November 10, 2025 • 44 mins
TaxTalk4U.com Trucking Tax Planning Business Owner Reduce taxes as Owner Operators, Business Owners. Tax Planning, how tax planning effects your business. How to minimize taxes for business. Section 179, Sec 199A Getting all your deductions that save you money on taxes. IRA, 401k, SEP retirement plans. IRS. Truck to Success for Truckers. How to save taxes work for independent owner-operators. Truck Driver Per diem OOIDA Truck to Success Cost per mile. Thank you to our Veterans!
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Tax Talk 4 U is broadcast live Mondays at 10AM ET and Music on W4CY Radio (www.w4cy.com) part of Talk 4 Radio (www.talk4radio.com) on the Talk 4 Media Network (www.talk4media.com). Tax Talk 4 U is viewed on Talk 4 TV (www.talk4tv.com).
Tax Talk 4 U Podcast is also available on Talk 4 Media (www.talk4media.com), Talk 4 Podcasting (www.talk4podcasting.com), iHeartRadio, Amazon Music, Pandora, Spotify, Audible, and over 100 other podcast outlets.
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Episode Transcript
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Speaker 1 (00:00):
The topics and opinions express in the following show are
solely those of the hosts and their guests and not
those of W FOURCY Radio. It's employees are affiliates. We
make no recommendations or endorsements for radio show programs, services,
or products mentioned on air or on our web. No
liability explicitor implies shall be extended to W FOURCY Radio
or its employees are affiliates. Any questions or comments should
be directed to those show hosts. Thank you for choosing
(00:21):
W FOURCY Radio.
Speaker 2 (00:28):
Barry G.
Speaker 3 (00:28):
Fowler EA brings you tax talk for you right here
on W four CY Radio and Talk for TV. As
an enrolled agent and a national leader in tax resolution
as well as Trucker bookkeeping and tax planning. With over
thirty years of experience, Barry will break down taxes, bookkeeping,
(00:49):
tax planning, and tax relief for individuals and businesses just
like you. So let's have some tax talk for you
with your host, Barry ger.
Speaker 4 (01:02):
Hey. Welcome, and it's another great Monday leading into a
great week. God bless you to be here and be
up do something important and exciting and fun for the
family this week. Hey, this week we honor veterans, and
tomorrow is Veterans Day Day that honors all that have
(01:26):
served in the United States Armed Forces in times of
war and in times of peace. It's actually the day
if you don't do it any other day of the year.
It's the day to thank all veterans for their service,
acknowledge the sacrifices they have made, their families have made,
(01:48):
and the contributions they've made to this great country, and
then also show appreciation for the courage and dedication. I mean,
this country would not be the country it is without
our veterans. And you know that day, Veterans Day, tomorrow
is the day to honor them above all. You know what,
(02:11):
we recognize all veterans. It's dedicated to everyone who has
served in the United States military, but not just those
that fought in some specific war. If you've served, thank you,
Thank you for your service to this country. We could
not have the freedoms we have today without our great
(02:32):
military and Armed forces. Well that being said, let's talk
about taxes. Now. We get the privilege of living in
this great country. We got to have the privilege of
paying taxes, right, Oh, my Atlanta. We got to do
some planning and today. What we're going to be talking
about above all for people is tax strategies. As a
(02:55):
business owner, you own your business. Now it doesn't matter
to me. You know, whether you're reporting on the Schedule
C as a business owner, you're reporting as an escort
on eleven twenty s, you're reporting as a partnership on
a ten sixty five. You've got to have strategies. You've
got to have ways to reduce the taxes that you
(03:19):
are going to pay for your family. Now, if you're
reporting on one of those three forms, you are getting
taxed at the bottom line on your personal tax return,
so net income Schedule C bottom line of your net income. Right,
there's tax for Social Security and Medicare and federal income taxes.
After a few adjustments eleven twenty and ten sixty five,
(03:42):
you're both going to get k ones from those entities.
So being taxed as an escort, you get it passed
through and you get tax for federal income tax on
there and reasonable wages as a W two and then
ten sixty five you're going to get guaranteed payments and
an income come from the business and be taxed there. Now,
(04:03):
if you are a corporation and tax as a c
court and you didn't make the election for escorp, and
the corporation pays the corporate tax. If you get distributions,
you get ten ninety nine dividends because they don't have distributions,
it's dividends. And then you also have w two wages. Now,
(04:25):
where does tax planning begin. Well, tax planning should have begin.
It's early on the beginning of the year. Tax planning
should have begun with starting keeping, taking an account of
all transactions that happen for your business. Now I tell you,
if you are in business, make sure you have a
separate bank account just for the business. Don't run anything
(04:49):
personal through its matter of fact, you take your distributions
or you take your wages, and those go to your
personal account, and then you pay all your personal expenses
out of your personal account, not out of the business.
No comlank. Now you've got good bookkeeping, meaning you've got
not just an income statement or cash flow statement, but
you've actually got a balance sheet in an income statement.
(05:10):
Start looking there, doing a comparison, and hopefully you had
good bookkeeping last year, or if you're new in business,
this is a great practice to go through and start
analyzing what's happening in your business. Look at your profit
and loss. Does it have all your expenses that you
expected to be there? Even the little things. You know,
(05:33):
if you have a telephone or cell phone service to
the business, is it recorded there? You know, are you
getting all your office supplies and everything else recorded there?
Maybe you're buying things out of your personal account because
you had expenses that you didn't have your have a
credit card or something. Did you account for all those expenses?
So every expense matters, So when we talk about strategies,
(05:57):
we want to make sure you're capturing every expense possible.
Look at your balance sheet. Now, your balance sheet, yes,
is going to have what's in your bank account reconcile amount.
It's going to have maybe your accounts receivable, who owes
you money, accounts payable, who owes you owe money? To
your loans. You may have loans that are outstanding that
(06:18):
you owe people or maybe somebody owes you money. You're
going to have assets you bought equipment, property, land, and
building this year that should be a kind of fort
on the balance sheet as a fixed asset. And if
you're running in comparison from one year to the next,
you'll be able to see the changes and the differences
right there on the balance sheet. Now, when you start
seeing those things, we're going to be able to explain
(06:41):
more how this is going to benefit you as a
business owner looking at how to save money on taxes,
because realistically, your tax strategy is to get you into
a better tax bracket, lower the tax rates down by
strategies to keep the taxes to the lowest amount allowed
(07:06):
by law. So why do we do these strategies? I mean,
who really wants to pay thirty seven percent income tax
plus maybe you know three point eighty percent and net
investment tax. Nobody really wants to do it. I don't
care how much money. People don't want to give money
to the federal government. Or if you're in a state
(07:29):
that's chargeding you, you don't want to give money to
the state either. I mean we all see that neither
the federal or state governments know how to spend money.
Actually they know how to spend money. They waste money,
but they don't know how to be reasonable. They don't
know how to have a good budget, they don't know
how to break even in their revenues. They're just rather
just haphazardly than, you know, save money. They're talking about
(07:54):
saving money and tax rates. You know, I got into
a disagreement with one of our county commissioners. They were
promoting an extra one percent sales tax in our area.
Because in the area that I live in, it's not
in a city, so it's unincorporated area. We pay a
lower sales tax rate than other people. Our county commissioner
(08:17):
decided he wanted to be able to add this one
percent in and he was supporting it. And he says, well,
you know, it's not really a tax increase. You're already
getting charged. No, I wasn't getting charged. I don't want
to pay an extra one percent in tax. Nobody wants
to pay more in tax. Yes, this went down in defeat.
It said right there on the ballot that it was
a tax increase, but he said it wasn't. It is
(08:40):
so you know, little fun things like that. Nobody wants
to pay more in tax. If you had the opportunity
to lower your tax rate, you would, wouldn't you. I'd
be the first one to raise my hand and say yes,
I want a lower tax rate. I am not going
to raise my hand and say increase my taxes just
because I want to pay more. You want to find
ways all the time to pay less money in taxes.
(09:05):
So again we started looking at your income statement, your
profit and laws, your balance sheet and making sure that
you have every deduction for your business that's allowed by law.
You know, is it ordinary necessary business expenses? Are they
classifying the money that you are paying for marketing? In marketing?
