Small Business Tax Savings Podcast

Send us a textAre you maximizing the potential of your real estate investments through 1031 exchanges and Opportunity Zones?In this podcast, Mike Jesowshek and guest Michael Scherer delve into the intricacies of 1031 exchanges, focusing on various replacement property options, including Delaware Statutory Trusts (DSTs) and Qualified Opportunity Zones. They discuss the advantages of passive investment through DSTs, the strategic importance of planning and consulting with tax advisors, and the potential tax deferral benefits of investing in Opportunity Zones. The conversation emphasizes the need for investors to align their investment choices with their financial goals and the importance of thorough planning.[00:00 - 04:37] Replacement Property Options and Delaware Statutory Trusts (DSTs) in 1031 ExchangesMike Jesowshek introduces the topic and welcomes back expert Michael Scherer to discuss 1031 exchange replacement properties and Opportunity Zones.Michael explains the concept of Delaware Statutory Trusts as a passive investment option for 1031 exchanges.[04:38 - 06:17] Direct Real Estate Investment vs. Passive DST InvestmentMichael compares the differences between active real estate investments and passive DST investments.What are the investor involvement and management responsibilities in different types of investments?[06:18 - 12:59] Strategies for Maximizing Tax Deferral and Qualified Opportunity Zones as an Investment AvenueExploring methods for achieving full tax deferral by combining different investment strategies, like DSTs and direct property purchases.Michael highlights the Importance of strategic planning and advisory collaboration.[12:59 - 19:06] Navigating the Complexity of 1031 Exchanges and Investment OptionsHow to approach 1031 exchanges, including the importance of selecting the right replacement properties?Michael explains the concept of Qualified Opportunity Zones, their benefits, and the tax implications involved.Opportunity Zones can serve as a fallback for failed 1031 exchanges or as a strategic choice for deferring taxes.[19:07 - 22:57] The Importance of Planning and Expert AdviceMichael emphasizes the value of expert advice and the need for early planning in the investment process.Direct Quotes:"Understanding the investor's goals and objectives and working with their tax advisor is critical." - Michael Scherer"It all comes down to planning and understanding what your objectives are." - Michael SchererConnect with Michael!LinkedIn: https://www.linkedin.com/in/michael-scherer-caia-8147504/ Email: levi.smith@rcxcapitalgroup.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: https://www.facebook.com/groups/taxsavings/YouTube: https://www.youtube.com/@TaxSavings 

Send us a textAre you maximizing your real estate investment potential through tax-deferred strategies? Mike Jesowshek and Michael Scherer delve into the intricacies of 1031 exchanges. They explain its purpose, benefits, and the critical role of proper planning and advice from tax advisors. They emphasize the necessity of involving a qualified intermediary and the potential financial advantages, including tax deferral and strategic reinvestment, to maximize wealth building in real estate investment.[00:00 - 04:52] 1031 Exchanges and its Planning and PrerequisitesMike Jesowshek introduces the topic and guest Michael Scherer from RCX Capital Group.They discuss the significance of 1031 exchanges in real estate tax strategy.Key aspects of initiating a 1031 exchange including the role of tax advisors and ownership structure, are discussed.[04:53 -12:22] 1031 Exchange Process, Timelines, and Exploring Replacement Property OptionsMichael explains the strict timelines and procedural steps involved in a 1031 exchange and the importance of investing in like-kind properties for tax deferral. He explores like-kind exchange requirements and potential replacement properties.[12:22 - 16:22] Liquidity and Investment Goals in 1031 ExchangesHow does the liquidity aspect of investments affect 1031 exchange decisions?Investment goals and timelines should align with 1031 exchange strategies.[16:22 - 20:04] Final Steps and the Role of RCX Capital Group in 1031 ExchangeMichael gives an overview of the final steps in the 1031 exchange process, focusing on replacement property identification and closing within set deadlines.He shares the importance of understanding and planning for the financial and legal intricacies of the exchange process.[20:05 - 24:23] Common Mistakes and Wrap-UpMichael outlines common mistakes in 1031 exchanges, emphasizing the need for early planning and professional guidance.Final thoughts on the importance of understanding 1031 exchanges as part of a comprehensive real estate investment strategy.Direct Quotes:"1031 exchange is an exceptional tool for wealth building, but something that you need to plan around." - Michael Scherer"Proper planning is essential. Talk through your options, understand your goals and objectives." - Michael Scherer"One of the most amazing wealth-building tools is section 1031." - Michael SchererConnect with Michael!LinkedIn: https://www.linkedin.com/in/michael-scherer-caia-8147504/ Email: levi.smith@rcxcapitalgroup.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: https://www.facebook.com/groups/taxsavings/YouTube: https://www.youtube.com/@TaxSavi

