Retirement

Let’s face it: navigating Roth IRA withdrawal rules can feel overwhelming. You’ve worked hard to grow your retirement savings, and the last thing you want is to lose a portion of it to penalties or taxes. But don’t worry, you’re not alone. At Insogna CPA, we’re here to help you make sense of the complexities, empowering you to make confident decisions about your financial future.

Whether you’re based in Austin or searching for the best CPA in Austin, understanding how Roth IRA withdrawals work is key to keeping more of your hard-earned money. Let’s break it down.

What Are You Withdrawing: Contributions or Earnings?

Here’s the first thing you need to know: not all withdrawals are treated equally. Your Roth IRA has two components:

• Contributions: The money you’ve deposited after taxes.
• Earnings: The growth your contributions generate over time.

The good news? Your contributions are always accessible—no taxes, no penalties. But earnings are a different story. If you withdraw them early, you could face a 10% penalty and additional taxes.

This is why it’s important to know the difference. Whether you’re working with an Austin, Texas CPA or managing your finances independently, keeping track of these details will save you time and stress.

Avoiding Penalties: The Rules You Need to Know

Let’s talk about those earnings. To withdraw them without penalties, you need to meet two requirements:

1. The Five-Year Rule: Your Roth IRA account must have been open for at least five years.
2. Qualifying Events: You can take out earnings penalty-free if:

• You’re 59½ or older.
• You’re using up to $10,000 for a first-time home purchase.
• You’re disabled or the withdrawal is after your death.

If you don’t meet these criteria, any withdrawal of earnings could result in taxes and penalties. Having a trusted CPA—especially from one of the top CPA firms in Austin, TX—can help you avoid these costly mistakes.

What Happens If You Get It Wrong?

We get it—reporting Roth IRA withdrawals isn’t the easiest task. The IRS requires you to correctly track and report the difference between contributions and earnings. You’ll also need to complete Form 8606 for non-qualified withdrawals.

At Insogna CPA, we’ve helped countless clients navigate these situations. Our Austin accounting services are designed to handle the complexities for you, so you can focus on building your wealth, not worrying about forms.

Why Partner with a CPA?

Roth IRA rules may be complicated, but you don’t have to figure it all out on your own. Here’s how a CPA can make your life easier:

• Proactive Planning: We help you map out a withdrawal strategy that aligns with your goals, whether that’s buying a home or funding your retirement.
• Tax Optimization: Our team specializes in identifying tax-saving opportunities that protect your earnings.
• Peace of Mind: With expert guidance from a firm like Insogna CPA—recognized as one of the best CPA firms in Austin—you can rest easy knowing your finances are in good hands.

From individuals in need of small business CPA services in Austin to those looking for trusted accounting firms in Austin, Texas, we’re here to simplify the process.

Your Next Steps

Roth IRAs are incredible tools for building tax-free wealth, but the rules around withdrawals can trip you up if you’re not careful. The good news? You don’t have to navigate them alone.

Whether you’re searching for an accountant in Austin, exploring options with CPA firms in Austin, TX, or simply want clarity on your retirement strategy, Insogna CPA is here to help. Our accounting services in Austin are tailored to your unique needs, ensuring that every decision you make is a confident one.

Let’s work together to keep your Roth IRA strategy sound. Contact Insogna CPA today for expert tax advice.

 

Ever feel like planning for retirement is just one more thing on your never-ending to-do list as a business owner? You’re not alone. When you’re running a business, managing retirement savings often gets pushed aside. But here’s the reality—a Solo 401(k) could be one of the smartest financial tools to help you reduce taxes and grow your wealth faster.

If you’re self-employed or run a business without full-time staff, this retirement plan was made for you. At Insogna CPA, we help business owners just like you simplify complex financial strategies—so you can focus on your business while we help you secure your future.

Let’s break down exactly what a Solo 401(k) is, why it matters for business owners, and how you can start using it to your advantage.

So, What Exactly Is a Solo 401(k)?

A Solo 401(k) is a retirement savings plan designed specifically for self-employed entrepreneurs or business owners with no employees (other than a spouse).

It works a lot like the 401(k) plans you might remember from a corporate job—but with some powerful differences designed for solo business owners.

The Big Perks:

• Contribute More: You can contribute as both the employee and employer, which means higher savings potential.
• Cut Your Taxes: Contributions can reduce your taxable income.
• Invest Your Way: Choose from stocks, mutual funds, and even real estate.
• Spouse Participation: If your spouse works for your business, they can contribute too!

It’s flexible, powerful, and a must-know tool if you’re serious about reducing your tax bill while saving for retirement.

Do You Qualify for a Solo 401(k)?

Wondering if you can use a Solo 401(k)? The eligibility requirements are simple:

• You’re self-employed with no full-time W-2 employees (except your spouse).
• You operate as a sole proprietor, LLC, S Corp, or C Corp.
• You want to save for retirement while lowering your tax bill.

If you’re making income on your own—whether as a freelancer, consultant, or business owner—you likely qualify.

