Small Business Tax Savings Podcast

Latest Episodes:

Supercharge Your Retirement with These Advanced Plan Options Jul 03, 2024

Show notes

Are you maximizing your current retirement plans but still looking for more advanced strategies to secure your future and take care of key employees?

In this episode, Mike Jesowshek and retirement expert Matt Ruttenberg discuss advanced retirement strategies for business owners who have maximized basic retirement plans. They explore qualified and non-qualified plans, focusing on cash balance plans and deferred compensation plans, which offer significant tax benefits and flexibility. They emphasize the importance of tailoring retirement plans to individual business needs and revenue levels, highlighting the potential for substantial contributions and long-term tax advantages.

[00:00 - 04:41] Introduction and Overview

Mike introduces the topic of advanced retirement strategies and welcomes Matt Ruttenberg.
Matt explains that advanced retirement strategies are not for everyone.
He introduces the concept of layering different retirement plans.

[04:42 - 10:18] Retirement Plan Stack and Qualified vs. Non-Qualified Plans

Matt explains qualified plans, including cash balance plans and their benefits.
He details the cash balance plan, its benefits, and its design for high contributions.
He also introduces non-qualified plans, highlighting deferred compensation plans.
What are the benefits of non-qualified plans for key employees and tax planning?

[10:19 - 17:22] Tax Code 7702 and Practical Considerations and Customization

Matt explains Section 162 plans and the use of life insurance platforms.
What are the benefits of tax code 7702 for long-term tax-deferred growth and tax-free withdrawals?
Retirement plans can be customized based on business needs.

[17:23 - 22:51] Customized Retirement Plans and Non-Qualified Plan Benefits

Matt explains the importance of qualified plan design and customizing retirement plans to fit individual business needs.
Different levels of revenue unlock various plan options.
What are the benefits of non-qualified plans for business owners and key employees?

[22:52 - 26:31] Common Misconceptions

Matt addresses misconceptions about 401K plans.
He shares the importance of understanding plan documents and options.

Direct Quotes:

"It's all about how you get the money out of the company and into these more advanced plan options." - Matt Rutenberg

"Not all 401Ks are created equal. It all comes down to the plan documents and how those are designed." - Matt Rutenberg

"Deferred compensation plans are often referred to as 'golden handcuffs' because they incentivize key employees to stay long-term." - Matt Rutenberg

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Podcast Host: Mike Jesowshek, CPA - Founder and Host of Small Business Tax Savings Podcast

Join TaxElm: https://taxelm.com/

IncSight Packages (Full-Service): https://incsight.net/pricing/

Book an Initial Consultation (IncSight): https://app.simplymeet.me/o/incsight/sale

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Podcast Website: https://www.TaxSavingsPodcast.com

Facebook Group: https://www.facebook.com/groups/taxsavings/

YouTube: https://www.youtube.com

Tax Savings Mid-Year Check: Essential Strategies for Small Businesses Jun 26, 2024

Show notes

Are you making the most of your tax strategies and deductions this year?

In this episode, Mike Jesowshek provides a mid-year tax savings check-in for small business owners. He emphasizes the importance of reviewing tax strategies, implementing them correctly, and maximizing deductions. Key topics include entity structure review, retirement planning, incorporating children into the business, utilizing the Augusta rule, tracking automobile expenses, and keeping bookkeeping up to date. Mike highlights the need for proactive planning

and correct implementation to achieve significant tax savings.

[00:00 - 06:37] Maximizing Deductions and Accountable Plans for S Corporations

Mike Jesowshek emphasizes the importance of assessing and implementing tax strategies.
He shares the importance of setting up an accountable plan for S Corporations.
How do you evaluate the appropriateness of the current structure based on profit levels?

[06:37 - 12:10] Other Tax Strategies and Correct Implementation

Mike discusses the importance of setting up and funding retirement accounts.
He highlights the importance of associating business purposes with travel to gain deductions.
He also emphasizes the need for correct implementation of tax strategies.
Year-end rush and errors can be avoided through regular bookkeeping.

