Unlock the mysteries of tax savings as we journey with tax with Rocky, unearthing the hidden treasures that can transform tax season from a dreaded chore to a golden opportunity for financial gain. This episode isn't just about crunching numbers; it's a deep dive into the personal evolution from solo tax-filing warriors to shrewd strategists armed with cutting-edge software and, ultimately, the wisdom of a top-tier tax professional. Alongside Rocky, we traverse the landscape of overlooked deductions and credits, revealing how these can vastly improve your financial returns, especially if you're balancing a day job with income from rental properties.
Setting out into the financial wilderness of California LLCs, we dissect the essentials of tax deductions, from home office write-offs to travel expenses, and how these can drastically reduce your business running costs. With Rocky's insights, we expose the essential role of a tax professional in guiding entrepreneurs through this complex territory, ensuring every possible penny is kept where it belongs—in your pocket. This chapter serves up a rich blend of personal experience and expert advice, reinforcing the potent impact that legal tax strategies can have on a business owner's bottom line.
As the conversation pivots to the importance of integrity and diligence in record-keeping, Rocky and I shine a spotlight on the perils of cutting corners and the relief that comes with having impeccable documentation. We share the brass tacks of strategic real estate planning, from maximizing tax advantages to making informed investment decisions. This episode isn't merely a rundown of do's and don'ts; it's a treasure map to fiscal prudence and long-term wealth, with Rocky providing the compass to navigate these turbulent financial seas with confidence and clarity. So, tune in, take notes, and prepare to sail smoothly through tax season with an expert at the helm.
Podcast Intro
Unlock the mysteries of tax savings as we journey with tax with Rocky, unearthing the hidden treasures that can transform tax season from a dreaded chore to a golden opportunity for financial gain. This episode isn't just about crunching numbers; it's a deep dive into the personal evolution from solo tax-filing warriors to shrewd strategists armed with cutting-edge software and, ultimately, the wisdom of a top-tier tax professional. Alongside Rocky, we traverse the landscape of overlooked deductions and credits, revealing how these can vastly improve your financial returns, especially if you're balancing a day job with income from rental properties.
Setting out into the financial wilderness of California LLCs, we dissect the essentials of tax deductions, from home office write-offs to travel expenses, and how these can drastically reduce your business running costs. With Rocky's insights, we expose the essential role of a tax professional in guiding entrepreneurs through this complex territory, ensuring every possible penny is kept where it belongs—in your pocket. This chapter serves up a rich blend of personal experience and expert advice, reinforcing the potent impact that legal tax strategies can have on a business owner's bottom line.
As the conversation pivots to the importance of integrity and diligence in record-keeping, Rocky and I shine a spotlight on the perils of cutting corners and the relief that comes with having impeccable documentation. We share the brass tacks of strategic real estate planning, from maximizing tax advantages to making informed investment decisions. This episode isn't merely a rundown of do's and don'ts; it's a treasure map to fiscal prudence and long-term wealth, with Rocky providing the compass to navigate these turbulent financial seas with confidence and clarity. So, tune in, take notes, and prepare to sail smoothly through tax season with an expert at the helm.
Podcast Intro
Welcome to the Professions Real Estate Investing Podcast. I'm on my point, rocky. How you doing today, rocky? Good man man, I like this one we're going to be talking about today taxes. You know a lot of people in 95s they dread talking about taxes, but me and you, we talk about this all the time.
Speaker 2:Yeah, I didn't like taxes either, man, but now I'm getting my deductions and stuff going and I'm getting a little more back, Right, I like, I like, I like looking at my numbers and like, oh man, I might owe this much. And after we do a taxes, I'm like I don't owe that much. Shoot matter of fact.
Speaker 1:I'm getting more money back. Exactly, and especially when tax professors tell you you know how to go, you know, give you those hidden gems too. Yeah, how to go about it, so, yeah. So the topic today mastering your taxes, how a tax professional can save time and money. And when it comes to taxes, to a person who works the basic of nine to five all the time, what they're doing is just working, looking at their, check how much, taking out for a technical analysis and looking at taxes, because that's when they start crying but they look like what's the net with how much they're bringing home.
Speaker 1:But, yeah, there's ways, there's ways to this, like we was talking about just before we got on, there's there's definitely levels of taxes, definitely levels of taxes. The first one. So we're going to do 10 of them on the on the how to master your taxes. The first one, especially, is the complex tax laws. That's why you have to hire for you know, a tax professional, because there's a lot of laws out there that we have no knowledge about. That they do that, they do know, but because that's that their profession and then, like, say like they can have you help you with hidden gems, and none of it's top secret. Yeah, is this like? If you want to get the information you got to know about it, you got to go to a reliable source that gives you that, that info for you.
