Mike Milligan and Gary explain how retirees can start businesses while minimizing taxes. Self-employment income can trigger higher Medicare premiums, but S-Corp status and retirement accounts like solo 401(k)s reduce taxable income. They also cover the 2026 mileage deduction of 72.5¢ per mile and a strategy to hire family members and fund a child's Roth IRA.
Be one of a kind with Mike's plan.
This is the One of a Kind Financial Show Daily with your host, Mike Milligan. It's Wednesday. It's hump day.
Hump day.
Starting a business in retirement can keep you sharp and profitable, but it can also create surprise tax bills, higher Medicare premiums, and compliance headaches if you wing it. On the One of a Kind Financial Show this past weekend, Gary and I broke down how retirees can run a business in 2026 and Keith the IRS for becoming their business partner. Enjoy this segment next, and remember, you are one of a kind.
If you ever played Monopoly, I always wind up in jail. I don't know why. But anyway, you know the difference between stumbling into bad property and building a strategy. Retirement entrepreneurship can be a blessing, but the tax rules reward people who set it up wisely. Retirement plans, mileage logs, and estimated payouts. Uh, do you realize self-employment Income can raise your Medicare premiums later? I didn't know that.
Oh, they can, right? Because that little fun side hustle might increase modified adjusted gross income enough to trigger IRMAA, again, based on the 2-year lookback. So that business that generates that extra cash, you know, I said before the break, like, let's talk about retiree entrepreneurship. I don't even know what it is, but it's like retirement and entrepreneurship combined. New word that means absolutely nothing. It just means that, like, if you're going to start a business, you better have a tax plan in place because there are a lot of tripwires, including IRMAA increases in Medicare.
We should have a drinking game. Every time we say IRMAA today, we take a drink and see what happens.
We would be hammered already, Gary.
Exactly. Is your business structure tax efficient or just tax convenient?
A sole proprietorship Is simple, but simplicity can be expensive. For some retirees, an S corp election can reduce payroll tax exposure if handled correctly. If you don't know what I'm talking about, the difference between a sole proprietorship and S corp, I invite you to call today because I love explaining the differences between those two when we get together. And it may be, by the way, Gary, a lot of our listeners are dealing with an advisor who also can't explain these because they don't know the difference between sole proprietor and S corp because they signed the back of a paycheck, which is they're an employee of the company they work for. They don't understand the intrinsic details of what being a small business owner is all about. We at One Oak understand that.
Right. Are you using the 2026 mileage rules correctly or leaving deductions on the table, Mike?
Mileage deductions on the One of a Kind Financial Show?
How about that?
Gosh, look what we're talking about, guys. The IRS set the 2026 business mileage rate at 72.5 cents per mile. So if you're running the business and you run it back from Norfolk to the oceanfront, 50 miles, right? That's a pretty good deduction there, guys. So that's $38 almost. That's real money if you're driving to client meetings, properties, vendors, or networking events. But you better have a clean system to track it. This can't be a wishy-washy made-up system. It's got to be actually recorded, actually documented.
Yeah. And there are apps for that, aren't there, Mike?
From what I understand.
There are.
There are great apps for that. You just got to remember. And I'm only 50 years old in 2026, Gary, but you just got to remember to tap that button when you get in the car.
Yep, exactly. This way you don't want to lose out on that. That adds up quickly, doesn't it? 72.5 cents per mile.
It does, especially for somebody who runs A driving business. I mean, there's a lot of people in retirement who, you know, maybe want to be an Uber driver, or they run like a carrier service where they pick up packages from one law firm and take it to another law firm. Or those mileages can add up, that money can add up quickly if you're doing a couple hundred miles a week.
