Episode 49. How to Use Trump Accounts as a Business Expense

Trump Accounts are a brand new tax-advantaged savings account for children, and most business owners have NO IDEA they can use this as a business tax deduction.

In this podcast, I break down exactly how Trump Accounts work, how you as a business owner can contribute up to $2,500 per year to your employees' children's Trump accounts as a 100% tax-deductible business expense, and how to combine this with hiring your own children in the business for even bigger savings.

I go over what Trump Accounts are and who qualifies, the $1,000 government contribution for babies born 2025–2028, how employers can contribute $2,500 tax-free to employees' children's accounts, and why this beats giving a raise. I also show you how to hire your kids and pay them up to $16,100 tax-free in 2026, how to combine Trump Accounts with the $5,000 annual contribution limit, and how strategies like bonus depreciation, Section 179, R&D tax credits, and the QBI deduction all tie back into this.

Let's also cover no tax on tips, no tax on overtime, and how these connect to Trump Accounts. Plus, a full step-by-step implementation plan so you can actually put this to work in your business.

Whether you're an S corporation owner, sole proprietor, LLC, or partnership, this podcast shows you how to keep more money in your pocket using 2026 tax strategies that actually work.

🆓  Download FREE PDF: 7 Write-Offs Every S-Corporation Business Owner MUST Know:   https://7taxwriteoffs.com/?el=podcast&htrafficsource=buzzsprout

*Disclaimer This material & presentation content is for informational and educational purposes only. This material and presentation content is designed to provide general information regarding the subject matter covered. It is not intended to serve as legal, tax, or other financial advice related to individual situations. Because each individual’s legal, tax, and financial situation is different, specific advice should be tailored to the particular circumstances. For this reason, you are advised to consult with your attorney, accountant, tax preparer, and/or other advisor regarding your specific situation or your client’s specific situation. The information and all accompanying material are for your use and convenience only.

Transcript

Trump Accounts And Who Benefits

SPEAKER_01 0:00

Today, we're doing a deep dive into Trump accounts and how business owners can actually leverage this as a business tax deduction, especially if you're hiring your own children to work for you in your business. Now, look, this is going to be huge, so pay attention. If you are a business owner, especially if you're an S Corporation owner, this is a new deduction for you. Today we're gonna break it down. We're gonna talk about what Trump accounts actually are, how they work, how the business owner's angle works, and then we're gonna talk about some real-world examples with some actual numbers and whether this makes sense for you in your specific situation as a business owner. I'm gonna show you how to combine this strategy with other 2026 tax strategies to create a comprehensive plan that could save you hundreds of thousands of dollars on taxes. Let's get right into it.

Show Intro And Philosophy

Trump Account Basics

SPEAKER_00 0:50

Welcome to the Tax Reduction Podcast for Moneymaking Entrepreneurs with Boris Musheev. Boris has helped entrepreneurs across the United States collectively save millions of dollars in taxes with the power of tax planning and advisory. The only way you, the business owner, can save money on taxes is by using proactive tax strategies. And this podcast is all about saving you money on taxes. Boris will share with you in-depth and easy-to-understand tax reduction strategies that you can implement in your business within 30 days or less. Let's jump into today's episode.

Employer Contributions vs Raises

Hiring Your Children Strategically

SPEAKER_01 1:23

A Trump account is a new tax advantage savings account for the children. And think of it this way: it's a 529 plan that met a traditional IRA and they had a baby, but with some unique twists, okay? So let's talk about concrete facts. Let's talk about some of the government money that the government is giving for your children. For babies born between 2025 and 2028, government is gonna give you a thousand dollars, that's right, and it goes into your child's Trump account. That's a thousand dollar deposit. Families can contribute up to five thousand dollars per year to each child's Trump account until the child turns 18. By the way, if you have an S Corporation, I've got a seven tax write-off steps. Every S corporation owner must know, it's in the description below. Alright, so here's the most interesting thing, okay? This is the provision that most people are completely missing. Employers, you as a business owner, can actually contribute up to$2,500 per year to your employees' children's Trump account, and that is not taxable income to them as an employee. Now, this is a great strategy because if you're also hiring children in your business, so let's do a math example, all right? The scenario number one is that we're just give our employee a raise. Scenario number two, where we're gonna put money into the Trump account. Let's say you've got an employee making sixty thousand dollars per year. They're in a 22% federal tax bracket, and you want to give them a$2,500 raise, they're gonna pay 22% tax on that, which is$550. Then they're gonna pay FICA tax, which is$191. Now that employee is gonna receive a net paycheck of about a$1,759. You as a business owner will also pay payroll taxes on that money that you pay. So same employee, same$60,000 salary. Instead of a raise, you contribute$2,500 into their child's Trump account. So gross contribution,$2,500. Federal income tax, zero. FICA income taxes, zero. Your employer taxes, payroll taxes are zero. And the net employee benefit, the check that that person receives in the Trump account is$2,500. This contribution is a hundred percent deductible for your business. You're essentially providing a$2,500 benefit that costs you$2,500, but you get a deduction, your employee gets a hundred percent tax-free value and a tax-free income. Now, let's talk about when you actually hire your children in your business. And if they're under the age of 18 and you're a sole proprietor or your partnership, and honestly, even if you're an S corporation, those wages are tax deductible to the business. Your child will not pay any income taxes on it if those wages are up to a standard deduction. Now for 2026, the standard deduction is sixteen thousand one hundred dollars. What that means is that your business can pay your children up to sixteen thousand one hundred dollars and your child will not pay any federal income taxes on it. If you're gonna add Trump accounts to the mix, your child is an employee of your business. You can contribute up to$2,500 to their Trump account. The business gets a$2,500 deduction. You step in as a parent and you give$2,500 as a parent. The maximum your child can have in their account per year is$5,000. So now your child will have$5,000. But the$2,500 that went into it will be a tax deduction for you. My recommendation: if you want to implement this, work with your tax advisor who understands both strategies and can document everything properly. Now, let's talk about additional tax strategies that you can use in 2026.

