Small Business Tax Savings Podcast

Latest Episodes:

How Can I Maximize Business Deductions and Write-Offs? Nov 09, 2022

Show notes

So many business owners for far too long have been told that they need to go out and buy things in order to lower their taxes. In this episode, we want you to change your way of thinking and maximize deductions and write-offs. We dig deep into concepts you need to know and steps you need to take.

[01:09] Pre Tax vs. After Tax Dollars

After tax dollars: money that you spend after it's been taxed
Pre tax dollars: spending done prior to the money being taxed
- This is spending that you do within your business prior to them being taxed
Strategize on how you can find after tax dollars that can be moved to pre tax dollars

[03:32] What Can You Deduct as a Business Expense?

In your business, you will have ordinary and necessary expenses that you can deduct when filing your taxes
Ordinary expenses: common and accepted expenses in your industry
Necessary expenses: expenses that are helpful and appropriate in operating your small business

[04:57] What Are Examples of Business Expenses?

Here's a list of common business expenses

[06:56] Maximizing Business Deductions and Write-Offs

How can you move spending that you are already doing from after tax spending into pre tax spending by finding a business purpose?
- Go through your personal credit card statement and see if you can find a business purpose to spending that you have already done
- Utilize an accountable plan to reimburse yourself
For every spending, ask yourself, "Is there a business purpose for this?" and if so, run it through the business and get a pre tax deduction for it

[09:27] What Do I Need to Document When Maximizing Deductions?

Talk with your tax professional before acting to ensure it’s valid in your line of business
Have a separate bank account (and credit card) for your business
Keep records and receipts
Don’t be greedy

[13:00] Final Thoughts

Don’t be afraid to take advantage of the tax law the way it's written for you

Key Quote

“We always want to be thinking about how can we move after tax spending, spending that we're already doing, finding a business purpose to it, and move it to pre tax spending.” - Mike Jesowshek

Resources Mentioned

Blog Posts:

The Ultimate List of Business Deductions Free Ebook:

https://www.taxsavingspodcast.com/deductions

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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

How Do I Write Off a Business Vehicle? Nov 02, 2022

Show notes

Using a car for your business comes with expenses but it also has tax deduction benefits. In this episode, we break down everything you need to know before you decide to buy or lease a business vehicle and how you can take a tax write-off and save money.

[02:27] Should I Buy or Lease a Vehicle?

How often do you expect to drive it?
- If you're going to be driving a lot of miles, a lease might not be a good option
How long do you plan to keep it?
- A lease is better if you always want a new vehicle
How much do you want for your monthly payment?
- Lease payments are generally less than a loan

[04:45] Should I Put the Vehicle Under My Personal Name or Business Name?

Find the Business Use Percentage (BUP) = Business Miles / Total Miles
If the vehicle is going to be used for business (>50%), it is recommended to put it in the business name
If the vehicle is going to be used for personal (>50%), it is recommended to put it in your personal name
- S or C Corp: use an accountable plan to reimburse yourself
- Sole Proprietor or Single Member LLC: include the business use on the Schedule C filing

[08:41] How Do I Write Off a Business Vehicle?

Mileage Method: you get a specific tax deduction per mile driven
- If you use the vehicle for business less than 50% of the time, you must use this method
Actual Method: BUP x Total Actual Expense
- If you use the actual expense method, you cannot also use mileage deduction
When disposing of a purchased vehicle, you will have a gain or loss depending on the basis of the vehicle

[13:17] How Does Depreciation of a Business Vehicle Work?

If Gross Vehicle Weight Rating is more than 6,000 pounds: you can write off 100% with bonus depreciation
If GVWR is 6,000 pounds or less: you can write off up to $19,200 in 2022 if you buy it and place it in service before year-end

[16:39] Final Thoughts

Always keep a mileage log and track all of your expenses

Key Quote

“If you're going to have a business vehicle, make sure you record your mileage, track it, do all that extra legwork you need to do to prove the business use of that vehicle.” - Mike Jesowshek

Resources Mentioned

Blog Posts:

Podcast Episode:

https://podcasts.apple.com/us/podcast/accountable-plan-importance-expense-reimbursement/id1377376636?i=1000451160618

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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

What Health Related Tax Strategies Should I Consider for 2022? Oct 26, 2022

Show notes

Health care matters not just for you but also for your business. In this episode, we examine how employers can set up medical plans based on their business structure and what strategies to apply to save on taxes.

