Biggest Tax Write Offs for Small Business in 2020 (These are Huge!)

[@jimhart]

Here is a link to the cheatsheet referenced in the video. www.hawthornlaw.net/deductions In my haste to get this uploaded a couple of weeks ago, I completely forgot to include this link in the description!

[@adamcartermi5]

If you have an s-corp and have a home office what about art bought for the home office. That doesnt have wear and tear, and isn’t really depreciable. But is considered valued and treasured?

[@Realestatewithalissa]

Hey! Thank you for this video. There are some great information here. I see that we are still able to deduct mileage and some business expenses. If I have not done all mileage on the business, can I still do that on my personal after I received my w-2 and k-1 and how. I can seem to find it. I am very interested in a one on one consultation 843957-4812

[@lancewallach353]

During the early 2010s, the IRS started investigating captives for abusive transactions. In 2016, the IRS published Notice 2016-66 in which the agency advised that micro-captive insurance transactions have the potential for tax avoidance or evasion. The IRS filed suit against companies paying premiums to captives and won three major lawsuits starting in 2017. The Tax Court articulated four factors that indicate an arrangement constituting insurance: Insurance risk, Risk shifting to the insurer, Risk distribution, and Commonly accepted notions of insurance. In these three cases, the Tax Court concluded that contracts between the captives and defendant companies had not passed the risk. In 2019, the IRS offered settlements to companies paying premiums to captives, which the IRS reported were accepted by 80% of the companies receiving such notice. The IRS will audit all small captives. Google Lance Wallach and your advisor, who do YOU think is better?

[@indasiasummerfield4308]

1. Office supplies 2. Cellphone + cellphone service 3. Travel 4. Meals 5. 20% self employment deduction 6. Mileage 7. Retirement

[@huil.6823]

1. office expenses, technology etc. 2. cell phone and services 3. travel expenses 4. meals - for travel check per diem based on destination cities; 50% of meals during which you talk business 5. 20% of profit as self employment deduction 6. mileages - 58cents per mile 7. retirement - SEP IRA allows deposit 9 months later bonus 1. health saving account 2. elect S corp status

[@jaredkolacz8441]

Thanks for the Info, filed for my LLC yesterday! I've still got miles and miles to learn.

[@Luis-xr6ec]

How’s it going with your LLC, Jared?

[@elude2487]

Same! 🤞🏾

[@ericharkleroad7716]

I've recently found your channel and have found it quite useful despite not being an internet/online business, I am a single member LLC. I usually listen more than watch your videos as I usually listen while doing other tasks that don't require too much thought. This time however, I watched enough to notice somethings in the background that I found quite interesting and I can't help but comment on. GO BROWNS! O-H!

[@guytech7310]

QBI deduction for LLC & S Corp is probably the best one. The only issue with LLC & S-Corp is you cannot deduct health insurance. You could leverage both if you set up both an LLC\-S-Corp and C-Corp. Invoice some revenue to the C-Corp to cover healthcare insurance & some wages, than use the LLC\S-Corp to make use of the QBI. Some deductions not included in this video: 1. Utilities such as internet. I presume every business uses internet service for business use. Also phone land-line or VOIP service if you are using it for your business. 2. Meals, if you are working remotely & need to grab meals while on the job you can expense them. Keep your meal receipts 3. Continuing education: This could be books, trade shows, seminars, and costs associated with educating yourself for business needs. 4. Office equipment: Copier, desktop PCs, laptops, tools, etc. Note usually for equipment owned by the business are subject to property tax, and depending on the cost of the item, you may need to amortized the expenses over several years. 5. Business losses: considering how bad 2020 is for most small businesses, & you had a net loss, you can usually write off the lost in the following year. Note its important to keep any reciepts, invoices or paperwork for anything you submit for tax deduction. Its very likely you business will be audited at least once, even if you done nothing wrong. State revenue agencies usually do random audit on small businesses. As long as you retain all of your expense paperwork, you will be fine.

[@jimhart]

Actually you can deduct health insurance that your business pays on your behalf. It gets reported as income on your w-2, and then you can deduct it on your 1040. I have done this for years. You just have to remember to run a year end payroll and add in the sum total of health insurance payments for the year.

