The Tax Mistakes Painting Business Owners Keep Making (AVOID THEM)

Send us Fan Mail Here are the tax mistakes Painting Business owners keep making. Daniel Honan, CPA, and Cody Hall break down when switching to an S corp starts to make sense, the costs that come with it (filing Form 2553, running payroll for yourself, an extra tax return, and solid bookkeeping), and why staying an LLC means paying an extra 15.3% in self-employment tax on your profit. They cover how the IRS judges a reasonable S corp salary and how to set yours from the roles you actually do, why you can pay every quarterly estimate and still owe in April, and the difference between tax planning and tax preparation. Daniel also explains when buying a truck in December can cut your taxes and what happens if you sell it in January, how to hire your kids for real, documented work (including through a sole proprietorship and a Roth IRA), and when it makes sense to put your spouse on payroll. Know Your Numbers & Save Big in Taxes, Daniel Honan, CPA Every episode is made for painting business owners. Follow the show so the next one downloads automatically. FREE BOOK FOR PAINTING CONTRACTORS Free, just cover shipping. Get your copy here: profitablepaintercpa.com/book WANT DANIEL TO LOOK AT YOUR NUMBERS? Join 529+ painting contractors who know exactly where their money goes, keep more of what they earn, and scale without tax surprises. Book a free Profit Checkup here: profitablepaintercpa.com/vsl Prefer video? Watch this episode on YouTube What We Discuss: 01:40 What painting business owners get wrong about taxes 02:37 When to switch to an S corp 03:07 What an S corp costs you first 08:13 Prove your profit before you switch 10:09 Staying an LLC: self-employment tax and audits 12:31 What's a reasonable S corp salary? 14:45 Setting your salary from the roles you do 17:08 Paid quarterly and still owe? 19:05 Due dates, 1040 vouchers, and IRS2Go 22:11 Tax projections and tax planning 24:05 Buying a truck in December 26:03 Selling it in January: depreciation recapture 27:59 Hiring your kids in your painting business 32:08 Paying your kids through a sole proprietorship 34:37 Should you put your spouse on payroll? Profitable Painter CPA – accounting and financial strategy for painting contractors. Visit us profitablepaintercpa.com This episode was originally recorded as a video for YouTube. If you hear me say things like “in this video” or reference visuals, don’t worry — the content still works perfectly in audio form. And if you ever want to watch the video version, you can find it on the  Profitable Painter YouTube channel. https://www.youtube.com/@BookkeepingForPainters For being a loyal listener, I want to send you a copy of my new book Profitable Painter. Inside, I’ll show you the exact frameworks that have helped painting businesses save big on taxes, increase profits, and scale with confidence Head over to profitablepaintercpa.com/book and grab your copy today. Don’t wait — this is my gift to you for being part of the Profitable Painter community.