Small Business Tax Savings Podcast

Latest Episodes:

Listener Q&A with Mike Jesowshek CPA (12/13/2023) Dec 13, 2023

Show notes

In 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 Deductions

Mike 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 Structure

A 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 Business

The Augusta Rule is applicable for business partners renting out their personal residences.

[07:32 - 10:47] TaxElm: The Comprehensive Tax Software for All Business Owners

Mike 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 Rewards

Using 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 Business

The 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 Corporations

Mike 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 Deductions

There 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 Corporation

There 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 Corporation

Mike 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

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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/

Year-End Wrap-Up Part 2: Proactive Tax-Saving Strategies for Business Owners Dec 06, 2023

Show notes

Mike Jesowshek continues his 2-part episode on year-end tax-saving strategies. In this episode, Mike covers specific strategies including hiring your kids for tax benefits, setting up a family management company for S corporations, and funding Roth IRAs for children. He also delves into the advantages of short-term rentals for offsetting income and utilizing health insurance premiums as tax deductions. Additionally, he advises on purchasing necessary business items for depreciation benefits and using a Section 105 plan for high medical expenses.

[02:00] The Strategy of Hiring Your Kids

Roth IRAs are beneficial for your children
Ensure compliance and fairness when hiring your kids
Hiring strategies for kids over 18

[06:30] Understanding State Standard Deductions

Medical expenses and tax deductions
The short-term rental loophole
Maximizing deductions through purchases
If you're in startup mode, make a sale before the end of the year.

[13:38] The Importance of Bookkeeping and Preparing for 1099 Season

Rushing in January or February will make you miss some deductions
If you're paying contractors that qualify and need a 1099 sent to them, you're going to need to start prepping those starting January 1st

[16:09] Recap and Importance of Implementation

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:

"We talk so much about how learning is so key as business owners, as individuals in general, but implementation is just as important." - Mike Jesowshek, CPA

"Hiring your kids, especially those that are under 18 is a great way to get a business deduction and those children potentially pay no income taxes on that income." - Mike Jesowshek, CPA

"If you're self-employed and you're paying for health insurance premiums, it's a tax deduction." - Mike Jesowshek, CPA

"An HSA is one tool that the IRS does not give out too often. You get a tax deduction going into it, there's tax-free growth and tax-free withdrawals." - 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/

Year-End Wrap-Up Part 1: Proactive Tax-Saving Strategies for Business Owners Nov 29, 2023

Show notes

The 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 Corporations

With an S Corporation, you need to take a reasonable salary as the owner of the business
Health insurance should be taken as a business expense in the business before the deduction can be taken
An accountable plan is a way that you can reimburse yourself for items that you paid for

[09:53] Maximizing Deductions and Utilizing Board Meetings

Every small business owner should have some type of board
The 14-day home rental rule or the ‘Augusta Rule’

[14:02] The 14-Day Home Rental Rule and Retirement Accounts

Solo 401k is the best option to put the most toward retirement

[17:30] Summary and Final Checklist for Year-End Tax Strategies

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:

"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

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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/

Expert Tips on Year-End Tax Strategies for Small Business Owners Nov 22, 2023

Show notes

Before 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 Expenses

IRS 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 Patients

Customers, clients, patients, and insurance companies oftentimes don't pay until billed
Not billing customers and patients is a time-tested tax-planning strategy that business owners have used successfully for years

[05:30] Buying Office Equipment

Bonus depreciation in 2023 is at 80%, but that will be reduced each year

[07:40] Use Your Business Credit Card

You get a deduction when that item gets put on that credit card
The 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 Deductions

If your business deductions exceed your business income, you have a tax loss for the year
If you are starting your business, you could very possibly have an NOL

[10:11] Convert to a Roth IRA

Consider converting your 401(k) or traditional IRA to a Roth IRA, especially if you are in a down income year.

[13:34] Charitable Contributions

To get an advantage for charitable contributions, you need to be taking itemized deductions

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:

"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

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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/

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To find out more on this topic and many others visit our website at www.TaxSavingsPodcast.com.

The ABCs of Business Tax: Understanding How Your Entity is Taxed and How to Pay Yourself Nov 15, 2023

Show notes

You 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 entity
Mike Discusses how profit is calculated for small businesses and its importance for taxation

[02:04] Pass-Through entity

There is no tax on that entity at the federal level
Sole proprietorship or a single member LLC with no S corp election: you're going to file that tax return and business information on Schedule C
Partnership: you're going to file that at business activity on a partnership tax return, which is form 1065
If you're operating as an S corporation, you're going to have a form 1120S

[05:15] How to Pay Yourself in Your Business

You can do an owner's draw or distribution, or you can do payroll
Owners draw or distribution: Transferring money from your business account to your account
Owner's draw does not reduce the profit of your business
With 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 payroll
Owner pay is not an expense!
Mike emphasizes the need for accurate bookkeeping and understanding of tax obligations

[12:41] Quick Recap
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

"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

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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/
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To find out more on this topic and many others visit our website at www.TaxSavingsPodcast.com.

