6 Ways Auto Shop Owners Overpay on Taxes [E242]

Thanks to our partners Promotive, WickedFile, and Overdryve

Did you buy a truck last December just to shrink your tax bill? Is the year-end bonus you pay yourself actually handing the IRS more money?

In part two of his tax series, Hunt Demarest, CPA with Paar Melis & Associates, moves from tax planning to the part every shop owner wants to hear about: paying less. He walks through six strategies and flags where owners get each one wrong. A $6,000 compressor saves you $1,500 but leaves you $4,500 poorer, while a $6,000 IRA contribution saves the same $1,500 and you keep every dollar. Hunt also explains why a small 401(k) can cost you thousands a year in fees, how an HSA works like a second retirement account, and why an S corp owner who bonuses profit onto payroll pays more tax. He closes with entity structure, where one election saved a client $25,000 in a year, and a simple rule for equipment: decide what you need first, and let taxes decide only when you buy it.

Whether you've never opened a retirement account or you're wondering if your entity setup still fits a shop that has doubled in size, this episode gives you a clear list to take to your accountant before year-end.

What You'll Learn…

(00:00) Intro

(03:39) Hunt's money-back guarantee

(05:03) Why a $6,000 compressor is a weak deduction

(06:23) Retirement: time beats dollars

(07:32) When your 401(k) costs more than it saves

(09:11) HSA vs. FSA explained

(13:36) The S corp bonus mistake