February 13, 2025 • 17 mins
Save money on taxes in 2025 with these top S-Corporation tax strategies! If you're a business owner, using the right tax planning techniques can help you reduce your tax liability, increase deductions, and keep more money in your pocket. Learn how the PTET tax can reduce your state tax burden and how to use reimbursements like the home office deduction and the Augusta Rule to lower taxable income.
Take advantage of retirement contributions to build wealth while cutting taxes. Set up a Family Management Company to shift income and create legal tax savings. Don’t overlook the auto deduction—write off business vehicle expenses the right way. These tax planning strategies help S-Corp owners keep more profits and stay IRS-compliant. You can implement these tax-saving strategies for your S-Corp in 2025!
I've put together this FREE resource for you:
7 Write-Offs Every S-Corporation Business Owner MUST Know
🆓 Download FREE PDF here: https://7taxwriteoffs.com/
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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 reason, ...
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Episode Transcript
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Speaker 1 (00:00):
If you have a profitable S-corporation or
you're thinking about having anS-corporation in 2025 for your
business.
Well, I will show you themust-have top four tax
strategies that you can use inyour S-corporation to
significantly reduce your taxes.
Ready, let's go.
Speaker 2 (00:19):
Welcome to the Tax Reduction Podcast for
Money-Making Entrepreneurs withBoris Mushaev.
Boris has helped entrepreneursacross the United States
collectively save millions ofdollars in taxes with the power
of tax planning and advisory.
The only way you, the businessowner, can save money on taxes
is by using proactive taxstrategies, and this podcast is
(00:40):
all about saving you money ontaxes.
Boris will share with youin-depth and easy to understand
tax reduction strategies thatyou can implement in your
business within 30 days or less.
Let's jump into today's episode.
Speaker 1 (00:52):
All right, awesome.
Let's start talking about thetop four tax strategies for your
business.
Now, the top four that we aregoing to talk about is the PTT
strategy, which is a phenomenaltax strategy.
A lot of advisors oraccountants don't use this for
their clients, so if you're abusiness owner, stick around.
I'm going to talk to you alittle bit more about it.
Reimbursements how you canreimburse yourself tax-free from
(01:16):
your business, from yourS-corporation, where your
S-corporation records as anexpense, a deduction, and you
don't pay any taxes on that.
We're going to talk aboutretirement options for an
S-corporation owner.
We're also going to talk aboutsetting up family management
company, where you can paymanagement fees and hire your
family members from that.
I also have a little bonus foryou.
(01:37):
I get asked a question a lothey, boris, what if I buy a car
but it is under my personal name?
Can I still write it off, or doI need to buy it from the
business?
How do I pay for it?
So we're definitely gonna talkabout it.
That's bonus.
That's actually five tops toptax deductions for you.
Now, before we continue about,before we continue talking about
(01:59):
these tax strategies, I wantedto find very quickly, in summary
, what is an S corporationbecauseporation, because some of
you may not be an S-corporationand you're thinking, hey, is
this the best option for me?
Now, what is an S-corporation?
Now, an S-corporation is not atype of a corporation that you
form.
Okay, what you form is an LLCor an Inc.
Okay, you can either form anLLC, a single member LLC, file
(02:23):
for it in your state, or form aregular corporation To become an
S corporation.
It's an election.
You have to elect to be an Scorporation.
You don't have to change yourEIN.
It's one form.
Usually, your tax advisor shouldbe able to do it.
If you don't have a tax advisor, definitely get a tax advisor.
Stop working with an accountantthat just puts the right
(02:43):
numbers in the right boxes.
So S corporation is tax advisor.
Stop working with an accountantthat just puts the right
numbers in the right boxes.
So S-corporation is an electionand in most cases, for most
business owners, especially ifthey start reaching 80 or
$100,000 in net profit from thebusiness, s-corporation is the
best option, depending on yourstate.
Some states actually do notlike S-corporations, for example
(03:04):
, new York City.
There's an extra corporationtax.
I believe Tennessee as well.
Definitely work with your taxadvisor, but for majority of
business owners in most of thestates, s-corporation is the
best option because it helps yousave money on the
self-employment taxes.
