Five Mistakes S-Corp Owners Make: How to Maximize Tax Savings

💰Using an accountable plan can help S-Corp owners reimburse themselves for business expenses and reduce taxes.

💸Paying yourself a reasonable compensation through payroll ensures compliance with tax laws and avoids penalties.

🩺Integrating health insurance premiums and HSA contributions into payroll can save you money in taxes.

📊Completing all necessary schedules, such as Schedule M2, prevents mistakes and potential IRS inquiries.

💰Tracking basis is crucial for S-Corp owners to determine the amount of distributions they can take tax-free.

What is an accountable plan?

—An accountable plan is a way for S-Corp owners to reimburse themselves for business expenses and reduce their taxes. It ensures compliance with IRS regulations.

Why is paying myself a reasonable compensation important?

—Paying yourself a reasonable compensation through payroll is essential for compliance with tax laws. It also helps avoid penalties and shows that you're running your business properly.

How do I integrate health insurance premiums and HSA contributions into payroll?

—To integrate health insurance premiums and HSA contributions into payroll, you need to set up a system that deducts these amounts from your income and includes them in your payroll tax calculations.

Why is completing all necessary schedules important?

—Completing all necessary schedules, such as Schedule M2, ensures accuracy and helps prevent potential IRS inquiries. It shows that you're reporting all required information and following tax regulations.

What is basis, and why is it important for S-Corp owners?

—Basis is the amount of investment an S-Corp owner has in the business. It's important to track basis because it determines the tax treatment of distributions and can help minimize taxable income.

00:00Learn about the five common mistakes made by S-Corp owners when preparing their taxes and how to avoid them.

06:00Using an accountable plan can help S-Corp owners reimburse themselves for business expenses and reduce taxes.

06:30Paying yourself a reasonable compensation through payroll ensures compliance with tax laws and avoids penalties.

08:50Integrating health insurance premiums and HSA contributions into payroll can save you money in taxes.

10:10Completing all necessary schedules, such as Schedule M2, prevents mistakes and potential IRS inquiries.

11:00Tracking basis is crucial for S-Corp owners to determine the amount of distributions they can take tax-free.