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Did you know there are still tax-saving strategies you can implement after the year has ended? 

In the episode, Mike Jesowshek focuses on tax strategies that entrepreneurs and business owners can implement post-year-end to optimize their tax positions. He covered various aspects, including making contributions to retirement plans (both traditional and Roth IRAs, as well as employer contributions to plans like SEP IRAs and solo 401(k)s), the importance of completing bookkeeping to not miss out on potential deductions and maximizing business deductions like home office and automobile expenses. Additionally, Mike highlights the value of health savings accounts as a tax-advantaged tool and the critical deadlines for making contributions or taking deductions to apply for the 2023 tax year.

[00:00 - 05:07] Retirement Tax Strategies After Year-End

• Traditional IRAs or Roth IRAs are standard retirement accounts available to both business owners and non business owners. 
• You can contribute to a Traditional IRA or Roth IRA until your tax filing date or due date (Not to Exceed April 15).
•  You can contribute until your tax filing date including extensions to the employER contribution portions.

[05:07 - 10:27] Tax Strategies After Year-End for Business Owners

• Go through all of your spending for the year with a fine tooth comb to see if there are any deductions related to the business that can be added to the bookkeeping.
• Do not be afraid to take a valid home office deduction.
• Mileage in automobile expenses can be included in tax filing.
• After the tax year has ended, rental property owners are still able to consider conducting a cost segregation study. 

[10:27 - 15:43] Other Tax Strategies

• A Health Savings Account (HSA) is a strategy everyone should be utilizing and maxing out if they qualify and have the funds available to do so.
• You do not get a tax deduction for Coverdell IRA but when you withdraw from it for qualified education expenses, it is tax-free (including any earnings).

Quote:

“Health Savings Accounts are almost like a retirement plan on steroids.” - 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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Expert Danny Wright from Peisner Johnson discusses the intricacies of sales tax and how it applies to business owners. Core concepts are discussed including determining if a business is subject to sales tax, identifying 'nexus' states where sales tax may be applicable, and understanding which products or services are taxable. Danny highlights the impact of accidental non-compliance, discussing the pitfalls of not remitting the sales tax charged to customers. He also notes complications caused by remote workers or drop-shipping in different states and explains the responsibilities under new marketplace facilitator laws. Finally, Danny explains how their firm offers free consultations to help businesses understand their unique responsibilities and potential liabilities.

[00:00 - 09:24] Introduction to Sales Tax for Business Owners

• Danny emphasizes the critical nature of sales tax as a gross receipts tax, which is independent of business profitability. 
• He underlines the significance of setting up tax collection processes and the peace of mind it brings, despite initial administrative costs.
• Three main questions are addressed: What is the sales tax nexus? Is my product or service subject to sales tax? Who is responsible for handling sales tax?

[09:24 - 20:30] The Impact of Sales Tax Nexus on Business Operations

• Sales tax is due based on the 'ship to' address, not where the product is sold or the business has nexus.
• A single small transaction does not automatically trigger nexus unless it exceeds the state's established threshold.
• Sales tax responsibility begins only after reaching the threshold, and states often offer a grace period for businesses to register and start collecting tax.

[20:54 - 33:55] Invoicing and Pricing in Taxation

• Danny discusses the complexity of sales tax, highlighting that a business might have both taxable and non-taxable revenue streams.
• How businesses invoice their customers can affect taxability.
• Businesses with nexus in multiple states may still find that their products are exempt from sales tax everywhere.

Quotes:

"It's super important to pay attention to [sales tax] because it doesn't care about profitability... it really is something that can get you in trouble in a hurry in the future if you don't get an 

"Once you hit [an economic nexus] threshold, that is when your responsibility begins... a lot of the states offer a grace period... that's part of what you can pay attention to when you're reviewing your nexus." - Danny Wright

"If you collect tax from a customer, it's not yours. And never keep it because you're going to be dealing with questions around fraud in the future." - Danny Wright

Connect with Danny!

Email: [email protected]  

Website: https://peisnerjohnson.com 

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

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Are you wondering if filing separately might be the right choice for your tax situation? 