[12:10 - 20:51] Tax Payments and the Importance of Bookkeeping

Mike reminds the listeners to keep up with estimated tax payments and proper documentation.
Benefits of regular bookkeeping: better tax planning, accurate estimated tax payments, and reduced errors.

Direct Quotes:

"If you're swiping a card, let's see if we can find a business purpose for this." - Mike Jesowshek, CPA

"Correct implementation is key. You can take a completely legal strategy and make it illegal by incorrect implementation." - Mike Jesowshek, CPA

"Bookkeeping is the backbone of your business. It's not just for tax purposes."

"Learning's great, but Implementation saves taxes." - Mike Jesowshek, CPA

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Podcast Host: Mike Jesowshek, CPA - Founder and Host of Small Business Tax Savings Podcast

Join TaxElm: https://taxelm.com/

IncSight Packages (Full-Service): https://incsight.net/pricing/

Book an Initial Consultation (IncSight): https://app.simplymeet.me/o/incsight/sale

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Podcast Website: https://www.TaxSavingsPodcast.com

Facebook Group: https://www.facebook.com/groups/taxsavings/

YouTube: https://www.youtube.com

Debunking Common Myths About Employing Your Children! Jun 19, 2024

Show notes

Ever wondered how hiring your kids in your business could save you money and teach them invaluable life lessons?

In this episode, Mike Jesowshek addresses common myths about hiring your children in your business. He outlines the potential tax benefits, the necessary legal steps, and the educational value for the children involved. Mike emphasizes that proper implementation and documentation are key to ensuring the strategy's legality and effectiveness. He also discusses the benefits of setting up a family management company and the possibility of hiring older children as 1099 contractors.

[00:00 - 04:45] Introduction

Mike discusses the strategy of hiring children, focusing on tax benefits, and moving after-tax spending to pre-tax spending.
He gives an overview of legal requirements, such as not withholding FICA taxes if the business is a sole proprietorship or partnership, and age considerations.
It is important to pay children a reasonable wage for actual work performed and the necessity of proper documentation.

[04:45 - 13:07] Myths about Hiring Children and S Corporation Considerations

Mike debunks myths such as hiring children being illegal or a form of tax evasion, and the importance of proper implementation.
He discusses the benefits of teaching children about work ethics and preparing them for future roles in the business.
What are the differences and additional requirements when hiring children under an S corporation?

[13:07 - 23:14] Hiring Children Over 18 and Finding Suitable Work Them

Mike explores the strategy for children over 18, including hiring them as W2 employees or 1099 contractors.
He addresses the concerns about finding appropriate tasks for children in the business and provides examples.

Direct Quotes:

"Hiring your children is legal, and it's not a form of tax evasion." - Mike Jesowshek, CPA

"When we hire our children at a young age, we're teaching them the invaluable lesson of working for a living." - Mike Jesowshek, CPA

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Podcast Host: Mike Jesowshek, CPA - Founder and Host of Small Business Tax Savings Podcast

Join TaxElm: https://taxelm.com/

IncSight Packages (Full-Service): https://incsight.net/pricing/

Book an Initial Consultation (IncSight): https://app.simplymeet.me/o/incsight/sale

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Podcast Website: https://www.TaxSavingsPodcast.com

Facebook Group: https://www.facebook.com/groups/taxsavings/

YouTube: https://www.youtube.com/@TaxSavings

Listener Q&A with Mike Jesowshek CPA Jun 12, 2024

Show notes

Ever wondered if you can retroactively claim depreciation on a rental property or how to effectively structure multiple business entities for tax benefits?

In this episode, Mike answers various listener questions related to tax strategies for small business owners. He covers topics including retroactive depreciation for rental properties, structuring multiple business entities, handling business-related vehicles, quarterly estimated tax payments, charitable contributions, hiring spouses, and the benefits of S corporations. He also provides detailed advice, including potential pitfalls and alternative strategies to optimize tax savings and compliance.

[00:00 - 05:33] Retroactive Depreciation and Structuring Multiple Businesses

Katy asks about claiming depreciation on a rental property retroactively.
Jeff inquires about setting up a new division within an existing business.

