Tax Reduction Podcast
Introducing your host, Boris Musheyev, CPA. In this podcast Boris debunks the tax code by teaching you simple and effective tax strategies, so you can keep the most of what you make. His mission is to help you cut taxes and build wealth using the power of proactive tax strategies. Every episode you will gain a better understanding of how the tax code is designed to be in favor of money-making entrepreneurs like yourself.
🆓 Download FREE PDF: 7 Write-Offs Every S-Corporation Business Owner MUST Know: https://www.7taxwriteoffs.com/?utm_source=podcast&utm_medium=homepage
Tax Reduction Podcast
Episode 19. Top 5 2024 Tax Planning Strategies
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In this podcast, let's dive deep into the art of tax planning, revealing the top five strategies that have helped our clients achieve significant savings. From leveraging S-Corporation structures and understanding reasonable compensation to optimizing retirement planning, and unlocking tax-free cash, we cover it all.
Plus, learn about the power of the Pass-Through Entity Tax (PTET) and the benefits of S-Corp Health Insurance in your tax planning arsenal.
🆓 Download FREE PDF: 7 Write-Offs Every S-Corporation Business Owner MUST Know: https://7taxwriteoffs.com/?el=podcast&htrafficsource=buzzsprout
*Disclaimer This material & presentation content is for informational and educational purposes only. This material and presentation content is designed to provide general information regarding the subject matter covered. It is not intended to serve as legal, tax, or other financial advice related to individual situations. Because each individual’s legal, tax, and financial situation is different, specific advice should be tailored to the particular circumstances. For this reason, you are advised to consult with your attorney, accountant, tax preparer, and/or other advisor regarding your specific situation or your client’s specific situation. The information and all accompanying material are for your use and convenience only.
Tax Planning Strategies for Business Owners
Speaker 1If you're not using tax planning strategies in your profitable business , I can guarantee you right now you are overpaying tens , if not hundreds of thousands of dollars in taxes in your business . I'm going to talk about the five tax planning strategies that saved our clients last year over $40,000 on average per each client . So what if you could take that $40,000 and put it in your pocket , and that is exactly what we're going to talk about . Ready , let's go .
Speaker 2Welcome to the Tax Reduction Podcast for money-making entrepreneurs with Boris Mushaev . Boris has helped entrepreneurs across the United States collectively save millions of dollars in taxes with the power of tax planning and advisory . The only way you , the business owner , can save money on taxes is by using proactive tax strategies , and this podcast is all about saving you money on taxes . Boris will share with you in-depth and easy to understand tax reduction strategies that you can implement in your business within 30 days or less . Let's jump into today's episode .
Speaker 1Let's get started . So , first of all , we're going to talk about what is really tax planning and are you really getting it as a business owner . Then we're going to talk about the five tax planning strategies . All right , that equal $40,735 in tax savings . This number is an average number our clients saved using these exact tax strategies . I'm just going to share everything with you . And , last but not least , how can we implement tax strategies ? Now , I can't go over all five of them , but I put together how to implement one of the strategies that will save you or I should say , save our clients on average , $8,850 . I will take you step by step . Make sure you have your notepad and your pen , because after this , you're going to be calling your accountant . All right , cool , let's get started right now . So what is really tax planning and what's this term that you keep hearing ?
Speaker 1As a matter of fact , tax planning is being taken very seriously by accounting industry , especially by American Institute of Certified Public Accountants , because it has become a big thing . A lot more business owners are now in America and a lot more business owners want to save money on taxes , but the accounting industry is changing . It used to be that there was a lot of tax preparers and there still are a lot of tax preparers , but very , very , very , very , very , very few select accountants will actually help you save money on taxes . Those are called tax advisors . So tax advisors are the one who use tax planning strategies . Using tax planning strategies or having a tax plan , that means being proactive . A lot of people are used to coming to their accountant after the year is over , ready to file their taxes . They get their tax bill and they say is there anything else that could be done ? There's got to be something else . Oh , my accountant is just . He's a knucklehead like I . He couldn't say me anything like that's because you maybe were not using tax planning right . So and you might be like boy , is that some accusation ? Look , you're a profitable business owner . You know it hurts to pay taxes , but you know what hurts the . I can tell this to you as a business owner myself . What hurts the most is that when not knowing right , when you know there's something that can be done but you just don't know how to . You just wish you knew how to . And that is what tax planning is .