Send us a textEver wondered how you could significantly reduce your taxable income from real estate investments in just one year?In this episode, Mike Jesowshek introduces Gabriel Florentino from Engineered Tax Services to discuss cost segregation studies, a tax strategy for real estate investors aiming to accelerate depreciation deductions. Gabriel explains the concept and benefits of cost segregation, emphasizing its significant impact on reducing taxable income by identifying and reclassifying property components to shorter depreciable lives. The discussion also covers the importance of understanding accounting terms, the difference between cost segregation and traditional depreciation methods, and the added advantage of bonus depreciation introduced in 2017, which allows for even greater tax savings in the early years of property ownership.[00:00 - 08:37] Cost Segregation StudiesMike introduces Gabriel Florentino to discuss how cost segregation can be a key tax planning strategy for real estate investments.Cost segregation allows for accelerated depreciation, offering significant tax benefits.Gabriel explains cost segregation as a method to write off 25-30% of a real estate asset's purchase price in the first year.[08:38 - 14:36] The Impact of Bonus DepreciationBonus depreciation, starting in 2017, boosts the benefits of cost segregation by allowing immediate depreciation of certain assets.Gabriel highlights the significant tax savings achievable, even as bonus depreciation percentages change over time.[14:37 - 19:52] Practical Examples and Cost Study AnalysisGabriel provides examples demonstrating the financial benefits of cost segregation and addresses the costs associated with conducting a study.Insights into the factors affecting the cost of a cost segregation study, including property type and location.[19:53 - 22:08] Conclusion and Final ThoughtsEmphasis on the value of cost segregation for both active and passive real estate investors.Gabriel mentions the complimentary benefit analysis offered to evaluate the potential benefits of conducting a cost segregation study.Direct Quotes:"Even if it's sunsetting, there is still a huge benefit of doing a cost seg study on a property." - Gabriel Florentino"Cost segregation study is still a strong tool because you're getting the real value of depreciation for a lot of components inside a property." - Gabriel FlorentinoConnect with Gabriel!Email: gflorentino@engineeredtaxservices.com Website: https://engineeredtaxservices.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: https://www.facebook.com/groups/taxsavings/YouTube: https://www.youtube.com/@TaxSavings 

Send us a textCurious about how real estate can help you grow your wealth and save on taxes?In this episode, Mike Jesowshek discusses how real estate can serve as a tool for both wealth-building and tax savings. He emphasizes the concept of depreciation, whereby the cost of a rental property can be deducted over time, and explains how this, along with other operating expenses, can offset rental income. He also delves into strategies for utilizing passive losses to offset ordinary income, such as qualifying as an active real estate investor or a real estate professional. Additionally, he touches on the "short-term rental loophole" and the importance of considering exit strategies when selling real estate investments.[00:00 - 05:21] Introduction and Overview of Real Estate Tax PlanningReal estate serves as a powerful tool for both wealth-building and tax savings.Depreciation allows the gradual deduction of the purchase price of a rental property over time.Operating expenses, including utilities and real estate taxes, can also offset rental income.An active real estate investor status allows for a maximum deduction of $25,000 to offset ordinary income.[04:00 - 13:41] Utilizing Passive Losses and Short-Term Rental LoopholePassive losses from rental properties cannot directly offset ordinary income but can be carried forward.The short-term rental loophole allows losses from short-term rentals to offset ordinary income under certain conditions.[13:41 - 17:09] Considerations for Business Owners in Real EstateBusiness income in real estate is considered active income and requires different tax strategies.An S Corporation can be beneficial for business owners earning over a certain threshold.[17:09 - 25:51] Exit Strategies and ConclusionExiting real estate investments may trigger taxes, but strategies like 1031 exchanges can defer tax liability.Quote:"Don't get into real estate for tax savings. Get into real estate to grow your wealth and then experience the benefit of tax savings that comes with real estate as that cherry on top." - 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/YouTube: https://www.youtube.com/@TaxSavings 

Send us a textAre you worried about filing your tax return on time or paying your tax bill?In this episode, Mike Jesowshek discusses tax extensions and strategies for paying tax bills, addressing common misconceptions and providing practical advice. He clarifies that filing an extension does not increase audit risk and emphasizes the importance of timely filing and payment. Mike outlines options for those who can and cannot afford their tax bills, including installment agreements and offers in compromise. Throughout the discussion, he stresses the significance of proactive tax planning to avoid financial strain in the future.[00:00 - 05:21] Understanding Tax Extensions and Their ImportanceFiling an extension doesn't increase audit risk, can lower chances of audit.The reasons for filing an extension include waiting on documents or incomplete bookkeeping.Extensions extend time to file, not time to pay; taxes are still due on original deadlines.Failure to file penalties is more severe than failure to pay penalties.Make estimated payments with extensions to avoid penalties and interest.[00:05:33 - 00:18:12] Strategies for Paying Tax BillsFor those who can afford tax bills, options include automatic withdrawal, online payments, or credit/debit card payments.For those who can't afford tax bills, filing returns is crucial; failure to file penalties are harsher.The options for payment include borrowing funds, short-term payment plans, or offers in compromise.Installment agreements with the IRS require timely payments to avoid complications.Proactive tax planning and estimated tax payments can prevent future financial strain.Direct Quotes:"Filing an extension is simply an extended time to file your tax return. The taxes are still due on that original due date." - Mike Jesowshek"Extensions extend time to file, not time to pay." - Mike JesowshekResources Mentioned:IRS Direct Pay: https://www.irs.gov/payments/direct-pay ______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/YouTube: https://www.youtube.com/@TaxSavings 