(09:26):
So maybe you're contributing and doing something at the church
and it's advertising, you're putting banners up, you're doing other
things to get your name out. Well, it does more
for you as a marketing expense than it does as
a charitable contribution. Yes, it feels nice as a charitable contribution,
but the tax deduction is better if it is a
(09:47):
marketing expense. So if you get some marketing out of it,
you can classify it as marketing expense versus charitable contributions. Now,
well you've got to look at all the different ideas
here on tax planning strategies for your business. So whether
you're an owner operator, whether you're in retail, whether you're
in marketing and consultant, whatever, you've got to do planning
(10:09):
for your business. We're going to take a quick break,
and when we come back from this break, we're going
to continue talking about tax planning for your business. We'll
do that right after that.
Speaker 3 (10:18):
We have only scratched the surface of today's show. Please
stand by as Barry G. Feller will be right back
with tax talk for you.
Speaker 2 (10:29):
If you owe the.
Speaker 3 (10:30):
IRS or are going through an IRS audit, don't go
at it alone. Called Taxation Solutions Tax Relief at eight
eight eight nine three zero one zero one six. We
are your solution for IRS debts, audits, back taxes, garnishments,
leans and levees. Whether you're an individual or business, you
(10:53):
need a solution and a strong, aggressive tax resolution. Don't
let the IRS walk all over you. Stop the IRS
now call eight eight eight nine three zero one zero
one six or go to Taxation Solutions dot net now
for a free no obligation consultation. Let's get back to
(11:19):
tax talk for you with more tax talk once again,
here's your host, Barry G.
Speaker 2 (11:25):
Fallon.
Speaker 4 (11:28):
Hey, I promise one of my friends who reached out
on me and he says, you know, I heard you
thanking veterans for Veterans Day and everything. Can you mention
me out there? I said, man everybody's going to have
their fifteen minutes of fame, so everybody needs to hear
you know, Michael, I appreciate your service, you know, for
this country and your friends that served with you as well.
(11:53):
Thank you for your service, and you know, hope you
continue listening to us and everything out there. You know,
it's a day of being thankful and seeing if you
see a veteran out there, you see somebody that has served,
or even somebody currently in the military, you know, hey,
thank them for their service out there. And we're talking
(12:13):
about business planning and tax planning strategies for twenty twenty
five for this year. We'll get into some twenty twenty
six stuff that you can do while you're working on
twenty twenty five planning. I mean, we've only got less
than two months left in this year. Can you believe
how fast this year has gone by? Again, man, you know,
so implementing strategies now, maybe you didn't think about it
(12:36):
earlier in the year, you got to think about it now.
So you know, some of the key strategies we're going
to be talking about is taking advantage of bonus appreciation
for asset purchases, maximizing the Qualified Business Income Deduction QBI,
utilizing business interest expense deductions, and other effective tactics that
(13:01):
we're going to come through and talk about as well,
such things as timing of income and expenses, and then
optimizing maybe your business structure. For twenty twenty six, maximizing
retirement contributions. We're going to get into that a little
bit more in depth as we go through, so some
of the key strategies again for twenty twenty five right now,
(13:25):
the One Big Beautiful Bill Act of twenty twenty five
permanently reinstated one hundred percent bonus deppreciation for qualifying property
placed in service after January nineteen, twenty twenty five. This
means your business can fully expense the cost of eligible
(13:46):
equipment in the year purchased. So if you purchase something
after January nineteen, twenty twenty five, you're going to be
able to use Section one seventy nine to fully depreciate
your equipment. Now watch out for this because you know,
depending on how much equipment you bought, if you're going
(14:06):
to be fully expensing things at one seventy nine, you
don't want to take the tax rate down to where
you're not paying quite anything, because now you might be
wasting depreciation because the next year you might be back
up into the much higher tax bracket. So you kind
of got a waigh how much depreciation you're going to
use based on your net income and based on your
(14:27):
tax situation. So we're always looking at that. But the
maximum deduction limit for Section one seventy nine expensing increased
to two point five million for property placed in service
after December thirty one, twenty four, with the phrase phase
out threshold at four million. Qualified production property. Business can
(14:52):
also take one hundred percent bonus depreciation for this qualified
production property placed in service before January one, thirty one
if construction began after January nineteen twenty five. So there's
little tweaks in the dates out there, so you kind
of got to watch and look at the actual rules
(15:14):
behind everything a when property was placed in service and
when maybe you started construction as well, like unqualified production property. Now,
the other good thing that happened in the one big
beautiful bill that helps you with your tax strategies for
this year is the Qualified Business Income Deduction QBI. Now,
(15:37):
if you've been in business, you're probably heard about the
twenty percent QBI deduction. The Section one ninety nine A,
the One Big Beautiful Bill made it permanent and that's
eligible for pass through entities. So this deduction was expanded
and said a minimum deduction of four hundred dollars and
(15:59):
as long as you had at least one thousand dollars
of qualified business income QBI. Yeah, a little bit complicated
calculation out here that you've got to go through, and
if you have losses, it complicates things further. Carrying losses
forward from QBI complicates things. Make sure you're working with
(16:20):
your tax preparer to know how this QBI deduction is
going to work and how it's going to work to
your advantage or how it could affect you in the future.
Also going forward due to the losses and everything as
it carries forward. QBI has always been one of these
nice things when you're making money, but complicated things when
(16:43):
you've been losing money for a few years and you're
carrying the QBI losses forward. Also has other complicated factors
in there, with wages and property and equipment and stuff
like that. So it's not something that I recommend anybody
tread lightly through. Make sure you've got to qualify tax
(17:04):
preprayer and rolled agent like us here at Taxition Solutions
Trucker Tax Tools, and that you've got the right calculations
in there for the QBI. Now, I know, you know
tax software. Oh you know, Hey, don't worry about it.
Everything is going to be easy. It's still one of
those things that unless you're carrying it forward from year
(17:27):
to year and that site aim Software, unless they carry
it forward for you, most people don't realize and just
ignore and then they get audited for this QBI problem
and you've got to go back in and fix it.
Trust me, the irs is tracking in some way, shape
or form and they will figure this out. Hey, speaking
(17:49):
of deductions and CBI and even truckers owner operators out
there in small businesses, Trucker tax tools dot Com is
the site that you can go to. We help truckers
with bookkeeping and taxes. Trucker Tax Tools is geared strictly
(18:10):
around you as a trucker to make your life run smoother.
Help you with bookkeeping, make sure that you have tax
planing that you need. Make sure that you know how
much your estimated tax payments should be made during the
year so that you're not hit with a huge tax
bill come April fifteenth, and then penalties for not making
(18:32):
your estimated tax payments as well. So contact us at
Trucker Tax Tools and go to Trucker tax tools dot
com hit our info page there and you'll be able
to connect with us on that site so that you
(18:53):
are getting every deduction possible. That phone number is eight
seven seven nine six six two four seven seven again
eight seven seven nine six six two four seven seven,
So get in touch with us there. Let us help
(19:17):
you with your bookkeeping and your taxes. You know, as
we're talking about, you know, business tax planning and everything else.
Something you can look at as a business owner potentially
is timing your income and your expenses. So if you're
using a cash basis accounting, accelerating your expenses into the
(19:40):
current year would help you bring down your net income.
So if there are expenses that you can pay and
you utilize this year, it's something you can look at
paying those as well. If you are on an acrol
basis again, and you can be buying things and having
(20:01):
payables and maybe slow down your collections and you're receivable,
the same thing goes on a cash basis, you can
slow down collections and less money that you receive in
during the last month of the year and defers it
possibly to collections in January, which takes the income into
(20:22):
the next year because you are cash basis, so it's time.
So if you're receiving less cash in today and receiving
it in January, then you would be bringing down the
gross revenue, which in turn wouldn't reduce your net income,
which in turn then lowers or taxes. Now, the next
(20:42):
year's tax rate is going to be a little bit higher,
but you've deferred it out a whole other year that
you would have to pay the federal income tax or
state income tax on that money. And if you're a
schedule see filer, you've also deferred paying Social Security of
Medicare out a whole other year as well. Now brings
(21:04):
us to a lot of other fun things we can
do and through the business, and we're going to talk
about some more great opportunities for tax planning for your business,
either as a owner, operator, consultant, retail business, you name it.
You need strategies. We've got a few more great strategies
(21:24):
coming up right after this.
Speaker 3 (21:27):
We have only scratched the surface of today's show. Please
stand by as Barry Chief Fowler will be right back with.