Speaker 1Tax planning is really an education by your tax advisor Exactly what can be done to save money on taxes . It is not tax preparation . Tax preparation is literally just getting numbers from you , tax documents , putting the right numbers in the right boxes . But I'll tell you how much I was surprised that even the right numbers are not put in the right boxes , which results in overpaying in taxes . Now , before we talk about five tax planning strategies , I hope you understand what tax planning is . The tax strategies that I'm about to talk to you , that I'm about to tell you about , is something that needs to be done proactively . It is not something all right great , I'll wait until the year is over , then I'll go and do some things on my taxes . Nope , that won't work either . Okay ? So now that we've talked about what is really tax planning , let's talk about the top five tax planning strategies that you can use for 2024 , right after this break .
Speaker 2If you have a tax preparer and you do not have a tax advisor , the only way you can save money on taxes is by using proactive tax planning strategies that only a tax advisor can give you . Boris put together a free PDF for you , the business owner Seven tax write-offs every S-corporation business owner must know . In this PDF , you can find seven tax strategies that you can start using in your business to instantly start saving money on taxes . Click on the link in the description below for a free download .
Speaker 1Welcome back . So let's talk about the five tax planning strategies . So , like I said before , I actually got these numbers savings this is the average savings for each one of these strategies for our clients for last year , okay , which total $40,735 . Just these five tax strategies alone . First of all , entity election .
Speaker 1A lot of business owners may already have an S corporation and I applaud you Great job If it , especially if it is your main operating business . Now some entities don't have an S-corporation and I applaud you Great job , especially if it is your main operating business . Now some entities don't have an S-corporation and they have what's called a limited liability company , an LLC , that is not being taxed as an S-corporation . If you're not being taxed as an S-corporation , you might want to speak to your tax advisor and assess whether S-corporation makes sense to you or not . Because with an S-corporation , you do not pay payroll taxes , which is the social security and Medicare tax and the entire net profit . You only pay it on your salary . Okay , that is an S-corporation . When you have a single member LLC , you pay that tax , that extra 15.3% tax , on their entire net profit .
Speaker 1Now you might say , boris , I already have an S corporation . Then you might want to focus on your reasonable compensation . Irs says that you , as an S corporation business owner , must pay yourself a reasonable salary , not too much , not too little . As a matter of fact , before President Biden was running for office or while he was running for office you can actually just Google it he was paying himself through an S corporation , saving at least half a million dollars on payroll taxes . He was using the exact same loophole and when he was asked , or his tax team was asked , they cited the exact IRS tax code that I'm telling you right now , which is like hey , as an S corporation owner , you have to pay yourself a reasonable compensation . So his reasonable compensation was assessed and that is what he was paid . So he set up an S corporation .
Speaker 1I'm telling you , I kid you not , this is a legitimate tax strategy that even our president used before , when he was running for office . So check it out , because what happens is that business owners that have an s corporation , they tend to overpay themselves in taxes , excuse me , in salary . That results in overpayment of payroll taxes . What we want to do is we want to lower that to reasonable compensation . Our clients , which we do a reasonable compensation analysis every year as part of their tax plan . As part of the tax advisory , we assess that and average savings for each client when they're using S-Corporation , combined with a reasonable compensation , report $8,387 . Now $8,387 back in their pocket .
Speaker 1Okay , now it's still not too late in 2024 to take advantage of this tax strategy . Now we had a situation a client that actually started paying himself on a salary , but he did not file for an S corporation and 2023 already passed . We made a late S election for him because he was compliant and he was doing everything as an S corporation , and 2023 already passed . We made a late S election for him because he was compliant and he was doing everything as an S corporation . So if you are in that situation , believe me , this can be fixed , but I strongly recommend being proactive about it , because you cannot , after the year is over , go back and reduce your salary Okay . Or if you were operating as a single member LLC , you can do a late S election but you didn't have a W2 salary , all right .
Speaker 1Then number two top five strategy is retirement . So many business owners save a lot of money on taxes by having a proper retirement tax strategy , whether you have employees or you don't have employees Okay . If you have employees , consider setting up a regular 401k , because you can put away up to $23,000 from your paycheck into your 401k . If you don't have employees , you can do a solo 401k , a SEP IRA . On average , our clients saved $11,230 . This is the strategy that you need to be super proactive about , because if you wait until year-end , it may be too late , especially if you're using a solo 401k or a regular 401k . It has to be processed through your payroll , especially if you have an S corporation .
Speaker 1The third strategy is PTET , pass-through entity taxation . I like to call it a made-up tax by your state . Most states made up this tax to give you a benefit . You get a credit on your personal taxes but at the same time , you get it as a business tax deduction , something that was created to combat tax cuts and jobs act in 2017 . I'm not going to bore you with details , but if your accountant haven't spoken to you about it , especially if you're in a high-paying tax such as in New York or California , man , we've got a bunch of clients from California saving tens of thousands of dollars , new Yorkers or most of the states in the in the country average savings per client seven thousand three hundred seventy one dollars .