Send us a textEver wondered if your global business ventures could be affecting your U.S. taxes more than you realize? In the podcast episode, Mike Jesowshek delves into the intricacies of foreign income for small business owners, covering essential aspects such as reporting requirements, types of foreign income, tax treaties, exemptions, the foreign earned income exclusion, the foreign tax credit, and compliance with reporting obligations. He emphasizes the importance of U.S. citizens and residents reporting worldwide income on their U.S. tax returns, regardless of where the income is earned. Mike also discusses strategies to mitigate double taxation, such as utilizing tax treaties and claiming foreign tax credits or income exclusions, while underscoring the critical nature of maintaining accurate records and understanding compliance requirements to ensure transparency and adherence to tax laws.[00:00 - 05:00] Introduction to Foreign Income for EntrepreneursMike Jesowshek introduces the topic of foreign income reporting for small business owners.Discussion on the requirement for U.S. citizens and residents to report worldwide income.[05:00 - 10:00] Tax Treaties, Exemptions, and Foreign Earned Income ExclusionExplanation of tax treaties and exemptions to avoid double taxation.Details on the foreign earned income exclusion, including eligibility criteria.[10:00 - 15:18] Compliance and Reporting RequirementsOverview of the compliance and reporting requirements for U.S. taxpayers with foreign income or assets.Explanation of FBAR reporting requirements for individuals with foreign bank accounts or financial interests.Quote:"There might be a credit, there might be some exclusion of it, there might be some exemptions, but the IRS wants to know about it." - 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/YouTube: https://www.youtube.com/@TaxSavings 

Send us a textIn this episode, Mike Jesowshek answers various listener questions regarding tax strategies, S corporation elections, hiring children for tax benefits, and setting up retirement plans for businesses with non-owner employees. The episode emphasizes the importance of structuring businesses correctly to maximize tax savings, including the considerations for S corporation status, late elections for business structures, the benefits of hiring family members, and the intricacies of purchasing a business and tax implications. Mike also discusses the potential of setting up retirement plans for employees as a tax-advantageous move for small businesses.[00:00 - 00:36] Introduction to Q&A Session[00:36 - 10:10] Q&A with Mike Jesowshek, CPA part 1Mike discusses the permanence of S corp elections and the possibility of revoking them.He explains the conditions under which a late S corp election can be made for businesses already in operation.Employing your children in your business for tax advantages has benefits.Mike discusses the tax implications of seller-financed business purchases and the importance of understanding the nature of the purchase (asset vs. stock sale).How the capitalization policy for items under $2,500 affects tax deductions.[10:10 - 23:50] Q&A with Mike Jesowshek, CPA part 2Owning multiple LLCs under one holding company can simplify tax filing and considerations for asset protection.Separating entities based on active participation versus passive income sources, such as rental properties is important.Mike gives an overview of retirement plan options for small businesses and the tax benefits associated with offering them to employees.What is the best setup for businesses operating between California and Florida?Mike’s advice on consolidating tax filings for multiple LLCs under a Wyoming LLC, emphasizes the need for legal advice on asset protection.What about hiring young grandchildren and its tax implications?Setting up a separate LLC for Airbnb or furnished property businesses.What are the tax benefits and options for setting up retirement plans for small business employees?[23:50 - 24:14] Closing SegmentDirect Quotes:"Hiring your kids is potentially a great way where you can get a business deduction and they pay no income taxes on that income, again, potentially." - Mike Jesowshek, CPA"You cannot save taxes by simply learning tax strategies. You save taxes when you learn them and then you implement them." - Mike Jesowshek, CPA"If you're starting a new business, start that business where you're operating. That's going to be the easiest piece." - 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/YouTube: https://www.youtube.com/@TaxSavings 

Discover post-year-end tax strategies for entrepreneurs such as maximizing retirement contributions, business deductions like home office and automobile expenses, and the importance of accurate bookkeeping. Learn about tax-saving opportunities through strategies like cost segregation studies, health savings accounts, and maximizing deductions for 2023 expenses. Get insights on early tax planning, real estate depreciation, and maximizing tax savings for entrepreneurs.

Expert Danny Wright discusses sales tax for business owners, addressing questions about nexus, taxable products/services, and responsibilities. He highlights the consequences of non-compliance and complications due to remote workers and drop-shipping. The importance of consulting a sales tax expert is emphasized.

Curious about filing taxes separately as a couple? Discover when it might actually save you money, like in cases of high medical expenses or income-driven student loan debt. However, beware of the downsides: higher tax rates and the loss of valuable credits could leave you worse off. The discussion highlights the rarity of this choice, emphasizing that 'married filing jointly' often offers greater benefits. Don't miss the insights on navigating the complexities of tax liability!