[@compegord07]

1. Office Expenses/Technology 2. Cell Phone & Service 3. (Business) Travel 4. Meals 5. 20% Self-Employment Deduction 6. Mileage (rate changes yearly) 7. Retirement

[@compegord07]

B1. Health Savings Account B2. Elect S-Corp (tax strategy)

[@trexy-2045]

How would you provide receipts from purchasing inventory from places you don’t receive receipts from? etc. Yard sales, Facebook marketplace meetups

[@kiag3640]

Thank you for the Tips! Small cleaning company from Cleveland, Ohio

[@ds8218]

OH-IO. My BF and biz partner is a huge Ohio State fan. Definitely sending him this video. Question: If we have short term vacation rental LLC, do we pay for meals, mileage and office supplies from our LLC credit card or our personal credit cards as an Unreimbursed expense? I thought if you pay out of your LLC bank account or are reimbursed by your company you cannot deduct it on your personal return???? Thanks!!

[@jameslanier6839]

Thanks for the videos you are making they have been so helpful to me with just starting my online business and helping learn what I need to know to start off on the right foot.

[@SouthpawAutoworks]

Thank you for the tips, Jim. You brought up some stuff that I had not yet considered. By the way, I like your ring light setup up. Looking good!

[@dardosjourney4359]

Hello. On a S-Corp, do you need to pay yourself via Payroll (getting a W2) at the end of the year or can you just pay yourself by withdrawing directly from the bank account without deducting any taxes and pay them when filing your taxes?

[@guytech7310]

I recommend having an accountant create a W-2 that is included with your annual tax filing. Less chance of creating red flags. FYI: I am not an accountant but a small business owner.

[@brittainiemooney2526]

Thank you for your informative videos! If I am traveling one hour each way daily for my business (education consultant/tutor), I assume my car payments, gas, and meals along the way are a deduction? Does that count under your "travel" category for deductions?

[@EtherealMami]

Regarding the mileage, would you pay yourself monthly or at the end of the year?

[@angelicamateo2027]

I'm sooo glad i found you I just TRIED to file LLC for my salon suite and I think I totally screwed up on what I needed to do or do the right file. I don't know I never done this and it took me 10 years to finally take things on for myself. I know now to fix I'll probably have to pay $80 just to fix then pay to file oh my goodness. so your videos are watched repeatedly great vids

[@davidnorman5488]

Q: I am building a 2-story garage that will be 50% for my business. How do I deduct this 50% and the other site-related costs to build it, ASAP. I could use the deduction on my 2021 taxes. Thanks

[@denisesalt9729]

I appreciate all the good information you provide. It really helps. Thanks

[@royshin625]

Thank you, thank you, thank you! I just started filing LLC and your channel is so so helpful!

[@dieguizz87]

Thanks!! Can you do a video advice for starting a Turo hosting business - for single and multiple member. What makes the most sense LLC or S Corp?

[@southpaww]

Great content, thanks so much! I’m a travel photographer, don’t yet have a business set up and that’s how I found your page. I could he writing off hotels and mileage for “vacations” if I’m out shooting every day?

[@abelinagonzales8174]

So much good information,,,a question ...When I request an invoice from my supplier should I use my doing bussiness as or my LLC ???

[@carloslopez8775]

Hi Jim thanks for all the helpful content and information. I’ve got one question I hope you can answer. If I’ve got a regular 9-to-5 job, but I started my own LLC on the side, how should I file my taxes? Can I file them separately or do they have to be filed together?

[@Darr300]

It's better to file together. But definitely get a financial advisor to do it for you. They will ensure you get all the tax credits.

[@monicamolina4185]

I also have a full time job and an LLC on the side. I hired a business tax accountant who files my business taxes and I do my personal . You have to wait until your business taxes are filed before you file your personal if you chose to file them separate. I'm in Texas. Check in your state how tax requirements are in this subject

[@dobattlers]

There isnt a “should”. Depending on how many members of the llc and what kind of taxation entity you have (s corp or not) it changes what you have to do. You dont get a choice. For llc taxed as s corps u have to file llc tax return first and separately then get a k-1 issued to the members who then use that to fill in personal tax return. For a single member llc not taxed as s corp i cant remember but i think u just file on your personal tax return.

[@adirathiinailahana667]

Hi, what is the difference between deducting for mileage and deducting for travel?

[@madelinekate2285]

Can you make a video about "disregarded entity" tax deduction for LLC's that are shared with spouse specifically in states that are community property states.

[@rusavolk]

Thank you, Mr.Haythorn. As a small busienss owner, trying to go solo, this information is absolutely invaluable. to me.

[@8BitGoomba]

You may be one of the Internet's best kept public secret. I have subscribed. I am enjoying this free education.

[@NATESGIRL286]

This video was SOOOOOO awesome. I am a new small business owner and this helped me substantially!

[@powercomm]

My nail salon was burned due an accident in May 2020. My State Farm insurance paid me $26,000 for my compensation. I received a 1099 in the amount of $26,000 from State Farm. I have not reopened my business because I think I will not make money due to covid19. My first question is can I claim the damage ? My second question is if I can claim the damage , is the limit is $26,000? Thank you!