Speaker 2 (21:34):
Tax talk for you.
Speaker 3 (21:38):
As an owner operator, you already spend too much time
away from your family. Trucker Tax Tools handles all your
bookkeeping and taxes. No matter what level trucker you are.
Life on the road can be taxing, but that doesn't
mean that your wallet or time with your family should suffer.
Trucker Tax Tools makes your life run smoothly. Trucker tax
(22:00):
Tools dot Com for a free guide that will give
you the tools to never worry about your taxes again.
Call Trucker Tax Tools eight seven seven nine sixty six
two four seven seven or go to Trucker tax Tools
dot Com now and let the experts keep you trucking.
(22:22):
Let's get back to tax stock for you with more
tax stock once again.
Speaker 2 (22:27):
Here's your host, Barry gif Fallo.
Speaker 4 (22:32):
Hey, welcome back. You know we're talking about tax strategies
saving money on taxes, and I mean that becomes a
real big key to most business owners. You want to
find a way to save money on taxes. I mean,
what happens when you get hit with that huge tax
bill at the end of the year. You go into
a painting you don't know where the money's coming from.
Maybe you've been in business for a number of years
(22:54):
and you've had great years and you haven't been able
to afford to pay the taxes, and you've got tax debt.
Le's for taxations comes in, saves you from the I
R S, saves you from you know, having to pay
the I R S all at once. Maybe an installment agreement.
Maybe you qualify for an offering compromise because your income
is way down this year. Whatever the case is, we're
(23:16):
in a no judgment zone of taxation solutions.
Speaker 2 (23:19):
UH.
Speaker 4 (23:19):
Taxation Solutions tax Relief is going to be your representation
for strong aggressive tax resolution against the I R S.
So don't let them walk all of you. Give us
a call it eight eight eight nine three zero one
zero one six again eight eight eight nine three zero
one zero one six or just go to Taxation Solutions
(23:41):
dot net again. Taxation Solutions dot net. Get a free consultation,
no obligation. Hey, sometimes we're not going to take you
as a client. We're going to tell you what to do,
how you can help yourself and solve the problem, you know,
without having to pay somebody to do it, because it
may not be worth hiring someone. But we're getting back
(24:03):
to talking about tax strategies. So what else can you
do as a business owner. Well, one of the things
you can do as a business owner is employee family member. Hey,
maybe you've got kids, even kids in college, kids in
high school. You know, if they are able to work
in your business, you can hire family member to work
for you. Most likely they're going to be in a
(24:24):
lower tax bracket. So you know, I have a daughter
in college who does a lot of stuff for us
via social media. She does some other administrative work for
us as well. We can pay her for the hours
and the time that she spends and works, and she
can use that money to pay for her college. So
we get the deduction on our books and lowers our
(24:47):
taxes down. She's w two. Yes, we've got to pay
some of security and Medicare on it, and she has
to pay Federal withholdings and stuff on it, but she's
in a lower tax bracket. She's going to be in
the ten percent bracket. So if your business income in
your family livelihood is going to drive you up to
you know, a twenty five percent or thirty seven percent
(25:10):
tax bracket, hiring these family members definitely decreases that tax rate.
And they're working in the business and just pay them
to do nothing. They actually have to be an employee.
They actually have to work. Now you might even be
able to hire a contract but again they're going to
pay Social Security of Medicare on that money. If it's
(25:33):
schedule to see maybe you could set them up in
their own escort and then pay them and then they
got to file taxes and everything from there. So employing
family members, even younger kids that can actually work in
the business for you, they can use that money to
buy clothes, pay for sports and you know, maybe they're
(25:56):
playing travel ball, travel cheer, travel swim, you know, any
number of sports that have you know, travel as well
and have other expenses you're playing select things like that.
They can use that money to pay for all those
things as well, and it doesn't come out of your budget.
It becomes out of their funds. You can even set
(26:18):
them up for retirement accounts. And now you've done something
that most people haven't done, is you've set them up
for life if they never touched that and let that
continue to grow. Now you can retirement accounts, use those
to lower your income for you and your business. Now
you can maximize your retirement contributions. So even if you're
(26:42):
just doing your simple iras, you can reduce your taxable
income while building retirement savings. And then those limits have
increase for twenty twenty five. Now if you have a
plan through the business, so be a solo forour to
one K or maybe a four to oh one K
(27:02):
for the business or simple accept IRA, those plans have
higher limits and you can maximize your contributions. If you
have employees, then you've got to work out matches, so
you can have a one or two percent match for
employees and yourself, but it does lower the amount that
(27:25):
you can actually contribute into these four oh one K
plans because whatever you match for yourself, you had to
use the same percentage to match for them. You might
even be able to use the defined benefit plan.
Speaker 2 (27:39):
Now.
Speaker 4 (27:39):
I think most of these things come into really good
play when you have strong net income and you want
to build loyalty of the employees with you. You can
have the four to oh one K with matching plans
and with stipulations in there of how long the vesting
period is as well, so it's not something you're just
(28:02):
giving away money and they're going to turn around and
walk in you know, a year two or three. So
you can also put stipulations when that matching kicks in.
Things like that. I suggest you talk to your benefits
coordinator and have them work with you to see how
(28:22):
is this going to help and assist you in providing
the best benefits for you, your family, your company, and
what kind of contributions you're going to have and is
it worth it. Now you get some deductions for other
taxes and things like that, so keep those things in mind,
(28:44):
and the tax credits might even be worth it out
there as well. Now, a couple of things that I
want to start touching on. So we've gone through all
this planning for twenty twenty five, so you have an
idea of what's going on. Your tax prepared and you
should be sitting there with their software and saying, hey,
this is the estimated taxes you're going to have for
(29:06):
twenty twenty five. We're doing that for our clients. We're
starting that process right now of in depth tax planning
for our clients. So if you're a trucker and you're
not with a trucker tax roles, talk to your tax
people your bookkeeping people. How are they doing a tax
plan for you. We're doing those tax plans here currently
(29:28):
and starting to work with our clients on planning. In
the first couple of years we were in this and
we were really getting into tax planning, and a lot
of our truckers were like, hey, I've never had anybody
to do this before. This is new, this is different.
Now they come to expect it. But hey, you have
great ideas. Nobody's ever told me to plan for retirement.
(29:48):
My retirement was sitting in this truck, driving until I dropped,
until they buried me in this truck. What about family?
What about being to be able to retire joy life.
I've seen way too many truckers that are in their
seventies it's still driving because they've never done planning. They've
never planned for retirement, never planned to be out of
(30:10):
the truck. Well, maybe it's time. As a business owner,
you should always be planning. So you've started this, you
started your planning. You're starting to look at what your
net income is. If you're a schedule C, maybe it's
time to consider a new structure. So should you be
an escort? Maybe you're an LLC and you now can
(30:34):
possibly be a multi member LLC and file as a partnership.
Will these strategies work? Will they save you money? So
the first thing we look at is should you be
an escort? Should you be a multi member LLC? Now,
the difference is between those two is maybe as a
husband and wife, we can make you a multi member
(30:54):
LLC and file as a partnership. You can elect that.
Maybe you don't want to have you're not married, don't
have a spouse, and you don't want to take on
a partner, you might be an escort. Are these strategies
right for everybody? No, they're not. You know, I hear
all the time, Hey, so and so said I should
be an es corp. So and so said I should
(31:15):
be a multi member partnership. File a partnership return. Well,
partnership returns are a little bit easier. It keeps the
trash off the personal return, which I'm all for. It
lets you modify what your wages are going to be
by using a guaranteed payment, but you do have to
file that extra tax return. So it does add a
level of complications to your life and expense for that.
(31:39):
If you're not saving enough money and it's going to
be no different filing a partnership return than it is
filing a schedule C. Then why do it other than
getting the trash and the audit ease over to a
partnership return. That's life choices. So now what about an escort?
Everybody's want us to know, don't you? And guess what
(32:02):
I'm gonna fill you in because we're gonna take a
quick break and after we come back, we're gonna talk
about escorps. Why you should or why you shouldn't be
an escort. We'll do that right after this.
Speaker 3 (32:13):
We have only scratched the surface of today's show. Please
stand by as Barry G. Fowler will be right back
with tax talk for you. As an owner operator, you
already spend too much time away from your family.
Speaker 2 (32:29):
Stop spending time doing paperwork.