Yep, absolutely. The show is the One of a Kind Financial Show with Mike Milligan. Mike is with One Oak Financial. I want you to get on the calendar to get you all set up with that comprehensive plan. There's no cost, there's no obligation. And maybe you have a question or two about today's Mike and the team happy to answer any questions you may have. 800-748-1838. Mike's going to be on the phones this weekend. 800-748-1838. Or text the word ideas to 600-700. Ideas to 600-700. You deserve a more confident plan to retire. Want to be stress-free? Peace of mind starts by picking up the phone and dialing that number one more time. And the number before we get back to the show, and that number is 800—
748-1838.
748-1838 or text the word ideas to 600-700. Are you missing the retirement plan inside the business opportunity, Mike?
Just because you're retired, you may be running this business, you still have the opportunity to take some of that earned income and put it inside of retirement accounts, whether that's a solo 401, a SEP IRA, or other strategy, like maybe a Roth IRA. That those previous ones, 401s, SEPs, can reduce taxable income while you're still producing. The other ones, can build a legacy of growth and tax-free in the future. So if you're running the business and you have some tax leverage, make sure that you have a plan for how to either defer taxes for when you no longer can work or no longer need the money, or you have a plan to build tax-free growth in the future.
Couple of minutes left. How about this? The lesser-known move, hiring family done correctly can shift taxes and build legacy. Hire family, I guess, if hopefully if they're They're good workers, I guess.
There's some rules in the IRS called the family management company that allow you to hire especially minors, right? If they could do work for you, like take trash out or filing or social media management or other known things that young kids can do, you could hire a grandchild or a minor child and create a family management company where it becomes an expense to your business, but also it's tax-free to the child. And then you could fund Roth IRA. And, you know, what we know about growth on interest or investments, growth on interest, it's not just about that, but it's the amount of time that money can be in the account. And so Albert Einstein says the 8th great wonder of the world is compound interest. Well, imagine putting compound interest in a 6-year-old's Roth IRA when they don't need it until they're 70. That's a lot of money.
Yeah, that's going to add up quickly. All right, I wish we had more time. That was a fun segment, Mike. Our final thoughts on This segment and the one-of-a-kind financial plan.
If you're heading in, if you're in retirement or heading into retirement and thinking of being a consultant or doing some part-time gig work, we have the knowledge to be able to help you structure it right and make it part of your one-of-a-kind financial plan. If you're doing it just to stay impactful in a community, to keep your mind sharp, Having a business structure in place for your retirement years is not a bad idea for everybody. Everybody's idea of retirement is different. It's not about sitting in a recliner, taking naps every day. Other people just want to reduce time and build something for themselves. You are one of a kind. And whether it's traveling, spending more time with grandkids, or building a business, we have the knowledge on the financial side to help you. One Oak Financial will build a one-of-a-kind financial plan. for you around taxes, retirement income, investments, long-term care, and legacy. That is just for you, customized, unique, so that you can live a one-of-a-kind life. I look forward to speaking with you guys this week about your plans and your future.
Yeah, Mike would love to talk to you. And it starts by picking up the phone and dialing this number, 800-748-1838, 800-748-1838, or text the word ideas to 600-700. This has been the One of a Kind Financial Show.
Daily with your host, Mike Milligan. Gary and I are here for education purposes only. Please do not take anything we say solely as financial recommendations for you personally, because every situation is different. If you need specific financial advice, please reach out to us at Ideas by Mike, doing business as One Oak Financial. I am a registered investment advisor, investment advisor representative with Advisory Alpha LLC, Advisory LLC, and Ideas by Mike doing business as One Oak Financial are separate and unrelated entities. Please consult with tax professionals before implementing tax strategies. Um, and we look forward to seeing you again on the One of a Kind Financial Showdown.
Be one of a kind with Mike's plan. Innovation, growth, take a stand. Visibility, strategy, take the lead. Transformation's yours, fulfill the need. Mike's got the way. To help you rise and stay. Leadership impact you'll find in your one-of-a-kind mind. Be one of a kind, take the flight. Ooh, ooh, ooh, ooh, ooh. Mike's the guide, you'll shine bright.
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