Small Business Tax Savings Podcast

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

Send us a textIt’s been half a decade since we started the Small Business Tax Savings Podcast. In today’s episode, Mike dives into how the podcast has grown and shares an exciting announcement that you don’t want to miss. Our unwavering mission? To help business owners pay the least amount in taxes as legally possible! We're on a mission to reach every small business owner in the U.S., and your support is propelling us closer to that vision. Thank you for being an integral part of our journey.[00:23] Reflecting on Our Journey: 5 Years of the Small Business PodcastThank you for your continuous support over the years!What’s happened to the podcast in the last five years?We’ve made over 270 episodes.More than 900,000 downloads.Apple podcast rating of 4.8 from 185 reviews.13,500 members in the free Facebook group.[04:31] What’s Next? Introducing TaxElm: Your Ultimate Tax ResourceGo to https://taxelm.com for your ultimate resource for eliminating taxes and wealth growth.With features like a custom tax plan, unlimited email access to accountants, live consultations, and bookkeeping analysis, we provide comprehensive support tailored to your unique situation.Tax Savings Blueprint and TrainingUnlimited Messaging w/ AccountantAnnual 1-on-1 Live ConsultationAnnual Bookkeeping AnalysisMonthly Group Webinars and TrainingPartner Directory and Discounts[08:46] How Can You Help Us?Leave Us a Review!On Apple Podcasts or wherever you may listen to us.Follow Us/Subscribe On Social Media FacebookTwitterInstagramYouTubeLinkedInTell Family, friends, colleagues, other Business Owners, and continue to tune in every week!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"Our number one goal here is to help business owners pay the least amount in taxes as legally possible." – Mike Jesowshek, CPA“Whether you're just starting a new company or looking to optimize your existing business finances, TaxElm offers the tools and guidance you need." – 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

Discover the crucial differences between independent contractors and employees. Misclassifying workers can lead to severe penalties, making accurate classification essential. Learn how to determine worker status based on control, relationships, and financial aspects. Gain insights into 1099 filings and the importance of meticulous documentation to avoid tax complications. This guide is packed with practical tips to ensure your business stays compliant and informed!

Send us a textEver wondered how an S-Corp's retirement contributions differ from a sole proprietor's? Or why the salary of an S-Corp owner is under scrutiny by the IRS? Dive into today's episode as Mike answers the questions you submitted! We dive into the intricacies of S-Corp tax strategies, answer questions about ad spends and late S-Corp conversions, and delve into the practicality of hiring children in business. Plus, get tips on navigating errors in transactions and staying ahead with the latest in tax planning. [01:12] Insights on S-Corps, LLCs, and Retirement PlanningAs an S-Corp owner with a SIMPLE IRA and $200,000 income, is the 3% match on just the W2 or the total?As a sole proprietor, should I get an EIN to pay my 16-year-old for minimal work?As a multi-member LLC, can we claim our client's ad spend as an expense for tax categorization?Since it's already late in the year, can I still convert my LLC into an S Corp? Or is that an audit red flag?[11:38] Tax Implications for Home-Based Work, S Corp Salaries, and Business LossesIf I work partly from home and have an external business location, can adding a home addition be tax-deductible?What are the implications of not taking a reasonable S Corp salary and skipping payroll for two years?My business has lost money for the past three years, but things are looking to turn around this year. Can I use those prior losses, or are they gone?[17:24] Questions on 1099 Mechanics, Hiring Minors, and Maximizing S Corp DeductionsIs anyone knowledgeable about the 1099 for mechanics? I've received mixed information and am seeking clarity. Can it be done without complications?I run an S Corp landscaping business and want to hire my children, aged 8 and 10. How can I make sure I'm following all the proper procedures?A third-year California real estate agent operating as an S corp LLC expects $250k in commissions with $150k pass-through profit. How can they maximize deductions and reduce taxes?[22:17] Navigating 1040 ES Payments and Initial Capital Contributions on 1120-SSomeone with an LLC taxed as an S corp mistakenly paid 1040 ES taxes from their business account. Can this be categorized as an owner's draw?LLC (taxed as S-Corp). The owner paid $2500 to the business account on the first day. Where do I need to put this amount on the 1120-S?[24:20] Final ThoughtsThe Time Is NOW To Start Paying Less In Taxes.  Join Our Tax Minimization Program Today!Key Quotes“When we look at retirement plans, look at two things. Who are we looking to take care of? And there can be multiple choices. Is it the business owner or is it their employees or both? And then what is the purpose of the plan?"– Mike Jesowshek, CPA“Now is the opportunity if you have not started tax planning yet or if you have not completed the implementation of the tax strategies that we talk about every single week on the podcast here. Now is the time to take action." – 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 questi