Speaker 3 (32:32):
Go to Trucker tax tools dot com, a solution built
specifically for truckers. Trucker tax tools dot Com makes your
life run smoothly. Let's get back to tax talk for
you with more tax talk once again.
Speaker 2 (32:49):
Here's your host, Barry G. Fowler.
Speaker 4 (32:54):
Hey, welcome back. Should you be an escort or shouldn't you?
That's one of the big questions when you're in business.
Now we go through a complete calculation on them and
we show where this money can save you money, where
it can save you in taxes, and what the drawbacks are.
So there are some good things, there's some bad things.
(33:14):
It really depends on your perspective. So first off, we're
going to look at net income. Where's your net income?
If your net income is fifty thousand, being an es
corp isn't necessarily one hundred percent advisable unless you want
to get the trash off of personal return onto a
business return. You can do that, But being an escort
(33:36):
means you've got to pay a reasonable wage to the
business owner that works in the business. Meaning if you
were working in the business for what you do for
the business, you would have to receive a reasonable wage
for that work. That means w two income and a
level of complexity. If there's not enough savings, why spend
(33:59):
the money for payroll and a payroll service, not to
mention the tax return to be done? Do not have
any benefit in your pocket? Now income becomes one one
hundred and fifty two hundred thousand is your net income?
Now we're talking about potential savings. That savings is going
(34:20):
to be the difference between the max tax bull amount
for Social Security, so that it would be right around
one hundred and eighty six thousand and what a reasonable
wage can be. So, if your business was netting two
hundred thousand dollars, let's say you're going to pay all
security and Medicare tax as a schedule see on the
full hundred and eighty six thousand, plus Medicare goes all
(34:42):
the way up to the two hundred. However, if your
reasonable wage for what you do for the business was
only that eighty six thousand, you now don't pay soll
security and Medicare tax on that other one hundred thousand,
So that saves you fifteen thousand, three hundred dollars a
year in soecurity and Medicare. Plus there's that other two
(35:03):
percent that you're going to pay from the one to
eighty six to the two hundred thousand, So added a
little bit more to it than there, and now that
becomes a lot more worthwhile of doing. Or if your
net income is one hundred thousand and reasonable wage for
what you do is fifty thousand, you're going to save
right around seventy five hundred dollars a seven five hundred
(35:26):
dollars in your pocket, not in the government. Now, what's
the drawback? You're paying less into Social Security and Medicare. However,
let's roll back to the retirement accounts. If you take
that savings and you were to make sure you contributed
it into your retirement account, and you made your normal
(35:47):
contribution that you would have made into your IRA, you've
now got a whole bunch more money into retirement. So
if you are able to set up a solo four
oh one K for your business, we rolled all that
money into the solo for one K, means you're going
to have about fifteen three hundred dollars in your solo
(36:08):
for a one K that if you don't touch, it's
going to continue to grow into a retirement age and
then you can draw. And if you do this every
single year and you never touch it and it continues
to compound every year, you could retire as a millionaire
if you started as very young and contribute it every year. Man,
(36:29):
when you get to retirement, agent, it is going to
be a beautiful retirement for it. So what we try
to teach our kids, we try to teach our family. Hey,
something else you can start considering doing if you're running
a really good business, and maybe it's a business that
you know, maybe your family members eventually want to get into,
or maybe they will get into one day they need
to get out and work for somebody else and then
come to work for you eventually, maybe gifting a percentage
(36:53):
of your business to them. So you know, if your
business goes through up and down cycles. When you're in
a downcycle and you gift share of your business, and
especially a business that may be worth much more than
what the inheritance tax is levels going to be, then
you want to find ways to move money out of
your pocket into somebody else's pocket, and especially your beneficiaries
(37:17):
because they'd be paying tax on it. And this is
one way of moving the shares from one to the other. Now,
if it's set up as like a partnership, this can
be really easy and really nice because it can be
shares of capital but not participating in profit and loss
of the business. So if you ever sold a business,
(37:38):
they would have percentage of capital. You can have different
levels of shares in a partnership whereas or even an
LLC whereas an escort, you've got to have one class
of stock, and they're therefore they would receive distributions just
like you would of profits if you're distributing profits, and
(37:59):
they would be responsible for the tax on it. So
we use this in like a real estate investment holding company.
The buildings sitting in here and it's receiving rents and
paying taxes and everything. And airs have a different class
of stock. So maybe they own five percent of the
capital and the business each and the mother and father
(38:24):
owned you know, if there were three kids, that's fifteen
percent and mother and father owned the other eighty five percent.
And those are voting shares and capital. But on the
profit and law of profit side, or the last side,
those shares I say, ay, let's say would receive one
hundred percent of profit from you know, the rental properties
(38:46):
and everything directly via K one. The kids won't receive
anything unless the company is actually sold or liquidated. So
it's kind of a beautiful way to carry property. They
have only the ownership in the shares of the stock
or the membership interests, but they're in a different class,
(39:07):
meaning they have no voting rights, they have no access
to anything through company, and they just owned shares of
capital and you know, mom and dad basically owned the
operating shares, operate the company, and receive the profits from
the business, or the losses from the business goes to them,
(39:31):
not to the kids. So it's kind of a beautiful way.
And eventually, you know, if the parents pass away those shares,
the rest of the capital then would be distributed and
the operating shares would be distributed to the kids if
so see fit or if the company is liquidated upon death,
(39:52):
then you know they would receive the capital that came
out from the business. So it kind of gives you
ways of moving the interest from you here to the
children without impacting their taxes. Maybe you wanted to impact
their taxes and have the money go over to them
(40:14):
and part of the profit, and you can just set
it up that way as well. It's one of the
fun things you can do in your business to make
things work for you and your family. I had a
quick question about charitable contributions. Ray, Hey, I really appreciate
the question charitable contributions. Yes, the One Big Beautiful Bill
(40:35):
had in a provision in it that could influence the
timing of your gifts or charitable contributions. Starting in twenty
twenty six, corporations may only deduct gifts in excess of
one percent of their taxable income. Now this is corporations
eleven twenties doesn't have anything to do with eleven twenty
s's or ten sixty fives. Those charitable contributions through to
(41:00):
you on your personal tax return. And yes, you get
some benefit of charitable contributions, depending on how much the
charitable contributions are well to depend on the magnitude of
the effect it has. Now you're going to have some
direct limited deductions, they're not on Schedule A, but excess
(41:23):
above that limitation starting in twenty twenty six is all
going to still go on Schedule A if you're above
that threshold that they have for you on the taxes.
I still say, if you're in business, everything you do,
whether you're making a terrible contribution, you're participating maybe a
charity golf event, maybe you're participating at your church's bizarre
(41:48):
and you're sponsoring things, it's not necessarily a charitable contribution.
That is advertising and is marketing. You're getting your name
out there. Don't classify it as a charitable contribution. Classify
it as marketing expenses. Now, if you're just giving a
gift to the church on a Sunday and you're just
giving it, and there's no benefit of marketing out of it.
(42:10):
It's not a marketing expense. It's sharable contribution. Don't try
to classify it any other way. So those are the
things that you need to keep in mind. Hey, what
do we take out of all this today? Planning, planning, planning.
The more planning you do, the less you hopefully will
pay in taxes. Find a good action prepare, Find somebody
(42:30):
that's an enrolled agent that I'll sit down and work
with you that you know, whether it's virtual, whether it's
in office, whether it's remote. You've got to have somebody
to talk to. Planning. We're doing planning now for our truckers.
Taxation Solutions does planning for their clients as well. Find
somebody good, find somebody that knows your industry and above all, plan, plan, plan, plan,
(42:54):
And they say in real estate and it's location, location, location.
In taxes, I said, day all your long, it's planning, planning, planning,
get your tax plan, make sure your tax plan is right,
review your tax plan. Planning, planning, planning. Hey, this is
a great week, great day. We're coming to you know,
(43:15):
what's six weeks left in the year. Get your plans
done tomorrow, celebrate. Thank you veterans, to all our veterans
out there, thank you, thank you, thank you for all
you've done for this God bless you. Hey. Tune in
here every Monday, ten am Eastern time on Tax Talk
for you again. It's Tax Talk number four, letter you
(43:37):
dot com. Follow us over there and never miss an
episode whatsoever, and we'll be right here on W four
CUI Radio ten am Mondays Eastern time. Be here, tune in,
let us answer your questions. We'll see you next week.
