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Are you maximizing your healthcare tax savings as a business owner?

In this episode, Mike Jesowshek discusses health care-related tax strategies for business owners, focusing on tools like Health Savings Accounts (HSAs), self-employed health insurance deductions, and Medical Expense Reimbursement Plans (Section 105). He explains how these strategies can help business owners minimize taxes while optimizing healthcare costs, both for themselves and their employees. Mike emphasizes the importance of understanding tax laws and maximizing deductions to lower tax liability while ensuring business owners can grow their wealth and take care of their healthcare needs.

Learn how HSAs, Section 105 plans, and self-employed health insurance deductions can lower your tax liability while protecting your health!

[00:00 - 05:53] Health Savings Accounts (HSAs)

• Mike explains how HSAs provide tax benefits: tax deduction on contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses.
• HSAs are powerful tools for both business owners and individuals, acting as a secondary retirement account for future medical costs.

[05:53 - 10:00] Self-Employed Health Insurance Deductions

• Mike details how self-employed individuals can deduct health insurance costs, focusing on sole proprietors, LLCs, and S corps.
• S corp owners must run health insurance premiums through their business and add them to their W-2s to receive deductions.

[10:00 - 19:27] Health Benefit Options for Small Business Owners with Employees

• Mike discusses section 105 plans or Medical Expense Reimbursement Plans, and how it's useful for business owners with high out-of-pocket medical costs.
• These plans turn medical expenses into business expenses, offering significant tax savings.
• He explains the three primary options: group health insurance, wage increases, or QSEHRA/HRAs to reimburse employees for medical costs.
• QSEHRA is a flexible and cost-effective option for small businesses with fewer than 30 employees.

Quotes:

"Think of an HSA as a secondary retirement plan because, at some point, we’re all going to face medical costs." - Mike Jesowshek, CPA

"If you're self-employed, you get a tax deduction for your health insurance, regardless of whether you cover your employees’ costs or not." - Mike Jesowshek, CPA

"QSEHRA allows small businesses to support their employees’ healthcare needs without the burden of a traditional group health plan." - 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: https://www.youtube.com

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Could your business deductions survive an IRS audit?

In this episode, Mike Jesowshek breaks down a real-life case where a business owner lost $2 million due to an IRS audit after attempting to write off a yacht as a business expense. He explains how poor bookkeeping and a lack of proper documentation led to the disallowance of the deduction. Mike emphasizes the importance of understanding and correctly implementing tax strategies, along with maintaining detailed records to defend against audits. The episode highlights the need for business owners to carefully substantiate deductions and avoid shortcuts, even when seemingly successful entrepreneurs do so.

[00:00 - 05:06] Lessons from Poor Bookkeeping

• Mike highlights a case where a business owner wrote off a $2 million yacht as a business expense.
• The IRS disallowed the deduction due to poor records and no evidence of business-related activities.
• Mike stresses the importance of having clear documentation and bookkeeping to defend business expenses in an audit.
• He discusses how many business owners wrongly assume that if someone else gets away with a deduction, they can too.

[05:06 - 07:04] Understanding Business Deductions

• Business deductions must be ordinary and necessary for the type of business.
• It is not enough to claim the deduction; proof must be provided through proper logs and receipts.
• Mike emphasizes the importance of correct implementation, using the home office deduction as an example.
• Even legitimate deductions can be disallowed if not implemented and documented properly.

[10:12 - 14:52] Correct Documentation: A Defense Against Audits

• Having detailed records and logs can protect business owners if the IRS audits them.
• Mike shares an example of a client who successfully navigated an audit by having all documentation in place.
• He also touches on various tax strategies like the Augusta rule, employee entertainment, and travel deductions.

Direct Quotes:

"Bookkeeping is the backbone of a business. Not only does it help your business grow, but it also helps defend your business expenses in the event of an audit." - Mike Jesowshek, CPA

"Just because someone down the road takes a deduction and doesn't get caught doesn't mean it’s right or that you won't get caught." - Mike Jesowshek, CPA

"A business deduction has to be ordinary and necessary for your type of business, and then you need the proof to back it up." - 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/

IncSight Packages (Full-Service): https://incsight.net/pricing/

Book an Initial Consultation (IncSight): https://app.simplymeet.me/o/incsight/sale

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

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

YouTube: https://www.youtube.com

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Have you ever wondered how to maximize your tax deductions while staying on the right side of the IRS?

In this episode, Mike Jesowshek provides an in-depth guide on over 30 tax write-offs and strategies that can save businesses thousands of dollars. He emphasizes the importance of understanding pre-tax versus after-tax spending, the significance of selecting the right business entity structure, and how to effectively maximize deductions. Mike also covers strategies such as using an S corporation to reduce self-employment taxes, hiring children within a business, and setting up a board for additional tax benefits. He stresses the need to correctly implement tax strategies to ensure they remain legal and beneficial.

[00:00 - 12:24] Pre-Tax vs. After-Tax Spending, Entity Structure, and S Corporations

• Mike introduces the importance of understanding tax strategies.
• Optimize spending to shift after-tax expenses into pre-tax deductions.
• He discusses how the business entity structure forms the foundation of your business.
• Different types of entity structures: sole proprietorship, LLC, C corporation.
• Choose the right entity structure to ensure proper tax benefits and legal protection.
• Consider S corporation status once your business reaches a certain profit level.

[12:24 - 26:03] Maximizing Deductions

• Mike breaks down the various business expenses that qualify as deductions, including advertising, contract labor, equipment, and gifts.
• Regularly review personal expenses to identify potential business deductions.

[26:03 - 35:18] Accountable Plan and Setting Up a Board for Tax

• Ensure proper documentation and exclusivity in home office use.
• Use a board for accountability, perspective, and additional tax deductions.

[35:18 - 44:47] Additional Tax Strategies: Meals, Travel, Automobile, and Retirement Planning

• Proper documentation and fair market value rental rates are crucial.
• Be strategic in everyday business activities to maximize deductions.

[44:47 - 57:30] Implementation of Tax Strategies

• Mike emphasizes the importance of not only learning tax strategies but also correctly implementing them.
• Correct documentation and cautious implementation are key to successful tax strategies.

Direct Quotes:

"The government doesn't come knocking and let you know when you missed out on an incentive that they gave you." - Mike Jesowshek, CPA

"Every business owner should have a home office of some sort." - Mike Jesowshek, CPA

"The implementation piece is where you start to see those tax savings." - 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/

IncSight Packages (Full-Service): https://incsight.net/pricing/

Book an Initial Consultation (IncSight): https://app.simplymeet.me/o/incsight/sale

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

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

YouTube: https://www.youtube.com