Stick Like Glue Radio #170 On this special episode of Stick Like Glue Radio, I interview rock star entrepreneur Diane Gardner. On this extended show we cover two important topics: smart tax planning and effective systems and procedures for small business owners! Don’t miss this important show!

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On this special episode of Stick Like Glue Radio, I interview rock star entrepreneur Diane Gardner. On this extended show, we cover two important topics: smart tax planning and effective systems and procedures for small business owners! Don’t miss this important show!

Main Questions Asked:

  • What is a tax coach, and why should every business owner have one?
  • What are some of the biggest mistake small business owners and entrepreneurs make when it comes to taxes?
  • What are the different types of entities?
  • How does someone figure out what type of entity is best for them?
  • Is healthcare something we should look at through the business?
  • How do pensions and retirement plans affect small business?
  • What are the most often missed tax deductions?
  • What is the difference between a system and a procedure?
  • Talk about ways to increase productivity.
  • How can systems and procedures be used for staff training?
  • What are your suggestions on how someone can improve quality control?

 

Key Lessons Learned:

What is a Tax Coach?

  • A tax coach helps takes an overall view of the business and looks at what is and isn’t being taken advantage of.
  • A tax coach can crosscheck the business entity and make a plan for the future such as restructuring salary and payroll system.
  • Tax coaches help businesses take full advantage of all the deductions and credits that exist that are IRS-approved and court-tested.

 

Common Mistakes

  • The biggest mistake is business owners being listed as the wrong entity type.
  • A lot of business owners start out as a sole proprietor but outgrow it, then don’t change the entity type.
  • Not keeping track of mileage, whether using the standard mileage method or actual cost.
  • Not tracking mileage can mean leaving several thousands of dollars of deductions on the table.

 

Types of Entities

LLC

  • Limited Liability Company.
  • It is possible to have an LLC but be taxed as an S-CORP.

S-CORP

  • The profits from the business flow back to the shareholders tax returns.
  • A certain amount of the income from the business can be structured into the owner’s salary.
  • The remainder flows through the person’s tax return, but there is no self-employment tax on it like there would be if they were a sole proprietor or general partnership.

 

C-CORP

  • Pays own income tax on a corporate level.

 

Systems and Procedures

  • Having great systems and procedures increases productivity as staff aren’t spending so much time trying to find the answer.
  • 80-90% of staff questions can be answered by going to the systems and procedures manuals.
  • A systems and procedures manual also gives you accountability.
  • When a staff member deviates from the system, they can be referred back to the manual.
  • For a business to become a salable asset, it needs to have the systems and procedures in place so, when the owner buys it, you can walk away.

 

Quality Control

  • Checklists are great for quality control, as it makes employees accountable for the various steps they are working on.
  • Setting clear expectations helps improve the quality.

 

Hiring Kids

  • This is a great way for parents and grandparents to write off a college education.
  • The IRS says a child can start working for you as young as 7 years old.
  • The first $6K is tax free to the child because of the standard deduction.
  • In order to make this work, you have to pay them no more than you would pay anyone else to do that work.

 

Resources:
Tax Coach 4 You
Get Off the Wheel                                    

Click to Tweet:

What common tax mistake do business owners make that costs thousands? Find out w @gardner_diane @newsletterguru https://www.getjimpalmer.com

Do you have systems and procedures manuals? Find out how to hack the process w/ @gardner_diane @newsletterguru https://www.getjimpalmer.com

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