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Are you making the most of year-end tax strategies to reduce your tax liability?

In this episode, Mike Jesowshek, CPA and owner of TaxElm, dives into essential year-end tax planning strategies for business owners, focusing on income timing, deductions, and proactive spending decisions. He explains how understanding current and projected income is key for effective tax planning, particularly for cash basis businesses. Strategies covered include prepaying expenses, delaying receipts, utilizing Roth conversions in low-income years, and taking advantage of family support tax benefits through appreciated stock transfers.

Discover how income timing, deductions, and smart spending choices can save you more as a business owner!

[00:00 - 05:08] Introduction to Tax Planning with Income Projections

• Mike Jesowshek introduces the importance of factoring in current and future income for year-end tax planning.
• He discusses the significance of strategic decisions around spending on necessary equipment.
• Effective tax planning requires knowing this year’s financial standings and projecting for the next year.

[05:08 - 10:47] Strategic Planning with Flow-Through Entities

• Flow-through entities impact tax planning based on business profit.
• Mike introduces the goal of shifting after-tax expenses into pre-tax spending.
• He advises against prepaying in low-income years when expenses may be more beneficial in higher income years.

[10:47 - 16:19] Buying Necessary Equipment for Deduction Optimization

• Mike advises only purchasing necessary equipment and aligning those purchases with high-income years for optimal tax benefits.
• He outlines how credit card spending can secure a deduction this year, even if payment occurs in the next.
• Roth conversions can be a way to maximize future tax-free growth during low-income years.

[16:19 - 19:56] Utilizing Appreciated Stock Gifting to Family Members

• Mike advises on gifting appreciated stock to family members in lower tax brackets instead of cash for tax advantages.
• He discusses limitations with children due to kiddie tax but highlights opportunities with other family members.

[19:56 - 25:19] Strategic Year-End Tax Planning

• Mike recaps key strategies for minimizing taxes legally by year-end.
• He emphasizes the importance of strategic planning and using every deduction opportunity as a business owner.

Direct Quotes:

"We always want to take advantage of what’s available to you." - Mike Jesowshek, CPA

“A Roth account grows tax-free and withdrawals are tax-free—that’s a beautiful thing.” - Mike Jesowshek, CPA

“The IRS loves business owners; they create jobs, employ people, and grow the economy.” - Mike Jesowshek, CPA

Check out this episode’s blog post: What Year End Strategies Are Available to Business Owners

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

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

YouTube: www.TaxSav

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Are you making the most of your tax-saving strategies before the year closes?

In this episode, Mike Jesowshek provides a comprehensive checklist of essential tax strategies to implement before the end of 2024. As a CPA and founder of Tax Helm, he emphasizes maximizing tax deductions, making necessary payments, and properly documenting strategies to avoid IRS issues. Mike covers everything from pre-tax versus after-tax spending and utilizing the Augusta Rule to managing self-employed health insurance and year-end retirement contributions. With a focus on practical application, he also offers advice on planning for business expenses, using credit cards strategically, and the importance of completing necessary documentation, like the BOI report, before December 31st.

Discover practical steps to keep more of your hard-earned income in this essential episode!

[00:00 - 05:10] Pre-Tax vs. After-Tax Spending

• Mike gives a reminder that most tax strategies must be implemented by December 31.
• He explains how business owners can convert personal spending to business expenses.
• Utilize pre-tax spending opportunities for valid business expenses like meals, travel, and more.

[05:11 - 11:45] Travel, Augusta Rule, and Implementing Board Meetings

• Business-focused travel, where the majority of the day is spent on work, can qualify as a deductible business day.
• The Augusta Rule allows homeowners to rent their home tax-free for up to 14 days.
• Mike shares the importance of board meetings for accountability and tax deductions.
• Even solo business owners can benefit from holding board meetings and documenting them.

[11:46 - 19:20] Hiring Your Kids, IRAs, and Health Savings Accounts

• Hiring children allows for tax-free income for children and provides eligibility for Roth IRA contributions.
• HSAs offer tax-deductible contributions and tax-free withdrawals for medical costs.

[19:21 - 230:20] S Corporations and Self-Employed Health Insurance

• Health insurance premiums must be included on W-2s for valid deductions.
• Mike gives a reminder to organize receipts, log business mileage, and complete the BOI report.
• Proper documentation ensures compliance and peace of mind during IRS reviews.

Direct Quotes:

“Let this serve as your final reminder—implement these strategies by December 31st to keep your hard-earned money.” - Mike Jesowshek, CPA

“A valid tax strategy, incorrectly implemented, becomes illegal. Understanding and correct implementation are key.” - Mike Jesowshek, CPA

“Hiring your kids in your business not only provides a tax deduction but allows them to start growing a tax-free retirement account.” - 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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Podcast Website: https://www.TaxSavingsPodcast.com

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

YouTube: www.TaxSavingsTV.com

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Are you overpaying on taxes and missing out on key deductions that could boost your business's bottom line?

In this episode, CPA Mike Jesowshek shares advanced tax strategies that empower business owners to significantly reduce their tax liabilities while building wealth. Mike addresses common challenges business owners face when minimizing taxes and introduces actionable tactics such as the 14-day home rental rule, implementing an accountable plan, and leveraging charitable contributions. With a focus on proper documentation and compliance, Mike provides insights on transforming potential tax burdens into effective deductions. He also presents TaxElm, a tax software tailored for business owners looking to maximize tax savings efficiently and responsibly.

[00:00 - 05:36] Introduction to Advanced Tax Strategies

• Mike introduces his goal to reveal tested tax strategies for saving significant money.
• Reasons for struggles: not knowing where to start, being overwhelmed by complexity, and spending time without professional guidance.
• Strategy #1: The 14-Day Home Rental Rule (Augusta Rule)
• Key steps: establishing a rental reason, finding a reasonable rate, and documenting proof.

[05:36 - 11:14] Strategy #2: Implementing an Accountable Plan

• Mike details how S corporations can set up accountable plans for reimbursements on business expenses like home office use, automobile, and utilities.
• He shares the importance of a written policy and detailed expense reporting for compliance.

[11:14 - 17:42] Strategy #3: Advanced Tax Strategies for High-Income Earners

• For those earning $350,000+, Mike shares insights on leveraging charitable contributions, business investments, and more to offset income.
• Emphasizes correct implementation to avoid potential IRS scrutiny.

[17:42 - 25:45] Short-Term Rental Loophole and Hiring Your Children for Business Deduction

• Short-term rentals (average stay of 7 days or less) are considered non-passive, allowing business owners to offset W-2 or business income.
• Mike shares the guidelines for hiring children aged 7-18 in the business for tax deductions.
• Compliance essentials: setting reasonable pay, tracking work hours, and direct payments.

[25:45 - 29:43] Conclusion and Introduction to TaxElm

• Mike introduces TaxElm, a software designed to help business owners implement these strategies and maximize tax savings.

Direct Quotes:

"These aren’t just theories; they are battle-tested methods that have saved my clients millions in taxes over the years." - Mike Jesowshek, CPA

"The right tax strategies can transform a business’s financial health." - Mike Jesowshek, CPA

"These strategies can take you from being an anxious and overwhelmed business owner to one who walks around with confidence and a sense of control." - 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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Podcast Website: https://www.TaxSavingsPodcast.com

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

YouTube: www.TaxSavingsTV.com