How to Lower Your Tax Bill

How To Lower Your Tax Bill Episode 30

How Much Profit Should You Keep in Your Business? For business owners wondering how to manage profits wisely, this episode is essential listening. Host Terrance Hutchins and co-host T’mia explore the strategic decision-making process behind retaining money in your business, explaining how much to keep, why it matters, and how it all ties into taxes. Building on previous episodes about where profit goes—like taxes, debt, and reinvestment—this conversation centers on the crucial (and often overlooked) topic of retained earnings. Whether you're a seasoned entrepreneur or a new S-corp owner, you’ll walk away with a clearer understanding of financial planning inside your business. What You’ll Learn in This Episode: * Why retaining profit is essential for long-term business stability and growth * The difference between C-corporations and pass-through entities when it comes to taxes * How to calculate and set up a proper rainy day fund for your business * Strategic reasons to retain money beyond emergency savings—like hiring or equipment replacement * A breakdown of how to allocate business profits (taxes, reinvestment, savings, distributions) * Why understanding distributions is key—and what most people get wrong Featured Tax Tip: Retaining profit doesn’t change your tax liability in an S Corp—the IRS still taxes you on what your business earns, not what you take out. Just like your kids ordering dinner doesn’t mean they’re paying the bill, your S Corp passes the check to you. Plan accordingly. If you’re building a business, don’t just focus on making money—focus on allocating it wisely. Learn how to prepare for surprises, fund your future, and structure your finances with tax-smart strategy. Subscribe to How to Lower Your Tax Bill on Spotify or Apple Podcasts. Keep More of What You Earn.

How To Lower Your Tax Bill Episode 29

In this episode of How to Lower Your Tax Bill, host Terrance Hutchins and co-host T’mia continue their series on managing profits for small business owners. This time, the spotlight is on reinvesting profits back into your business—and how to do it in a way that actually builds long-term value. Whether you're new to entrepreneurship or scaling an established business, this conversation will help you rethink what profit really is, why some owners are unknowingly devaluing their businesses, and how reinvesting strategically can save you thousands in taxes while setting up future growth. Key Discussion Points: * Why your business profits aren’t really profit if you’re underpaying yourself * The four areas where reinvestment makes the biggest impact: people, systems, processes, and marketing * How to set a baseline return on investment before reinvesting a dollar * What “return on invested capital” is—and how it tells you if your business is healthy * Why a big tax write-off now can mean lower taxes today and lower capital gains later Featured Tax Tip: Reinvesting in your business reduces taxable profit today—and if that increases your business’s value, you’ll pay a lower capital gains tax rate (capped at 20%) when you sell, instead of ordinary income tax rates (which can be over 30%). That's a strategic win. If you’ve ever wondered where your profit goes—or how to turn it into more revenue instead of just expenses—this episode is your roadmap. Subscribe to How to Lower Your Tax Bill on Spotify or Apple Podcasts — and as always, Keep More of What You Earn.

How To Lower Your Tax Bill Episode 28

Is Business Debt Worth It? Tax Truths You Need to Know In this episode of How to Lower Your Tax Bill, host Terrance Hutchins and co-host T’mia continue their series on what to do with your business profits—this time diving into the realities of using debt as a business strategy. Whether you're thinking of financing a new vehicle, bidding on a big project, or taking out a loan to expand, this episode unpacks what debt really costs you from a tax and cash flow perspective. Ideal for business owners navigating decisions about loans, reinvestment, and capital expenses, this conversation helps you think critically about whether the “tax write-off” is actually worth the debt you’re taking on. Key Discussion Points: * Why debt feels like a tax win—but can drain your cash in year two * The danger of spending $1 to save 40 cents: why tax write-offs aren't always smart * How to evaluate if a project is worth financing and what poor forecasting can cost you * Understanding “cash trapped in the balance sheet” and how delayed payments can trigger tax trouble * What good debt looks like: using loans to buy assets that pay for themselves—and then some Featured Tax Tip: Buying a vehicle to reduce your tax bill can backfire—fast. Only the interest on your loan is deductible after year one, not the principal. If your new asset isn’t generating profit, your debt may cost you more than the taxes you saved. Whether you're a cautious entrepreneur or an ambitious growth-seeker, this episode gives you practical tools to forecast smartly, avoid unnecessary debt, and keep your profits working for you—not your lender. Subscribe to How to Lower Your Tax Bill on Spotify or Apple Podcasts — and as always, Keep More of What You Earn.