In this episode, Mike Jesowshek discusses various aspects of 'married filing separately' tax status, explaining when this filing status could be advantageous. He primarily mentions scenarios such as a high medical expense situation for one spouse, significant student loan debt based on income for one spouse, or a tax lien on one spouse. Though in general, he believes 'married filing jointly' often provides better tax benefits. Mike also highlights the potential downsides to filing separately, such as higher tax rates and the loss of certain tax benefits.

[00:00 - 04:13] Married Filing Separately: When does it make sense?

• Mike emphasizes that advising clients to file separately is rare, but they want to educate on when it does make sense.
• Key reasons for choosing to file separately:
  • A complete separation of tax liability
  • High medical expenses
  • Income-based student loan payments

[04:13 - 06:29] The Downsides of Married Filing Separately

• A key downside highlighted is higher tax rates for those who file separately, potentially leading to a higher overall tax liability.
• The loss of several tax benefits when filing separately is also possible, including education tax credits, child independent care tax credits, earned income tax credits, and deductions for student loan interest and certain retirement savings contributions.
• Mike also touches on the potential for double taxation in community property states when filing separately, adding complexity and possibly higher tax preparation fees.

[06:29 - 09:10] The Process of Filing Separately

• Each spouse must complete their own tax returns, including their individual income, deductions, and tax bills.
• When filing separately, couples must decide who will claim any dependents.
• If one spouse opts for itemized deductions, the other must also do the same, which can be a disadvantage.
• Mike shares some example situations where filing separately makes more sense.

[09:10 - 15:23] Recap and Final Thoughts

Quotes:

"When you file separately, you're separating yourself from that spouse. So the spouse that doesn't have the tax debt doesn't get their refund necessarily taken away." - Mike Jesowshek, CPA

"Most taxpayers we talk to are far better off filing jointly instead of separately. But there are some specific cases where separately makes more sense." - Mike Jesowshek, CPA

"When you file separately, it doesn't mean that you're having marital issues... We just want to look at what the tax benefit is." - 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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Have you ever wondered how tax planning can significantly reduce your business's tax liability compared to just tax preparation? 

In this episode, Mike discusses the difference between tax planning and tax preparation. Tax preparation is important and required by law. It only involves reporting your business' previous year's activity to the IRS or your state agency. Tax planning, on the other hand, is a strategic activity done throughout the year that can help reduce the amount of tax a business pays. Mike emphasizes that, while tax preparation is mandated by the law, tax planning is crucial for reducing tax liability and increasing business owners' cash flow. He also provides practical approaches on how to implement tax planning, including the importance of continuous learning and strategy implementation throughout the year.

[00:00 - 05:04] Tax Planning vs Tax Preparation

• Mike focuses on the differences between tax planning and tax preparation, especially relevant at the beginning of the year.
• Tax planning is an ongoing process throughout the year, from January to December.
• Mike addresses common concerns and misconceptions about tax planning, emphasizing that it's about legally saving on taxes.

[05:04 - 12:15] The Significance of Tax Planning

• Mike highlights how the government incentivizes business owners through tax strategies and the positive impact of businesses on the economy.
• Saving taxes through planning is not cheating the government; it's making use of legal incentives.
• Not engaging in tax planning is like refusing government-offered benefits.
• Understanding the law and correctly implementing tax strategies ensures legality.
• Mike shares how to start with tax planning, including learning about tax strategies through various resources like podcasts, blogs, and YouTube channels.

[12:15 - 17:58] Resources for Tax Planning

• See the links below!

Quotes:

"Our mission is to help small business owners understand the strategies that are available to them, that they can implement in their business, regardless of your business size." - Mike Jesowshek, CPA

"Tax planning is not just something that we do once in June and then we're done. No, tax planning is something that's going to be constantly evolving." - Mike Jesowshek, CPA

"Learning doesn't save us on taxes. Taking what we've learned and implementing it is what provides us with those tax savings." - 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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What if you discovered that by embracing the new e-filing changes and understanding the nuances of the 1099 NEC, 1099-MISC, and 1099-K forms, you could not only streamline your tax processes but also potentially uncover hidden financial benefits for your business? 

