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://bit.ly/podcast7writeoffs
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Tax Reduction Podcast
Episode 31. Top 4 S-Corporation Tax Strategies
Save money on taxes in 2025 with these top S-Corporation tax strategies! If you're a business owner, using the right tax planning techniques can help you reduce your tax liability, increase deductions, and keep more money in your pocket. Learn how the PTET tax can reduce your state tax burden and how to use reimbursements like the home office deduction and the Augusta Rule to lower taxable income.
Take advantage of retirement contributions to build wealth while cutting taxes. Set up a Family Management Company to shift income and create legal tax savings. Don’t overlook the auto deduction—write off business vehicle expenses the right way. These tax planning strategies help S-Corp owners keep more profits and stay IRS-compliant. You can implement these tax-saving strategies for your S-Corp in 2025!
I've put together this FREE resource for you:
7 Write-Offs Every S-Corporation Business Owner MUST Know
🆓 Download FREE PDF here: https://7taxwriteoffs.com/
Ready to start saving money on your taxes?
☎️ Schedule your FREE Tax Advisory Session: https://taxplanningcall.com/
🤩 If you are looking for easy-to-use payroll software, I personally use and recommend to my clients Gusto Payroll Software - https://gusto.com/r/boris466
P.S. When you sign up for Gusto, you get a $100 Visa gift card
*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, ...
If you have a profitable S-corporation or you're thinking about having an S-corporation in 2025 for your business. Well, I will show you the must-have top four tax strategies that you can use in your S-corporation to significantly reduce your taxes. Ready, let's go.
Speaker 2:Welcome 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 1:All right, awesome. Let's start talking about the top four tax strategies for your business. Now, the top four that we are going to talk about is the PTT strategy, which is a phenomenal tax strategy. A lot of advisors or accountants don't use this for their clients, so if you're a business owner, stick around. I'm going to talk to you a little bit more about it. Reimbursements how you can reimburse yourself tax-free from your business, from your S-corporation, where your S-corporation records as an expense, a deduction, and you don't pay any taxes on that. We're going to talk about retirement options for an S-corporation owner. We're also going to talk about setting up family management company, where you can pay management fees and hire your family members from that. I also have a little bonus for you. I get asked a question a lot hey, boris, what if I buy a car but it is under my personal name? Can I still write it off, or do I need to buy it from the business? How do I pay for it? So we're definitely gonna talk about it. That's bonus. That's actually five tops top tax deductions for you.
Speaker 1:Now, before we continue about, before we continue talking about these tax strategies, I wanted to find very quickly, in summary, what is an S corporation becauseporation, because some of you may not be an S-corporation and you're thinking, hey, is this the best option for me? Now, what is an S-corporation? Now, an S-corporation is not a type of a corporation that you form. Okay, what you form is an LLC or an Inc. Okay, you can either form an LLC, a single member LLC, file for it in your state, or form a regular corporation To become an S corporation. It's an election. You have to elect to be an S corporation. You don't have to change your EIN. It's one form.
Speaker 1:Usually, your tax advisor should be able to do it. If you don't have a tax advisor, definitely get a tax advisor. Stop working with an accountant that just puts the right numbers in the right boxes. So S corporation is tax advisor. Stop working with an accountant that just puts the right numbers in the right boxes. So S-corporation is an election and in most cases, for most business owners, especially if they start reaching 80 or $100,000 in net profit from the business, s-corporation is the best option, depending on your state. Some states actually do not like S-corporations, for example, new York City. There's an extra corporation tax. I believe Tennessee as well. Definitely work with your tax advisor, but for majority of business owners in most of the states, s-corporation is the best option because it helps you save money on the self-employment taxes.
Speaker 1:The main advantage why business owners choose to elect to be an S-corporation is to save money on self-employment taxes. The main advantage why business owners choose to elect to be an S corporation is to save money on self-employment taxes. When you're not an S corporation, when you are, let's say, an LLC, which most businesses are, they're single member LLCs. What happens is that they pay self-employment taxes the 15.3% tax on the entire net profit but when you become an s corporation, your s corporation profits are not subjected to that 15, only your salary is. So that is an s corporation, it's a. It's a.
Speaker 1:It's also a pass-through business, just like an llc right. All the income is passed through to your personal income taxes. Now the way it is passed through it's through a K-1. So think about it this way K-1 is, in very simple terms, is like a W-2 for a business owner from an S-corporation. Simple, okay. K-1 reports your profits or losses in some cases from the S-corporation on your personal taxes. So S-corporation doesn't pay any corporate taxes. It helps you avoid self-employment taxes on the entire net profit. That is the power of S-corporation and this is why a lot of small business owners choose to be an S-corporation. But what a lot of people don't realize is that S-corporation has a lot more benefits, a lot more availabilities and tax strategies that you can use.