The Untold Benefits of Hiring Your Kids in Your Business Nov 08, 2023

Show notes

Hiring 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 Tax

Hiring your kids is allowed by the IRS and provides benefits that don't apply to other people
You get a business deduction, and your child potentially pays no income tax on that income
You can pay your child out of a sole proprietorship without having to withhold for social security, Medicare, or federal unemployment taxes
Your 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 Child

The 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 business
Track time, tasks, and duties
Pay to an account in the child's name
Have a job description, employment agreement, and worksheet
Mike shares the other benefits of hiring your child

[10:32] S Corporation and Non-Direct Children

If you operate as an S Corporation, you need to withhold for social security, Medicare, and federal unemployment
You 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

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

Join 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

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

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

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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

Small Business Tax Savings Podcast - 5 Years in Review Nov 01, 2023

Show notes

It’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 Podcast

Thank 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 Resource

Go 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 Training
- Unlimited Messaging w/ Accountant
- Annual 1-on-1 Live Consultation
- Annual Bookkeeping Analysis
- Monthly Group Webinars and Training
- Partner 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
Tell 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

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

Join 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

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

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

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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

Navigating the Maze of Independent Contractors vs Employees - Critical Insights for Your Business! Oct 25, 2023

Show notes

What’s so important about correctly classifying your workers within your business?

In today's episode, Mike talks about the difference between independent contractors and employees. With the government cracking down on worker misclassification, it's more essential than ever for businesses to accurately identify their workers. Misclassifications can lead to hefty penalties, making it imperative for business owners to understand and adhere strictly to payroll guidelines.

Mike stresses the importance of thorough documentation to ensure smooth 1099 NEC filings at year-end. With the filing deadline on January 31st, this episode aims to give you the knowledge and tools needed for accurate tax reporting!

[01:12] Employee or Independent Contractor: What's the Difference?

It's the employer's duty to determine the correct classification of workers.
While independent contractors receive their full payment without deductions, employees have tax and other withholdings deducted from their earnings.
If classified as a 1099 independent contractor, you are responsible for paying taxes on your business profit.

[06:31] How to Determine an Independent Contractor or Employee

Who controls the work, from specifics to schedules?
The IRS focuses on behavioral, financial, and type of relationship to classify workers.
Whether there's an employment or independent contractor agreement in place can be a clear indicator of worker status.

[14:02] Why Is Proper Classification Important?

Incorrectly classifying a worker can lead to severe financial consequences, including back taxes and penalties.
Just because another business classifies its workers a certain way doesn’t mean it's correct or suitable for your business.
For both independent contractors and employees, having clear agreements in place helps define and solidify the working relationship.

[17:28] How to Avoid 1099 Pitfalls: Year-End Filing Best Practices

It is crucial for businesses to know when and why they need to file a 1099 NEC form.
- Payments totaling $600 or more to an independent contractor within a tax year necessitate this filing.
Actively collect Form W-9 from all contractors regardless of the payment amount to ensure they have all necessary information on hand for potential future 1099 NEC filings.
Take note of situations where a 1099 NEC filing is not required
Start preparing for 1099 NEC filings well before the year-end to ensure a smooth and compliant filing process.

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

"The responsibility of determining an independent contractor or employee comes down to the employer." – Mike Jesowshek, CPA

"If you're classified as a 1099 independent contractor, just know that you're responsible for paying the taxes on any income that you have." – Mike Jesowshek, CPA

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

Join 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

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

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

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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

Listener Q&A with Mike: S-Corp Nuances, Home-Based Tax Strategies, Navigating Complex Deductions and More! Oct 18, 2023

Show notes

Ever 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 Planning

As 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 Losses

If 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 Deductions

Is 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-S

Someone 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 Thoughts

The 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

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

Join 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.com

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

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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

Mastering Tax Strategies for Health Costs: How to Maximize Deductions and Save Big! Oct 11, 2023

Show notes

How 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 Business

Differences between health insurance and medical sharing plans.
Sole Proprietor or Single Member LLC
S Corporation Owner
If 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 Costs

Utilize 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 Insurance
- Increase Wages to Cover Costs (Taxable)
- Setup an HRA or QSEHRA
For 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

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

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