[@whatwrld4207]

What is the best software or tax filing entities should you file your taxes with if you have an LLC.

[@knowledgeapplied]

#8:: Business credit card interest, loan interest, and banking fees.

[@cutiefruba4]

How do you buy stuff that's a business expense when you have a business bank account? do you take your debit card with the llc name to the store to buy things or just buy with your personal card and reimburse yourself by writing a check from the llc to yourself?

[@jaz11girl]

Great video, I appreciate the content. Just one question, I know you are in North Carolina but Are all these rules and laws just for North Carolina or are they for all 50 states? Thanks again

[@PRETTYSM]

Im from Rhode Island and I started my online last year but I never got any sales even with marketing expenses, travel expenses, meeting referral. Etc... can I still do Sched C? Tia.

[@johnrobbins9244]

Thank you so much for making these videos! Go Bucks!

[@amberjacques5791]

How do you deduct the self employment deduction? What form do you use? What business structure fo you need? Thanks so much for you videos!

[@willoughbykrenzteinburg]

If you mean the deduction for 1/2 of self-employment tax, when you fill out form SE (which is used to calculate SE tax), you would calculate the deduction on that form, and the instructions on that line of the form would direct you to the line of the 1040 where you should put the deduction. I don't remember the line off the top of my head, but it's clear on form SE how to carry it over to the 1040.

[@bobs8670]

Is it necessary to get a business telephone line for a bigger tax write off or using my personal cellphone good enough?

[@jayadams2771]

Did you ever make a video on the 20% Employment tax? I can't find one. Great vids btw!

[@IamSolTara]

can you explain the 20% self-emloyment deduction?

[@mpinnington8218]

Thanks for the great video. Awesome! Just subscribed. Looking forward to more helpful videos!

[@LAYLAYYAHDIGG]

Loved the video! Can you make a video talking about how to file for taxes for an LLC? Such as wether to do cash or accrual, corporate income tax or partnership income tax etc.

[@dobattlers]

If you arent a large business with a bunch of legal requirements and employees going llc and opting for s for taxation is great. First you create and llc then you have to send in a letter to the federal government requesting s corp taxation. If you are asking the accrual vs cash question just do cash method, theres way too much work needed to operate an accrual accounting methodology.

[@juliapetrova1322]

I love it very useful and simple easy to understand THANK YOU FOR WHAT YOU DO ! It’s definitely very beneficial to the business owners

[@julianna1606]

At around 6:20 you mention paying yourself as an employee why wouldn’t you take advantage of paying yourself as an owner and not paying payroll taxes etc.? Thanks!

[@SpaceCave]

Hello! Thank you for the lovely video! I have a question: I do not drive and I don't have a license, but I often rent a car through my boyfriend who would drive me to get supplies. Sometimes I would take a taxi to get to the store for supplies. Does that count as tax deductible?

[@knowledgeapplied]

Business rentals, yes. Business supplies, yes. Business cab expenses, yes. Make sure to keep your receipts to document the charges in addition to documenting any emails, contracts, or screenshots of your taxi/Uber/Lyft rides with notations, explaining why the trips were necessary for your business.

[@uccoskun]

Thank you for the detailed tips. I have a separate question. Do an LLC pay taxes when it purchases supplies to build a product. For example, I need to buy components to build a robot do I have to pay sale taxes when I buy the parts? I'm asking because restaurants dont pay taxes when they purchase groceries. Thank you,

[@dobattlers]

Thats because food itself is exempt from taxes. Most things outside of food has a sales tax. Any person or business entity (llc, c corp, etc) has to pay taxes when buying supplies.

[@dave.zoller]

What a helpful video! Thank you! You’ve motivated to start my own channel.

[@janetburnett3935]

Thank you for the great series! I did want to mention something. At least in Alabama, whatever you contribute to a Health Care Account, you lose any excess funds at the end of the year.

[@Ironshredder1]

I have an LLC setup to be taxed as an s Corp. how do I go about funding a Roth IRA and traditional IRA that got created by my past employer for me after my 401k got rolled over into that. How do I find those or am I supposed to open a SEP IRA now ? And may I have both a solo 401k and Roth IRA or just one

[@XioArleen]

Is your rent a tax deduction as a single-member LLC? EX: if you rent a room live there and also work there. Or would you take the home-office deduction? If so, is the money paid for the renting of the room lost?

