Listener Q&A with Mike Jesowshek CPA (10/18/2023)

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

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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!

Brett: Here’s a question I haven’t found an answer to anywhere on the internet…I am a business owner of an S Corp with a SIMPLE IRA plan. We do an elective 3% match contribution for employees. As owner, this year I am projected to make $200,000. $50,000 of that is in W2 salary, and the other $150,000 is from distributions. Is the 3% employer match based on just the W2 salary portion or can it match the full $200,000 including distributions? Thanks!!

Christine: Do I have to get an EIN number as a Sole Prop to pay my 16 year old for minimal work? He is the only employee I have. Thank you.

Sadie: My husband and I recently started a digital marketing agency. We are a multi-member LLC.
Can we claim our clients ad spend as an expense, and if so, how do we categorize it for tax purposes?

Lacy: Since it’s already late in the year, can I still convert my LLC into an S Corp? Is that an audit red flag?

Shaquita: If I have a business that has a location outside of my home but also do part of my work from home, could any part of adding an addition to my home be tax deductible?

Richard: What happens if I do not take a reasonable salary for my S Corp? I currently have not ran payroll this year or last year.

Jordan: My business has lost money the past 3 years but things are looking to turn around this year. Can I use those prior losses or are they gone?

Danielle: Is anyone familiar with 1099ing a mechanic? I’ve tried to do some research but it isn’t very clear. I’ve been told we can’t because it would be a nightmare. Then I’ve read that we can. I’m very confused!

Josh: I own a landscaping business taxed as an S Corp. I’m looking to hiring my kids (8 and 10) but just don’t know what to do to ensure I’m doing everything correctly. Please help!

Anonymous Facebook Group Member: Wife is a third year real estate salesperson(agent) in CA. She has done much better this year compared with prior years. She likely gross $250k in commission. Operating as an llc, S-Corp status, pays herself as only w-2 employee. Will probably have about $150k in pass through profit. Don’t really want to pay too much in taxes. Need strategy suggestions to count towards deductions. Thanks.

Anonymous Facebook Group Member: I have an LLC (taxing as S-Corp). I accidentally paid my 1040ES (estimated personal tax) from my business account. Can I set this transaction as owner draw? Thanks

Anonymous Facebook Group Member: LLC (taxed ax S-Corp). Owner paid $2500 to the business account on the first day. Where do I need to put this amount on the 1120-S? Order equity, reimbursement, capital stock (line 22 )? Thanks in advance

SOURCE: https://www.taxsavingspodcast.com/blog/listener-q-a-with-mike-jesowshek-cpa-10-18-2023 https://www.taxsavingspodcast.com/blog.rss