The main advantage why businessowners choose to elect to be an
S-corporation is to save moneyon self-employment taxes.
(03:24):
The main advantage why businessowners choose to elect to be an
S corporation is to save moneyon self-employment taxes.
When you're not an Scorporation, when you are, let's
say, an LLC, which mostbusinesses are, they're single
member LLCs.
What happens is that they payself-employment taxes the 15.3%
tax on the entire net profit butwhen you become an s
corporation, your s corporationprofits are not subjected to
(03:48):
that 15, only your salary is.
So that is an s corporation,it's a.
It's a.
It's also a pass-throughbusiness, just like an llc right
.
All the income is passedthrough to your personal income
taxes.
Now the way it is passedthrough it's through a K-1.
So think about it this way K-1is, in very simple terms, is
(04:08):
like a W-2 for a business ownerfrom an S-corporation.
Simple, okay.
K-1 reports your profits orlosses in some cases from the
S-corporation on your personaltaxes.
So S-corporation doesn't payany corporate taxes.
It helps you avoidself-employment taxes on the
entire net profit.
That is the power ofS-corporation and this is why a
(04:30):
lot of small business ownerschoose to be an S-corporation.
But what a lot of people don'trealize is that S-corporation
has a lot more benefits, a lotmore availabilities and tax
strategies that you can use.
Speaker 2 (04:55):
And those are my favorite top four tax strategies
that we're going to talk aboutright after this break.
Give you, boris, put together afree PDF for you, the business
owner Seven tax write-offs everyS Corporation business owner
must know.
In this PDF you can find seventax strategies that you can
start using in your business toinstantly start saving money on
taxes.
(05:15):
Click on the link in thedescription below for a free
download.
Speaker 1 (05:19):
All right, welcome back.
Let's talk about the first ofthe top four tax strategies,
which is a PTET tax.
Let's talk about what is a PTETpass-through entity taxation.
Pass-through entity taxation isthe way that you can basically
switch how you pay your taxes.
It's just in a simple term.
So let's say you are in thestate of California and you pay
(05:39):
crazy 13% state income taxes toCalifornia.
Or you're in New York City andyou pay state and city taxes of
10%.
Guess what?
Those taxes that you pay foryour personal taxes right to the
state, they're not taxdeductible.
There's a limit of only $10,000and it's probably property
(06:00):
taxes.
Okay, all the state taxes thatyou pay, they're not tax
deductible.
Ptet stands for pass-throughentity taxation.
Your state you don't know this,okay, and your accountant
doesn't know this, or accountantknows this and doesn't do this
for you your state gives you anoption Instead of paying
personal income taxes and notget a tax deduction.
(06:21):
They say, hey, why don't youelect to pay business taxes
instead and not personal taxes?
Same tax, nothing changes, youdon't pay anything extra, but
what happens is that you turn itinto a tax deduction.
Now, my clients, the taxadvisory clients, that we work
with everybody, it's a must,it's a mandate in my firm that
(06:42):
everybody elects to be taxed forptet.
For those states that qualifyand most states do offer this
option they get a great taxbenefit, saving thousands and,
in some cases, tens of thousandsof dollars just from this
deduction.
You don't have to pay anythingextra for this, you don't have
to invest your money anywhere.
You're just changing how youpay your taxes.
(07:03):
Phenomenal tax strategy Educateyour accountant or, better yet,
get yourself a tax advisor.
Okay, phenomenal tax strategy.
Tax strategy number two the topfour for an S corporation in
2025 is reimbursement.
One of them is home office.
I get asked a lot hey, boris,but I have an office, or let's
(07:24):
say, I'm a medical professional,I'm a dentist or I'm a lawyer,
or I've got a warehouse, or weprovide services, whatever it is
plumbing services.
You know, we've got a location,we've got a warehouse.
How do I still write off homeoffice?
So the IRS says if your homeoffice is an administrative home
office, meaning to say, ifyou're doing administrative work
(07:44):
in your home, then that officeis considered the principal
location.
And what happens with theprincipal location?
You get a write-off.
You can reimburse yourself forusing your home.