[01:28] Self-Employed Health Insurance Deduction

If you're self-employed, you will always get a business deduction for the health insurance costs that you incur
For Sole Proprietorship or Single Member LLC: deduct self-employed health insurance premiums on Schedule 1 of your personal tax return (1040)
For S Corporation Owner:
- Have the S Corp pay for the insurance
- Add it to your W2 payroll as S Corp owner self-employed health insurance. Your payroll provider should know how to handle this.
- Deduct on your personal tax return (Schedule 1)
If you are providing health insurance for non-owner employees, include those on their W2, in Box 12 with code DD

[04:21] Options Available to Business Owners With High Medical Costs

You can utilize a Section 105 plan to turn personal medical expenses into a business deduction and be able to reimburse employees for medical costs incurred

[06:16] Options are Available for Small Businesses With Employees

Some options are: group health insurance, increased wages, HRA or QSEHRA
For small businesses with less than 50 full-time employees that don't offer a group health insurance policy:
- With a QSEHRA, employers reimburse employees tax-free for medical expenses
- You can offer yearly allowances of up to $5,450 for single employees and $11,050 for employees with a family

[10:27] What Is An HSA and How Do They Work?

If you contribute to an HSA, withdrawals are tax-free when used for qualified medical expenses and interest or earnings are NOT taxed
The maximum you can contribute to an HSA for 2022 is $3,650 for self-only or $7,300 for families
An HSA is a great savings vehicle because there is no tax on the interest or gains earned within it

[13:00] Final Thoughts

Start thinking about these health insurance options and be on top of tax planning

Key Quotes

“Taking care of your health is so important, and oftentimes as a busy professional, that's something that gets put to the side. And so there's also tax planning that comes into play when we talk about various aspects of health.” - Mike Jesowshek

“I was afraid to bring employees simply because of this little piece of medical. I was afraid would cost too much. But there are options out there.” - Mike Jesowshek

Resources Mentioned

Blog Posts:

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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

How Can I Utilize a Board Meeting for Tax Savings? Oct 19, 2022

Show notes

Being an entrepreneur can be challenging and having a board of advisors is a great way to get guidance and outside perspective that can positively impact your business. In this episode, we tell you all about its benefits: from tax deductions to personal and professional growth.

[00:58] Tax Advantages of Board Meetings

A board of advisors or advisory board is a group of people appointed to provide advice and counsel for a business
The members of your advisory board could be family members, friends, colleagues, or anyone you want to bring in
Holding regular board meetings can be a tax advantage, as all travel and expenses related to the meetings are deductible except for entertainment expenses
One way to utilize this advantage is to have board meetings at your home, which is known as the Augusta Rule

[04:41] What Documentation Should I Be Recording or Keeping?

The meetings must be ordinary and necessary
Have a record or minutes of the meeting on file to outline what was accomplished and discussed
- Include who attended, location, time spent, agenda items, outcomes, etc.
The more documentation, the better
Keep receipts and store them digitally

[05:53] The Power of Having a Board of Advisors

With a board of advisors, you get insights from others
- Depending on your entity structure and location, you may actually be required to hold the annual meeting
You are held accountable and become motivated to get things done
Board meetings can also help with planning and alignment because you have the opportunity to think about the future of the business
It provides stress relief

[08:29] Final Thoughts

Consult your attorney to know which type of board would be the best for you and how to set it up

Key Quotes

“What better way to not only get a tax deduction but you’re getting your family involved in your business, and they could potentially be better prepared to pass it on in the future to future generations.” - Mike Jesowshek