However: If you hire non-spouse full-time employees, you’ll need to explore traditional 401(k) options instead.

How Much Can You Contribute? (More Than You Think!)

Here’s where a Solo 401(k) really shines compared to other retirement plans.

You can contribute twice—once as an employee and again as the employer.

As of 2023:

• Employee Contribution: Up to $22,500 (or $30,000 if you’re over 50).
• Employer Contribution: Up to 25% of your net self-employment income.
• Total Possible Contribution: Up to $66,000 (or $73,500 for those over 50).

Example for a Business Owner Earning $100,000:

• Employee Contribution: $22,500
• Employer Contribution: $25,000 (25% of net earnings)
• Total Saved: $47,500 in tax-advantaged retirement savings!

Pro Tip: The higher your income, the more you can save—and lower your taxable income.

How a Solo 401(k) Saves You Money on Taxes

Let’s talk about the part every business owner cares about—saving money on taxes.

A Solo 401(k) lets you reduce your taxable income, which can mean thousands of dollars saved each year.

Here’s how it works:

Option 1: Traditional Contributions (Pre-Tax)

• Contributions are made before taxes.
• Reduces your taxable income this year.
• You’ll pay taxes when you withdraw during retirement.

Option 2: Roth Contributions (After-Tax)

• Contributions are made after taxes.
• No tax savings now, but…
• Tax-free withdrawals in retirement, including growth!

Example:

If your business earns $150,000 and you contribute $50,000 into a Solo 401(k):

• Your taxable income drops to $100,000.
• This could save you thousands in taxes today while you build wealth for the future.

At Insogna CPA, a top-rated Austin Texas CPA firm, we help you structure your Solo 401(k) contributions to maximize both immediate tax savings and long-term wealth growth.

Solo 401(k) vs. Other Retirement Plans—Which Is Best?

You might be wondering how the Solo 401(k) stacks up against other retirement plans like the SEP IRA or Traditional IRA.

Feature	Solo 401(k)	SEP IRA	Traditional IRA
Who Qualifies?	Self-employed, no staff	Self-employed	Anyone with income
Contribution Limit?	$66,000 ($73,500 if 50+)	$66,000	$6,500 ($7,500 if 50+)
Employer Contribution?	✅ Yes, up to 25%	✅ Yes, up to 25%	❌ No
Catch-Up Contributions?	✅ Yes ($7,500 for 50+)	❌ No	✅ Yes ($1,000 for 50+)
Roth Option?	✅ Yes	❌ No	✅ Yes

Key Takeaway: If you’re self-employed and want higher contribution limits with more tax flexibility, the Solo 401(k) beats most other options.

How to Set Up a Solo 401(k) (Without the Headache)

Setting up a Solo 401(k) might sound complicated, but it doesn’t have to be—especially when you have the right guidance.

Here’s how we help at Insogna CPA:

Step 1: Confirm Eligibility – We’ll review your business structure and income to ensure you qualify.
Step 2: Customize Your Plan – Choose between pre-tax and Roth options to match your goals.
Step 3: Handle Setup – Our team will establish your Solo 401(k) plan and prepare all necessary paperwork.
Step 4: Maximize Contributions – We’ll help you determine the ideal contribution amounts based on your income.
Step 5: Keep You Compliant – If your account balance exceeds $250,000, we’ll ensure proper Form 5500-EZ filing.

Why Business Owners Trust Insogna CPA

At Insogna CPA, we go beyond tax prep—we’re here to help you build lasting wealth through smart financial strategies.

🔹 Specialized in Small Business Retirement Planning
🔹 Personalized Tax Strategies Tailored to Your Business
🔹 Ongoing Compliance Support
🔹 Deep Expertise as a Leading Austin CPA Firm

We don’t just help you save on taxes this year—we help you build a financial legacy for the years ahead.

Ready to Build Wealth and Save on Taxes?

Solo 401(k) can be your secret weapon for reducing taxes and growing long-term wealth—but only if it’s set up the right way.

Let Insogna CPA, your trusted small business CPA in Austin, TX, guide you every step of the way.

👉 Get started today—contact Insogna CPA for a personalized Solo 401(k) strategy!

Running a business is challenging enough without having to decode complex tax strategies. But here’s the thing—knowing how to use tools like the Qualified Small Business Stock (QSBS) exemption and the 83(b) election can make a massive difference when it comes to reducing your tax bill and keeping more of your hard-earned money.

At Insogna CPA, we work with entrepreneurs, founders, and small business owners like you every day, helping them understand and leverage strategies that can create long-term wealth protection. Let’s break this down in a way that makes sense—so you can start using these strategies to your advantage.

What is QSBS (Qualified Small Business Stock)?

Imagine you start a business, and it takes off—really takes off. You invest a lot upfront, and five years later, your company’s value has skyrocketed. Now you’re thinking of selling your shares and making a significant profit.

But here’s the good news: if your stock qualifies as Qualified Small Business Stock (QSBS) under Section 1202 of the IRS code, you could avoid paying capital gains taxes on up to $10 million of profit.

