In today's episode, we are jumping into our taxes with my buddy and tax advisor, The Cash Flow Doctor, Eric Nghiem. Our taxes go towards our city, state, and country, paving roads and improving our communities. However, we'd all like to save a little bit more and put it towards growing our businesses and donating to charities of our choice. Eric Nghiem gives us some simple strategies that we can apply this tax season to save and grow our money.
Timestamped Show Notes:
- [ 8:03 ] Entrepreneurs and Taxes
- [ 9:07 ] Bookkeeping
- [ 12:30 ] Filing as a Business: Getting The Most Deductions
- [ 14:32 ] Structuring your business entity: LLC, S-Corp, C-Corp
- [ 17:44 ] Deductions
- [ 22:41 ] Appropriate Salary and Retirement Plans
- [ 29:14 ] Business Sales
- [ 40:00 ] The New Tax Bill
Takeaways:
- Eric highly recommends utilizing an accounting or bookkeeping system, even if it's as simple as an excel spreadsheet, a ledger, even a basic notebook. Quickbooks and Xero are also great accounting softwares to keep your records safe, storage, and easy to navigate when it comes time for your taxes.
- As an Entrepreneur, the first step in tackling your taxes is to make sure you have proper bookkeeping set up. This gives you a chance to also see on a daily basis where you is profits and expense.
- Limited liability saves your company from large liability suits, however, there is no tax benefit. S-Corp is highly recommended for most small businesses under a million dollars in revenue. Put yourself on salary with self-employment tax, but the rest of your profits will come without the self-employment tax.C-Corp is a more advanced entity, under the new tax plan it will be more beneficial than in the past.
- Keep track of your common expenses for deductions, internet service, web hosting, personal cell phone (as long as you have a landline), vehicle expenses, mileage, meals with clients, anything that's usual, ordinary you can deduct. Make sure you leave a paper trail, use a business credit and debit cards.
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