Small Business Taxes for Beginners and New Entrepreneurs

Episode #528
Starting your first or next business? This episode is for you. Today, we’re bringing you everything you need to know about small business taxes for beginners. Whether you’re a solo entrepreneur, partner, landlord, house flipper, Airbnb host, or something in between, you MUST know about these tax laws before you start making money with your own business because if you get them wrong, you could be paying a MASSIVE penalty come tax time. You could save yourself thousands, or TENS of thousands, just by tuning in!
Brandon Hall, CPA, runs a real-estate-focused tax and accounting firm for big and small real estate investors. But, even if you’re not investing in real estate, these tax tips also apply to YOU. In today’s episode, we threw dozens of hard-hitting tax questions at Brandon so you know what to do with your next side hustle or full-blown business.
We’ll discuss whether you need an LLC, the real benefits of getting one, and which business entity (LLC, S-corp, C-corp, etc.) makes the most sense for your specific business and tax needs. Making money on your own but NOT paying quarterly taxes? This could cost you BIG, but thankfully, Brandon goes through exactly how much you could owe. And if you want to owe less to the IRS, we’ll give examples of tax deductions plus, which are NOT worth it and could put you at a BIG audit risk.
Need a tax professional for your small business? Find one for free with BiggerPockets Tax and Financial Services Finder: www.biggerpockets.com/busines...
Show Notes at:
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How to Obtain Real Estate Professional Tax Status:
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Hear Past Episodes with Brandon:
BiggerPockets Real Estate 196 - LLCs, House Hacking, and Saving on Taxes with Brandon Hall:
www.biggerpockets.com/blog/bp...
BiggerPockets Real Estate 269 - How the New Tax Code Affects Your Real Estate Investments:
www.biggerpockets.com/blog/bi...
BiggerPockets Real Estate 934 - How to Pay Less Taxes by Buying Real Estate (1 Write-Off You’re Overlooking):
www.biggerpockets.com/blog/re...
On the Market 96 - The Biggest Real Estate Tax Loophole You’ve (Probably) Never Heard Of:
www.biggerpockets.com/blog/on...
On the Market 165 - Year-End Tax Updates, New IRS Interest Rates, and URGENT News for LLCs:
www.biggerpockets.com/blog/on...
On the Market 187 - 100% Bonus Depreciation Coming Back? (Do NOT File…Yet):
www.biggerpockets.com/blog/on...
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00:00 Intro
01:42 Do You Need an LLC?
02:01 Different Business Entities
09:29 3 Steps to Set Up an LLC
16:49 KEY Dates to Know
19:14 Estimated Taxes
25:48 The “SALT” Taxes
31:56 Tax Deductions and Audit Red Flags
44:22 Claiming Passive Losses

[@missygech995]

Please make more videos like this

[@tmooney75]

I really appreciated the segment on estimated taxes, but Scott said you guys were gonna hear from the lawyers on the Operating Agreement part, and Scott was right. It varies by state, but in Tennessee, for example, Operating Agreements are not legally required, and in fact we don't even encourage them for single-member LLCs. But if you don't have an Operating Agreement, your LLC is governed by the rules set out in the LLC statute. What IS legally required is registering your LLC with not only the Secretary of State by with your county clerk. So anyway, yeah, you need a lawyer. And no, you can't call references unless you already know them, because I am prohibited by ethics from telling you who my other clients are. And I'm also ethically prohibited from being motivated by any interest other than the client's, so I'm not sure what that whole "incentives" conversation was about. This is not attorney advertising, by the way. Just clearing up a couple points.

[@I_amMe.]

Thanks for such a great and valuable information!
I wish it was longer though 😊

[@luker5799]

Paying 1k for a form you can get for free is insane lmao. Of course a lawyer would say you need to pay him for one. Smh. Also a lot of small business struggle with cash flow in the early stages so saying you can’t afford to have a business if you don’t want to shell out 1k is a brain dead statement.