In this episode, Mike welcomes Christina Wright to discuss the IRS 600 1099-k tax rule and its recent postponement. They also discuss the changes in e-filing, covering the difference between 1099-NECs and 1099-MISCs, their uses, and their dues. The conversation revolves around the importance of adhering to tax rules to avoid penalties and the implications of the new 1099k rule for transactions made using cards or payment apps. They also cover the future outlook of this threshold for tax year 2024. 

Tune in to learn more about the impact of newly-imposed e-filing changes and the recommended practices in choosing provisions for e-file providers!

[00:00 - 04:22] Understanding 1099s and Their Importance

• Christina highlights the 1099 NEC (Non-Employee Compensation) form, used for reporting payments to freelancers or contractors over $600. 
• The 1099 Miscellaneous form reports various types of payments such as rents and awards.

[04:22 - 11:22] Understanding 1099-k and Its Implications

• Christina discusses the process of filing 1099 forms and the complexities involved.
• Historically, the 1099-k had a high threshold for reporting ($20,000 and 200 transactions), but the IRS considered lowering this to include smaller transactions. 
• For the 2022 tax year, the IRS planned to lower the 1099-K threshold to $600, regardless of transaction count.
• However, the IRS postponed this change to the 2023 tax year, and then again delayed it.

[11:22 - 18:05] E-filing Changes for 2023 Returns

• Christina discusses the significant e-filing changes for the 2023 tax year.
• She also shares the challenges of e-filing independently and the advantages of using a provider like Tax Bandits, which specializes in e-filing forms all year round.
• Key considerations when choosing an e-file provider include their ability to support the volume of forms, provide necessary forms and corrections, offer team coordination features, and deliver strong customer support.

[18:05 - 19:59] Conclusion and Final Thoughts

Quotes:

"The e-file threshold has been reduced from 250 forms to 10 forms... It's a huge change, it's a big reduction and it's going to affect a lot of businesses, even the smallest businesses."  - Christina Wright

"E-filing... makes everything easier and it's cost-effective. It's not something that's going to break the bank."- Mike Jesowshek, CPA

Connect with Christina Wright!

Email: [email protected]

TaxBandits: https://www.taxbandits.com 

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

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Can you believe we're already stepping into another year, and with it, another tax season, signaling it's time to gear up, get organized, and make this the easiest tax season yet?

In this episode, Mike welcomes us to a fresh year, 2024, and discusses the start of a new tax season. He emphasizes the importance of preparation and provides comprehensive tips for both business owners and individuals on navigating tax season effortlessly. Topics covered include the significance of gathering documents, understanding business versus personal returns, deadlines to mark on the calendar, and the necessity of bookkeeping. He outlines various tax forms and documents one should start collecting for businesses and on a personal level.

[00:00 - 03:51] Wrapping Up 2023

• Mike shares the importance of gathering documents such as receipts, bank statements, and sales.
• What is the difference between business and personal tax returns?

[03:51- 14:19] The Role of Bookkeeping in Tax Preparation

• The Importance of Gathering and Organizing Documents
• Understanding the Personal Side of Tax Preparation

[14:19 - 21:08] Important Tax Filing Due Dates

• January 16, 2024 
• January 31, 2024 
• March 15, 2024 
• April 15, 2024

Quotes:

"Bookkeeping is the backbone to your business and provides so many benefits throughout the year.” - Mike Jesowshek, CPA

"The last thing that we want you to do is to keep pushing off this idea of bookkeeping." - Mike Jesowshek, CPA

"Our goal is to help make this tax season the one that is so easy for you... but it takes some work on your end. You need to put in some effort and you need to get some of these things done as soon as possible." - 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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How can business owners effectively plan for retirement while managing the growth and operations of their businesses?

