Tax Strategy Q&A: Mega Backdoor Roth, RV Write-Offs, and LLC Mistakes

Mark Kohler and Mat Sorensen Answer Your Biggest Questions About LLCs, 401(k)s, Business Trusts, and the Right Way to Build Wealth

If you’re a business owner trying to build wealth, reduce taxes, and avoid costly mistakes, this episode of the Main Street Business Podcast is a must-listen. Mark J. Kohler and Mat Sorensen tackle real questions from real entrepreneurs—including how to structure a partnership correctly, whether the “business trust” loophole in California is a myth, how to maximize a solo 401(k), and what vehicle deductions really look like in 2025.

With decades of legal and tax experience, they cut through confusion and deliver practical strategies that help you build your American Dream—without falling into common traps.

Want to see Mark and Mat break it all down with real-world examples and unscripted reactions?

Watch the full episode below. From entity structure disasters to mega Roth strategies and RV tax write-off tips, this open forum Q&A covers a ton of ground—and might just save you thousands.

Catch the full episode of the Main Street Business Podcast right here—perfect for your commute or next walk around the block. Hear direct answers to real business and tax questions from fellow entrepreneurs across the country:

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What’s the Best Business Structure for Multiple Partners?

If you and your partners are all shareholders in an S corporation, you may be in the wrong setup. One listener asked how three partners—two with 45% and one with 10% ownership could reduce FICA taxes. Mark had strong words:

“Whoever recommended that S-corp structure didn’t know what they were doing. This is costing you thousands.”

The Fix: Create a multi-member LLC owned by each partner’s individual S-corp. This structure lets each partner manage their own reasonable salary, write off their own expenses (like travel, auto, and electronics), and avoid FICA pitfalls.

What’s the Right Way to Maximize Your Solo 401(k)?

Becky asked how to hit the $70K contribution cap using her S-corp and solo 401(k). The breakdown:

Start with reasonable comp – say $60K salary.

Contribute:

• $23K employee deferral
• $15K employer match (25% of $60K)
• $7K to a Roth IRA
• $5K to a Health Savings Account (HSA)

Result: $50K+ in tax-advantaged contributions before even increasing salary.

“Don’t chase higher salary just for the write-off. You’ll pay more in FICA,” Mark advised. 

Can I Use a Multi-Member IRA LLC to Pool Family Retirement Accounts?

Yes—but proceed with caution. A listener asked if he could combine his Roth, solo 401(k), Coverdell, and spouse’s accounts into one investment LLC.

Mat’s verdict:

• You can pool funds into a multi-member IRA LLC.
• You cannot change ownership percentages later. That would trigger a prohibited transaction under IRS rules.

Ownership is fixed at formation and must be based on the initial capital contributions of each account.

Can You Deduct an RV for Your Business?

Listener Jay is a full-time RVer launching a mobile RV repair business and asked if RV-related expenses are deductible.

“Bad news: Your RV is your home. That makes write-offs very limited,” Mark said.

Here’s what’s allowed:

• Mileage to job sites
• RV campsite fees, groceries, or RV depreciation (unless it’s not your primary residence)

Pro Tip: If the RV isn’t your home, you can treat it as a business vehicle or even a rental. Huge opportunity!

Business Trust vs. LLC in California — Is It a Scam?

William asked if a business trust avoids the $800 California franchise tax.

Mark and Mat’s answer: Don’t fall for it.

• California doesn’t legally recognize “business trusts.”
• There’s no liability protection like with LLCs.
• You could jeopardize loans, contracts, and asset protection.

Stick with an LLC, pay the $800, and sleep better knowing you’re protected.

Mega Backdoor Roth: Still Worth It in 2025?

Yes, it’s alive and well—but not available to everyone.

• Only 25% of 401(k) plans allow after-tax contributions.
• Works best in solo 401(k) plans where you’re the employer.
• Be sure to ask your plan provider if this is allowed.

Got a Tax Question? Submit It to the Show!

Mark and Mat want to hear from you. Go to mainstreetbusinesspodcast.com and submit your question. It might be answered live in the next open forum episode.