Not only that you also can takea depreciation deduction If you
own a home.
Majority of our clients that Iwork with are business owners
and majority of them own a home.
(08:06):
So they get a depreciationdeduction mortgage interest,
property taxes, hoa if they have.
We've got insurance, maidservices, cleaning services,
utilities All of that becomesreimbursable based on the square
footage of the home that youuse for the business.
Again, you've got to be doingadministrative work right and a
lot of business owners really doadministrative work in their
(08:28):
home.
So you know billing, invoicing,working on their bookkeeping,
you know responding to theiraccountants' emails mostly it's
done from home and all therequest documents, all of this
administrative.
Irs says you can reimburseyourself through what's called
an accountable plan.
If you don't know whataccountable plan is, get
yourself a tax advisor.
I guarantee your tax advisorwill probably know help you set
(08:50):
up those reimbursements.
Again, this is another strategy.
There my clients save thousandsof dollars in taxes.
Nothing changes.
They're not investing moneyinto anything else.
They're not taking out extramoney from the business.
This is the same money that youwould have paid for the
expenses, but now you're turningit into a tax deduction.
The next reimbursement is anAugusta rule, 14-day rule
(09:13):
probably abused by some businessowners.
But if you do it right and youfollow the IRS guidelines and
rules and show you, hey, how toavoid such an audit and how to
stay in compliance, augusta rulebasically says hey, even if
you're taking home office, forexample, you can still rent your
entire home to your businessfor business meetings, as long
as it's under 14 days, becausewe have this beautiful rule in
(09:35):
the IRS tax code that if yourent your home up to 14 days,
you don't have to pay any incometaxes on it.
It creates an opportunity foryou, the business owner, to be
able to take deductions.
Right, you can rent your homeat a reasonable rate.
Look it up online.
How much would your home go for?
Follow all the rules.
Speak to your tax advisorAnother strategy that yields my
(09:58):
clients thousands of dollars intax savings.
Are we paying for anythingextra?
Are we investing in anywhereelse?
Nope, we're just changing onhow we're paying for things.
Okay, legally, following theIRS tax code.
Now, as an S-corporation owner,you can set up different types
of retirement accounts.
That benefits you the most.
There's two types ofS-corporation owners.
(10:19):
One of them is owner-employeeYou're the only employee of your
S-corporation, or you couldhave other employees.
So if you are the only owner ofyour business, you can set up a
SEP IRA or a solo 401k.
The great news is that a lot ofbusiness owners that I'm
speaking to right now we're likein the beginning of the year of
2025, they're like oh, I didn'thave anything for 2024.
(10:41):
What do I do?
I probably missed out.
I'm like nope, you can actuallystill set up a SEP IRA for 2024
and contribute to it beforeMarch of 2025.
Or if you filed an extension,then by the extension deadline,
okay so SEP IRA 25% of yourS-Corporation salary, the W-2
that you take from theS-Corporation can be contributed
(11:03):
by your S-Corporation.
Okay, with a solo 401k it gets alittle bit tricky If you
haven't set it up for last year,you kind of missed the boat on
a solo 401k.
But if you want to implement itfor 2025, then same advantage
as an S-Corporation SEP IRA,which is 25% of your salary, but
plus you as a business ownercan put away $23,500, if you're
(11:27):
under the age of 50, from yourW-2, which really increases your
deduction If you're aprofitable business owner.
I would assume.
Well, not, I would assume,excuse me, I would actually take
an average, which I've seenwith my clients about $45,000
into solo 401k deduction.
Sep IRA, which is only limitedto your salary, will probably be
about $25,000.
(11:48):
Now again, please speak to yourtax advisor about this.
These strategies are availableevery day, any day, any minute
for you, the business owner.
You just have to work with theright person to be able to take
advantage of these taxstrategies.
Okay, the next one is a 401k Ifyou have employees, not if
you've got employees, don'tworry about it.
(12:09):
What you can do is still set upa safe harbor 401k which
protects you at 3% to match youremployees, which you know they
could put away a lot more than3%.
You will be matched, you willbe safeguarded, excuse me, to
put away 3% or maximum 4%,depending on their contribution.