In this episode, Mike welcomes back Jeremy Keil, a retirement planning expert from Keil Financial Partners, to discuss the importance of retirement planning for business owners. They explore why business owners, whether they're just starting or have been operating for a while, often neglect retirement planning and the possible consequences of doing so. They discuss aspects such as income from businesses, selling businesses, scenarios they have encountered with various business owners, and misconceptions about Health Savings Accounts (HSAs). They also delve into practical steps and strategies that business owners can implement now to save for retirement, such as maximizing HSA and Roth IRA contributions, setting up retirement plans like simple IRAs, SEP IRAs, and 401ks, and taking advantage of age-weighted profit sharing 401ks and after-tax contributions.

[00:00 - 07:21] Retirement Planning for Business Owners

• Jeremy discusses the importance of considering retirement spending, income maximization, and tax minimization for business owners.
• They address the tendency of business owners to overlook retirement planning, focusing instead on business growth and operations.
• The common pitfalls for business owners, such as overvaluing their business or failing to create a business model that functions independently of their personal involvement.
• Jeremy emphasizes the need for business owners to plan for retirement regardless of their current business success.

[07:21- 17:00] Health Savings Account and Other Retirement Saving Strategies for Business 

• Jeremy emphasizes the benefits of Health Savings Accounts (HSAs) for maximizing tax advantages in retirement savings.
• Advice on maximizing HSAs: contribute the maximum amount possible, and pay medical bills out-of-pocket while saving receipts for potential future reimbursement from the HSA.
• Business owners should consider Roth IRAs, especially if their income is below a certain threshold, highlighting the opportunity for both individual and spousal contributions.
• He advises starting small with retirement savings, regardless of business size, and gradually increasing contributions over time.

Quotes:

"Your investments, you have less control over than all the other places that I mentioned. So we want to focus on the things you can control." - Jeremy Keil

"When you're saving into your retirement, you want to get the most tax advantage that you can. And the number one best tax advantage you can get in any account is the health savings account." - Jeremy Keil

Connect with Jeremy!

Website: www.keilfp.com 

Podcast: Retirement Revealed Podcast

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

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Do you want to understand how retirement savings for small business owners work?

In this episode, Mike welcomes Steven Jarvis, CPA, the host of the Retirement Tax Podcast. Steven provides insight on saving for retirement, especially for small business owners, and discusses the potential tax advantages. Steven also dives into the difference between pre-tax and Roth contributions, and shares tips for managing changes in tax situations in life events such as loss of a spouse or divorce. Lastly, Steven emphasizes the need to take action based on informed decisions to ensure maximum tax efficiency.

[00:00 - 05:10] Retirement Savings Strategies

• Steven discusses the importance of retirement planning for entrepreneurs, contrasting it with employee retirement plans.
• There is a need for realistic expectations of business valuation at retirement.
• Business owners need to update their retirement plans as their business evolves and grows.

[05:10 - 12:22] Financial Planning for Business Owners

• Steven emphasizes the need for business owners to start thinking about retirement planning and seeking financial advisors.
• Business owners face complexities and decision-making challenges regarding retirement plans compared to W-2 employees.
• Steven explores the differences between pre-tax and Roth contributions, including the impact of future tax rates and personal financial situations on these decisions.
• The importance of understanding and preparing for the tax implications of inheriting IRAs and the differing rules for spouses and non-spousal beneficiaries is covered.

[12:22 - 15:50] Tax Implications of Life-Changing Events

• Steven talks about the shift in tax filing status and the need for tax planning after the loss of a spouse.
• The loss of a spouse affects real estate tax strategies, especially when the spouse is a real estate professional.
• Steven encourages us to focus on emotional healing before tackling financial adjustments.

[15:50 - 17:40] Closing Segment

Quotes:

"We need to make great decisions and then figure out the most tax efficient way to do that." - Steven Jarvis, CPA

"The more typical experience for small business owners is that they spend their whole life working on this business that is going to always be more valuable to them than it's going to be to someone else." - Steven Jarvis, CPA

 "The IRS rules have changed, but the paperwork needs to catch up with it." - Steven Jarvis, CPA

"Part of the reason we do long-term planning is to address some of life's inevitabilities." - Steven Jarvis, CPA

Connect with Steven! 

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Retirement Tax Strategies Podcast

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

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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/

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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/

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