Listener Q&A with Mike Jesowshek CPA (12/13/2023)

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!

Matt: I just listened to the August Rule and Board Meetings podcasts. I am wondering, can I make my dad a board member/advisor and schedule our quarterly board meetings to coincide with our family vacations to his house to make the travel tax deductible? And on the flip side, can I schedule board meetings to coincide with his visits to our house, then rent my house to myself for these meetings? How does the number of days spent in meetings versus the total trip length affect tax deductibility? Same rules as a conference or any other business trip? I have an LLC taxed as a sole proprietor (but thinking of switching to Scorp for 2024). Thanks!

Steve: I'm just starting out as a small business owner. I haven't made any purchases yet. Prior to my starting, I am debating between S-Corp vs. sole proprietorship for tax structure. The venture is part time to start, and I plan to keep it that way. As a W-2 employee, I'm debating on the two tax structures mentioned above.

James: If you own a business with a partner, can you each take part in the Augusta rule. 14 days for me and 14 days for my partner or only 14 days total?

Nick: I heard you talk about your new software TaxElm. Can you explain who this would be best for and why?

Cameron: I heard your podcast on business card rewards spending and it raised a question: If someone were to use the points earned on their business credit card for personal expenditures/travel/vacation, wouldn’t that be a form of commingling personal with business expenses opening up a corporate veil issue? There are some cards where you have to actually spend the money on the business card first, then offset that expense line item using the cc company points. In that case your personal expense would have been paid for initially on the business card. What are the implications here?

Brook: I'm an S-Corp for my counseling practice. This year my husband started a sole prop LLC to contract the work for a property that will rent to my counseling practice. His LLC won't have any profit this year. We are using mostly personal funds and my owner distributions for the purchase and remodel expenses. My income increased by 35% halfway through the year, and my husband resigned from his corporate career to do this. Even though the property is owned by my husband's LLC, can all the expenses of the remodel (with major sqft. addition) be deductions under my counseling LLC as the "renter" who is contracting the work to be done? What program do you recommend using that shows how deductions are calculated for tax purposes?

Savinay:  I want to deduct home office expenses on my 1120S for my S-Corp. I have created an accountable plan. I believe it will be Line 19 on the 1120S, but how will I input this into the Turbo Tax business software? Could you help me with it? 

Brad: I love your show and it helps me get through my daily struggle of going to the gym. My question is somewhat brief. I am 50% member of 2 S-Corporations my wife is a W-2 employee and also has a side business where she consults so she has to file a schedule C. We both file Schedule C’s, mine from real estate commission income. My wife is a professor at a College so she drives from home to various campuses of the school. She has a home office upstairs, my home office is downstairs. Can we both take the $500 per month home office tax deduction on our schedule C’s? We filed jointly. I have copied my business partner on this email. He is the other 50% of both S corporations and his wife is also in education and consults on the side.

Aman: Someone want to hire his children age 18. I know you mentioned you have a pod cast would you please let me know what are the process to hire a child. I was asking if the s-cop owner hire an own child age 18 years old. What payroll taxes they have to pay. 

Le: I have a clothing business. We used a graphic designer and a clothing designer (two separate people) to make our logo and the design for our clothes. Should those just be written off as normal expenses (such as meals and other materials) or do I have to send them a 1099? Thanks

Sam: How many tax reducing strategies do you currently have in your library?

Keith: My dad and I own a LLC S corp with 50/50 share. I want to hire my 8 yo son to clean the office. I know we’d have to hold out taxes since we’re an S corp but could we also hold out a set amount to go into a 529? Would a 529 be better than a Roth? Would the contribution to savings help lower our tax bill?