But then you can turn aroundand take $23,500 from your
(12:31):
paycheck if you're under the ageof 50 and put that into the
401k.
So, another tax strategy.
A lot of business owners that Iwork with they're always
thinking about hey, boris, or inmost cases I like educate them
right.
So when you want to retire, doyou want to retire only with
taxable income or do you want toretire also with tax-free
income?
There's many ways how you canset up your 401ks okay.
(12:52):
One of the ways is set it up asRoth 401k, where the money
that's going in is after taxmeans you don't get a deduction
but everything there growstax-free, or you can split it.
You've got to speak to your taxadvisor, pair it up with your
financial advisor that helps youset up 401k okay and then come
(13:13):
up with that strategy Absolutelymind-blowing and really can
yield a lot of savings for youin the future when you retire.
The fourth tax strategy isfamily management company.
You, as an S corporation owner,can hire your family members,
particularly your children, whoalready started helping you in
your business, and pay them alegitimate salary.
Now, when you pay them from anS corporation, you will be
(13:35):
subject to payroll taxes.
What you can do instead is setup a family management company
that has a purpose, that has abusiness purpose to serve you
right and not just to avoidtaxes, so to speak.
Now your spouse can own thefamily management company.
It could be a soleproprietorship.
The S-corporation will pay thefamily management company
(13:55):
management fees for providingemployees to an S-corporation or
some kind of a services right.
Let's say, cleaning services byyour children, filing services,
administrative services.
Your family management companythen hire your children and pay
them.
When children are paid from asole proprietorship, such as a
(14:15):
family management company thatis owned by your spouse, you
also don't pay self-employmenttaxes and it's a great way to
shift income from your high taxbracket to lower tax brackets
for children or really at zerotax bracket.
Now that is the top four taxstrategies.
They can absolutely be utilized.
A lot of business owners areconcerned Is this going to take
(14:37):
up a lot of my time to do?
Actually, ptet won't.
Reimbursements will take upfive minutes of your time a
month.
Retirement, a one-time setup,family management company five
minutes It'll take you everymonth to kind of coordinate the
whole thing Pay the managementfee, pay the children for the
time they work.
Really doesn't take up a lot oftime.
(14:57):
You just need to make sureyou're working with the right
team for this.
Now let's talk about the bonus,the auto deduction.
I get asked the question a lot,boris, can I deduct and auto my
car in my S-Corporation BecauseI don't want to buy it on the
S-Corporation.
I don't want to put title onthe S-Corporation because the
commercial insurance will behigh, and that is true.
(15:19):
Now, good news is that if youbuying a car for the business
whether it's a, you know, 30 use, 50 use, 70 use you can buy the
car with your own funds.
Okay, have the businessreimburse you.
You can still take depreciationdeduction depending on the
usage of the car for thebusiness.
Now you can also actually buy acar with your business money
(15:43):
and even though the title willbe on your personal name, that's
totally okay, as long as you'reusing it for the business.
Whatever percentage you'reusing it for the business, you
can still deduct it.
So, in summary, you can pay forthe car from the business
account or from your personalaccount.
If you pay from the personalaccount, you can still record
the car as an asset under thebusiness, reimburse yourself and
(16:03):
take depreciation deductionbased on the usage.
If you pay for it from thebusiness, that is also okay.
You can also take adepreciation, again, depending
on the usage of the vehicle.
You can take all itsappropriate deductions.
Ladies and gentlemen, I beg you,please, if you want to start
saving money on taxes.
Yesterday I spoke to a newclient that is doing really well
(16:28):
for himself, invested in a lotof real estate and his
accountant files his taxes onTurboTax.
I don't have anything againstTurboTax, but TurboTax is
designed for people to filetheir own taxes.
If you've got an accountantfiling on TurboTax, not even
using a tax professionalsoftware and there's a lot of
(16:48):
cases like this Okay, there's alot of deductions you may be
missing out.
If you're not doing proactivetax planning for yourself, if
you're not using tax strategies,you don't have a tax advisor,
then I guarantee you you areoverpaying in taxes.
Thank you so much.
Please hear my voice, keep myvoice.
