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What if the key to unlocking exponential growth in your 401k is simply reaching $100,000? Could this milestone be the turning point for your financial freedom?

In this episode, Mike Jesowshek dives into the concept of why your 401k experiences explosive growth after reaching a $100,000 threshold. He explains the mechanics of compounding interest, the rule of 72, and how starting early can significantly impact retirement savings. Mike also introduces the idea of self-funded retirement accounts, detailing how business owners can leverage them to invest in areas such as real estate or cryptocurrency. He underscores the importance of surpassing the $100,000 mark to unlock greater investment opportunities and financial flexibility, offering practical tips to achieve this milestone efficiently.

[00:00 - 06:15] The Power of Compound Growth

• Mike shares his personal financial journey and why $100,000 is a pivotal milestone for investors.
• He breaks down the "rule of 72" and how it applies to achieving financial goals.
• Early and consistent investing accelerates your financial trajectory.

[06:16 - 12:10] Why $100,000 is a Game-Changer

• Mike discusses how hitting $100,000 opens doors to investment opportunities beyond traditional options.
• Reaching this milestone creates leverage for greater diversification and growth.

[12:11 - 16:45] How to Get to $100,000 Faster

• Mike highlights the importance of automating investments and sticking to a long-term strategy.
• Focus on consistency and discipline to build momentum.

[16:46 - 19:24] Final Takeaways and Encouragement

• Mike recaps the importance of achieving $100,000 and how it sets the foundation for future wealth-building.
• Take the first steps today, no matter where you are in your financial journey.

Direct Quotes:

"Think of compounding interest like a snowball rolling down a hill—small at first, but it can grow into something massive over time." - Mike Jesowshek, CPA

"The rule of 72 gives you a simple formula: divide 72 by your interest rate, and you’ll know how long it takes for your money to double." - Mike Jesowshek, CPA

"Starting early with your retirement savings means you’re giving your money more time to work for you, doubling multiple times before retirement." - Mike Jesowshek, CPA

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Podcast Host: Mike Jesowshek, CPA - Founder and Host of Small Business Tax Savings Podcast

Join TaxElm: https://taxelm.com/

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Podcast Website: https://www.TaxSavingsPodcast.com

Facebook Group: https://www.facebook.com/groups/taxsavings/

YouTube: www.TaxSavingsTV.com

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Did you know you can maximize your HSA contributions even if you switch to a high-deductible health plan late in the year?

In this episode of the Small Business Tax Savings Podcast, Mike Jesowshek answers listener-submitted tax and business-related questions, covering topics such as HSA contributions, structuring multiple businesses, employing children, vehicle deductions, the Employee Retention Tax Credit (ERC), and year-end tax planning strategies. He emphasizes the importance of implementing tax-saving strategies tailored to individual circumstances and highlights tools like Tax Savings Podcast resources and Taxelm for deeper guidance.

Discover this and more tax-saving tips in today’s listener Q&A episode!

[00:00 - 02:53] HSA Contributions and the Last Month Rule

• Mike explains the IRS’s Last Month Rule, allowing full-year HSA contributions if enrolled by December 1st.

[02:53 - 05:42] Starting a Business and Learning Tax Strategies

• A Minnesota listener seeks guidance after forming a new business.
• What is the importance of implementation over mere learning of tax strategies?

[05:42 - 07:39] Employing Children and Managing Child Support

• Mike gives advice on structuring small business ownership to avoid affecting child support obligations.

[07:39 - 13:00] Structuring Multiple Businesses

• Discussion on using DBAs versus separate LLCs for businesses in different verticals.
• Consideration of liability and future sale opportunities.

[13:00 - 19:16] Core Tax Strategies and Vehicle Deductions

• Mike discusses core tax strategies such as home office, automobile, and travel deductions.
• He explains vehicle deductions, depreciation methods, and financing.

[19:16 - 27:30] Year-End Tax Planning Tips

• Mike clarifies on how to handle ERC credits in amended taxes.
• He encourages listeners to implement achievable strategies before the year ends.

Direct Quotes:

“The key piece is implementation. You can learn all you want all day long, but if you don't implement anything, you don't see the tax savings.” - Mike Jesowshek, CPA

“As long as you have that high-deductible health plan in place by December 1st, you're eligible to contribute the full amount to an HSA for the year.” - Mike Jesowshek, CPA

“Take off what you can bite off and do that. I’d much rather see you do one or two strategies than try to do ten and end up doing zero.” - Mike Jesowshek, CPA

Check out this episode’s blog post: https://www.taxsavingspodcast.com/blog/tax-questions-answered-vehicle-deductions-entity-structure-wotc-compliance-and-more

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Podcast Host: Mike Jesowshek, CPA - Founder and Host of Small Business Tax Savings Podcast

Join TaxElm: https://taxelm.com/

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Podcast Website: https://www.TaxSavingsPodcast.com

Facebook Group: https://www.facebook.com/groups/taxsavings/

YouTube: www.TaxSavingsTV.com

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What if you could offset your investment gains by strategically selling at a loss—are you making the most of your tax-saving opportunities?

In this episode, Mike explains the tax strategy of tax loss harvesting, which involves selling investments at a loss to offset gains in other areas, ultimately reducing tax liability. The episode covers how to execute this strategy, the wash sale rule, and common mistakes to avoid. Key points include understanding the wash sale rule, which prevents the deduction of a loss if the same or substantially identical stock is repurchased within 30 days. The host also discusses how to maximize the benefits of tax loss harvesting while being strategic and mindful of its limitations.

[00:00 - 05:21] Introduction to Tax Loss Harvesting

• Mike introduces tax loss harvesting as a way to save money by offsetting capital gains with losses.
• Tax loss harvesting allows investors to turn investment losses into tax-saving opportunities.

[05:22 - 10:55] How Tax Loss Harvesting Works and The Wash Sale Rule

• Mike explains the mechanics of tax loss harvesting, including offsetting capital gains and ordinary income up to $3,000 per year.
• The wash sale rule is introduced as a key consideration in tax loss harvesting.
• Buying the same security in an IRA within 30 days of selling it in a taxable account also triggers the wash sale rule.

[10:55 - 14:30] Avoiding the Wash Sale Rule

• Mike explains the implications of buying back the same investment after the 30-day period and how this can be an effective strategy.
• After 30 days, it's safe to buy back the asset without triggering the wash sale rule.
• Another strategy is simply waiting out the 30-day period to repurchase the asset.

[14:31 - 16:00] Common Mistakes and Considerations in Tax Loss Harvesting

• Mike shares some common pitfalls, such as neglecting to account for the wash sale rule or selling investments too hastily without considering the long-term implications.
• He advises listeners to work closely with tax professionals when engaging in tax loss harvesting to maximize its effectiveness.

Direct Quotes:

"Smart investors know how to turn losses into gains—into tax-saving opportunities." - Mike Jesowshek, CPA

"You can’t just sell and buy the same stock back right away without triggering the wash sale rule." - Mike Jesowshek, CPA

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Podcast Host: Mike Jesowshek, CPA - Founder and Host of Small Business Tax Savings Podcast

Join TaxElm: https://taxelm.com/

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Podcast Website: https://www.TaxSavingsPodcast.com

Facebook Group: https://www.facebook.com/groups/taxsavings/

YouTube: www.TaxSavingsTV.com