[@willoughbykrenzteinburg]

For the home office deduction, you are allowed to take a deduction for the percentage of rent you pay that is equal to the percentage of your space that is *_exclusively_* used for business. That is the "rule". In other words, if you are running a business out of a studio apartment, it is not likely that you have a space that is only used for business. If you do any other activity in that room (like watch TV, sleep, cook, etc.) then technically, you do not get to take a deduction for home office. If you do have such a space, then you can take the square footage of that space used exclusively for business and divide it by the total square footage - which will give you a percentage. You then add up all your home expenses - rent, utilities, insurance (if applicable), etc. and then multiply that total by the percentage used for business, and this is your home office deduction. OR, you can use the simplified method and simply multiply the square footage used exclusively for business by $5 up to a total of 300 square feet ($1,500 deduction).

[@everythingfromatoy]

Love your advice and tips. I hope this applies to 🇨🇦 businesses too. New subscriber! 🥰🥳

[@toddlempe1454]

wait..question: "take a picture of receipts"? It's all automatically recorded within the business account, and within quickbooks. Why a picture? What am I not getting? TIA

[@Mei_li_]

I am in CT. Do you have a good reference on who I should contact to do tax? Thanks

[@db3519]

Thank You very much for all of this info! We are now on your list! Friendly feedback on your audio...intro & outro music is quite loud😉

[@dalisavage9278]

If you are a trucker you still can to the miles deducting

[@MzTypeOHnegative]

Sorry I'm confused. So if I buy a camera or a car, or a pizza or etc, do I pay tax on these items with the LLC? How do they know if what i'm buying is just for personal use and not the business? Is it the case that if I buy things with my personal checking account, then I won't have to report that on my taxes? or is it the case that whatever I buy will be taxed on the LLC... please help.

[@DreamFirms]

Very informative video! Thanks Hawthorn!

[@cleanducts27]

How did you miss the Vehicle deduction. any vehicle over 6k lbs. is 100% deductable.

[@lewisbaker3215]

I got help with the PPP loan from *@Busineszcreditz* on Instagram and have loan forgiveness. I feel this could help you all.

[@judyzhang6226]

Hi I have a restaurant, I purchase ingredients and all kinds of meats from local super markets, I paid tax for it already. Can I deduct it ? Thanks

[@TheHaslemBoyz]

I have an LLC and I want to enclose my covered back porch and use it as my home office, can the expenses be a tax deduction?

[@ZhoustifyMarketing]

Can you deduct things if you pay in cash? If so, I'm guessing we need to keep the receipts or scan them.

[@kelvinlyons3401]

If i have regular job and a self business can max out both accounts

[@andreac9679]

Thanks for all your topics - Can you go into more detail on the QBI Deduction? finding it a little confusing...

[@JG-no4qr]

What if you return an item you've purchased, but still use the receipt to write it off? I'm sure it's fraud, but how do/can they prove/audit that?

[@alioumaiga8072]

Thank you for your advices. I hope that in New York, I can consider them.

[@ZhoustifyMarketing]

Do you have a video for rideshare drivers?

[@Inspirationhills]

Do you have or can you make on the different type business and what type of corp is better for these specific bus? for example realtors reg s corp or llc? also we are planing on opening an assisted living facility next month, this type of business from what I understand would need 2 entities, once for the real estate and one for the business...but again: which one would be better? real estate rentals type of entity..? you get the idea..I'm sure

[@guytech7310]

S-corp may provide a bit more legal protection than an LLC. If you think you might be sued, an S-Corp is probably the best option. Also contact an insurance agent about business insurance and see which option is best for your business. Its possible you might get an better option & lower cost policy with an S-Corp than an LLC. If your doing an assisted living, I would highly recommend discussing this with a business attorney familar with in home nursing & also contacting an insurance agent. Your assisted living business is most certainly going to need a solid insurance policy. You might need to go with a C-Corp for proper liability protection and insurance coverage. Note with an C-Corp you cannot take advantage of the 20% QBI deduction mentioned in this video.

[@yoyocoopah]

I love the outtro track😂😂👌

[@shisso]

Thank you so much for this very informative video! Also I was listening to this in my car and the ending music was booming! Never thought taxes and bass can go together in one video. Just awesome!

[@vheilshorn]

Lots of OSU stuff back there. Are you located in Ohio (thus familiar with Ohio law)?

[@jimhart]

Went to OSU Law - live in NC now - am not licensed to practice law in Ohio as of right now.

[@andreboyer553]

Thank you for this awesome video you have given me so much powerful and positive information to help my business.

[@trace7488]

Thanks for making these videos! They’re a huge help in pointing me in the right direction.

[@user-mv4im2wo8e]

Could you also get a tax reduction from a Roth IRA?

[@stoneywillis]

Let’s say I bought a piece of furniture cash from someone on offer up can I write that off?