Send us a textHow can your health expenses actually put money back in your pocket come tax season? We take a deep dive into a topic many of us often shy away from; Health. Today's episode is about how health intersects with your wallet. Specifically, how you can leverage health-related expenses to save on your taxes. We dive into self-employed health insurance, tax strategies for high medical costs, employee health options, and health savings accounts. Whether you're self-employed, running an S corporation, or simply an individual trying to navigate the complex landscape of health-related deductions, today's episode promises insights that could potentially save you money!Don’t Forget! As part of our Tax Minimization Program, we have a full section on how to go about Health Related Tax Deductions [00:25] Determining the Health Insurance Deduction Based on Your BusinessDifferences between health insurance and medical sharing plans.Sole Proprietor or Single Member LLCS Corporation OwnerIf you have non-owner employees and provide health insurance benefits, you will get a deduction for your costs for them too[06:03] Business Owners With No Employees + High Medical CostsUtilize a Section 105 Plan to turn personal medical expenses into a business deduction.[09:05] Health Benefit Options Available For Small Businesses With Employees Check our blog What Health Benefit Options are Available for Small Businesses With Employees?Options available: Group Health InsuranceIncrease Wages to Cover Costs (Taxable)Setup an HRA or QSEHRAFor small businesses with 25 or fewer employees, we recommend the QSEHRA option[12:54] What Is An HSA and How Do They Work?Read our article diving into the HSA: What Is An HSA and How Do They Work?You get a tax deduction for the funds you contribute into an HSA.Withdrawals are tax-free if used for qualified medical expenses.Interest or earnings within the HSA are NOT taxed.[18:45] What Is An HSA and How Do They Work?As year-end approaches, our goal is to guide you through strategies to ensure you pay the least amount in taxes for 2023 legally!Start planning and implementing now to get deductions in 2023.Key Quotes“I recommend everybody, business owner or not, if you have a high deductible health plan and you qualify, you should be maxing out a health savings account in HSA." – Mike Jesowshek, CPA“We have a lot of S Corp owners that don't think about this. They skip this process and just try to take it out on Schedule 1. The IRS could come back and disallow that.’ – Mike Jesowshek, CPA“When I first started my business, it was tough to bring on employees because I didn't know how to handle the health insurance piece. I always thought it was complex, and super expensive. I learned about this idea of a QSEHRA, which is a great option where I didn't have to worry about a group plan.” – Mike Jesowshek, CPA“I would hate to see small business owners avoiding growing their business or avoiding bringing on employees for the fact of health insurance when there is an option that is relatively easy, not as complex, and potentially could save you some money as well.” – Mike Jesowshek, CPA______Podcast Host: Mike Jesowshek, CPA - Founder

Send us a textHow should you reimburse yourself for business expenses? The truth is the answer will depend on what kind of business you have. In this episode, Mike dives into reimbursing oneself for business-related costs and introduces an accountable plan; What is it and why you might need it? He also covers the four major requirements for this plan to ensure the IRS will accept reimbursements as legitimate. This episode is a must-listen for business owners aiming to navigate the often tricky terrain of personal and business expense separation! [00:25] Reimbursing Yourself As a Sole Proprietor or Single Member LLCHow you reimburse yourself depends on how your business is organized.As a sole proprietor or single-member LLC, you simply take the deduction for thebusiness portion of an expense on your Schedule C when filing your taxes.For mileage or home office expenses, report them on Schedule C. For others, like an 80% business-used cell phone, add them to Schedule C or transfer the cost from business to personal account and claim it.[03:45] Reimbursing Yourself As A S-Corporation or C-CorporationRemember:Operating as an S-Corp means you’re an employee of the corporation. The IRS requires you to have an "Accountable Plan" in place.When you pay an employee, you pay them wages which are subject to both employment and income taxes. With a reimbursement we want to ensure employees (including you) do not get hit with taxes on reimbursements.An Accountable Plan lets owners and employees submit expenses for business reimbursement without it being taxable income. [05:36] How to Set Up An Accountable Plan A written accountable plan is advised for clarity and ease during audits. It must adhere to four key principles:Business ConnectionSubstantiationNo Excess PaymentTimelinessAs part of our Tax Minimization Program we have a full section on the Accountable Plan and we discuss how to: 1. Adopt a Written Reimbursement Policy (Accountable Plan)2. Create an Accountable Plan Template / Expense Report 3. Make the Reimbursement Payment Some common accountable plan expenses include home office, personal automobile usage, office expenses, travel, parking/tolls, business meals, tools, dues, licenses, cell phone/internet, and training.[12:30] Closing SegmentMake sure you set up and use the reimbursement system before year-end for timely expense recording!Key Quotes“How we reimburse ourself is going to depend on how our business is organized.” – Mike Jesowshek, CPA“An accountable plan is just a fancy word for reimbursement policy…it’s a tool to make sure that reimbursement is being done according to law and that the IRS will accept it." – Mike Jesowshek, CPAPodcast 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