[05:33 - 10:11] Business Vehicles, Quarterly Estimated Tax Payments, and Education Expenses

Julia asks about transferring a personal vehicle to a business.
Gigi questions whether quarterly estimated tax payments need to be equal.
Curtis asks about deducting tuition, books, and commuting costs for his daughter.

[10:11 - 16:19] Charitable Contributions, Hiring a Spouse, and COGS

Tony inquires about the deductibility of charitable contributions.
Scott asks about hiring his spouse for clerical work in his financial advisory business.
Laurie asks about handling tax deductions for unsold inventory.

[16:20 - 21:16] Payroll Taxes for Spouses and S Corporation vs. Sole Proprietorship

Jasper asks about the benefits of hiring a spouse who works as a real estate professional.
Angie and an anonymous Facebook group member ask about the benefits of filing as an S corporation.

[21:16 - 25:15] Closing Remarks

Direct Quotes:

"The problem with charitable contributions is that they're an itemized deduction now, and a lot of people no longer take itemized deductions because the standard deduction is much higher." - Mike Jesowshek, CPA

"99 percent of the time, the S corporation plays out as a better option if you're making $50,000 or more per year." - Mike Jesowshek, CPA

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Podcast Host: Mike Jesowshek, CPA - Founder and Host of Small Business Tax Savings Podcast

Join TaxElm: https://taxelm.com/

IncSight Packages (Full-Service): https://incsight.net/pricing/

Book an Initial Consultation (IncSight): https://app.simplymeet.me/o/incsight/sale

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Podcast Website: https://www.TaxSavingsPodcast.com

Facebook Group: https://www.facebook.com/groups/taxsavings/

YouTube: https://www.youtube.com/@TaxSavings

Understanding the Qualified Business Income Deduction for Small Business Owners Jun 05, 2024

Show notes

Are you maximizing your tax savings with the QBI deduction?

In this episode, Mike delves into the intricacies of the Qualified Business Income (QBI) deduction, also known as the Section 199A deduction, which was part of the Tax Cuts and Jobs Act. He explains the basic rules and income thresholds, discusses which types of income qualify, and provides details on how to calculate the deduction. Additionally, he addresses the expiration of the QBI deduction after 2025 and clarifies that the deduction is taken on personal tax returns, not business returns.

Discover the key rules and strategies to ensure you're not leaving money on the table by tuning in!

[00:00 - 05:21] Introduction to QBI Deduction

Mike gives an overview of the QBI deduction and its origin in the Tax Cuts and Jobs Act.
General rule: Deduct up to 20% of qualified business income.
Types of businesses that qualify: sole proprietorships, LLCs, S corporations, and partnerships.

[05:22 - 10:10] Non-Qualifying Income and Income Thresholds

Mike explains the income types that do not qualify for QBI: investment income, wage income, and income from C corporations.
Income thresholds for 2024: $191,950 for singles and $383,900 for married couples.
Calculation changes for those above income thresholds.

[10:11 - 15:00] Specified Service Trade or Business (SSTB)

Mike defines SSTBs and gives examples such as healthcare, law, financial services, athletics, performing arts, accountants, and consultants.

[15:01 - 20:20] Calculation Examples

Mike shares step-by-step examples of calculating the QBI deduction below and above income thresholds.
What is the Impact of W-2 wages and qualified property on the deduction?

[20:21 - 23:03] Conclusion and Resources

The QBI deduction is taken on personal tax returns.
The expiration of the QBI deduction is after 2025 unless extended by Congress.

Direct Quotes:

"If you have sole proprietorship income, LLC income, S corporation income, partnership income, those are all the types of income that would qualify for the QBI deduction." - Mike Jesowshek, CPA

"The QBI deduction is taken on your tax return, not your business tax return."- Mike Jesowshek, CPA

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Podcast Host: Mike Jesowshek, CPA - Founder and Host of Small Business Tax Savings Podcast

Join TaxElm: https://taxelm.com/

IncSight Packages (Full-Service): https://incsight.net/pricing/

Book an Initial Consultation (IncSight): https://app.simplymeet.me/o/incsight/sale

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Podcast Website: https://www.TaxSavingsPodcast.com

Facebook Group: https://www.facebook.com/groups/taxsavings/

YouTube: https://www.youtube.com/@TaxSavings

Can Small Business Owners Write Off Gym Memberships on Taxes? [2024] May 29, 2024

Show notes

Have you ever wondered if your business can deduct the cost of an on-site gym?