Speaker 2:And those are my favorite top four tax strategies that we're going to talk about right after this break. 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 1:All right, welcome back. Let's talk about the first of the top four tax strategies, which is a PTET tax. Let's talk about what is a PTET pass-through entity taxation. Pass-through entity taxation is the way that you can basically switch how you pay your taxes. It's just in a simple term. So let's say you are in the state of California and you pay crazy 13% state income taxes to California. Or you're in New York City and you pay state and city taxes of 10%. Guess what? Those taxes that you pay for your personal taxes right to the state, they're not tax deductible. There's a limit of only $10,000 and it's probably property taxes. Okay, all the state taxes that you pay, they're not tax deductible.
Speaker 1:Ptet stands for pass-through entity taxation. Your state you don't know this, okay, and your accountant doesn't know this, or accountant knows this and doesn't do this for you your state gives you an option Instead of paying personal income taxes and not get a tax deduction. They say, hey, why don't you elect to pay business taxes instead and not personal taxes? Same tax, nothing changes, you don't pay anything extra, but what happens is that you turn it into a tax deduction. Now, my clients, the tax advisory clients, that we work with everybody, it's a must, it's a mandate in my firm that everybody elects to be taxed for ptet. For those states that qualify and most states do offer this option they get a great tax benefit, saving thousands and, in some cases, tens of thousands of dollars just from this deduction. You don't have to pay anything extra for this, you don't have to invest your money anywhere. You're just changing how you pay your taxes. Phenomenal tax strategy Educate your accountant or, better yet, get yourself a tax advisor. Okay, phenomenal tax strategy.
Speaker 1:Tax strategy number two the top four for an S corporation in 2025 is reimbursement. One of them is home office. I get asked a lot hey, boris, but I have an office, or let's say, I'm a medical professional, I'm a dentist or I'm a lawyer, or I've got a warehouse, or we provide services, whatever it is plumbing services. You know, we've got a location, we've got a warehouse. How do I still write off home office? So the IRS says if your home office is an administrative home office, meaning to say, if you're doing administrative work in your home, then that office is considered the principal location. And what happens with the principal location? You get a write-off. You can reimburse yourself for using your home. Not only that you also can take a depreciation deduction If you own a home.
Speaker 1:Majority of our clients that I work with are business owners and majority of them own a home. So they get a depreciation deduction mortgage interest, property taxes, hoa if they have. We've got insurance, maid services, cleaning services, utilities All of that becomes reimbursable based on the square footage of the home that you use for the business. Again, you've got to be doing administrative work right and a lot of business owners really do administrative work in their home. So you know billing, invoicing, working on their bookkeeping, you know responding to their accountants' emails mostly it's done from home and all the request documents, all of this administrative. Irs says you can reimburse yourself through what's called an accountable plan. If you don't know what accountable plan is, get yourself a tax advisor. I guarantee your tax advisor will probably know help you set up those reimbursements.
Speaker 1:Again, this is another strategy. There my clients save thousands of dollars in taxes. Nothing changes. They're not investing money into anything else. They're not taking out extra money from the business. This is the same money that you would have paid for the expenses, but now you're turning it into a tax deduction. The next reimbursement is an Augusta rule, 14-day rule probably abused by some business owners. But if you do it right and you follow the IRS guidelines and rules and show you, hey, how to avoid such an audit and how to stay in compliance, augusta rule basically says hey, even if you're taking home office, for example, you can still rent your entire home to your business for business meetings, as long as it's under 14 days, because we have this beautiful rule in the IRS tax code that if you rent your home up to 14 days, you don't have to pay any income taxes on it. It creates an opportunity for you, the business owner, to be able to take deductions. Right, you can rent your home at a reasonable rate. Look it up online. How much would your home go for? Follow all the rules. Speak to your tax advisor Another strategy that yields my clients thousands of dollars in tax savings. Are we paying for anything extra? Are we investing in anywhere else? Nope, we're just changing on how we're paying for things. Okay, legally, following the IRS tax code.
Speaker 1:Now, as an S-corporation owner, you can set up different types of retirement accounts. That benefits you the most. There's two types of S-corporation owners. One of them is owner-employee You're the only employee of your S-corporation, or you could have other employees. So if you are the only owner of your business, you can set up a SEP IRA or a solo 401k. The great news is that a lot of business owners that I'm speaking to right now we're like in the beginning of the year of 2025, they're like oh, I didn't have anything for 2024. What do I do? I probably missed out. I'm like nope, you can actually still set up a SEP IRA for 2024 and contribute to it before March of 2025. Or if you filed an extension, then by the extension deadline, okay so SEP IRA 25% of your S-Corporation salary, the W-2 that you take from the S-Corporation can be contributed by your S-Corporation.