[@tylerpetruzzi4616]

Love what yall do I really apricate it!

[@anntiup]

How would i have my LLC Taxed if I am delivery driver?? (Uber Eats) AWESOME VIDEOS BY THE WAY,,,THANKS!

[@sbmAt09]

Appreciate you for making these videos! This is ALOT of great info!

[@itskimwhalen]

If you have an S-Corp with a spouse can you both contribute 19,500 each to the solo 401K + 25% payroll?

[@jimhart]

Don’t quote me on this but I believe that is correct. Check with your financial advisor or accountant.

[@RealCHEKO]

How can I write off a computer and other items I already own?

[@ffoenix1]

I wish u taught us in high school. I would saved so much $$$$. Thank U. Coffee break was kinda too. 👍

[@sashavickers3800]

Bingo. This is exactly what we should be learning in school. not humanities nonsense

[@iwashere9066]

I have a quick question for the self employment tax. So can i still use that if I am working another job while running an online business? Or is self-employment tax on for people who use their business as their only sources of income ?

[@marcpelosi6630]

where is the deduction list in the notes?

[@livingbreed]

Quick Books Self Employed app. $120 yearly fee but it’s incredible.

[@ledoriagarrett]

Wish there was a "LOVE" instead of "Like"...you are awesome! Great information and the video music is well matched to the topics.

[@jimhart]

Thank you!

[@MsMermaidgirl1999]

Is there anyway to avoid the 800 tax annual fee, we have to pay each year to keep your LLC active or is this how it works?

[@andresito01]

What is the latest I can file S-Corp election for 2019? My accountant screwed up and was wondering if I could change that before doing my Corp taxes. I no longer work with that accountant

[@forrestgalt2832]

If your pay from the company is over $125,000 does it still make sense to be S-Corp? Any savings?

[@ZhoustifyMarketing]

So you use gusto and quickbooks together?

[@NaturalEarthTones]

My husband is a manager for a large corporation and pays out if pocket for food and prizes for his employees for a boost of morale, whatever the case can he deduct that?

[@HapaGuru]

just subscribed! thank you for this.

[@oscarescobar7000]

whats the best structure for a partnership a general Partnership or A Limited Liability Company

[@loveit8602]

I wonder if every LLC that someone has can create a solo 401k? If each LLC has healthy earnings, the ability to quickly save for retirement would be insane!! If you have three LLCs, $58,000 * 3 = $174,000 retirement savings a year!!!

[@crybabykermit8651]

Quick question. I apologize if he already said this in the video. Say I have a business and I would like to take photographs of my products for my website. Can I hire a photographer to do it for me, and then use that as a tax write off?

[@angelafleak7440]

Make sure your getting a verification on your odometer reading throughout the year and that those miles match up with you log miles or they will rip those amazing deduction away and you’ll be audited if those miles are 2x’s std yearly miles to work number they estimate. Funny how in my audit for this exact thing was nowhere to be found in their rules/laws just make up as they go.... grrrrrrr. Lol

[@strubies]

How do you get an odometer verification? Does a mechanic shop bill with date and odom work?

[@AnimusMotivation]

First thing first thank you for the great info second when making a claim on your taxes if the purchase was made on a personal bank account and not on the company card can it still be claimed?

[@dobattlers]

Purchasing from the wrong bank account has no impact on what u can take as a deduction, your company still paid for it. Two reasons. Most small business owners have their business as a legal entity where all the profit and loss goes directly on their personal tax return. If you are asking this question and a business owner I have to imagine you are in that boat. In that case you really dont have a business and personal bank account. All your bank accounts are business and all of them are personal. Even if you have a “business” and separate “personal” checking account, for taxes they are no different. Also for internal accounting purposes if you paid for it from your personal account, your company would now have a payable to you and a resulting expenses would show up on the company books so of course you could deduct it.

[@axelparedes6353]

does that apply even when you're a foreign owner of an LLC in the USA?

[@robblowe8525]

What if you work but have a small business on the side that makes more than your job per year?

[@AgentKodak]

🔥 video hella informative

[@matalebtube4900]

I have a company and I have foreign employees and I pay them per month $3000 in total, just wanted to know if there was a way for me to use it in Tax deduction? please help

[@karljay7473]

So you have 100K in profits, you pay yourself 50K and then where does the rest of the money go? You have the other 50K that sits in the company name, but how do you spend it without it being considered income? I guess you can use it for business expenses, but you wouldn't be able to spend it on yourself unless you paid the taxes on it, right? Maybe if it were a dividend, but how else can you access the other 50K?

[@livinglifecustom4558]

Great video, i will have to look into what can be applied here on the UK