In this episode, Mike focuses on the tax deductibility of gym memberships and on-premises athletic facilities for small businesses. He clarifies that personal gym memberships are not deductible, with rare exceptions for fitness instructors. However, gyms or athletic facilities located on business premises can be deductible if they primarily serve rank-and-file employees, not owners or highly compensated employees. He also provides detailed guidelines and examples to help business owners understand and comply with IRS rules for these deductions.

Discover the rules and exceptions by tuning in!

[00:00 - 05:10] Gym Membership Deductions and On-Premises Athletic Facilities

Mike discusses the non-deductibility of personal gym memberships.
It is a rare exception for fitness instructors using gyms as their business location.
To qualify to be deductible, facilities must primarily serve rank-and-file employees.
Highly compensated employees are employees who earn $155,000 or more in 2024.

[05:10 - 11:30] Examples and Case Studies

Example 1: Gym usage by owners and highly compensated employees vs. rank-and-file employees.
Example 2: Single owner and one rank-and-file employee using the gym.
Example 3: Owner and family members using the gym exclusively.
Mike shares the importance of using a sign-in sheet or key card system for tracking gym usage.

[11:30 - 15:45] Conclusion and Additional Resources

Direct Quote:

"No business allowable business deduction for personal expense, which would be a gym membership, but there are some rare circumstances on where a gym membership might be acceptable." - Mike Jesowshek, CPA

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Podcast Host: Mike Jesowshek, CPA - Founder and Host of Small Business Tax Savings Podcast

Join TaxElm: https://taxelm.com/

IncSight Packages (Full-Service): https://incsight.net/pricing/

Book an Initial Consultation (IncSight): https://app.simplymeet.me/o/incsight/sale

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Podcast Website: https://www.TaxSavingsPodcast.com

Facebook Group: https://www.facebook.com/groups/taxsavings/

YouTube: https://www.youtube.com/@TaxSavings

Unlocking the Secrets of Meal Expense Deductions for Small Businesses in 2024 May 22, 2024

Show notes

Ever wondered how to save on taxes with your business meal expenses?

In this episode, Mike Jesowshek discusses the ins and outs of meal expense deductions for small business owners. He explains how these deductions can turn after-tax spending into pre-tax spending and outlines the criteria for deductibility. Mike emphasizes the importance of detailed record-keeping and highlights various scenarios where meal expenses can be deducted. He also touches on the differentiation between meal and entertainment expenses and mentions strategies to maximize deductions while cautioning against excessive claims that could raise red flags with the IRS.

Discover practical tips by tuning in!

[00:00 - 03:38] Introduction and Basics of Meal Deductions

Mike Jesowshek discusses basic IRS rules: food and beverage costs must be ordinary, necessary, and business-related to be deductible.
Mike explains pre-tax spending versus after-tax spending.
It is possible to convert a family dinner into a business expense by making it a board

meeting.

[03:39 - 09:08] Types of Deductible Meal Expenses

Dining with others (clients, staff, vendors) is 50% deductible.
Solo meals when traveling for business are also 50% deductible.
Meals provided at company events or marketing presentations are 100% deductible.
Company parties are 100% deductible if the majority of attendees are non-tainted employees.
Entertainment expenses are not deductible.
Meals associated with entertainment, like a baseball game, are 50% deductible if separated on the invoice.

[09:09 - 13:31] Detailed Record-Keeping, Strategies, and Pitfalls

Mike shares the importance of writing details directly on receipts (who, what, where, when, why).
He gives a warning against excessive meal expense claims to avoid IRS red flags.