Get yourself a tax advisor Tillthe next time.
Speaker 2 (17:08):
That's it for today's episode.
Be sure to check out thedescription below for some free
tax reduction resources thatBoris put together for you.
If you're ready to work with atax advisor on your tax planning
, be sure to schedule your callby heading over to
wwwtaxplanningcallcom.
That's wwwtaxplanningcallcom.
And be sure to subscribe to ourpodcast to be notified when the
(17:29):
next strategy is released.
If you have a profitable S-corporation or
you're thinking about having anS-corporation in 2025 for your
business.
Well, I will show you themust-have top four tax
strategies that you can use inyour S-corporation to
significantly reduce your taxes.
Ready, let's go.
Speaker 2 (00:19):
Welcome to the Tax Reduction Podcast for
Money-Making Entrepreneurs withBoris Mushaev.
Boris has helped entrepreneursacross the United States
collectively save millions ofdollars in taxes with the power
of tax planning and advisory.
The only way you, the businessowner, can save money on taxes
is by using proactive taxstrategies, and this podcast is
(00:40):
all about saving you money ontaxes.
Boris will share with youin-depth and easy to understand
tax reduction strategies thatyou can implement in your
business within 30 days or less.
Let's jump into today's episode.
Speaker 1 (00:52):
All right, awesome.
Let's start talking about thetop four tax strategies for your
business.
Now, the top four that we aregoing to talk about is the PTT
strategy, which is a phenomenaltax strategy.
A lot of advisors oraccountants don't use this for
their clients, so if you're abusiness owner, stick around.
I'm going to talk to you alittle bit more about it.
Reimbursements how you canreimburse yourself tax-free from
(01:16):
your business, from yourS-corporation, where your
S-corporation records as anexpense, a deduction, and you
don't pay any taxes on that.
We're going to talk aboutretirement options for an
S-corporation owner.
We're also going to talk aboutsetting up family management
company, where you can paymanagement fees and hire your
family members from that.
I also have a little bonus foryou.
(01:37):
I get asked a question a lothey, boris, what if I buy a car
but it is under my personal name?
Can I still write it off, or doI need to buy it from the
business?
How do I pay for it?
So we're definitely gonna talkabout it.
That's bonus.
That's actually five tops toptax deductions for you.
Now, before we continue about,before we continue talking about
(01:59):
these tax strategies, I wantedto find very quickly, in summary
, what is an S corporationbecauseporation, because some of
you may not be an S-corporationand you're thinking, hey, is
this the best option for me?
Now, what is an S-corporation?
Now, an S-corporation is not atype of a corporation that you
form.
Okay, what you form is an LLCor an Inc.
Okay, you can either form anLLC, a single member LLC, file
(02:23):
for it in your state, or form aregular corporation To become an
S corporation.
It's an election.
You have to elect to be an Scorporation.
You don't have to change yourEIN.
It's one form.
Usually, your tax advisor shouldbe able to do it.
If you don't have a tax advisor, definitely get a tax advisor.
Stop working with an accountantthat just puts the right
(02:43):
numbers in the right boxes.
So S corporation is tax advisor.
Stop working with an accountantthat just puts the right
numbers in the right boxes.
So S-corporation is an electionand in most cases, for most
business owners, especially ifthey start reaching 80 or
$100,000 in net profit from thebusiness, s-corporation is the
best option, depending on yourstate.
Some states actually do notlike S-corporations, for example
(03:04):
, new York City.
There's an extra corporationtax.
I believe Tennessee as well.
Definitely work with your taxadvisor, but for majority of
business owners in most of thestates, s-corporation is the
best option because it helps yousave money on the
self-employment taxes.
The main advantage why businessowners choose to elect to be an
S-corporation is to save moneyon self-employment taxes.
(03:24):
The main advantage why businessowners choose to elect to be an
S corporation is to save moneyon self-employment taxes.
When you're not an Scorporation, when you are, let's
say, an LLC, which mostbusinesses are, they're single
member LLCs.
What happens is that they payself-employment taxes the 15.3%
tax on the entire net profit butwhen you become an s
corporation, your s corporationprofits are not subjected to
(03:48):
that 15, only your salary is.