Have a God bless glorious week, and again, thank you veterans.
Speaker 3 (43:58):
Are you an individual or business that wants to understand
taxes and how they affect you. Are you looking for
specific tax advice for self employed business owners and truckers.
Are you behind on taxes and your bookkeeping? Are you
dealing with the irs and ready to have some relief,
(44:18):
then you need Tax Talk for you, hosted by tax
and trucker expert Barry g.
Speaker 2 (44:25):
Vouer Ea.
Speaker 3 (44:26):
Tune in ten am Eastern time every Monday right here
on W four CY Radio and Talk for TV. Don't
forget to check this and past episodes at tax talkforu
dot com. See you next week at W fourcy dot com.
The topics and opinions express in the following show are
solely those of the hosts and their guests and not
those of W FOURCY Radio. It's employees are affiliates. We
make no recommendations or endorsements for radio show programs, services,
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liability explicitor implies shall be extended to W FOURCY Radio
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be directed to those show hosts. Thank you for choosing
(00:21):
W FOURCY Radio.
Speaker 2 (00:28):
Barry G.
Speaker 3 (00:28):
Fowler EA brings you tax talk for you right here
on W four CY Radio and Talk for TV. As
an enrolled agent and a national leader in tax resolution
as well as Trucker bookkeeping and tax planning. With over
thirty years of experience, Barry will break down taxes, bookkeeping,
(00:49):
tax planning, and tax relief for individuals and businesses just
like you. So let's have some tax talk for you
with your host, Barry ger.
Speaker 4 (01:02):
Hey. Welcome, and it's another great Monday leading into a
great week. God bless you to be here and be
up do something important and exciting and fun for the
family this week. Hey, this week we honor veterans, and
tomorrow is Veterans Day Day that honors all that have
(01:26):
served in the United States Armed Forces in times of
war and in times of peace. It's actually the day
if you don't do it any other day of the year.
It's the day to thank all veterans for their service,
acknowledge the sacrifices they have made, their families have made,
(01:48):
and the contributions they've made to this great country, and
then also show appreciation for the courage and dedication. I mean,
this country would not be the country it is without
our veterans. And you know that day, Veterans Day, tomorrow
is the day to honor them above all. You know what,
(02:11):
we recognize all veterans. It's dedicated to everyone who has
served in the United States military, but not just those
that fought in some specific war. If you've served, thank you,
Thank you for your service to this country. We could
not have the freedoms we have today without our great
(02:32):
military and Armed forces. Well that being said, let's talk
about taxes. Now. We get the privilege of living in
this great country. We got to have the privilege of
paying taxes, right, Oh, my Atlanta. We got to do
some planning and today. What we're going to be talking
about above all for people is tax strategies. As a
(02:55):
business owner, you own your business. Now it doesn't matter
to me. You know, whether you're reporting on the Schedule
C as a business owner, you're reporting as an escort
on eleven twenty s, you're reporting as a partnership on
a ten sixty five. You've got to have strategies. You've
got to have ways to reduce the taxes that you
(03:19):
are going to pay for your family. Now, if you're
reporting on one of those three forms, you are getting
taxed at the bottom line on your personal tax return,
so net income Schedule C bottom line of your net income. Right,
there's tax for Social Security and Medicare and federal income taxes.
After a few adjustments eleven twenty and ten sixty five,
(03:42):
you're both going to get k ones from those entities.
So being taxed as an escort, you get it passed
through and you get tax for federal income tax on
there and reasonable wages as a W two and then
ten sixty five you're going to get guaranteed payments and
an income come from the business and be taxed there. Now,
(04:03):
if you are a corporation and tax as a c
court and you didn't make the election for escorp, and
the corporation pays the corporate tax. If you get distributions,
you get ten ninety nine dividends because they don't have distributions,
it's dividends. And then you also have w two wages. Now,
(04:25):
where does tax planning begin. Well, tax planning should have begin.
It's early on the beginning of the year. Tax planning
should have begun with starting keeping, taking an account of
all transactions that happen for your business. Now I tell you,
if you are in business, make sure you have a
separate bank account just for the business. Don't run anything
(04:49):
personal through its matter of fact, you take your distributions
or you take your wages, and those go to your
personal account, and then you pay all your personal expenses
out of your personal account, not out of the business.
No comlank. Now you've got good bookkeeping, meaning you've got
not just an income statement or cash flow statement, but
you've actually got a balance sheet in an income statement.
(05:10):
Start looking there, doing a comparison, and hopefully you had
good bookkeeping last year, or if you're new in business,
this is a great practice to go through and start
analyzing what's happening in your business. Look at your profit
and loss. Does it have all your expenses that you
expected to be there? Even the little things. You know,
(05:33):
if you have a telephone or cell phone service to
the business, is it recorded there? You know, are you
getting all your office supplies and everything else recorded there?
Maybe you're buying things out of your personal account because
you had expenses that you didn't have your have a
credit card or something. Did you account for all those expenses?
So every expense matters, So when we talk about strategies,
(05:57):
we want to make sure you're capturing every expense possible.
Look at your balance sheet. Now, your balance sheet, yes,
is going to have what's in your bank account reconcile amount.
It's going to have maybe your accounts receivable, who owes
you money, accounts payable, who owes you owe money? To
your loans. You may have loans that are outstanding that
(06:18):
you owe people or maybe somebody owes you money. You're
going to have assets you bought equipment, property, land, and
building this year that should be a kind of fort
on the balance sheet as a fixed asset. And if
you're running in comparison from one year to the next,
you'll be able to see the changes and the differences
right there on the balance sheet. Now, when you start
seeing those things, we're going to be able to explain
(06:41):
more how this is going to benefit you as a
business owner looking at how to save money on taxes,
because realistically, your tax strategy is to get you into
a better tax bracket, lower the tax rates down by
strategies to keep the taxes to the lowest amount allowed
(07:06):
by law. So why do we do these strategies? I mean,
who really wants to pay thirty seven percent income tax
plus maybe you know three point eighty percent and net
investment tax. Nobody really wants to do it. I don't
care how much money. People don't want to give money
to the federal government. Or if you're in a state
(07:29):
that's chargeding you, you don't want to give money to
the state either. I mean we all see that neither
the federal or state governments know how to spend money.
Actually they know how to spend money. They waste money,
but they don't know how to be reasonable. They don't
know how to have a good budget, they don't know
how to break even in their revenues. They're just rather
just haphazardly than, you know, save money. They're talking about
(07:54):
saving money and tax rates. You know, I got into
a disagreement with one of our county commissioners. They were
promoting an extra one percent sales tax in our area.
Because in the area that I live in, it's not
in a city, so it's unincorporated area. We pay a
lower sales tax rate than other people. Our county commissioner
(08:17):
decided he wanted to be able to add this one
percent in and he was supporting it. And he says, well,
you know, it's not really a tax increase. You're already
getting charged. No, I wasn't getting charged. I don't want
to pay an extra one percent in tax. Nobody wants
to pay more in tax. Yes, this went down in defeat.
It said right there on the ballot that it was
a tax increase, but he said it wasn't. It is
(08:40):
so you know, little fun things like that. Nobody wants
to pay more in tax. If you had the opportunity
to lower your tax rate, you would, wouldn't you. I'd
be the first one to raise my hand and say yes,
I want a lower tax rate. I am not going
to raise my hand and say increase my taxes just
because I want to pay more. You want to find
ways all the time to pay less money in taxes.
(09:05):
So again we started looking at your income statement, your
profit and laws, your balance sheet and making sure that
you have every deduction for your business that's allowed by law.
You know, is it ordinary necessary business expenses? Are they
classifying the money that you are paying for marketing? In marketing?
(09:26):
So maybe you're contributing and doing something at the church
and it's advertising, you're putting banners up, you're doing other
things to get your name out. Well, it does more
for you as a marketing expense than it does as
a charitable contribution. Yes, it feels nice as a charitable contribution,
but the tax deduction is better if it is a
(09:47):
marketing expense. So if you get some marketing out of it,
you can classify it as marketing expense versus charitable contributions. Now,
well you've got to look at all the different ideas
here on tax planning strategies for your business. So whether
you're an owner operator, whether you're in retail, whether you're
in marketing and consultant, whatever, you've got to do planning
(10:09):
for your business. We're going to take a quick break,
and when we come back from this break, we're going
to continue talking about tax planning for your business. We'll
do that right after that.
