Investment

Running an eCommerce business is already a juggling act—inventory, marketing, customer service, and keeping up with ever-changing algorithms. But while you’re optimizing ads and scaling sales, there’s one thing you can’t afford to ignore: your future.

You work hard for your money, so how do you make sure it works just as hard for you? The right retirement plan can mean the difference between financial freedom and playing catch-up later. Whether it’s a Solo 401(k), a SEP-IRA, or a Roth IRA, you’ve got options. The key is knowing which one fits your business and your goals.

Not sure where to start? Don’t worry, that’s where we come in. At Insogna CPA, one of the best CPA firms in Austin, Texas, we specialize in helping business owners like you make smart financial moves, minus the jargon. Let’s break it all down.

The Best Retirement Plans for eCommerce Sellers

If you don’t have a traditional job with a company-sponsored 401(k), saving for retirement falls entirely on you. The good news? You get to pick the plan that works best for your business. Here are your top three options:

1. IRA (Traditional or Roth): The Simple and Flexible Option

Best for: New or small-scale eCommerce sellers who want an easy, no-fuss way to save.

How it works:

• You can contribute up to $7,000 per year ($8,000 if you’re 50+).
• Anyone with earned income can open an IRA.
• There are two types:
  • Traditional IRA: Contributions may lower your taxable income now, but you’ll pay taxes when you withdraw later.
  • Roth IRA: Contributions are after-tax, but your withdrawals in retirement are tax-free.

Why you’ll love it:
 ✔ No complicated setup. Just open an account and start saving.
 ✔ Roth IRA means tax-free growth—yes, really tax-free.
 ✔ Traditional IRA lets you lower taxable income today.

What to consider:
 ❌ Contribution limits are lower than 401(k) or SEP-IRA.
 ❌ Roth IRA has income limits—if you make too much, you may not qualify.

If you’re keeping things simple and don’t want to deal with business paperwork, an IRA is a great starting point. A quick chat with an Austin tax accountant can help you decide between Roth and Traditional.

2. SEP-IRA: The Power Move for Self-Employed Sellers

Best for: Growing eCommerce businesses or freelancers with variable income.

How it works:

• You can contribute up to 25% of your net earnings (capped at $69,000 in 2024).
• Tax-deductible contributions lower your taxable income.
• Ideal if you’re self-employed or have a small team.

Why you’ll love it:
 ✔ Much higher contribution limits than an IRA.
 ✔ Flexible—no required contributions each year.
 ✔ Easy setup with little administrative hassle.

What to consider:
 ❌ If you have employees, you must contribute the same percentage for them.
 ❌ No Roth (tax-free withdrawal) option—your money grows tax-deferred, but you’ll pay taxes when you withdraw.

If your business is taking off and you want to stash away more money while lowering your tax bill, a SEP-IRA is a great tool. And trust us—working with a CPA in Austin, Texas makes setting it up a breeze.

3. Solo 401(k): Max Out Your Retirement Savings

Best for: High-earning eCommerce sellers who want to invest aggressively for the future.

How it works:

• You can contribute up to $23,000 as an employee (+$7,500 if you’re 50+).
• As your own “employer,” you can also contribute up to 25% of your earnings, with a total cap of $69,000.
• Tax-deductible contributions lower your taxable income, or choose the Roth option for tax-free withdrawals in retirement.

Why you’ll love it:
 ✔ Biggest contribution limits—perfect if you’re making serious profits.
 ✔ You control how much to save each year.
 ✔ Offers both pre-tax (Traditional) and after-tax (Roth) options.

What to consider:
 ❌ If your plan balance exceeds $250,000, you’ll have to file additional IRS paperwork.
 ❌ More setup and admin work than an IRA or SEP-IRA.

If you want maximum tax advantages and the ability to save aggressively, a Solo 401(k) is hard to beat. Not sure how to get started? That’s what Austin accounting firms like Insogna CPA are here for.

Which Plan Makes the Most Sense for You?

Still torn? Here’s a quick cheat sheet:

Your Situation	Best Plan
Just starting out, want something simple	Traditional or Roth IRA
Growing business, need flexibility	SEP-IRA
High profits, want to save aggressively	Solo 401(k)
Have employees and want to offer benefits	Traditional 401(k) (not covered in this article)

The bottom line? There’s no one-size-fits-all retirement plan, but there is one that fits you. A quick consultation with an Austin small business accountant can help you choose the smartest path forward.

Let’s Talk About Your Future

Your business is thriving now, but what about 20 or 30 years from today? Choosing the right retirement plan today means securing the financial freedom to live life on your own terms later.

At Insogna CPA, we help eCommerce sellers like you navigate tax strategies, maximize retirement savings, and build real wealth without the guesswork. Whether you’re searching for an Austin tax accountant, a small business CPA in Austin, or an expert tax advisor in Austin, we’re ready to help.

Let’s build wealth while you grow your business. Contact Insogna CPA today.

