Listener Q&A with Mike Jesowshek CPA (10/16/2024)

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!

Listener from Phoenix, Arizona: hey! I’ve been listening to your podcasts and I’m learning a lot! I have a question I can’t seem to find an answer for, and maybe your community would like this info too. If I made a big purchase (a mentorship) on my personal credit card before I had my business card, and they weren’t willing to refund me so I can repurchase it on my business card, is it possible to write off the mentorship on my taxes if I have the receipts? A second question: can I still write things off for my business if i don’t have much money coming in yet?

Amber: I’m selling my small boutique cycle studio and wondering how to minimize the tax burden.

Rebecca: You say in this article about business owners with high medical costs, "You may have noticed that we did not mention an S Corp as a qualifying business. If you operate as an S Corp you may need to consider a work around as you would not be able to do a Section 105 Plan within an S Corp." I have had an S-Corp for years and I am the sole owner. My husband does help a little in the business and could work more if necessary but we have about $20k a year in non-covered medical expenses every year and it's killing us. 

Facebook Group Member Dale: My wife and I have created an LLC with an S-corp tax designation. My wife owns 51%, and I own 49%. I am the primary consultant and bill our clients by the hour. In turn, I am paid via payroll at the average hourly rate for a consultant in my area, as per Indeed. My wife manages the books, handles payroll, and other administrative functions. We pay her an hourly rate based on the average bookkeeper hourly rate in our area, also as per Indeed. Currently, her duties only require a few hours a week, so her payroll is low. My question is about ownership draw. I understand the concept of a reasonable salary for the job performed, but I'm unsure how the owner percentage affects the ownership draw. Additionally, is it reasonable for the ownership draw to be higher for me because my pay is higher, but my owner percentage is less than hers?

Listener from Augusta, Georgia: Absolutely love how easy you make understanding my business tax choices Would like to join TaxElm, going to look into this soon!

Walesia: Hi I loved you YouTube videos on accountable plans and explaining the need for it. So I just started up my business and I plan to use my business credit card as my main business purchases and pay it back timely from my business account. Does it make a difference on tax deductions if I use my personal account and reimburse myself or if I just use my business credit card? Also I wound not need an accountable plan if I strictly use my business credit card for business purchases correct or would I need to in order to show that my expenses are business related (for example buying lunch or grocery when I lodge for when I do travel locum jobs—I’m a CRNA)? 

Anonymous Facebook Group Member: If I charge a client for travel (x miles at a set rate per mile) to provide services outside my normal region can I still deduct the mileage? Or no since I already charged them a travel fee?

Listener from Orlando, Florida: Hi there, I'm interested in a consultation. How can I set that up?

Listener from Langhorne, Pennsylvania: Hello. I’m a small business owner and was hoping to get more info for my business with 30 employees and retirement plans. Seems like a simple IRA is the most logical plan, but could you direct me to the podcast where you talk about this? Thank you!

Listener from Little Rock, Arkansas: Is there a chance I could speak to someone about tax plans for my two businesses?

Facebook Group Member Mostafa: Hello everybody, I have a question regarding Owner Draw from my single member LLC that has been always a matter of confusion to me. So say I make $100K on W2 from my regular job. Then I took $50K out of my business bank account to my personal account as an owner draw as a form of equity access. And by the end of the year, my single member LLC ran at $30K loss. How would my taxable income be roughly calculated in this scenario? Will the $50K I took out of my business be added to to the $100K I made on W2?