[13:32 - 17:02] Recap and Additional Resources

Direct Quotes:

"Meals are a great opportunity to turn after-tax spending into pre-tax spending." - Mike Jesowshek

"Keep detailed records. Write directly on the receipt who you met with, the purpose, and snap a photo for your files." - Mike Jesowshek

"Don't get greedy. Make sure you're smart with it. The IRS allowed us to move after-tax spending into pre-tax spending." - Mike Jesowshek

"Even though you might be having lunch with someone you consider non-business related, if you're talking business, you can often tie that to a business purpose." - Mike Jesowshek

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Podcast Host: Mike Jesowshek, CPA - Founder and Host of Small Business Tax Savings Podcast

Join TaxElm: https://taxelm.com/

IncSight Packages (Full-Service): https://incsight.net/pricing/

Book an Initial Consultation (IncSight): https://app.simplymeet.me/o/incsight/sale

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Podcast Website: https://www.TaxSavingsPodcast.com

Facebook Group: https://www.facebook.com/groups/taxsavings/

YouTube: https://www.youtube.com/@TaxSavings

Top Small Business Tax Deductions: How to MAXIMIZE Savings May 15, 2024

Show notes

Have you ever wondered how to turn your everyday expenses into legitimate business deductions?

Mike Jesowshek discusses strategies for maximizing small business tax deductions, emphasizing the importance of both obvious and non-obvious deductions. He explains that any expense, whether ordinary or necessary for the business, qualifies as a deductible. Mike emphasizes proper documentation and legal compliance to ensure these deductions are valid. He also contrasts pre-tax and after-tax spending, showing how business owners can leverage pre-tax expenses to reduce taxable income. The episode includes practical tips on turning personal expenses into business deductions and stresses the importance of keeping separate business and personal financial accounts to avoid commingling.

Tune into this episode to uncover the strategies that can save your business thousands in taxes each year!

[00:00 - 04:54] Introduction and Basic Deduction Concepts

Mike Jesowshek introduces the topic of maximizing tax deductions for small businesses.
He explains basic deductible expenses like advertising and software purchases.
He emphasizes the correct implementation and documentation to keep deductions legal.

[04:55 - 09:33] Maximizing Deductions and Real-World Applications

Mike talks about converting personal expenses to business deductions.
Pre-tax versus after-tax spending and its impact on taxes.
Mike shares real-life scenarios of converting personal expenses during COVID-19.
It is important to keep receipts and detailed documentation for all business expenses.

[09:34 - 16:45] Effective Documentation and Banking Practices

Avoid commingling of funds and separate business accounts.
Mike outlines strategies for documenting meals and travels as business expenses.
Mike discusses the use of accountable plans to handle business expenses paid personally.
He emphasizes the importance of reimbursements to ensure proper tax records and compliance.

[16:46 - 24:19] Exploring Common Deductions and Episode Wrap-Up

Mike encourages listeners to review the IRS guidelines to understand what qualifies as a deductible expense.
He shares strategies for integrating personal activities with business purposes to optimize tax deductions.

Direct Quotes:

"As a business owner, pre-tax spending allows you to reduce taxable income before it even reaches your pocket." - Mike Jesowshek

"Maximizing deductions isn't just about spending more; it's about spending smarter." - Mike Jesowshek

Resources Mentioned:

Free guide on maximizing deductions available at: www.TaxSavingsPodcast.com/deductions

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Podcast Host: Mike Jesowshek, CPA - Founder and Host of Small Business Tax Savings Podcast

Join TaxElm: https://taxelm.com/

IncSight Packages (Full-Service): https://incsight.net/pricing/

Book an Initial Consultation (IncSight): https://app.simplymeet.me/o/incsight/sale

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Podcast Website: https://www.TaxSavingsPodcast.com

Facebook Group: https://www.facebook.com/groups/taxsavings/

YouTube: https://www.youtube.com/@TaxSavings

Empower Your Team: Choosing the Right Retirement Plan for Your Small Business with Employees May 08, 2024

Show notes

Are you leveraging the latest tax credits to provide the best retirement plans for your employees?

Hosts Mike Jesowshek and guest Matt Ruttenberg discuss retirement plan options for businesses with employees. The conversation highlights various types of retirement plans like SEP IRAs, SIMPLE IRAs, Safe Harbor 401(k)s, and traditional 401(k)s. They explore the benefits of these plans, particularly in light of recent tax credits and laws that make setting up these plans more advantageous. The episode emphasizes the importance of understanding one's business needs and goals to choose the right plan, stressing the consultative approach to retirement planning.