Speaker 3 (10:18):
We have only scratched the surface of today's show. Please
stand by as Barry G. Feller will be right back
with tax talk for you.
Speaker 2 (10:29):
If you owe the.
Speaker 3 (10:30):
IRS or are going through an IRS audit, don't go
at it alone. Called Taxation Solutions Tax Relief at eight
eight eight nine three zero one zero one six. We
are your solution for IRS debts, audits, back taxes, garnishments,
leans and levees. Whether you're an individual or business, you
(10:53):
need a solution and a strong, aggressive tax resolution. Don't
let the IRS walk all over you. Stop the IRS
now call eight eight eight nine three zero one zero
one six or go to Taxation Solutions dot net now
for a free no obligation consultation. Let's get back to
(11:19):
tax talk for you with more tax talk once again,
here's your host, Barry G.
Speaker 2 (11:25):
Fallon.
Speaker 4 (11:28):
Hey, I promise one of my friends who reached out
on me and he says, you know, I heard you
thanking veterans for Veterans Day and everything. Can you mention
me out there? I said, man everybody's going to have
their fifteen minutes of fame, so everybody needs to hear
you know, Michael, I appreciate your service, you know, for
this country and your friends that served with you as well.
(11:53):
Thank you for your service, and you know, hope you
continue listening to us and everything out there. You know,
it's a day of being thankful and seeing if you
see a veteran out there, you see somebody that has served,
or even somebody currently in the military, you know, hey,
thank them for their service out there. And we're talking
(12:13):
about business planning and tax planning strategies for twenty twenty
five for this year. We'll get into some twenty twenty
six stuff that you can do while you're working on
twenty twenty five planning. I mean, we've only got less
than two months left in this year. Can you believe
how fast this year has gone by? Again, man, you know,
so implementing strategies now, maybe you didn't think about it
(12:36):
earlier in the year, you got to think about it now.
So you know, some of the key strategies we're going
to be talking about is taking advantage of bonus appreciation
for asset purchases, maximizing the Qualified Business Income Deduction QBI,
utilizing business interest expense deductions, and other effective tactics that
(13:01):
we're going to come through and talk about as well,
such things as timing of income and expenses, and then
optimizing maybe your business structure. For twenty twenty six, maximizing
retirement contributions. We're going to get into that a little
bit more in depth as we go through, so some
of the key strategies again for twenty twenty five right now,
(13:25):
the One Big Beautiful Bill Act of twenty twenty five
permanently reinstated one hundred percent bonus deppreciation for qualifying property
placed in service after January nineteen, twenty twenty five. This
means your business can fully expense the cost of eligible
(13:46):
equipment in the year purchased. So if you purchase something
after January nineteen, twenty twenty five, you're going to be
able to use Section one seventy nine to fully depreciate
your equipment. Now watch out for this because you know,
depending on how much equipment you bought, if you're going
(14:06):
to be fully expensing things at one seventy nine, you
don't want to take the tax rate down to where
you're not paying quite anything, because now you might be
wasting depreciation because the next year you might be back
up into the much higher tax bracket. So you kind
of got a waigh how much depreciation you're going to
use based on your net income and based on your
(14:27):
tax situation. So we're always looking at that. But the
maximum deduction limit for Section one seventy nine expensing increased
to two point five million for property placed in service
after December thirty one, twenty four, with the phrase phase
out threshold at four million. Qualified production property. Business can
(14:52):
also take one hundred percent bonus depreciation for this qualified
production property placed in service before January one, thirty one
if construction began after January nineteen twenty five. So there's
little tweaks in the dates out there, so you kind
of got to watch and look at the actual rules
(15:14):
behind everything a when property was placed in service and
when maybe you started construction as well, like unqualified production property. Now,
the other good thing that happened in the one big
beautiful bill that helps you with your tax strategies for
this year is the Qualified Business Income Deduction QBI. Now,
(15:37):
if you've been in business, you're probably heard about the
twenty percent QBI deduction. The Section one ninety nine A,
the One Big Beautiful Bill made it permanent and that's
eligible for pass through entities. So this deduction was expanded
and said a minimum deduction of four hundred dollars and
(15:59):
as long as you had at least one thousand dollars
of qualified business income QBI. Yeah, a little bit complicated
calculation out here that you've got to go through, and
if you have losses, it complicates things further. Carrying losses
forward from QBI complicates things. Make sure you're working with
(16:20):
your tax preparer to know how this QBI deduction is
going to work and how it's going to work to
your advantage or how it could affect you in the future.
Also going forward due to the losses and everything as
it carries forward. QBI has always been one of these
nice things when you're making money, but complicated things when
(16:43):
you've been losing money for a few years and you're
carrying the QBI losses forward. Also has other complicated factors
in there, with wages and property and equipment and stuff
like that. So it's not something that I recommend anybody
tread lightly through. Make sure you've got to qualify tax
(17:04):
preprayer and rolled agent like us here at Taxition Solutions
Trucker Tax Tools, and that you've got the right calculations
in there for the QBI. Now, I know, you know
tax software. Oh you know, Hey, don't worry about it.
Everything is going to be easy. It's still one of
those things that unless you're carrying it forward from year
(17:27):
to year and that site aim Software, unless they carry
it forward for you, most people don't realize and just
ignore and then they get audited for this QBI problem
and you've got to go back in and fix it.
Trust me, the irs is tracking in some way, shape
or form and they will figure this out. Hey, speaking
(17:49):
of deductions and CBI and even truckers owner operators out
there in small businesses, Trucker tax tools dot Com is
the site that you can go to. We help truckers
with bookkeeping and taxes. Trucker Tax Tools is geared strictly
(18:10):
around you as a trucker to make your life run smoother.
Help you with bookkeeping, make sure that you have tax
planing that you need. Make sure that you know how
much your estimated tax payments should be made during the
year so that you're not hit with a huge tax
bill come April fifteenth, and then penalties for not making
(18:32):
your estimated tax payments as well. So contact us at
Trucker Tax Tools and go to Trucker tax tools dot
com hit our info page there and you'll be able
to connect with us on that site so that you
(18:53):
are getting every deduction possible. That phone number is eight
seven seven nine six six two four seven seven again
eight seven seven nine six six two four seven seven,
So get in touch with us there. Let us help
(19:17):
you with your bookkeeping and your taxes. You know, as
we're talking about, you know, business tax planning and everything else.
Something you can look at as a business owner potentially
is timing your income and your expenses. So if you're
using a cash basis accounting, accelerating your expenses into the
(19:40):
current year would help you bring down your net income.
So if there are expenses that you can pay and
you utilize this year, it's something you can look at
paying those as well. If you are on an acrol
basis again, and you can be buying things and having
(20:01):
payables and maybe slow down your collections and you're receivable,
the same thing goes on a cash basis, you can
slow down collections and less money that you receive in
during the last month of the year and defers it
possibly to collections in January, which takes the income into
(20:22):
the next year because you are cash basis, so it's time.
So if you're receiving less cash in today and receiving
it in January, then you would be bringing down the
gross revenue, which in turn wouldn't reduce your net income,
which in turn then lowers or taxes. Now, the next
(20:42):
year's tax rate is going to be a little bit higher,
but you've deferred it out a whole other year that
you would have to pay the federal income tax or
state income tax on that money. And if you're a
schedule see filer, you've also deferred paying Social Security of
Medicare out a whole other year as well. Now brings
(21:04):
us to a lot of other fun things we can
do and through the business, and we're going to talk
about some more great opportunities for tax planning for your business,
either as a owner, operator, consultant, retail business, you name it.
You need strategies. We've got a few more great strategies
(21:24):
coming up right after this.
Speaker 3 (21:27):
We have only scratched the surface of today's show. Please
stand by as Barry Chief Fowler will be right back with.
Speaker 2 (21:34):
Tax talk for you.
Speaker 3 (21:38):
As an owner operator, you already spend too much time
away from your family. Trucker Tax Tools handles all your
bookkeeping and taxes. No matter what level trucker you are.
Life on the road can be taxing, but that doesn't
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(22:00):
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dot Com now and let the experts keep you trucking.
(22:22):
Let's get back to tax stock for you with more
tax stock once again.
