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

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

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