Speaker 1:Okay, with a solo 401k it gets a little bit tricky If you haven't set it up for last year, you kind of missed the boat on a solo 401k. But if you want to implement it for 2025, then same advantage as an S-Corporation SEP IRA, which is 25% of your salary, but plus you as a business owner can put away $23,500, if you're under the age of 50, from your W-2, which really increases your deduction If you're a profitable business owner. I would assume. Well, not, I would assume, excuse me, I would actually take an average, which I've seen with my clients about $45,000 into solo 401k deduction. Sep IRA, which is only limited to your salary, will probably be about $25,000. Now again, please speak to your tax advisor about this.
Speaker 1:These strategies are available every day, any day, any minute for you, the business owner. You just have to work with the right person to be able to take advantage of these tax strategies. Okay, the next one is a 401k If you have employees, not if you've got employees, don't worry about it. What you can do is still set up a safe harbor 401k which protects you at 3% to match your employees, which you know they could put away a lot more than 3%. You will be matched, you will be safeguarded, excuse me, to put away 3% or maximum 4%, depending on their contribution. But then you can turn around and take $23,500 from your paycheck if you're under the age of 50 and put that into the 401k.
Speaker 1:So, another tax strategy. A lot of business owners that I work with they're always thinking about hey, boris, or in most cases I like educate them right. So when you want to retire, do you want to retire only with taxable income or do you want to retire also with tax-free income? There's many ways how you can set up your 401ks okay. One of the ways is set it up as Roth 401k, where the money that's going in is after tax means you don't get a deduction but everything there grows tax-free, or you can split it. You've got to speak to your tax advisor, pair it up with your financial advisor that helps you set up 401k okay and then come up with that strategy Absolutely mind-blowing and really can yield a lot of savings for you in the future when you retire.
Speaker 1:The fourth tax strategy is family management company. You, as an S corporation owner, can hire your family members, particularly your children, who already started helping you in your business, and pay them a legitimate salary. Now, when you pay them from an S corporation, you will be subject to payroll taxes. What you can do instead is set up a family management company that has a purpose, that has a business purpose to serve you right and not just to avoid taxes, so to speak. Now your spouse can own the family management company. It could be a sole proprietorship. The S-corporation will pay the family management company management fees for providing employees to an S-corporation or some kind of a services right. Let's say, cleaning services by your children, filing services, administrative services. Your family management company then hire your children and pay them. When children are paid from a sole proprietorship, such as a family management company that is owned by your spouse, you also don't pay self-employment taxes and it's a great way to shift income from your high tax bracket to lower tax brackets for children or really at zero tax bracket. Now that is the top four tax strategies. They can absolutely be utilized.
Speaker 1:A lot of business owners are concerned Is this going to take up a lot of my time to do? Actually, ptet won't. Reimbursements will take up five minutes of your time a month. Retirement, a one-time setup, family management company five minutes It'll take you every month to kind of coordinate the whole thing Pay the management fee, pay the children for the time they work. Really doesn't take up a lot of time. You just need to make sure you're working with the right team for this.
Speaker 1:Now let's talk about the bonus, the auto deduction. I get asked the question a lot, boris, can I deduct and auto my car in my S-Corporation Because I don't want to buy it on the S-Corporation. I don't want to put title on the S-Corporation because the commercial insurance will be high, and that is true. Now, good news is that if you buying a car for the business whether it's a, you know, 30 use, 50 use, 70 use you can buy the car with your own funds. Okay, have the business reimburse you. You can still take depreciation deduction depending on the usage of the car for the business. Now you can also actually buy a car with your business money and even though the title will be on your personal name, that's totally okay, as long as you're using it for the business. Whatever percentage you're using it for the business, you can still deduct it. So, in summary, you can pay for the car from the business account or from your personal account. If you pay from the personal account, you can still record the car as an asset under the business, reimburse yourself and take depreciation deduction based on the usage. If you pay for it from the business, that is also okay. You can also take a depreciation, again, depending on the usage of the vehicle. You can take all its appropriate deductions.
Speaker 1:Ladies and gentlemen, I beg you, please, if you want to start saving money on taxes. Yesterday I spoke to a new client that is doing really well for himself, invested in a lot of real estate and his accountant files his taxes on TurboTax. I don't have anything against TurboTax, but TurboTax is designed for people to file their own taxes. If you've got an accountant filing on TurboTax, not even using a tax professional software and there's a lot of cases like this Okay, there's a lot of deductions you may be missing out. If you're not doing proactive tax planning for yourself, if you're not using tax strategies, you don't have a tax advisor, then I guarantee you you are overpaying in taxes. Thank you so much. Please hear my voice, keep my voice. Get yourself a tax advisor Till the next time.
Speaker 2:That's it for today's episode. Be 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.