So that is an s corporation,it's a.
It's a.
It's also a pass-throughbusiness, just like an llc right
.
All the income is passedthrough to your personal income
taxes.
Now the way it is passedthrough it's through a K-1.
So think about it this way K-1is, in very simple terms, is
(04:08):
like a W-2 for a business ownerfrom an S-corporation.
Simple, okay.
K-1 reports your profits orlosses in some cases from the
S-corporation on your personaltaxes.
So S-corporation doesn't payany corporate taxes.
It helps you avoidself-employment taxes on the
entire net profit.
That is the power ofS-corporation and this is why a
(04:30):
lot of small business ownerschoose to be an S-corporation.
But what a lot of people don'trealize is that S-corporation
has a lot more benefits, a lotmore availabilities and tax
strategies that you can use.
Speaker 2 (04:55):
And those are my favorite top four tax strategies
that we're going to talk aboutright after this break.
Give you, boris, put together afree PDF for you, the business
owner Seven tax write-offs everyS Corporation business owner
must know.
In this PDF you can find seventax strategies that you can
start using in your business toinstantly start saving money on
taxes.
(05:15):
Click on the link in thedescription below for a free
download.
Speaker 1 (05:19):
All right, welcome back.
Let's talk about the first ofthe top four tax strategies,
which is a PTET tax.
Let's talk about what is a PTETpass-through entity taxation.
Pass-through entity taxation isthe way that you can basically
switch how you pay your taxes.
It's just in a simple term.
So let's say you are in thestate of California and you pay
(05:39):
crazy 13% state income taxes toCalifornia.
Or you're in New York City andyou pay state and city taxes of
10%.
Guess what?
Those taxes that you pay foryour personal taxes right to the
state, they're not taxdeductible.
There's a limit of only $10,000and it's probably property
(06:00):
taxes.
Okay, all the state taxes thatyou pay, they're not tax
deductible.
Ptet stands for pass-throughentity taxation.
Your state you don't know this,okay, and your accountant
doesn't know this, or accountantknows this and doesn't do this
for you your state gives you anoption Instead of paying
personal income taxes and notget a tax deduction.
(06:21):
They say, hey, why don't youelect to pay business taxes
instead and not personal taxes?
Same tax, nothing changes, youdon't pay anything extra, but
what happens is that you turn itinto a tax deduction.
Now, my clients, the taxadvisory clients, that we work
with everybody, it's a must,it's a mandate in my firm that
(06:42):
everybody elects to be taxed forptet.
For those states that qualifyand most states do offer this
option they get a great taxbenefit, saving thousands and,
in some cases, tens of thousandsof dollars just from this
deduction.
You don't have to pay anythingextra for this, you don't have
to invest your money anywhere.
You're just changing how youpay your taxes.
(07:03):
Phenomenal tax strategy Educateyour accountant or, better yet,
get yourself a tax advisor.
Okay, phenomenal tax strategy.
Tax strategy number two the topfour for an S corporation in
2025 is reimbursement.
One of them is home office.
I get asked a lot hey, boris,but I have an office, or let's
(07:24):
say, I'm a medical professional,I'm a dentist or I'm a lawyer,
or I've got a warehouse, or weprovide services, whatever it is
plumbing services.
You know, we've got a location,we've got a warehouse.
How do I still write off homeoffice?
So the IRS says if your homeoffice is an administrative home
office, meaning to say, ifyou're doing administrative work
(07:44):
in your home, then that officeis considered the principal
location.
And what happens with theprincipal location?
You get a write-off.
You can reimburse yourself forusing your home.
Not only that you also can takea depreciation deduction If you
own a home.
Majority of our clients that Iwork with are business owners
and majority of them own a home.
(08:06):
So they get a depreciationdeduction mortgage interest,
property taxes, hoa if they have.
We've got insurance, maidservices, cleaning services,
utilities All of that becomesreimbursable based on the square
footage of the home that youuse for the business.
Again, you've got to be doingadministrative work right and a
lot of business owners really doadministrative work in their
(08:28):
home.
