding the nuances of the 1099 NEC, 1099-MISC, and 1099-K forms, you could not only streamline your tax processes but also potentially uncover hidden financial benefits for your business? In this episode, Mike welcomes Christina Wright to discuss the IRS 600 1099-k tax rule and its recent postponement. They also discuss the changes in e-filing, covering the difference between 1099-NECs and 1099-MISCs, their uses, and their dues. The conversation revolves around the importance of adhering to tax rules to avoid penalties and the implications of the new 1099k rule for transactions made using cards or payment apps. They also cover the future outlook of this threshold for tax year 2024. Tune in to learn more about the impact of newly-imposed e-filing changes and the recommended practices in choosing provisions for e-file providers![00:00 - 04:22] Understanding 1099s and Their ImportanceChristina highlights the 1099 NEC (Non-Employee Compensation) form, used for reporting payments to freelancers or contractors over $600. The 1099 Miscellaneous form reports various types of payments such as rents and awards.[04:22 - 11:22] Understanding 1099-k and Its ImplicationsChristina discusses the process of filing 1099 forms and the complexities involved.Historically, the 1099-k had a high threshold for reporting ($20,000 and 200 transactions), but the IRS considered lowering this to include smaller transactions. For the 2022 tax year, the IRS planned to lower the 1099-K threshold to $600, regardless of transaction count.However, the IRS postponed this change to the 2023 tax year, and then again delayed it.[11:22 - 18:05] E-filing Changes for 2023 ReturnsChristina discusses the significant e-filing changes for the 2023 tax year.She also shares the challenges of e-filing independently and the advantages of using a provider like Tax Bandits, which specializes in e-filing forms all year round.Key considerations when choosing an e-file provider include their ability to support the volume of forms, provide necessary forms and corrections, offer team coordination features, and deliver strong customer support.[18:05 - 19:59] Conclusion and Final ThoughtsQuotes:"The e-file threshold has been reduced from 250 forms to 10 forms... It's a huge change, it's a big reduction and it's going to affect a lot of businesses, even the smallest businesses."  - Christina Wright"E-filing... makes everything easier and it's cost-effective. It's not something that's going to break the bank."- Mike Jesowshek, CPAConnect with Christina Wright!Email: christina@spanenterprises.comTaxBandits: https://www.taxbandits.com ______Podcast Host: Mike Jesowshek, CPA - Founder and Host of Small Business Tax Savings PodcastJoin TaxElm: https://taxelm.com/IncSight Packages (Full-Service): https://incsight.net/pricing/Book an Initial Consultation (IncSight): https://app.simplymeet.me/o/incsight/sale-------Podcast Website: https://www.TaxSavingsPodcast.comFacebook Group:

Get ready for tax season 2024 with tips on gathering important documents, understanding business versus personal returns, and crucial deadlines. Learn the role of bookkeeping in tax prep and the significance of maintaining financial records. Discover the essential tax forms to collect for businesses and individuals, and mark important due dates on your calendar for a stress-free filing process.

Send us a textHow can business owners effectively plan for retirement while managing the growth and operations of their businesses?In this episode, Mike welcomes back Jeremy Keil, a retirement planning expert from Keil Financial Partners, to discuss the importance of retirement planning for business owners. They explore why business owners, whether they're just starting or have been operating for a while, often neglect retirement planning and the possible consequences of doing so. They discuss aspects such as income from businesses, selling businesses, scenarios they have encountered with various business owners, and misconceptions about Health Savings Accounts (HSAs). They also delve into practical steps and strategies that business owners can implement now to save for retirement, such as maximizing HSA and Roth IRA contributions, setting up retirement plans like simple IRAs, SEP IRAs, and 401ks, and taking advantage of age-weighted profit sharing 401ks and after-tax contributions.[00:00 - 07:21] Retirement Planning for Business OwnersJeremy discusses the importance of considering retirement spending, income maximization, and tax minimization for business owners.They address the tendency of business owners to overlook retirement planning, focusing instead on business growth and operations.The common pitfalls for business owners, such as overvaluing their business or failing to create a business model that functions independently of their personal involvement.Jeremy emphasizes the need for business owners to plan for retirement regardless of their current business success.[07:21- 17:00] Health Savings Account and Other Retirement Saving Strategies for Business Jeremy emphasizes the benefits of Health Savings Accounts (HSAs) for maximizing tax advantages in retirement savings.Advice on maximizing HSAs: contribute the maximum amount possible, and pay medical bills out-of-pocket while saving receipts for potential future reimbursement from the HSA.Business owners should consider Roth IRAs, especially if their income is below a certain threshold, highlighting the opportunity for both individual and spousal contributions.He advises starting small with retirement savings, regardless of business size, and gradually increasing contributions over time.Quotes:"Your investments, you have less control over than all the other places that I mentioned. So we want to focus on the things you can control." - Jeremy Keil"When you're saving into your retirement, you want to get the most tax advantage that you can. And the number one best tax advantage you can get in any account is the health savings account." - Jeremy KeilConnect with Jeremy!Website: www.keilfp.com Podcast: Retirement Revealed Podcast______Podcast Host: Mike Jesowshek, CPA - Founder and Host of Small Business Tax Savings PodcastJoin TaxElm: https://taxelm.com/IncSight Packages (Full-Service): https://incsight.net/pricing/Book an Initial Consultation (IncSight): https://app.simplymeet.me/o/incsight/sale-------Podcast Website: https://www.TaxSavingsPodcast.comFacebook Group: https://w