Speaker 2 (22:27):
Here's your host, Barry gif Fallo.
Speaker 4 (22:32):
Hey, welcome back. You know we're talking about tax strategies
saving money on taxes, and I mean that becomes a
real big key to most business owners. You want to
find a way to save money on taxes. I mean,
what happens when you get hit with that huge tax
bill at the end of the year. You go into
a painting you don't know where the money's coming from.
Maybe you've been in business for a number of years
(22:54):
and you've had great years and you haven't been able
to afford to pay the taxes, and you've got tax debt.
Le's for taxations comes in, saves you from the I
R S, saves you from you know, having to pay
the I R S all at once. Maybe an installment agreement.
Maybe you qualify for an offering compromise because your income
is way down this year. Whatever the case is, we're
(23:16):
in a no judgment zone of taxation solutions.
Speaker 2 (23:19):
UH.
Speaker 4 (23:19):
Taxation Solutions tax Relief is going to be your representation
for strong aggressive tax resolution against the I R S.
So don't let them walk all of you. Give us
a call it eight eight eight nine three zero one
zero one six again eight eight eight nine three zero
one zero one six or just go to Taxation Solutions
(23:41):
dot net again. Taxation Solutions dot net. Get a free consultation,
no obligation. Hey, sometimes we're not going to take you
as a client. We're going to tell you what to do,
how you can help yourself and solve the problem, you know,
without having to pay somebody to do it, because it
may not be worth hiring someone. But we're getting back
(24:03):
to talking about tax strategies. So what else can you
do as a business owner. Well, one of the things
you can do as a business owner is employee family member. Hey,
maybe you've got kids, even kids in college, kids in
high school. You know, if they are able to work
in your business, you can hire family member to work
for you. Most likely they're going to be in a
(24:24):
lower tax bracket. So you know, I have a daughter
in college who does a lot of stuff for us
via social media. She does some other administrative work for
us as well. We can pay her for the hours
and the time that she spends and works, and she
can use that money to pay for her college. So
we get the deduction on our books and lowers our
(24:47):
taxes down. She's w two. Yes, we've got to pay
some of security and Medicare on it, and she has
to pay Federal withholdings and stuff on it, but she's
in a lower tax bracket. She's going to be in
the ten percent bracket. So if your business income in
your family livelihood is going to drive you up to
you know, a twenty five percent or thirty seven percent
(25:10):
tax bracket, hiring these family members definitely decreases that tax rate.
And they're working in the business and just pay them
to do nothing. They actually have to be an employee.
They actually have to work. Now you might even be
able to hire a contract but again they're going to
pay Social Security of Medicare on that money. If it's
(25:33):
schedule to see maybe you could set them up in
their own escort and then pay them and then they
got to file taxes and everything from there. So employing
family members, even younger kids that can actually work in
the business for you, they can use that money to
buy clothes, pay for sports and you know, maybe they're
(25:56):
playing travel ball, travel cheer, travel swim, you know, any
number of sports that have you know, travel as well
and have other expenses you're playing select things like that.
They can use that money to pay for all those
things as well, and it doesn't come out of your budget.
It becomes out of their funds. You can even set
(26:18):
them up for retirement accounts. And now you've done something
that most people haven't done, is you've set them up
for life if they never touched that and let that
continue to grow. Now you can retirement accounts, use those
to lower your income for you and your business. Now
you can maximize your retirement contributions. So even if you're
(26:42):
just doing your simple iras, you can reduce your taxable
income while building retirement savings. And then those limits have
increase for twenty twenty five. Now if you have a
plan through the business, so be a solo forour to
one K or maybe a four to oh one K
(27:02):
for the business or simple accept IRA, those plans have
higher limits and you can maximize your contributions. If you
have employees, then you've got to work out matches, so
you can have a one or two percent match for
employees and yourself, but it does lower the amount that
(27:25):
you can actually contribute into these four oh one K
plans because whatever you match for yourself, you had to
use the same percentage to match for them. You might
even be able to use the defined benefit plan.
Speaker 2 (27:39):
Now.
Speaker 4 (27:39):
I think most of these things come into really good
play when you have strong net income and you want
to build loyalty of the employees with you. You can
have the four to oh one K with matching plans
and with stipulations in there of how long the vesting
period is as well, so it's not something you're just
(28:02):
giving away money and they're going to turn around and
walk in you know, a year two or three. So
you can also put stipulations when that matching kicks in.
Things like that. I suggest you talk to your benefits
coordinator and have them work with you to see how
(28:22):
is this going to help and assist you in providing
the best benefits for you, your family, your company, and
what kind of contributions you're going to have and is
it worth it. Now you get some deductions for other
taxes and things like that, so keep those things in mind,
(28:44):
and the tax credits might even be worth it out
there as well. Now, a couple of things that I
want to start touching on. So we've gone through all
this planning for twenty twenty five, so you have an
idea of what's going on. Your tax prepared and you
should be sitting there with their software and saying, hey,
this is the estimated taxes you're going to have for
(29:06):
twenty twenty five. We're doing that for our clients. We're
starting that process right now of in depth tax planning
for our clients. So if you're a trucker and you're
not with a trucker tax roles, talk to your tax
people your bookkeeping people. How are they doing a tax
plan for you. We're doing those tax plans here currently
(29:28):
and starting to work with our clients on planning. In
the first couple of years we were in this and
we were really getting into tax planning, and a lot
of our truckers were like, hey, I've never had anybody
to do this before. This is new, this is different.
Now they come to expect it. But hey, you have
great ideas. Nobody's ever told me to plan for retirement.
(29:48):
My retirement was sitting in this truck, driving until I dropped,
until they buried me in this truck. What about family?
What about being to be able to retire joy life.
I've seen way too many truckers that are in their
seventies it's still driving because they've never done planning. They've
never planned for retirement, never planned to be out of
(30:10):
the truck. Well, maybe it's time. As a business owner,
you should always be planning. So you've started this, you
started your planning. You're starting to look at what your
net income is. If you're a schedule C, maybe it's
time to consider a new structure. So should you be
an escort? Maybe you're an LLC and you now can
(30:34):
possibly be a multi member LLC and file as a partnership.
Will these strategies work? Will they save you money? So
the first thing we look at is should you be
an escort? Should you be a multi member LLC? Now,
the difference is between those two is maybe as a
husband and wife, we can make you a multi member
(30:54):
LLC and file as a partnership. You can elect that.
Maybe you don't want to have you're not married, don't
have a spouse, and you don't want to take on
a partner, you might be an escort. Are these strategies
right for everybody? No, they're not. You know, I hear
all the time, Hey, so and so said I should
be an es corp. So and so said I should
(31:15):
be a multi member partnership. File a partnership return. Well,
partnership returns are a little bit easier. It keeps the
trash off the personal return, which I'm all for. It
lets you modify what your wages are going to be
by using a guaranteed payment, but you do have to
file that extra tax return. So it does add a
level of complications to your life and expense for that.
(31:39):
If you're not saving enough money and it's going to
be no different filing a partnership return than it is
filing a schedule C. Then why do it other than
getting the trash and the audit ease over to a
partnership return. That's life choices. So now what about an escort?
Everybody's want us to know, don't you? And guess what
(32:02):
I'm gonna fill you in because we're gonna take a
quick break and after we come back, we're gonna talk
about escorps. Why you should or why you shouldn't be
an escort. We'll do that right after this.
Speaker 3 (32:13):
We have only scratched the surface of today's show. Please
stand by as Barry G. Fowler will be right back
with tax talk for you. As an owner operator, you
already spend too much time away from your family.
Speaker 2 (32:29):
Stop spending time doing paperwork.
Speaker 3 (32:32):
Go to Trucker tax tools dot com, a solution built
specifically for truckers. Trucker tax tools dot Com makes your
life run smoothly. Let's get back to tax talk for
you with more tax talk once again.
Speaker 2 (32:49):
Here's your host, Barry G. Fowler.
Speaker 4 (32:54):
Hey, welcome back. Should you be an escort or shouldn't you?
That's one of the big questions when you're in business.
Now we go through a complete calculation on them and
we show where this money can save you money, where
it can save you in taxes, and what the drawbacks are.
So there are some good things, there's some bad things.
(33:14):
It really depends on your perspective. So first off, we're
going to look at net income. Where's your net income?