Speaker 1Guess what's the best thing about this strategy ? You actually don't have to spend money on anything . You just have to rearrange how you pay your taxes . I'm telling you it's like it's a winner , okay . The next thing is tax-free cash withdrawals . Like what do you mean , boris ? Tax-free cash withdrawals ? What happens is you can actually reimburse from your business for the expenses that you use for the business in your own home . That could be your home office , a separate area in your home where you're conducting business . Whether you have a separate location or not , irs still allows you to reimburse yourself if you use it for administrative purposes .
Speaker 1The second , what do we call it ? A tax-free cash reimbursement If you hold meetings in your home up to 14 days , which is called an Augusta rule . This tax strategy is part of 2024 . Saved you . Saved my clients , excuse me on average $4,889 on taxes . Now .
Speaker 1S-corporation Health Insurance that's the big one , okay , and that's what we're gonna talk about how to implement it . Saved my clients $8,850 on taxes . Now . If you own an S corporation and you're more than 2% shareholder , irs actually lets you take a double dip into this deduction . Not only do you get a tax deduction if you properly report on your W-2 , but you also reduce your taxable social security Medicare . Now a lot of business owners say , boris , this is too much information for me , this is too much technical terms . I agree , so that is why you've got to be working with a tax advisor . This is , your tax preparer is not doing any of this stuff . They're just too busy preparing tax returns . All right , s corporation health insurance say there are clients an average of $8,850 total savings Adding up all of these strategies was $40,735 per each business owner . Now we're going to talk about how to implement the health insurance strategy in your business where you can start saving money right away , right after this break .
Speaker 2If all your accountant does is taxes , you may be overpaying in taxes by thousands of dollars every year . Every week , Boris releases a tax strategy on his podcast so that you , the business owner , can pay less in taxes every single year . Be sure to subscribe to our podcast to be notified when a new tax strategy is released . If you're ready to work with a tax advisor on your tax strategy and planning , be sure to schedule your call by heading over to wwwtaxplanningcallcom . Again , that's wwwtaxplanningcallcom . Again , that's wwwtaxplanningcallcom .
Speaker 1Welcome back . Now let's talk about how to implement at least one of these strategies . Boris , give us the juice , okay . So let's talk about owner health insurance . If you're an S-corporation owner , you've got to do this proactively . If you have a health insurance and , excuse me , if you own more than 2% of the S corporation and you pay for health insurance , irs lets you double dip into this deduction what I call double dip . Okay , irs lets you to double dip into this deduction , like what I call to double dip , meaning to say you get a tax deduction but you also save on payroll taxes . Now , the policy of the health insurance can be either in your name or the business name . It can be paid by you or by the business . If it's paid by you , just have the business reimburse you . Okay , that's simple . It's really not that complicated . What gets complicated is how to report it and , honestly , all payroll softwares have this what do you call it ? Option in their payroll where you log in and say , hey , I'm an s corporation owner , I own more than two percent and this is how much I pay for premiums every month . What happens when your payroll is processed ? That will automatically be recorded on the w2 box 14 when you file your taxes . And number two it will automatically deduct it from your social security , medicare taxable wages . It's a small fix without you spending any money .
Speaker 1So if you're not working with a tax advisor , I personally do not recommend doing this on your own . Why is that ? Number one ? Let's say , a few months in the year already passed and you want to implement this strategy , you can actually go back to the beginning of the year and include this . That's's number one . Number two you need to properly set it up on a monthly basis . I would strongly recommend doing this with a tax advisor . Definitely seek a professional advice from your tax advisor Hopefully you have one okay To be able to properly implement this strategy , because this strategy alone saved our clients an average of $8,850 on taxes simply by switching a couple of things around on their business
Maximizing Tax Savings for Business Owners
Speaker 1.
Speaker 1Ladies and gentlemen , I just want to tell you right now if you have a profitable business , you're overpaying in taxes , if not by tenths , then by hundreds of thousands of dollars . If you don't have tax planning , if you don't have tax strategies and you just have a tax preparer who you speak to once a year , that is not the way , as a business owner , to save money on taxes . That is not the way , as a business owner , to operate your business . When you buy items , equipment , you always look for deals on sale , right ? You sign up for marketing to make money , to advertise your services , and yet you give it all away by not properly having tax strategies and tax planning . So hopefully after this you'll be able to implement top five tax strategies and get yourself a tax advisor Till the next time , that's it for today's episode .
Speaker 2Be sure to check out the description below for some free tax reduction resources that Boris put together for you . If you're ready to work with a tax advisor on your tax planning , Be sure to schedule your call by heading over to wwwtaxplanningcallcom . That's wwwtaxplanningcallcom . And be sure to subscribe to our podcast to be notified when the next strategy is released .