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 35. 5 Trump Tax Changes for Business Owners
Are you a business owner trying to stay ahead of the curve on the latest tax laws? President Trump’s new tax reform has just passed the House, and it brings some game-changing tax updates that will affect how business owners pay taxes moving forward. If you’re not up to date, you could be missing out on massive tax savings, or worse, get caught unprepared.
In this podcast, I break down the 5 key changes every business owner needs to know. From overtime pay becoming tax-free, to the QBI deduction increasing to 23% (but watch out if you’re a doctor, attorney, or accountant), these shifts could seriously impact your tax strategy. I also explain how bonus depreciation is making a comeback, why the PTET strategy is evolving, and how the R&D credit is finally getting its full power back.
Bottom line: If you’re not updating your tax strategy now, you’re either leaving money on the table or walking into a problem you could’ve avoided.
Listen to this before your CPA shrugs and says, “Let’s look at that next year.”
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/?el=podcast&htrafficsource=buzzsprout
Ready to start saving money on your taxes?
☎️ Schedule your FREE Tax Advisory Session: https://taxplanningcall.com/?el=podcast&htrafficsource=buzzsprout
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*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 ...
Big, beautiful bill. Yes, Trump's new tax law changes has just passed the House. It's May 22nd. It has a lot of things there that will affect how you, the business owner, pays in taxes, but I want to cover five things that will ultimately affect every business owner and how they pay taxes, and how can you plan for it coming into this year, as the plan is going to take effect this year. All right, five things that I want to talk about is, first of all, no tax on overtime. What does that mean for a business owner that gets paid salary from a business, or if you employ your spouse? Okay, the second thing. By the way, I have my notes here, so I'll be looking down. The second thing is a QBI deduction, which is like a free gift from IRS. It used to be 20%, it's going up to 23%, but there's bad news for doctors, attorneys and yours truly, accountants. Okay.
Speaker 1:The third thing I want to talk to you about is bonus depreciation. It is finally coming back. What are limitations? What's the timeline on that? The fourth thing I want to talk to you about is PTET tax strategy, which has been a game changer for a lot of business owners since 2017, since the passing of Tax Cuts and Jobs Act, but now the government doing everything in its power in this bill to limit that. So that's going to be interesting to see. And the fifth thing that I want to talk to you about is research and development credit to see. And the fifth thing that I want to talk to you about is research and development credit. It is finally coming back at its full force. For those of you that have been affected by the changes from 2022, this will be great news for you All. Right, I think this is as far as the intro. Let's get going.
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:Awesome.
Speaker 1:The first thing is no tax on overtime. So there's some provisions in the bill. It says, hey, it cannot be somebody who's making more than $155,000. It cannot be for an executive or highly compensated employee, which basically says you rule out the owner. That's what it seems like. And even if you're an owner that makes less than $155,000, but what if your spouse works for the business? Or what if your children and I'm talking about, like older children? Already I have a lot of clients that have children over the age of 20 and they help out in a business. It's like passing down to the generation. What if they're not considered executives and they're just employees? They're not have that important title in the business.
Speaker 1:It would be very interesting to see the final touches of this bill as it passes through the Senate. What are limitations on that? And is there a tax strategy that we can implement where your spouse because in most cases spouses also work together with the business owner they work overtime? Could we somehow strategize the salary to have regular pay but the overtime is not subject to income taxation? That would be a really cool strategy, because if your accountant is not talking to you about this, if you're an advisor, well, hopefully you have a tax advisor. If you don't have a tax advisor, ladies and gentlemen, I'm telling you right now you're overpaying in taxes. Okay, so these are the types of things you need to be talking to them about it, because I bet you, once this law passes in the Senate, we've got all the final details. We're raising this conversation with all of our clients. We're this conversation with all of our clients Like, hey, let's see if we can first of all apply it to you. It looks like you can't, because usually the owner is the executive of the business, so most likely will not. But is there a spouse involved? Are there children involved? How can we take out more money from the business tax-free? So, again, really, really cool strategy. Keep an eye out for it, speak to your accountant about it. That's the first thing.
Speaker 1:The second thing is qualified business income tax deduction. Now, what is a qualified business income tax deduction? So, basically, it's a 20% haircut. Irs says, hey, and I'm just going to keep the math very simple. There's some calculations involved, but I want to keep it very simple. Irs says, hey, whatever's your net profit from the businesses, right, we'll take the lower of your taxable income, or net profit In this case. In this example I'm going to use profit of the business. You can take 20% of that and that is a deduction. It's a free gift. So if you have a net profit of a half a million dollars, basically get $100,000 write-off.
Speaker 1:We just finished taxes for one of our clients yesterday that we do tax advisory for. His accountant missed QBI deduction in previous years. This year his QBI deduction is $280,000. I think it's like $1.5 million and changed net profit. We take 20% of that like huge. A lot of accountants surprisingly miss this, even though it's a check the box deduction. Now this 20% is now going up to 23%. Okay, unless the Senate changes when they do final touches. But that is a huge win for a lot of business owners.
Speaker 1:If you're a business owner and you're not sure if your accountant took that deduction, look up. I think it's line 10 of your tax return, of your 1040. See if it's there. If not, amendment opportunities. More money could be available to you All right Now, why is this bad news for doctors, lawyers and accountants?