That’s right—zero capital gains taxes on potentially millions of dollars.

Does Your Stock Qualify for QSBS?

Here’s what needs to happen:
 ✅ You Own Shares in a C Corporation – The business must be structured as a C Corp, not an LLC or S Corp.
 ✅ The Company Has Gross Assets Under $50 Million – At the time you received your shares.
 ✅ You Held the Stock for At Least Five Years – Patience is key here!
 ✅ You Acquired the Stock Directly from the Company – Shares need to be issued directly, not bought second-hand.

If your business fits this profile, you could be in for some serious tax savings. But if you’re unsure whether you qualify, Insogna CPA, a leading Austin, Texas CPA firm, can review your situation and help you make the most of this exemption.

What is an 83(b) Election and Why Should You Care?

The 83(b) election is a powerful tax-saving tool if you’re receiving restricted stock or equity compensation as a founder or early employee.

Think of it this way:

You receive shares in your company when they’re worth next to nothing. But instead of waiting for the shares to increase in value and being taxed later (when it could cost you a lot more), you can prepay taxes upfront at today’s lower valuation.

Here’s How It Works:

Say you receive 10,000 shares of restricted stock worth $1 per share.

Without the 83(b) election:

• You wait to pay taxes until the shares vest.
• If the shares rise to $10 each, you owe taxes on $100,000 in ordinary income.

With the 83(b) election:

• You pay taxes on the shares’ current value.
• At $1 per share, you only pay taxes on $10,000

If the shares later grow in value, the profit would be taxed at the lower capital gains rate instead of ordinary income rates. See the difference?

But there’s a catch—you have only 30 days from receiving your restricted stock to file the 83(b) election with the IRS. Miss that deadline, and you’ll lose out on this advantage.

👉 Need help filing on time? Our experts at Insogna CPA, one of the best CPA firms in Austin, can handle the entire process for you.

How QSBS and 83(b) Work Together for Bigger Savings

Now, here’s where things get even more interesting. When you combine QSBS and the 83(b) election, you’re creating a double tax-saving shield.

Imagine this:

1. You receive restricted stock and file an 83(b) election, paying minimal taxes upfront.
2. You hold the stock for five years.
3. The stock qualifies for QSBS, and you sell your shares.
4. You avoid capital gains taxes on up to $10 million in profit.

This combo can be a game-changer for startup founders and early investors, but only when executed properly—and that’s where Insogna CPA, a trusted small business CPA in Austin, TX, steps in.

Steps We Take to Get It Right for You

When you partner with Insogna CPA, we make sure every step is handled with precision. Here’s how we ensure you maximize your tax benefits:

Step 1: Confirm Eligibility – We review your company structure and stock issuance to confirm if you qualify for QSBS and 83(b) benefits.
Step 2: Prepare the Paperwork – Filing an 83(b) election requires precision. We prepare and submit it on your behalf within the critical 30-day window.
Step 3: Track Your Holding Period – To claim the QSBS exemption, you’ll need to hold your shares for at least five years. We track this for you.
Step 4: Ensure Compliance – Proper documentation is crucial for both elections. We keep your financial records audit-ready.
Step 5: Provide Ongoing Support – Whether you need help with tax planning or future stock events, our team has you covered.

Our clients trust us as their Austin accounting services partner because we simplify complex tax strategies while ensuring every opportunity is fully leveraged.

Why Work with Insogna CPA?

At Insogna CPA, we go beyond traditional accounting. Our focus is on helping business owners, founders, and early-stage investors like you keep more of what you’ve worked hard to build.

• ✅ Proactive Tax Planning
• ✅ Specialized in Equity Compensation
• ✅ Compliance-Driven Approach
• ✅ Expertise in High-Value Tax Strategies

Whether you’re a startup founder exploring tax-saving strategies or an entrepreneur managing restricted stock, our CPA firm in Austin, Texas provides expert guidance every step of the way.

Common Questions About QSBS and 83(b)

Q: Can I file an 83(b) election after the deadline?
A: No. The IRS requires the election to be filed within 30 days of receiving your stock grant—no exceptions.

Q: Does QSBS apply to LLCs?
A: No, QSBS is only available to C Corporations that meet specific criteria.

Q: Can I use QSBS and 83(b) together?
A: Absolutely! When combined properly, they can provide massive tax savings—but the rules are complex, which is why working with a CPA in Round Rock, TX like Insogna CPA is crucial.

Let’s Maximize Your Tax Savings Together

You’ve worked hard to build your business—don’t let unnecessary taxes take a bite out of your success. With the right strategies, you can protect your wealth, reduce your tax liability, and secure long-term financial benefits.

At Insogna CPA, we specialize in small business tax strategies and help entrepreneurs just like you make informed financial decisions.

👉 Ready to see how QSBS and the 83(b) election can work for you? Contact Insogna CPA, your trusted Austin CPA firm, today for expert tax planning guidance!

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!