Discover the pros and cons of business-owned versus personally-owned vehicles. Learn about the importance of documenting business use for IRS compliance. Get tips on calculating business use percentage and deducting vehicle expenses. Explore factors to consider when buying or leasing a vehicle for business. Maximize tax savings with vehicle deductions like mileage, maintenance, and depreciation.

Learn how to maximize tax savings through depreciation strategies for small businesses. Discover the benefits of regular, bonus, and section 179 depreciation methods. Find out when depreciation starts and how to handle asset sales. Simplify financial records with a capitalization policy for year-end decisions.

Send us a textHow can a business utilize the “14-day home rental rule” and get the most out of their business deductions while still taking advantage of tax-free income? In this episode of the Small Business Tax Savings Podcast, Mike discusses the 14-day home rental rule, which allows business owners to shift taxable business income to tax-free personal income by renting out their home for 14 days or less in a calendar year. He explores how this strategy can be beneficial for businesses that need to host events and meetings for employees and clients, as it allows them to deduct the rental rate from their tax return.Mike covers the details of how to make use of this tax code, including the need to document rental activity, setting a reasonable rental rate, and issuing 1099s if payments exceed #600.Tune in now and listen as Mike shares how to utilize this strategy and get the most out of their business deductions while still taking advantage of tax-free income![00:24] Discover How The Augusta Rule Can Help You Shift Your BusinessToday’s topic is, “Your Guide to 14-Day Tax-Free Home Rentals”Mike discusses how this rule allows one to potentially shift taxable business income to tax-free personal income[04:40] Take Advantage Of The 14-Daay Home Rental RuleBusiness must be a separate legal entity to take advantage of this strategyNeed to have a valid business reason for rentalHome office deduction can still be taken on top of the 14-day home rentalDetermine a reasonable rental rate and have backup proof[08:34] Utilize The 14-Day Home Rental Rule For Tax DeductionsHave a lease agreement to button up the strategyMake a payment from a business account to the personal accountProcess 1099 from business to personal and zero it out on personal tax returnUtilizing the 14-day home rental rule can be used as a tax deduction[14:09] Closing SegmentMike shares how to utilize the Augusta Rule!  Final WordsKey Quotes“If you want to take advantage of this strategy, there are a few things that you need to know, you need to file, you need to be thinking about. You need to have a valid business reason. It must be 14 days or less in total for the year. And it must be a personal residence.” – 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

Send us a textHow can you save money with the “Kiddie Tax”? In this episode of the Small Business Tax Savings Podcast, Mike discusses strategies for reducing or avoiding the Kiddie Tax. He explains when it applies and what investments can be used to keep unearned income low.Mike provides tips on filing form 8615, investing in Series EE, saving bonds, and more.    Tune in now and listen as Mike shares his goal to ensure you are paying the lowest amount in taxes as legally possible! [00:24] Strategies To Minimize Unearned Income Tax For MinorsToday’s topic is, “How can you take advantage of the Kiddie Tax”What is a “Kiddie Tax”?[01:21] 4 Primary Criteria Of Kiddie TaxPeople were investing in stocks, interest, and dividends in their child’s name to take advantage of lower tax bracketsFour primary criteria for when the kiddie tax comes into playStay below the threshold to avoid Kiddie TaxChoose investments that yield minimal or no dividends[05:36] Minimize Kiddie Tax And Take Advantage Of Investment OpportunitiesUtilize a Section 529 plan for tax-exempt withdrawalsInvest in life insurance products with tax-deferred growthWhere can you apply “Kiddie Tax”?What are ways to avoid the “Kiddie Tax”?[08:02] Closing SegmentMike shares his goal to ensure you are paying the lowest amount in taxes as legally possible!Final Words Key Quotes“Stay below the threshold. Simply put, if the unearned income of your child is under the annual threshold. No “Kiddie Tax” applies, nothing to worry about there.” – 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/tax IncSight 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