Speaker 2:Oh, that was it, like like we were talking about earlier, like I've been doing my taxes. I did my taxes in the beginning by myself, with you know, whatever online resources you have, you put plugging your numbers and then boom, your taxes done. And then I upgraded to like HR tax liberty those guys, you know, the big ones and then then I did my taxes and now this year I'm actually went to a tech professional that not only does your taxes, but they actually look at all your income, all your possible deductions and everything, and you kind of create what you can get and they put those numbers in exactly what you need to put them in, and your W2 form or your business and anything like that, and they'll put together and then that will be your actual, real taxes that are taken out or taxes that you have to pay into. Because, man, not when I went to a tax professional list, they're like why don't you claim this, why aren't you doing that, why are you doing this? I was like you can claim that.
Speaker 1:I remember you telling me that I was like there's certain things, I was like I think it's this too. It's like when I told you about certain things, like I know you believe me, but when she told you and you've seen it for your eyes, you're just like you know, what Tony was right, but you want it's that assurance. That's all it is. That's all it is. It's just an assurance, that's it yeah. Because I've already done it and I've been shopping for one, and then this week I'm going to be going to her too.
Speaker 2:So, like man, I don't know what's going on. Yeah.
Speaker 1:So I'm just like there's so many Like I started off with when I learned about it, you know, when I got my LLC. I have a couple of books that talks about taxes, taxes what you can write off, and like, like, say like, if you're a landlord, what you can write off for your properties, and that's the one thing like we're talking about here on the podcast right here right now. Is it what the taxes is Like. If you have a W2 job and you also have rental incomes, how can you go about? You know, off sending the taxes, what's needed, like, because when you own rental property, you get a ride. You know the government looks highly nice to you when it comes to, you know, tax write-offs, tax deductions.
Speaker 2:And like going back to this, the tax laws, like there's laws in place to where you can write so much off in your losses and write so much off your deductions in your personal, like your W2, and then even with your business. So together, knowing the law of how much you can write off and what forms you need to fill out to make it all legal, I mean as a common person, you're not going to know that.
Speaker 1:No.
Speaker 2:You're not going to know that unless you like done it for a while, you've got some bugs or you started studying on your own, but that tax official going to someone that has been doing it right, been doing it forever, they're like. She's straight-looking me like why don't you claim it? This I was like I never claimed that before.
Speaker 1:She's like well under law.
Speaker 2:So and so for a W2 person you can claim this, but under law so and so because you have an L of business and you have an ENN number you can also claim that on your business. So you have a consensus to deductions or one big one. She's like what do you want to do?
Speaker 1:I was like whatever you want, you want to make me happy with all this taxing.
Speaker 2:So her knowing a lot how to apply it to my personal taxes and my business taxes together it's called man. It Saved Me Thousands. Yeah, I'm a regular W2 person with starting off with a fresh new LLC.
Speaker 1:Yeah, and the thing about it is that people have no idea too, because I watch. I have my share watching podcasts, I watch the guys over at Think Media and when it comes to know, you know, because you're not doing the podcast, the YouTube, social media, and even if it's a startup that gets written off, it's a startup LLC. If you have a corporate LLC mine has been around for two years, yours is over a year it's going in two years the startup you can write that off. The government allows it. That's like the government allows it and that's what a lot of people don't know. So you know. And then you have this too, your first year, your first two years.
Speaker 1:They say you're definitely going to take a loss. You're going to take a loss because you're using your own money. It's going to take a minute to establish business credit for it, for your business, and then get things rolling, because that's where me and you were at right there, you know, right there, Exactly right there, right at the door. And number two would be deductions and credits. So, identifying deductions and credits which, like I said, a lot of people don't know about you to go to a tax professional because they know exactly what you need to do.
Speaker 1:There's a lot of things that people have no idea that you can write off for taxes. I talked to my guy, mike, at Boundary Waters and we was talking about like all the ride-offs like he brought up bringing machines to help out with the shirts and merchandising the shirts and everything, and he has a machine like granted, like he's going to lose one person, but it's big enough and it makes it enough where it doesn't need a person there because of the machine, but it's. You know certain things like that's an example used, but there's a lot of ways that you can use your business to write off and if you don't know about it, that's why you need a higher tax professional. It may be it may take a little bit of change, but let me tell you overall it's a great umbrella because they know the law, you don't know the law and they're going to make sure that you're protected.