Managing production costs in the film and creative industry can be complex, especially when it comes to tax strategies. Whether you’re an independent filmmaker, producer, or content creator, understanding amortization can be a game-changer for both compliance and cash flow management.

At Insogna CPA, a trusted accounting firm in Austin, we specialize in helping creative entrepreneurs like you simplify financial concepts and maximize tax advantages. Let’s break down amortization and why it matters for your production business.

What is Amortization?

Amortization is an accounting method used to spread the cost of an asset over its useful life. In the film industry, this concept applies to production costs. Rather than deducting all expenses in the year they’re incurred, amortization allows you to spread the cost across multiple years as the project generates revenue.

Example:
 If you spend $100,000 producing a short film expected to generate income for three years, instead of deducting the full $100,000 immediately, you can amortize the expense and deduct around $33,333 per year for three years.

Why it Matters:

• Helps align expenses with revenue.
• Reduces taxable income gradually over time.
• Provides a clearer picture of your project’s profitability.

As a leading small business CPA in Austin, TX, Insogna CPA helps creative professionals manage this process efficiently while ensuring compliance with IRS guidelines.

Amortization and Section 181: Maximizing Your Deductions

The Section 181 tax incentive offers a unique benefit for qualifying film and television productions. This IRS provision allows eligible production costs to be fully deducted in the same year they are incurred instead of being amortized over time.

Key Benefits of Section 181:

• Immediate Deduction: Deduct up to $1 million in qualifying production costs in the year the expenses occur.
• Multiple Projects: Apply Section 181 deductions to multiple productions within the same year.
• S. Filming Requirement: Projects must be primarily filmed within the United States to qualify.

Example:
 If you produce a documentary with a $750,000 budget and qualify for Section 181, you could deduct the entire $750,000 from your taxable income that same year.

Not sure if your project qualifies? Our CPA firm in Austin, Texas offers specialized support for creative entrepreneurs to ensure proper filing and maximize deductions.

Amortization vs. Depreciation: Key Differences

While amortization and depreciation both involve spreading costs over time, they apply to different types of assets:

• Amortization: Used for intangible assets like production costs, intellectual property, and script rights.
• Depreciation: Used for tangible assets like cameras, lighting equipment, and production sets.

At Insogna CPA, a trusted Austin accounting firm, we help film producers determine when to use amortization versus depreciation for optimal tax savings.

How Amortization Works in Film Production: Step-by-Step Example

Let’s break it down further:

Scenario: You invest $120,000 in producing a feature film. The project will generate revenue over four years.

Amortization Schedule:

• Year 1: Deduct $30,000
• Year 2: Deduct $30,000
• Year 3: Deduct $30,000
• Year 4: Deduct $30,000

This method ensures the production costs are spread over the project’s revenue-earning lifespan, providing a balanced tax strategy.

However, if your production qualifies for Section 181, you could deduct the full $120,000 in Year 1 instead, leading to immediate tax savings.

Why Proper Documentation is Essential

To claim production cost deductions through amortization or Section 181, accurate record-keeping is critical. Without proper documentation, you risk IRS scrutiny or losing valuable deductions.

Key Documents to Maintain:

• Production Budgets & Invoices: Clear records of all production-related expenses.
• Contracts & Agreements: For talent, crew, and vendors involved in the project.
• Revenue Tracking: Detailed statements showing when and how the production generates income.

At Insogna CPA, a leading small business CPA in Austin, we ensure our clients maintain proper documentation to maximize their tax savings while staying compliant.

Why Creative Entrepreneurs Need CPA Support for Amortization

Navigating IRS rules on amortization and Section 181 can be overwhelming, especially for creatives balancing multiple projects. Working with a professional CPA ensures you:

• Maximize eligible tax deductions.
• Stay compliant with complex IRS regulations.
• Avoid costly mistakes in documentation or filing.

As a top-rated CPA in Round Rock TX and Austin, we specialize in production accounting and have supported countless creative businesses with strategic tax planning.

Frequently Asked Questions About Amortization for Film Production

Q: Can I use both amortization and Section 181?
 A: No. Section 181 allows full deductions upfront, while amortization spreads costs over time. However, you can choose different methods for separate projects.

Q: What if my project doesn’t qualify for Section 181?
 A: If Section 181 eligibility is limited, standard amortization remains a reliable strategy for gradually deducting costs.

Q: Can I apply Section 181 to international projects?
 A: No, Section 181 requires the majority of production to occur within the U.S.

Maximize Your Production Tax Benefits with Insogna CPA

Understanding amortization and tax strategies like Section 181 can be the difference between a financially successful project and one burdened by tax liabilities. At Insogna CPA, we simplify complex accounting for creative entrepreneurs, ensuring you focus on your art while we handle the numbers.

As a top-rated accounting firm in Austin Texas, we provide:

• Specialized Tax Planning for Film & Media Projects
• Section 181 Compliance Support
• Expert Amortization and Depreciation Strategies

Ready to maximize your production tax savings? Contact Insogna CPA, a trusted small business CPA in Austin TX for expert production accounting today!