Send us a textDo you want to understand how retirement savings for small business owners work?In this episode, Mike welcomes Steven Jarvis, CPA, the host of the Retirement Tax Podcast. Steven provides insight on saving for retirement, especially for small business owners, and discusses the potential tax advantages. Steven also dives into the difference between pre-tax and Roth contributions, and shares tips for managing changes in tax situations in life events such as loss of a spouse or divorce. Lastly, Steven emphasizes the need to take action based on informed decisions to ensure maximum tax efficiency.[00:00 - 05:10] Retirement Savings StrategiesSteven discusses the importance of retirement planning for entrepreneurs, contrasting it with employee retirement plans.There is a need for realistic expectations of business valuation at retirement.Business owners need to update their retirement plans as their business evolves and grows.[05:10 - 12:22] Financial Planning for Business OwnersSteven emphasizes the need for business owners to start thinking about retirement planning and seeking financial advisors.Business owners face complexities and decision-making challenges regarding retirement plans compared to W-2 employees.Steven explores the differences between pre-tax and Roth contributions, including the impact of future tax rates and personal financial situations on these decisions.The importance of understanding and preparing for the tax implications of inheriting IRAs and the differing rules for spouses and non-spousal beneficiaries is covered.[12:22 - 15:50] Tax Implications of Life-Changing EventsSteven talks about the shift in tax filing status and the need for tax planning after the loss of a spouse.The loss of a spouse affects real estate tax strategies, especially when the spouse is a real estate professional.Steven encourages us to focus on emotional healing before tackling financial adjustments.[15:50 - 17:40] Closing SegmentQuotes:"We need to make great decisions and then figure out the most tax efficient way to do that." - Steven Jarvis, CPA"The more typical experience for small business owners is that they spend their whole life working on this business that is going to always be more valuable to them than it's going to be to someone else." - Steven Jarvis, CPA "The IRS rules have changed, but the paperwork needs to catch up with it." - Steven Jarvis, CPA"Part of the reason we do long-term planning is to address some of life's inevitabilities." - Steven Jarvis, CPAConnect with Steven! LinkedInRetirement Tax Strategies Podcast______Podcast Host: Mike Jesowshek, CPA - Founder and Host of Small Business Tax Savings PodcastJoin TaxElm: https://taxelm.com/IncSight Packages (Full-Service): https://incsight.net/pricing/Book an Initial Consultation (IncSight): https://app.simplymeet.me/o/incsight/sale-------Podcast Website: https://www.TaxSavingsPodcast.comFacebook Group:

Send us a textIn this episode, Mike gives listeners an extensive review of tax-saving strategies for their businesses. Topics include the Augusta rule for tax deductions related to board meetings, the advantages of forming an LLC over a sole proprietorship, the benefits of S Corporations at certain profit levels, and the tax implications of hiring family members. Tune in to learn more![01:24 - 04:08] Combining Family Vacations with Board Meetings for Tax DeductionsMike discusses making a family member a board member/advisor and aligning board meetings with family vacations for tax benefits.[04:08 - 06:41] Choosing the Right Business StructureA new small business owner inquires about the choice between an S Corp and a sole proprietorship for tax purposes.[06:41 - 07:32] Utilizing the Augusta Rule for Partners in BusinessThe Augusta Rule is applicable for business partners renting out their personal residences.[07:32 - 10:47] TaxElm: The Comprehensive Tax Software for All Business OwnersMike details the main features of Taxelm, starting with a tax savings blueprint that provides a roadmap of personalized tax strategies and estimated savings.[10:47 - 13:17] Understanding Business Credit Card RewardsUsing business credit card rewards, like flight miles, for personal use does not constitute a business expenditure and is generally not seen as co-mingling.[13:17 - 15:39] Tax Deductions for Property Remodeling in BusinessThe rental agreement is important in determining who bears the remodeling expenses for tax deduction purposes.[15:39 - 17:07] Optimizing Home Office Deductions for S CorporationsMike discusses the general eligibility for home office deductions and the importance of having an accountable plan in place.[17:07 - 19:10] Maximizing Home Office DeductionsThere is a potential to optimize tax structures by consolidating multiple business activities under a single S corporation.[19:10 - 21:01] Hiring Your Child in Your S CorporationThere is a distinction between hiring a child as a 1099 contractor versus a W-2 employee. [21:01 - 25:52] 1099 Requirements, TaxElm, and Hiring Family Members in an S CorporationMike addresses discusses about the tax treatment of expenses paid to a graphic designer, the number of tax-reducing strategies available in the TaxEelm library, and hiring your own children in an LLC S Corp.Quotes:"Every individual in the country can rent out their personal residence for 14 days or less and pay no income taxes on that income." - Mike Jesowshek, CPA"That cleaning company, which is owned by you or your spouse, would pay your children out of there because it's a sole proprietorship." - Mike Jesowshek, CPA______Podcast Host: Mike Jesowshek, CPA - Founder and Host of Small Business Tax Savings PodcastJoin TaxElm: https://taxelm.com/IncSight Packages (Full-Service): https://incsight.net/pricing/Book an Initial Consultation (IncSight): https://app.simplymeet.me/o/incsight/sale-------Podcast Website: https://www.TaxSavingsPodcast.comFacebook Group:

The podcast discusses proactive tax-saving strategies for business owners, including hiring kids for tax benefits, setting up family management companies, funding Roth IRAs for children, and utilizing health insurance premiums as deductions. It also covers strategies for maximizing deductions, preparing for 1099 season, and the importance of implementing tax-saving strategies before year-end.

Send us a textThe year is finally coming to an end. But are you and your business properly equipped for it?In this episode, Mike shares the tax strategies that should be taken into consideration as the end of the year approaches. He focuses on taxation for small businesses and the use of S Corporations. He also details some information on maximizing deductions and optimizing the benefits of LLC setups, salary considerations, retirement account funding, and board meetings. Mike also offers insights on the value of home office deductions, the importance of reasonable salaries, the benefits of accountable plans, and the 14-day home rental 'Augusta' rule. Get everything ready before 2024 by tuning in![01:17] Understanding and Utilizing S CorporationsWith an S Corporation, you need to take a reasonable salary as the owner of the businessHealth insurance should be taken as a business expense in the business before the deduction can be takenAn accountable plan is a way that you can reimburse yourself for items that you paid for[09:53] Maximizing Deductions and Utilizing Board MeetingsEvery small business owner should have some type of boardThe 14-day home rental rule or the ‘Augusta Rule’[14:02] The 14-Day Home Rental Rule and Retirement AccountsSolo 401k is the best option to put the most toward retirement[17:30] Summary and Final Checklist for Year-End Tax StrategiesThe Time Is NOW To Start Paying Less In Taxes. Join Our Tax Minimization Program (with Stress-Free Bookkeeping Training)! Join Our Tax Minimization Program Today!Key Quotes:"If you're operating as a sole proprietorship and you're starting to see some progress and think an S Corp might be in the future, do some legwork now to get that LLC set up." - Mike Jesowshek, CPA"Every time you're swiping your card, ask yourself: Is there a business purpose for this? Can I back it up? Is it reasonable and necessary in my business to make this purchase?" - Mike Jesowshek, CPA"Every small business owner should have some type of board. It serves as a great opportunity to again get tax deductions for some of those traveling, some of these meals." - Mike Jesowshek, CPA______Podcast Host: Mike Jesowshek, CPA - Founder and Host of Small Business Tax Savings PodcastJoin TaxElm: https://taxelm.com/IncSight Packages (Full-Service): https://incsight.net/pricing/Book an Initial Consultation (IncSight): https://app.simplymeet.me/o/incsight/sale-------Podcast Website: https://www.TaxSavingsPodcast.comFacebook Group: https://www.facebook.com/groups/taxsavings/