2026 Tax Strategies Overview

SPEAKER_00 5:04

If you have a tax preparer and you do not have a tax advisor, the only way you can save money on taxes is by using proactive tax planning strategies that only a tax advisor can give you. Boris put together a free PDF for you, the business owner. Seven tax write-offs every S Corporation business owner must know. In this PDF, you can find seven tax strategies that you can start using in your business to instantly start saving money on taxes. Click on the link in the description below for a free download.

Implementation Steps And Compliance

Resources And Closing

SPEAKER_01 5:35

Alright, the first one on the list is bonus depreciation. You can actually start deducting any equipment that you bought for business 100% starting 2025. Bonus depreciation may not be the best option for you. Look at section 179, because with section 179, we can pick and choose. So I'll give you a quick example. Let's b let's say you bought an equipment worth$300,000. Okay, you're gonna have to write off 100 uh percent of it. But what if you don't need$300,000 right now? Like some of my clients, they know that next year they're gonna be in a higher bracket. So what I do for them is like, all right, why don't we take a look at what section 179? How much of 300 do you actually need? So section 179 allows you to pick and choose the amount from that entire purchase. The next one on the list is RD tax credits. Now, this may be huge for you because a lot of business owners in 2025 and 2026 are turning to AI to start coding and developing apps. And if you are that individual, you can get a research and development tax credit. And in 2025, this tax credit, the deduction for it, is now 100%. On top of that, you get a research and development tax credit. So think about it this way: you spend$100,000 on RD, IRS says, you know what, you can deduct it, and we're gonna give you a credit. Another one of my favorites in the Big Beautiful bill is the qualified business income deduction, which is the QBI deduction and it made permanent. Okay, so if you run an S Corporation, an LLC, or a partnership, or even a sole proprietorship, you basically get a 20% QBI deduction and it now stays. Now, what does that mean? Let's say you made$100,000 net profit in your business and it is lower than your taxable income. Now, if you're an S corporation owner, taking a$200,000 in business income, meaning so your K1 income is$200,000, you multiply that by 20%, you get$40,000 QBI deduction. That's about$8,800 in tax savings if you're in a 22% tax bracket. Next one on the list: no tax on tips. If you run a restaurant, salon, barbershop, delivery service, valet service, anywhere your employees receive tips. Now, here's the thing though: it is not a deduction for you as a business, it's more of an employee benefit for your employees. They can deduct up to$25,000 in qualified tips from their personal income and their personal taxes. Another one on the list is no tax on overtime, and this applies for a lot of industries. If you have employees working significant overtime, this is a real benefit that costs you nothing but makes their total compensation more valuable. We're talking about non-exempt employees. These are employees that actually qualify for overtime, they get paid overtime pay. So if it's one and a half, that's 0.5, right? That needs to add up up to$25,000, and that becomes a deduction. How does this tie all back to the Trump accounts? Simple. You're keeping significantly more money in your business through these deductions. Let's say you used any one of these strategies, right? If you are saving$20,000 or even$100,000, you can basically take that money and allocate it towards your employees into their Trump accounts or again towards your children that either work for you in your business or don't work for you in the business. Alright, let's talk about implementation. Number one, identify eligible employees, survey your workforce, right? Quest children, or do you have your own children that work for you in your business? Okay, you can make this part of your benefits package. You might be surprised. This could be 20, 30, or even 50% of your workforce, depending on your industry and demographics. Step two, create a written documentation. Okay, you need a formal employee benefit plan document that outlines eligibility criteria, contribution amounts, timing of the contributions, what happens if employee leaves, and how to enroll. Step three, employee enrollment process. The employee's family opens the Trump accounts. Okay, and you need to find out about that account and that account number so they can provide it to you and you can fund uh that account and make contributions. Now look, set a deadline. Step four, payroll and accounting setup. Work with your payroll provider and make sure the contributions are properly coded. Okay, make sure they're recorded as a separate employee benefit expense in your accounting system. Step five, make the contributions. Decide on the timing. Is it going to be annual lump sum or are you going to contribute quarterly? So my recommendation, just do annual lump sum, either beginning or the end of the year, whatever works for you. Step number six, make sure you do an annual review. So Trump accounts are brand new. So and businesses are just figuring out how to use them strategically. The IRS might issue more additional guidance on this. So there might be clarification or even changes to what I'm saying over here. If you want to stay ahead of the curve, now's the time to explore this tax strategy and speak to your tax advisor. So stay informed, stay proactive, work with a qualified tax advisor and always, always make decisions based on your unique business circumstances and goals. Now that's it for today. See you guys next time.

SPEAKER_00 10:40

That's it for today's episode. Be sure to check out the description below for some free tax reduction resources that Boris put together for you. If you're ready to work with a tax advisor on your tax planning, be sure to schedule your call by heading over to www.taxplanningcall.com. That's www.taxplanningcall.com. And be sure to subscribe to our podcast to be notified when the next strategy is released.