How To Lower Your Tax Bill Episode 27

One Big Beautiful Bill, Part 2: Advanced Opportunities & Loopholes for Savvy Taxpayers Host Terrence Hutchins and returning guest David Stevens shift from “what changed” to “how to exploit it.” This follow-on conversation mines the fine print of the “One Big Beautiful Bill,” surfacing planning angles that tipped employees, high-income coastal professionals, and growth-minded business owners can act on right now. Key takeaways 1. SALT cap relief—finally a workaround Deduct up to $40 k of state & local taxes (phasing out above $500 k AGI) through 2030; pair it with strategic charitable giving to stack deductions. 2. Tip & overtime exclusions First $25 k in combined tips/overtime ($12.5 k single) is off-limits to the IRS for earners under $300 k AGI—only 2025-2028, so document every dollar. 3. New “personal perks” bucket Car-loan interest on U.S.-assembled vehicles (max $10 k), “Trump Accounts” for newborns, and supersized 529 uses for tutoring & therapy up to $20 k—each with sunset dates readers should diary. 4. Charitable & family credits rebooted A resurrected $2 k above-the-line charity deduction, refundable $5 k adoption credit, plus HSA compatibility for bronze plans—great news for gig-economy families. 5. Business-owner bonanza 100 % bonus depreciation on manufacturing/refining buildings (four-year window), immediate R&D expensing, tighter but more lucrative corporate-giving thresholds, and beefed-up Qualified Opportunity Zone and QSBS incentives. 6. Farmer-friendly gain spreading Capital gains from farm sales can be recognized over four years when property stays in long-term agricultural use—easing cash-flow hits and succession plans. Featured Tax Tip Waiting tables or bartending in 2025? Track tips daily with a simple phone spreadsheet—the first $25 k you record could be 100 % tax-free under the new exclusion. Stay tuned! Subscribe to How to Lower Your Tax Bill on Spotify or Apple Podcasts — and as always, Keep More of What You Earn.

How To Lower Your Tax Bill Episode 26

Episode 26 – “Decoding the ‘One Big Beautiful Bill’: How the New Tax Law Impacts Families & Businesses (Part 1)” In this webinar-style episode, host Terrence Hutchins teams up with tax partner David Stevens to unpack the sweeping “One Big Beautiful Bill.” If you’re an individual taxpayer, parent, real-estate investor, or small-business owner wondering what stays, what changes, and where new savings may hide, this conversation is for you. Key Takeaways 1. 2018 rate brackets made permanent – the top rate holds at 37 %, averting a scheduled jump back to 39.6 % and sparing most filers an automatic tax hike 2. Higher, inflation-indexed child tax credit – boosted from $2,000 to $2,200 per qualifying child and set to rise with the CPI 3. Standard deduction locked in – roughly the first $31,500 of married-filing-joint income remains tax-free, keeping itemizing optional for ~70 % of households 4. Estate & gift exemption climbs to $15 million per person, giving high-net-worth families fresh breathing room for legacy planning 5. Business-friendly perks – 100 % bonus depreciation and an expanded $2.5 million §179 expensing limit become permanent, super-charging upfront deductions on equipment and cost-seg studies 6. Paperwork relief – 1099-MISC/K reporting kicks in at $2,000 (up from $600), reducing the form flood for contractors and platforms Featured Tax Tip Considering a major equipment purchase or a cost-segregation study? Lock it in while 100 % bonus depreciation and the beefed-up §179 limits are available—front-loading those deductions can offset other active or passive income this year. Subscribe to How to Lower Your Tax Bill on Spotify or Apple Podcasts and, as always, Keep More of What You Earn.