So you know billing, invoicing,working on their bookkeeping,
you know responding to theiraccountants' emails mostly it's
done from home and all therequest documents, all of this
administrative.
Irs says you can reimburseyourself through what's called
an accountable plan.
If you don't know whataccountable plan is, get
yourself a tax advisor.
I guarantee your tax advisorwill probably know help you set
(08:50):
up those reimbursements.
Again, this is another strategy.
There my clients save thousandsof dollars in taxes.
Nothing changes.
They're not investing moneyinto anything else.
They're not taking out extramoney from the business.
This is the same money that youwould have paid for the
expenses, but now you're turningit into a tax deduction.
The next reimbursement is anAugusta rule, 14-day rule
(09:13):
probably abused by some businessowners.
But if you do it right and youfollow the IRS guidelines and
rules and show you, hey, how toavoid such an audit and how to
stay in compliance, augusta rulebasically says hey, even if
you're taking home office, forexample, you can still rent your
entire home to your businessfor business meetings, as long
as it's under 14 days, becausewe have this beautiful rule in
(09:35):
the IRS tax code that if yourent your home up to 14 days,
you don't have to pay any incometaxes on it.
It creates an opportunity foryou, the business owner, to be
able to take deductions.
Right, you can rent your homeat a reasonable rate.
Look it up online.
How much would your home go for?
Follow all the rules.
Speak to your tax advisorAnother strategy that yields my
(09:58):
clients thousands of dollars intax savings.
Are we paying for anythingextra?
Are we investing in anywhereelse?
Nope, we're just changing onhow we're paying for things.
Okay, legally, following theIRS tax code.
Now, as an S-corporation owner,you can set up different types
of retirement accounts.
That benefits you the most.
There's two types ofS-corporation owners.
(10:19):
One of them is owner-employeeYou're the only employee of your
S-corporation, or you couldhave other employees.
So if you are the only owner ofyour business, you can set up a
SEP IRA or a solo 401k.
The great news is that a lot ofbusiness owners that I'm
speaking to right now we're likein the beginning of the year of
2025, they're like oh, I didn'thave anything for 2024.
(10:41):
What do I do?
I probably missed out.
I'm like nope, you can actuallystill set up a SEP IRA for 2024
and contribute to it beforeMarch of 2025.
Or if you filed an extension,then by the extension deadline,
okay so SEP IRA 25% of yourS-Corporation salary, the W-2
that you take from theS-Corporation can be contributed
(11:03):
by your S-Corporation.
Okay, with a solo 401k it gets alittle bit tricky If you
haven't set it up for last year,you kind of missed the boat on
a solo 401k.
But if you want to implement itfor 2025, then same advantage
as an S-Corporation SEP IRA,which is 25% of your salary, but
plus you as a business ownercan put away $23,500, if you're
(11:27):
under the age of 50, from yourW-2, which really increases your
deduction If you're aprofitable business owner.
I would assume.
Well, not, I would assume,excuse me, I would actually take
an average, which I've seenwith my clients about $45,000
into solo 401k deduction.
Sep IRA, which is only limitedto your salary, will probably be
about $25,000.
(11:48):
Now again, please speak to yourtax advisor about this.
These strategies are availableevery day, any day, any minute
for you, the business owner.
You just have to work with theright person to be able to take
advantage of these taxstrategies.
Okay, the next one is a 401k Ifyou have employees, not if
you've got employees, don'tworry about it.
(12:09):
What you can do is still set upa safe harbor 401k which
protects you at 3% to match youremployees, which you know they
could put away a lot more than3%.
You will be matched, you willbe safeguarded, excuse me, to
put away 3% or maximum 4%,depending on their contribution.
But then you can turn aroundand take $23,500 from your
(12:31):
paycheck if you're under the ageof 50 and put that into the
401k.
So, another tax strategy.
A lot of business owners that Iwork with they're always
thinking about hey, boris, or inmost cases I like educate them
right.
So when you want to retire, doyou want to retire only with
taxable income or do you want toretire also with tax-free
income?
There's many ways how you canset up your 401ks okay.