“If you're having these monthly meetings, it helps keep you accountable. Your board wants to see what was accomplished. They want to see the progress, and this can help move you along.” - Mike Jesowshek

“You can have anybody on your board that you want, as long as you think they're going to be able to provide some great guidance to you and really be a stamping point to help your business out.” - Mike Jesowshek

Resources Mentioned

Blog Posts:

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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

What Do I Need to Maintain My Corporate Entity? Oct 12, 2022

Show notes

On this episode Mike Jesowshek, CPA talks with Attorney Andrew M Ayers about things you need to have in place to maintain your corporate entity.
1) Your Corporate Binder
2) Why Do I Need to Keep Corporate Records?
3) Do I Need to File My Corporate Records with the State?

LINKS FROM THE SHOW

Show Blog: https://www.taxsavingspodcast.com/blog/what-do-i-need-to-maintain-my-corporate-entity

Join Our Tax Minimization Program: https://www.taxsavingspodcast.com/tax
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Podcast Host: Mike Jesowshek, CPA - Founder and Host of Small Business Tax Savings Podcast

Article: https://www.taxsavingspodcast.com/blog/what-do-i-need-to-maintain-my-corporate-entity

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

What Do I Need To Know About 1099-NECs? Oct 05, 2022

Show notes

With January fast approaching, it’s important for business owners to start preparing their 1099-NECs. If you want to stay ahead and get everything in order before the deadline, this episode is for you! We discuss whether or not a transaction needs a 1099, what the process for filing is, and what will happen if you missed filing a 1099.

[01:07] Fast Facts About 1099-NECs

If your business pays a subcontractor or vendor, whether it’s an individual or a company, a total of $600+, you need to request a W9 so you can send them a 1099-NEC
If you received a 1099-NEC as a contractor, you must report this income to the IRS
Be it one-time or accumulative, as long as the total payment is over $600, you need to file a 1099-NEC

[04:05] When It Is NOT Required to File 1099-NECs

Payments to C or S Corporations
Employees
Payments for merchandise, telephone, freight, or storage
Payments to non-U.S. citizens performing work outside of the U.S
Payments made via Credit Card or PayPal

[06:25] 1099-NEC Preparation Made Easy

Step 1 – Collect a W9 from all contractors before you pay
Step 2 – Fill out the 1099-NEC
Step 3 – Send a copy of the 1099-NEC form to the contractor
Step 4 – File a copy of the 1099-NEC with the IRS and State (if required)
For contractors who are non-U.S. citizens - get an accomplished W8-BEN or W8-BEN-E instead

[08:54] Penalties for Failing to File a 1099-NEC

1099-NECs must be filed at the IRS and sent to the recipient by January 31st of the following year
The fine will depend on how late you are

[10:16] Different Types of 1099s

There are over 15 types of 1099 forms that are used for various purposes

[12:30] Final Thoughts

Do that legwork now so you can get on top of the forms needed
Utilize software to make processing and filing easier

Key Quotes

“If you are the one paying the contractor, you are the one that files the 1099-NEC.” - Mike Jesowshek

“Sometimes it's hard to get a W9 from someone after the fact so just ask for it upfront. Again, one rule of thumb before you pay anyone, collect a W9 from them.” - Mike Jesowshek

Resources Mentioned

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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

How Does the Home Office Deduction Work? Sep 28, 2022

Show notes

The home office deduction is a tax deduction almost anyone can take advantage of, especially post-COVID’s work-from-home movement. There's a lot of confusion among business owners thinking that the home office deduction is an IRS red flag, but in this episode, we set the record straight. We talk about this deduction, who can qualify for it, and everything you need to know.

[01:02] What Qualifies As A Home Office?

The home office deduction is not a red flag, as long as you're doing it properly
A home office is used exclusively for business and on a regular basis
It is a principal place of business that is used to meet clients or is used to do administrative or management work

[04:34] How To Calculate the Home Office Deduction

The simplified option: Standard deduction of $5 per square foot of home used for business (maximum 300 square feet)
The actual method: Your BUP multiplied by all the expenses associated with that home

[09:17] Where Do You Claim The Home Office Deduction?

