In this episode, Mike Jesowshek answers various listener questions regarding tax strategies, S corporation elections, hiring children for tax benefits, and setting up retirement plans for businesses with non-owner employees. The episode emphasizes the importance of structuring businesses correctly to maximize tax savings, including the considerations for S corporation status, late elections for business structures, the benefits of hiring family members, and the intricacies of purchasing a business and tax implications. Mike also discusses the potential of setting up retirement plans for employees as a tax-advantageous move for small businesses.

[00:00 - 00:36] Introduction to Q&A Session

[00:36 - 10:10] Q&A with Mike Jesowshek, CPA part 1

• Mike discusses the permanence of S corp elections and the possibility of revoking them.
• He explains the conditions under which a late S corp election can be made for businesses already in operation.
• Employing your children in your business for tax advantages has benefits.
• Mike discusses the tax implications of seller-financed business purchases and the importance of understanding the nature of the purchase (asset vs. stock sale).
• How the capitalization policy for items under $2,500 affects tax deductions.

[10:10 - 23:50] Q&A with Mike Jesowshek, CPA part 2

• Owning multiple LLCs under one holding company can simplify tax filing and considerations for asset protection.
• Separating entities based on active participation versus passive income sources, such as rental properties is important.
• Mike gives an overview of retirement plan options for small businesses and the tax benefits associated with offering them to employees.
• What is the best setup for businesses operating between California and Florida?
• Mike’s advice on consolidating tax filings for multiple LLCs under a Wyoming LLC, emphasizes the need for legal advice on asset protection.
• What about hiring young grandchildren and its tax implications?
• Setting up a separate LLC for Airbnb or furnished property businesses.
• What are the tax benefits and options for setting up retirement plans for small business employees?

[23:50 - 24:14] Closing Segment

Direct Quotes:

"Hiring your kids is potentially a great way where you can get a business deduction and they pay no income taxes on that income, again, potentially." - Mike Jesowshek, CPA

"You cannot save taxes by simply learning tax strategies. You save taxes when you learn them and then you implement them." - Mike Jesowshek, CPA

"If you're starting a new business, start that business where you're operating. That's going to be the easiest piece." - Mike Jesowshek, CPA

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Podcast Host: Mike Jesowshek, CPA - Founder and Host of Small Business Tax Savings Podcast

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