Send us a textBefore you know it, 12/31/23 will be gone, and we will be in 2024. In this episode, Mike focuses on year-end tax strategies for businesses. He emphasizes the importance of timely action for implementing various tax-saving measures before the end of the year. Key topics include prepaying expenses, managing income and deductions, using business credit cards for immediate deductions, and considering Roth conversions in low-income years. Mike also discusses strategies for supporting family members in lower tax brackets and making charitable contributions before year-end. Leverage existing tax laws and opportunities to optimize financial outcomes by tuning in![02:11] Prepaying ExpensesIRS regulations contain a safe-harbor rule that allows cash-basis taxpayers to prepay and deduct qualifying expenses up to 12 months in advance without challenge, adjustment, or change by the IRS[03:52] Stop Billing your Customers, Clients, and PatientsCustomers, clients, patients, and insurance companies oftentimes don't pay until billedNot billing customers and patients is a time-tested tax-planning strategy that business owners have used successfully for years[05:30] Buying Office EquipmentBonus depreciation in 2023 is at 80%, but that will be reduced each year[07:40] Use Your Business Credit CardYou get a deduction when that item gets put on that credit cardThe day you charge a purchase to your business or personal credit card is the day you deduct the expense[08:22] Don't Assume You Are Taking Too Many DeductionsIf your business deductions exceed your business income, you have a tax loss for the yearIf you are starting your business, you could very possibly have an NOL[10:11] Convert to a Roth IRAConsider converting your 401(k) or traditional IRA to a Roth IRA, especially if you are in a down income year.[13:34] Charitable ContributionsTo get an advantage for charitable contributions, you need to be taking itemized deductionsThe Time Is NOW To Start Paying Less In Taxes. Join Our Tax Minimization Program (with Stress-Free Bookkeeping Training)! Join Our Tax Minimization Program Today!Key Quotes:"If you're running at a loss, you can carry forward those losses to offset future income." - Mike Jesowshek, CPA"If you know you're going to pay something, rent's a great example, insurance a great example, you're going to need accurate bookkeeping no matter what." - Mike Jesowshek, CPA"Do not buy things you don't need just to get a tax deduction. That is a lose-lose-lose situation." - Mike Jesowshek, CPA______Podcast Host: Mike Jesowshek, CPA - Founder and Host of Small Business Tax Savings PodcastJoin TaxElm: https://taxelm.com/IncSight Packages (Full-Service): https://incsight.net/pricing/Book an Initial Consultation (IncSight): https://app.simplymeet.me/o/incsight/sale-------Podcast Website: https://www.TaxSavingsPodcast.comFacebook Group: https://www.facebook.com/groups/taxsavings/--------To find out more on this topic and many ot