Discover how simple adjustments to your retirement planning could save you thousands in taxes and benefit your entire team by tuning in!

[00:00 - 06:15] Overview of Retirement Plan Options

Mike introduces the topic of retirement plans for businesses with employees.
He encourages listeners to refer to previous episodes for foundational knowledge.
Matt details various retirement plans available, including SIMPLE and SEP IRAs, Safe Harbor, and traditional 401(k) plans.

[06:15 - 14:49] Deep Dive into Plan Features and Selection

Matt explains how businesses can select appropriate plans based on their priorities and business goals.
They discuss the role of tax credits in offsetting the costs of starting retirement plans.

[14:49 - 23:01] Final Thoughts and Listener Q&A

Matt and Mike address common misconceptions about the complexity and cost of setting up retirement plans.
They conclude with advice on consulting professionals to tailor retirement plans to specific business needs.

Direct Quotes:

"The vast amount of retirement plan options available should encourage every business owner to consider what's best for their situation." - Matt Ruttenberg

"Don't be afraid to reach out for help, as the right plan can significantly impact your business's and employees' futures." - Matt Ruttenberg

Connect with Matt Ruttenberg!

LinkedIn: https://www.linkedin.com/in/mattruttenberg/

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Podcast Host: Mike Jesowshek, CPA - Founder and Host of Small Business Tax Savings Podcast

Join TaxElm: https://taxelm.com/

IncSight Packages (Full-Service): https://incsight.net/pricing/

Book an Initial Consultation (IncSight): https://app.simplymeet.me/o/incsight/sale

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Podcast Website: https://www.TaxSavingsPodcast.com

Facebook Group: https://www.facebook.com/groups/taxsavings/

YouTube: https://www.youtube.com/@TaxSavings

Best Retirement Plans for Solo Entrepreneurs: 2024 Guide to Maximizing Savings with No Employees May 01, 2024

Show notes

Are you a solo entrepreneur puzzled by the myriad of retirement planning options?

Mike Jesowshek welcomes back Matt Ruttenberg to discuss retirement plan options for solo entrepreneurs without employees. They highlight various plans like IRAs, SIMPLE IRAs, SEP IRAs, and solo 401(k)s, emphasizing the importance of starting with the desired savings amount to determine the most suitable plan. The episode covers the contribution limits, the benefits of each plan type, and the financial implications of choosing one plan over another, particularly in terms of tax deductions and maximizing retirement savings.

Discover how choosing the right plan can maximize your savings and secure your financial future by tuning in!

[00:00 - 05:48] Exploring Basic Retirement Plan Options, SEP IRAs, and Solo 401(k)s

Mike introduces the topic of retirement plans for solo entrepreneurs.
Matt discusses simple retirement options like individual IRAs and SIMPLE IRAs, highlighting their benefits and contribution limits.
He elaborates on the higher contribution limits of SEP IRAs and the advantages of solo 401(k)s, including their structure and potential for higher savings.

[05:48 - 15:22] Comparison of SEP IRA and Solo 401(k) Contributions and Decision-Making in Retirement Planning

Matt and Mike share a detailed explanation of how contribution limits are calculated based on business type and income.
They discuss the extra benefits of solo 401(k)s, such as catch-up contributions for those over 50.
Choosing the right retirement plan based on the amount one wants to save simplifies the decision-making process.

[15:22 - 20:05] Closing and Resource Mention

Direct Quote:

"So you might have a couple hundred dollars of fees, but you are netting a substantial amount more, going into that solo than you are with the SEP IRA." - Matt Ruttenberg

Connect with Matt Ruttenberg!

LinkedIn: https://www.linkedin.com/in/mattruttenberg/

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Podcast Host: Mike Jesowshek, CPA - Founder and Host of Small Business Tax Savings Podcast

Join 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.com

Facebook Group: https://www.facebook.com/groups/taxsavings/

YouTube: https://www.youtube.com/@TaxSavings