Claiming the deduction will depend on how your business is set up
Check out our blog on the Accountable Plan and why it’s important

[10:40] Final Thoughts on How the Home Office Deduction Works

It’s not an audit risk if you do it properly
To help prove your deduction, keep a log and take photos to record the business use of that home office
Bonus tip: A home office increases the amount of business mileage you can take

Key Quotes

“The home office deduction is not a red flag as long as you're doing it properly. Actually, the home office deduction is something that the majority of business owners should take advantage of.” – Mike Jesowshek

“A home office deduction is not an audit risk as long as you're doing it right. Just don't get greedy. Make sure you document the necessary items to support your deduction.” – Mike Jesowshek

Resources Mentioned

Blog Mentioned - Accountable Plan Importance (Expense Reimbursement): https://www.taxsavingspodcast.com/blog/what-is-an-accountable-plan-and-why-is-it-important-to-my-business
Article: https://www.taxsavingspodcast.com/blog/how-does-the-home-office-deduction-work
Join Our Tax Minimization Program: https://www.taxsavingspodcast.com/tax

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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

What Strategies Are Available To Increase College Financial Aid? Sep 21, 2022

Show notes

On this episode Mike Jesowshek, CPA brings on guest, Jack Wang, to discuss the strategies available to increase college financial aid as part 3 of our mini series around college savings and financial aid.

1) Which of these schools give - and which students get money?
2) What does this all mean?

LINKS FROM THE SHOW

Show Blog: https://www.taxsavingspodcast.com/blog/what-strategies-are-available-to-increase-college-financial-aid

Join Our Tax Minimization Program: https://www.taxsavingspodcast.com/tax
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Podcast Host: Mike Jesowshek, CPA - Founder and Host of Small Business Tax Savings Podcast

Article: https://www.taxsavingspodcast.com/blog/what-strategies-are-available-to-increase-college-financial-aid

Join Our Tax Minimization Program: https://www.taxsavingspodcast.com/tax

IncSight Packages: https://incsight.net/pricing/

What Are The Basics Around Financial Aid For College? What Options Are Available? Sep 14, 2022

Show notes

On this episode Mike Jesowshek, CPA brings on guest, Jack Wang, to discuss the basics around financial aid for college as part 2 of our mini series around college savings and financial aid.

1) What are the types of aid?
2) What are the sources of aid?
3) What year counts for financial aid?
4) What does this all mean?

LINKS FROM THE SHOW

Show Blog: https://www.taxsavingspodcast.com/blog/what-are-the-basics-around-financial-aid-for-college-what-options-are-available

Join Our Tax Minimization Program: https://www.taxsavingspodcast.com/tax
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Podcast Host: Mike Jesowshek, CPA - Founder and Host of Small Business Tax Savings Podcast

Article: https://www.taxsavingspodcast.com/blog/what-are-the-basics-around-financial-aid-for-college-what-options-are-available

Join Our Tax Minimization Program: https://www.taxsavingspodcast.com/tax

IncSight Packages: https://incsight.net/pricing/

What Options Are Available For College Saving? Sep 07, 2022

Show notes

On this episode Mike Jesowshek, CPA brings on guest, Jack Wang, to discuss the options available for college saving as part 1 of our mini series around college savings and financial aid.

LINKS FROM THE SHOW

Show Blog: https://www.taxsavingspodcast.com/blog/what-options-are-available-for-college-saving

Join Our Tax Minimization Program: https://www.taxsavingspodcast.com/tax
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Podcast Host: Mike Jesowshek, CPA - Founder and Host of Small Business Tax Savings Podcast

Article: https://www.taxsavingspodcast.com/blog/what-options-are-available-for-college-saving

Join Our Tax Minimization Program: https://www.taxsavingspodcast.com/tax

IncSight Packages: https://incsight.net/pricing/