If your net income is fifty thousand, being an es
corp isn't necessarily one hundred percent advisable unless you want
to get the trash off of personal return onto a
business return. You can do that, But being an escort
(33:36):
means you've got to pay a reasonable wage to the
business owner that works in the business. Meaning if you
were working in the business for what you do for
the business, you would have to receive a reasonable wage
for that work. That means w two income and a
level of complexity. If there's not enough savings, why spend
(33:59):
the money for payroll and a payroll service, not to
mention the tax return to be done? Do not have
any benefit in your pocket? Now income becomes one one
hundred and fifty two hundred thousand is your net income?
Now we're talking about potential savings. That savings is going
(34:20):
to be the difference between the max tax bull amount
for Social Security, so that it would be right around
one hundred and eighty six thousand and what a reasonable
wage can be. So, if your business was netting two
hundred thousand dollars, let's say you're going to pay all
security and Medicare tax as a schedule see on the
full hundred and eighty six thousand, plus Medicare goes all
(34:42):
the way up to the two hundred. However, if your
reasonable wage for what you do for the business was
only that eighty six thousand, you now don't pay soll
security and Medicare tax on that other one hundred thousand,
So that saves you fifteen thousand, three hundred dollars a
year in soecurity and Medicare. Plus there's that other two
(35:03):
percent that you're going to pay from the one to
eighty six to the two hundred thousand, So added a
little bit more to it than there, and now that
becomes a lot more worthwhile of doing. Or if your
net income is one hundred thousand and reasonable wage for
what you do is fifty thousand, you're going to save
right around seventy five hundred dollars a seven five hundred
(35:26):
dollars in your pocket, not in the government. Now, what's
the drawback? You're paying less into Social Security and Medicare. However,
let's roll back to the retirement accounts. If you take
that savings and you were to make sure you contributed
it into your retirement account, and you made your normal
(35:47):
contribution that you would have made into your IRA, you've
now got a whole bunch more money into retirement. So
if you are able to set up a solo four
oh one K for your business, we rolled all that
money into the solo for one K, means you're going
to have about fifteen three hundred dollars in your solo
(36:08):
for a one K that if you don't touch, it's
going to continue to grow into a retirement age and
then you can draw. And if you do this every
single year and you never touch it and it continues
to compound every year, you could retire as a millionaire
if you started as very young and contribute it every year. Man,
(36:29):
when you get to retirement, agent, it is going to
be a beautiful retirement for it. So what we try
to teach our kids, we try to teach our family. Hey,
something else you can start considering doing if you're running
a really good business, and maybe it's a business that
you know, maybe your family members eventually want to get into,
or maybe they will get into one day they need
to get out and work for somebody else and then
come to work for you eventually, maybe gifting a percentage
(36:53):
of your business to them. So you know, if your
business goes through up and down cycles. When you're in
a downcycle and you gift share of your business, and
especially a business that may be worth much more than
what the inheritance tax is levels going to be, then
you want to find ways to move money out of
your pocket into somebody else's pocket, and especially your beneficiaries
(37:17):
because they'd be paying tax on it. And this is
one way of moving the shares from one to the other. Now,
if it's set up as like a partnership, this can
be really easy and really nice because it can be
shares of capital but not participating in profit and loss
of the business. So if you ever sold a business,
(37:38):
they would have percentage of capital. You can have different
levels of shares in a partnership whereas or even an
LLC whereas an escort, you've got to have one class
of stock, and they're therefore they would receive distributions just
like you would of profits if you're distributing profits, and
(37:59):
they would be responsible for the tax on it. So
we use this in like a real estate investment holding company.
The buildings sitting in here and it's receiving rents and
paying taxes and everything. And airs have a different class
of stock. So maybe they own five percent of the
capital and the business each and the mother and father
(38:24):
owned you know, if there were three kids, that's fifteen
percent and mother and father owned the other eighty five percent.
And those are voting shares and capital. But on the
profit and law of profit side, or the last side,
those shares I say, ay, let's say would receive one
hundred percent of profit from you know, the rental properties
(38:46):
and everything directly via K one. The kids won't receive
anything unless the company is actually sold or liquidated. So
it's kind of a beautiful way to carry property. They
have only the ownership in the shares of the stock
or the membership interests, but they're in a different class,
(39:07):
meaning they have no voting rights, they have no access
to anything through company, and they just owned shares of
capital and you know, mom and dad basically owned the
operating shares, operate the company, and receive the profits from
the business, or the losses from the business goes to them,
(39:31):
not to the kids. So it's kind of a beautiful way.
And eventually, you know, if the parents pass away those shares,
the rest of the capital then would be distributed and
the operating shares would be distributed to the kids if
so see fit or if the company is liquidated upon death,
(39:52):
then you know they would receive the capital that came
out from the business. So it kind of gives you
ways of moving the interest from you here to the
children without impacting their taxes. Maybe you wanted to impact
their taxes and have the money go over to them
(40:14):
and part of the profit, and you can just set
it up that way as well. It's one of the
fun things you can do in your business to make
things work for you and your family. I had a
quick question about charitable contributions. Ray, Hey, I really appreciate
the question charitable contributions. Yes, the One Big Beautiful Bill
(40:35):
had in a provision in it that could influence the
timing of your gifts or charitable contributions. Starting in twenty
twenty six, corporations may only deduct gifts in excess of
one percent of their taxable income. Now this is corporations
eleven twenties doesn't have anything to do with eleven twenty
s's or ten sixty fives. Those charitable contributions through to
(41:00):
you on your personal tax return. And yes, you get
some benefit of charitable contributions, depending on how much the
charitable contributions are well to depend on the magnitude of
the effect it has. Now you're going to have some
direct limited deductions, they're not on Schedule A, but excess
(41:23):
above that limitation starting in twenty twenty six is all
going to still go on Schedule A if you're above
that threshold that they have for you on the taxes.
I still say, if you're in business, everything you do,
whether you're making a terrible contribution, you're participating maybe a
charity golf event, maybe you're participating at your church's bizarre
(41:48):
and you're sponsoring things, it's not necessarily a charitable contribution.
That is advertising and is marketing. You're getting your name
out there. Don't classify it as a charitable contribution. Classify
it as marketing expenses. Now, if you're just giving a
gift to the church on a Sunday and you're just
giving it, and there's no benefit of marketing out of it.
(42:10):
It's not a marketing expense. It's sharable contribution. Don't try
to classify it any other way. So those are the
things that you need to keep in mind. Hey, what
do we take out of all this today? Planning, planning, planning.
The more planning you do, the less you hopefully will
pay in taxes. Find a good action prepare, Find somebody
(42:30):
that's an enrolled agent that I'll sit down and work
with you that you know, whether it's virtual, whether it's
in office, whether it's remote. You've got to have somebody
to talk to. Planning. We're doing planning now for our truckers.
Taxation Solutions does planning for their clients as well. Find
somebody good, find somebody that knows your industry and above all, plan, plan, plan, plan,
(42:54):
And they say in real estate and it's location, location, location.
In taxes, I said, day all your long, it's planning, planning, planning,
get your tax plan, make sure your tax plan is right,
review your tax plan. Planning, planning, planning. Hey, this is
a great week, great day. We're coming to you know,
(43:15):
what's six weeks left in the year. Get your plans
done tomorrow, celebrate. Thank you veterans, to all our veterans
out there, thank you, thank you, thank you for all
you've done for this God bless you. Hey. Tune in
here every Monday, ten am Eastern time on Tax Talk
for you again. It's Tax Talk number four, letter you
(43:37):
dot com. Follow us over there and never miss an
episode whatsoever, and we'll be right here on W four
CUI Radio ten am Mondays Eastern time. Be here, tune in,
let us answer your questions. We'll see you next week.
Have a God bless glorious week, and again, thank you veterans.
Speaker 3 (43:58):
Are you an individual or business that wants to understand
taxes and how they affect you. Are you looking for
specific tax advice for self employed business owners and truckers.
Are you behind on taxes and your bookkeeping? Are you
dealing with the irs and ready to have some relief,
(44:18):
then you need Tax Talk for you, hosted by tax
and trucker expert Barry g.
Speaker 2 (44:25):
Vouer Ea.
Speaker 3 (44:26):
Tune in ten am Eastern time every Monday right here
on W four CY Radio and Talk for TV. Don't
forget to check this and past episodes at tax talkforu
dot com. See you next week at W fourcy dot com.
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