Speaker 1:So the government is not like these professionals. For whatever reason, the IRS tax code is not so favorable to them when it comes to certain things, like for QBI. I don't exactly remember the threshold numbers. I should have pulled it up before, but I'm just going to use 400,000 because it's $400,000, and change. So if you're an attorney, doctor or a lawyer and you are over this threshold, then you don't get a QBI deduction. Now a lot of planning opportunity comes in to bring your income below that threshold, which you absolutely can utilize tax planning and again, if you're not talking to your tax advisor, you need to be talking to your tax advisor about these strategies and if you are that professional an attorney or a doctor that you could possibly reduce your income below that threshold to get that QBI because it's going up to 23%. So that's that.
Speaker 2:Hopefully that is clear Now before we move on to bonus depreciation just a very quick break 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, awesome, welcome back. So the third thing I wanna talk to you about is bonus depreciation. So very, very interesting stuff. A lot of business owners were very concerned when bonus depreciation when it started going down I think in 2025, it's 40%. So if you buy something for $1,000, you can take a deduction right away of $400, 40%. Now, what business owners did not realize and didn't speak to their tax advisor is there's something that is called Section 179. So if you're a business owner that buys a lot of equipment okay, recently spoke to a business owner buys hundreds of thousands of dollars of equipment Section 179 achieves the same result as bonus depreciation was. Important is because people wanted to buy cars that's over 6,000 pounds and write that off, and it made a lot of difference for those that buy real estate and use cost segregation. That's where limitations were. Now the bonus depreciation came back. It doesn't mean that all of a sudden, you can now write off your equipment. You could still have done that using section 179. Now bonus depreciation will be a huge winner for those that invest in real estate and do accelerated depreciation using cost segregation. Now, one thing I do want to note they said in the bill that passed the House that bonus depreciation will be effective.
Speaker 1:Listen to this January 19th, 2025. Well, what if you bought something before January 19th in 2025? I remember there was like a similar issue, I think, in 2017, in September, there was an asset. If you purchase in before September 27th 2017, it was a different law. After September 17th 2017, it was a different law. After September 17, 2017, like a different law. I can't remember the details. So same thing happening. So planning is super crucial. So, if you happen to buy your equipment or, in your case, real estate right before January 19 of 2025, this bonus depreciation could affect you. But the good news is that the question becomes when did you place it in service? Ah, so those are the details Very, very important for you to discuss with your tax advisor. If you don't have a tax advisor, ladies and gentlemen, I am telling you right now you are way overpaying in taxes, it's true. So get yourself a tax advisor. Start working with somebody who's doing just tax preparation.
Speaker 1:Next thing PTET pass-through entity taxation. In 2017, when there was a SALT cap, how much you can deduct in your state and local taxes was $10,000. So states created this thing called PTET. They say you know what when you pay taxes to us your personal income taxes you can't take that as a write-off. But if you pay it as a business tax, you'll get a write-off. We'll give it to you as a credit. So basically, you had to change how you pay your personal taxes state personal taxes Instead of paying state personal, you convert it to business. Instead of paying state personal, you convert it to business.
Speaker 1:Irs could not do anything about it because states got creative in tax planning for their business owners that live in that state. So a lot of, by the way, a lot of business owners are still missing out on this. I spoke to a business owner yesterday who was in a process of enrolling. Actually, I think he did enroll to work with us and he's like he lives in California highest, highest state right and he's like Boris, just like talking to you guys. From one conversation I realized I'm saving so much money on PTET and I looked up his numbers $16,000. In California you still have until 2025 to elect for the PTET. It was a huge win.
Speaker 1:So the government says, oh, we now know what the state is doing and we're going to basically limit how business owners can deduct PT ET. And one of the very interesting things I read today. They basically want to disallow it, like I said earlier before, for professionals such as accountants, attorneys and doctors. Basically, they're going to put more limitation on that. Everybody else should be okay, but there's going to be some cap on it. They're still working on it.
Speaker 1:I really hope it doesn't go away. I really hope there's going to be Senate is not going to allow it. I really hope it doesn't go away. I really hope there's going to be Senate is not going to allow it and you know there's going to be a lot of organizations or that are basically going to fight for it, because I think it's really important for business owners. All right, these are the top five tax strategies that I think will affect I know will affect a lot of business.
Speaker 1:Oh, no, wait, I missed one. How could I? The R&D tax credit? Oops, sorry. All right, research and development.
Speaker 1:Very, very quickly, I want to talk to you about research and development. So, before 2022, right, for those of you that have been waiting like Boris, what do you mean? I want research development information. Okay, for those of you that had research and development tax credits before 2022, the government allowed you to take a full deduction of all the qualified expenses and give you a credit. The credit was about 10%. Okay, the credit was about 10% of qualified expenses. So this is like dirty back of the napkin calculation, as you noticed when the lights went out. So that's totally great. So you could take a deduction and you can claim a credit In 2022, they said you know what? You can't take a deduction anymore right away in your first year. You're going to what's called amortize it over the course of five years. So it actually put a lot of strain and a lot of startups because, like, look, the credit is not that big for us and now we can take this deduction. Imagine spending $500,000, but being told you can only deduct $100,000. The other four is going to be pushed over for the next four years. So, starting January 2025, they of business owners were not able to deduct these expenses.
Speaker 1:I was hoping for something that you could do this retroactively and amend your returns. I had very high hopes, but no. But the good news is that it's coming back in its full capacity. Great, now, please, if you're not working with a tax planner yet and don't have a tax advisor, get yourself a tax advisor. Profitable business owners, especially those making a million dollars or more. I've got a great training below how you can start saving hundreds of thousands of dollars on taxes using tax planning and strategies, and I hope this was great. 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 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.