(12:52):
One of the ways is set it up asRoth 401k, where the money
that's going in is after taxmeans you don't get a deduction
but everything there growstax-free, or you can split it.
You've got to speak to your taxadvisor, pair it up with your
financial advisor that helps youset up 401k okay and then come
(13:13):
up with that strategy Absolutelymind-blowing and really can
yield a lot of savings for youin the future when you retire.
The fourth tax strategy isfamily management company.
You, as an S corporation owner,can hire your family members,
particularly your children, whoalready started helping you in
your business, and pay them alegitimate salary.
Now, when you pay them from anS corporation, you will be
(13:35):
subject to payroll taxes.
What you can do instead is setup a family management company
that has a purpose, that has abusiness purpose to serve you
right and not just to avoidtaxes, so to speak.
Now your spouse can own thefamily management company.
It could be a soleproprietorship.
The S-corporation will pay thefamily management company
(13:55):
management fees for providingemployees to an S-corporation or
some kind of a services right.
Let's say, cleaning services byyour children, filing services,
administrative services.
Your family management companythen hire your children and pay
them.
When children are paid from asole proprietorship, such as a
(14:15):
family management company thatis owned by your spouse, you
also don't pay self-employmenttaxes and it's a great way to
shift income from your high taxbracket to lower tax brackets
for children or really at zerotax bracket.
Now that is the top four taxstrategies.
They can absolutely be utilized.
A lot of business owners areconcerned Is this going to take
(14:37):
up a lot of my time to do?
Actually, ptet won't.
Reimbursements will take upfive minutes of your time a
month.
Retirement, a one-time setup,family management company five
minutes It'll take you everymonth to kind of coordinate the
whole thing Pay the managementfee, pay the children for the
time they work.
Really doesn't take up a lot oftime.
(14:57):
You just need to make sureyou're working with the right
team for this.
Now let's talk about the bonus,the auto deduction.
I get asked the question a lot,boris, can I deduct and auto my
car in my S-Corporation BecauseI don't want to buy it on the
S-Corporation.
I don't want to put title onthe S-Corporation because the
commercial insurance will behigh, and that is true.
(15:19):
Now, good news is that if youbuying a car for the business
whether it's a, you know, 30 use, 50 use, 70 use you can buy the
car with your own funds.
Okay, have the businessreimburse you.
You can still take depreciationdeduction depending on the
usage of the car for thebusiness.
Now you can also actually buy acar with your business money
(15:43):
and even though the title willbe on your personal name, that's
totally okay, as long as you'reusing it for the business.
Whatever percentage you'reusing it for the business, you
can still deduct it.
So, in summary, you can pay forthe car from the business
account or from your personalaccount.
If you pay from the personalaccount, you can still record
the car as an asset under thebusiness, reimburse yourself and
(16:03):
take depreciation deductionbased on the usage.
If you pay for it from thebusiness, that is also okay.
You can also take adepreciation, again, depending
on the usage of the vehicle.
You can take all itsappropriate deductions.
Ladies and gentlemen, I beg you,please, if you want to start
saving money on taxes.
Yesterday I spoke to a newclient that is doing really well
(16:28):
for himself, invested in a lotof real estate and his
accountant files his taxes onTurboTax.
I don't have anything againstTurboTax, but TurboTax is
designed for people to filetheir own taxes.
If you've got an accountantfiling on TurboTax, not even
using a tax professionalsoftware and there's a lot of
(16:48):
cases like this Okay, there's alot of deductions you may be
missing out.
If you're not doing proactivetax planning for yourself, if
you're not using tax strategies,you don't have a tax advisor,
then I guarantee you you areoverpaying in taxes.
Thank you so much.
Please hear my voice, keep myvoice.
Get yourself a tax advisor Tillthe next time.
Speaker 2 (17:08):
That's it for today's episode.
Be sure to check out thedescription below for some free
tax reduction resources thatBoris put together for you.
If you're ready to work with atax advisor on your tax planning
, be sure to schedule your callby heading over to
wwwtaxplanningcallcom.
That's wwwtaxplanningcallcom.
And be sure to subscribe to ourpodcast to be notified when the
(17:29):
next strategy is released.
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