Listener Q&A with Mike Jesowshek CPA (08/16/2023)

On this Podcast we answer listener questions! If you have a question you would like discussed on a future episode, submit it now!

1. Go to www.TaxSavingsPodcsat.com
2. Click Podcast 
3. Scroll to the Bottom and Submit Your Question

You never know, your question may be on the next Q&A session. Below are today's questions, tune into our Podcast to hear the answers!

Shauna: Hi Mike! I’ve been listening to your podcast for years now, and it has been so helpful! Thank you so much for educating small business owners! Question: My daughter, who recently married, has an online Pilates studio, and I help with her books and taxes. She uses two rooms in her house for her business. Since for 2023, they will now be filing their taxes as married filing jointly, can she go back and include utilities that her husband paid prior to the wedding in her Business Use of Home Deductions, or should she just include them after the date of the wedding? They were living together prior, and she only had been including the ones she paid. Thank you!!

Annie: We are just in the beginning stages of starting a business for short term rentals in our area. I have been doing market and tax research as proof of concept. We are currently evaluating 2 different options-one being purchasing an entirely separate property that is STR only, and the other being purchasing a new primary residence for ourselves that has a guesthouse which we can STR. I’ve been trying to figure out the different tax implications between the 2 strategies as we make our choice. Can you give me a synopsis? I would assume the second has significantly fewer deductions that can be taken/it would have to be calculated as a percentage write-off as opposed to a total write-off? Would it also affect depreciation calculations and home office deductions? Thanks!

Christine: Hello! I love your podcast! My question is regarding paying my 16-year-old for work he does for my business. I write him a business check out of my business checking account and he's deposits it into his custodial bank account at another bank. It is reasonable, average part-time work on occasion, I have time sheets and all the necessary trail and bookkeeping to show that it's legitimate. But I recently thought I heard you mention some thing about that it's all legit and a write off and a tax exempt paycheck for him ..until he is working somewhere else. He is starting a new job just on the weekend mornings next week. Does that now make my paycheck to him unacceptable in the eyes of the IRS or can he do both? the part-time job he got is on the books with direct deposit and his occasional paycheck from my business. I can't wait to hear your response.Thank you for all your valuable information. I've learned so much! Sincerely, Christine from Long Island New York. 

Christopher: Hey guys, hate to ask, but when and how do I pay taxes on my LLC in Florida?
First time doing this LLC stuff. Also if you can answer this, I purchased about $3k worth of equipment, most of it before I formed the LLC, can I write any of that off?

Erin: Hi everyone! I own a vacation rental cleaning business in western NC. Last year, I was able to move enough savings into a simple IRA in order to avoid my tax liability for the year. But this year, I became an S-corp for tax purposes, so I have a payroll company. With taxes being held automatically, are there any loop holes I should know about to sax on taxes? Trying hard to wrap my head around all this while growing the business. Thanks!

Nicole: I own a small Montessori private school as a single member LLC. I am thinking of opening a children's art studio at another location. Would I be able to run this as a DBA, or should I get a separate LLC for this business? Any advice is much appreciated.

Matthew: Can anyone help me understand under what circumstances am I required to prepay quarterly taxes for my LLC? Are there any instances in which I would be exempt from prepaying?

Rene: What are some suggestions for good bookkeeping? I’m just starting out and any help would be awesome. Even a suggestion to a good YouTube video would be great.

Nate: I’ve been in business for past 5 yrs as an LLC in Pennsylvania. I’m an independent repair service company. Small business. I am looking for someone to teach me more about tax deductions available for my business. I feel like I am missing out on a lot of money I could be saving…I know the basic deduction like miles, meals, travel, etc. I just started to listen to the tax saving podcast. They talk about switching to S corp, Paying my children as w-2 and many more deductions I never hear of. I just want to learn more tax deductions. I need someone with the heart of a teacher. To teach me more about taxes and deductions.
Any recommendations?

Raymond: Hi everyone, I was wondering as I am a LLC and own 75% and my wife owns 25% but we’ll be filing as S-Corp. Does that make us an LLC still? I’m only asking because I was looking into adding my kids on payroll as they help out our business but not sure if we’re considered an LLC or an S-Corp for the purposes of the $12,000 deduction payroll we can pay them. I know for LLC that’s tax free but I seen with S-Corp I would need to look into a family management company. Thanks everyone!

Chelsie: I run a small salon business. Sometimes I do free services in exchange for advertising.
My CPA told me I cannot write off free services because there was not an exchange of money?
Shouldn’t I be able to write off the service for the amount I would typically charge??

Nicole: I currently have a 1099 contractor that I now need to convert to w2 (terms changed and he is now an actual employee). I do not have any employees since I self perform just about everything. Now he will be my first. I am currently paying him $50/hr as a 1099. I made it very clear there would be a reduction in his hourly rate switching to w2. What hourly rate is equivalent considering I will have to pay a portion of his Connecticut state taxes and Fed. I am so lost will all the calculations online. I use quick books payroll and I cant see the #s until I actually run it. Side note, I also need a financial advisor/account/ tax specialist. Someone who can help me file my quarterly taxes and help with strategies.

Vonnie: When you're doing your taxes do you take the amount collected in the Venmo/cashapp before they deduct their fees or the amount after they deduct their fees. I'm in a pickle please help.

Tyler: Quick question about the Augusta rule. Does it apply to people who use part of the property they rent as their home office? The situation is that I rent a house along with my business partner. We use two rooms explicitly for business purposes. Can we still hold our annual meeting at that property that we rent and enjoy the tax savings from that under 14 day rental, or does it only apply to properties that we own as individuals? Thanks in advance.

Anonymous Facebook Group Member: I have a single-member LLC which has elected to be taxed as a s-corp.Since I work from home and the LLC is registered at my home address, I am trying to figure out the best structure to deduct rent. IS it better for the LLC to pay me and then I pay rent to my landlord? Or shall the LLC pay rent directly to my landlord? What is the most tax efficient way to do this?