Send us a textYou might think that your business is a low-profit business. But is it?In this episode, Mike Jesowshek discusses vital financial concepts for small business owners, focusing on how businesses are taxed and the importance of understanding profit. He explains that profit is calculated as sales minus expenses and highlights the differences between pass-through entities and C corporations regarding tax implications. The episode also covers owner compensation methods, including owner's draws/distributions and payroll, emphasizing that owner's draws do not reduce business profit and, therefore, do not affect the taxable income.[00:58] What is Profit in Your Business? The idea of a pass-through entityMike Discusses how profit is calculated for small businesses and its importance for taxation[02:04] Pass-Through entityThere is no tax on that entity at the federal levelSole proprietorship or a single member LLC with no S corp election: you're going to file that tax return and business information on Schedule CPartnership: you're going to file that at business activity on a partnership tax return, which is form 1065If you're operating as an S corporation, you're going to have a form 1120S[05:15] How to Pay Yourself in Your BusinessYou can do an owner's draw or distribution, or you can do payrollOwners draw or distribution: Transferring money from your business account to your accountOwner's draw does not reduce the profit of your businessWith a sole proprietorship, a single member LLC that's not an S corporation or a partnership, you are legally not required to pay yourself W2[08:53] How Does Tax Work?You will be taxed on your profit: Sales minus expenses and payrollOwner pay is not an expense!Mike emphasizes the need for accurate bookkeeping and understanding of tax obligations[12:41] Quick RecapThe Time Is NOW To Start Paying Less In Taxes. Join Our Tax Minimization Program (with Stress-Free Bookkeeping Training)! Join Our Tax Minimization Program Today!Key Quotes"Your profit is very simply your sales minus your expenses." - Mike Jesowshek, CPA "Owner's draws or distributions... they do not reduce the profit of your business." - Mike Jesowshek, CPA "You're taxed on the profit of your business... that's going to be sales minus expenses equals profit." - Mike Jesowshek, CPA______Podcast Host: Mike Jesowshek, CPA - Founder and Host of Small Business Tax Savings PodcastJoin TaxElm: https://taxelm.com/IncSight Packages (Full-Service): https://incsight.net/pricing/Book an Initial Consultation (IncSight): https://app.simplymeet.me/o/incsight/sale-------Podcast Website: https://www.TaxSavingsPodcast.comFacebook Group: https://www.facebook.com/groups/taxsavings/--------To find out more on this topic and many others visit our website at www.TaxSavingsPodcast.com. 

Send us a textHiring one's children is an often overlooked but incredibly beneficial strategy. With IRS regulations allowing for business deductions for wages paid to those under 18, this can be an effective pre-tax spending and money-saving opportunity for parents. In this episode, we'll discuss the importance of having proper documentation in place when utilizing this strategy, as well as creative ways to use your child's skills in your business while teaching them valuable lessons in financial management and responsibility. We'll provide resources to help you create documents and templates valid when dealing with the IRS, including a job description, employment agreement, worksheet tracking task/date/hours worked, payment proof, and W-2. Plus, we'll explore how hiring your children can move after-tax spending into pre-tax spending - so don't miss out on this super informative episode![00:27] Hiring Your Kids: Get a Business Deduction and Potentially Pay No TaxHiring your kids is allowed by the IRS and provides benefits that don't apply to other peopleYou get a business deduction, and your child potentially pays no income tax on that incomeYou can pay your child out of a sole proprietorship without having to withhold for social security, Medicare, or federal unemployment taxesYour child can claim the standard deduction of 13,850, and any income over that will be taxed at the lowest bracket[04:23] Things You Need to Know Before Hiring Your ChildThe child must be age seven or older The child must be paid a reasonable rate for the type of work they are doing in your businessTrack time, tasks, and dutiesPay to an account in the child's nameHave a job description, employment agreement, and worksheetMike shares the other benefits of hiring your child[10:32] S Corporation and Non-Direct ChildrenIf you operate as an S Corporation, you need to withhold for social security, Medicare, and federal unemploymentYou can also hire non-child family members but would need to withhold for social security, Medicare, etc.The Time Is NOW To Start Paying Less In Taxes. Join Our Tax Minimization Program (with Stress-Free Bookkeeping Training)! Join Our Tax Minimization Program Today!Key Quotes"I've never found a business where their child couldn't do something for their business. And that's as business owners; we need to start thinking, what can our child be doing for our business?" – Mike Jesowshek, CPA"There's a lot of extra benefits to hiring your children over and above just the tax benefits. Your child's starting to understand working for a living and getting paid, and now they can go buy their things and they start to learn money management." – Mike Jesowshek, CPA______Podcast Host: Mike Jesowshek, CPA - Founder and Host of Small Business Tax Savings PodcastJoin Our Tax Minimization Program: https://www.taxsavingspodcast.com/taxIncSight Packages: https://incsight.net/pricing/Book an Initial Consultation: https://app.simplymeet.me/o/incsight/sale-------Podcast Website: https://www.TaxSavingsPodcast.comFacebook Group: https://www.facebook.com/groups/taxsavings/--------To find out more on this topic and many others visit our website at www.TaxSavingsPodcast.com. You can also give us a call at 844-327-9272 or send your questions to us at: Ask@TaxSavingsPodcast.com