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!
Stick Like Glue Radio www.getjimpalmer.com
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.
- 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
- Limited Liability Company.
- It is possible to have an LLC but be taxed as an 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.
- 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.
- 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.
- 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.
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What common tax mistake do business owners make that costs thousands? Find out w @gardner_diane @newsletterguru https://www.getjimpalmer.com
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