Speaker 2:Yeah, and it does. So it does cost more to get a tax professionalist that will look through stuff CPA, ea but if they're able, if they so, if they cost more to do your taxes versus like when they're towing tax, hr for like $100, $200, something like that and you get it done, yeah you pay that money off front and then you'll do your taxes and it'll be done. But if you go somewhere, a tax professionalist they're charging you for like $250, $350, depending on how much it is, how much taxes they have to go through for you and file. But if they're saving you, if they're saving you more than what you're paying them in deductions and knowing these credits like child tax credit, owning a business credit, owning a rental property, owning a shoe there's all kinds of you own that you can get credit for your home, you know, for your income taxes, stuff and your Homeowners taxes, yes, so all those little things that they can add. And then your deductions.
Speaker 2:I was gonna like for me it quadrupled my, my deductions and it helped me lower my taxable income and now I Almost fell into the lower tax racket because I was able to do that so much out. So next year I have to spend more in my business stuff to get a lot more deduction. But I was fell into a different tax bracket and that lowering my tax bracket almost helped me Get taxed a lot less. Just buy.
Speaker 1:You, just, you just need to take a couple vacations.
Speaker 2:You would have to, I could have, oh yeah, but knowing what I know, now I'm just gonna I'm saving all my, all my receipts for everything, yeah, and then just I think the other the year add them all up and see if they but you can't do that with you know an online or HR or something that you miss they sit and you literally go in a HR somewhere and there's like 10 people in a cubicle and you go to the next one's open I'm way they type it, a big type in your income and Couple things put, put your social security card or number in there and then, yeah, there you go.
Speaker 2:There's something you get back at this on the show. They're not sitting down, you know, knowing like I do have a real property is any deduction or any right off I can do. I, yeah, I think so maybe, but I want to show your answer. So people just know was lazy or not lazy. That's why I'm not.
Speaker 1:That's how they were trained.
Speaker 2:Yeah, and they're just not like, they're just not.
Speaker 1:They have a job.
Speaker 2:You're an expert.
Speaker 2:Single line all the number, yeah, yeah, because, man, if you buy, if you have rental property and you don't take advantage of the annual deductions that you get, I think it's right there, think it's what three point three point three, three point three, six, five percent, you can write off of your Taxes on your own property. Wow, the number, and that's just and that's just automatically, no matter what you have that run my property, yeah, how much is worth, or whatever, so you can write that off. I think you write a rental property off for 25 years. 25 years, you can write, you can do the depreciation, appreciation. Yeah, there's so much. I have a list. Yeah, yeah.
Speaker 2:I was like you can depreciate. Claim that depreciation for 25 years automatically. Just my head around, probably, and you're in it flooring, the appliance.
Speaker 1:Everything, yeah so much yet, yeah, and each one has a different, different statue of years of each one. And another thing that I'll say this to and I remember I told you this one and a lot of people I know don't know this is when you go to Tax professional and you get your taxes done Whatever that amount is how much you spent, you should get it done you actually use that as a Rival to tax the next following exactly, and you have no idea.
Speaker 2:People don't know that. No, so, so so. People don't know. If you have a LLC you have to pay. In California you have to pay an annual fee to have LC is a hundred bucks a month.
Speaker 2:I guess which is ridiculous with a high and then, and then you have to go file, file it under an LLC. So you have to get a tax professionalist to help you do that, or you do yourself, yes, but so they charge you a fee to do a W2 and to do your LLC. But then, so you have the fee, extra fee, because you have LC to file, and then you have another $800 a year fee to have LC in California. So you have to pay for that. But if the text person didn't know or almost didn't care, they can, they, they.
Speaker 2:My text label was like well, you have to pay out all now, but they come next year, will? We'll just write that off. I'm like come here, yes. So she's like yeah, this is your business, so anything has to do for your business. Legal fees, which is obviously legal fees, yes, she's like we can write that off next year. So everything that I paid this year, I'm just gonna use that to help write off next year.
Speaker 2:And then I saw in a song, so like I told my wife, yeah, she's like well, how do we get these right? I was like it's money that we're spending no matter what already, but we're gonna get it back in In deductions. Yes, we're gonna get it back in deductions and like it's hard, it was hard for my wife to like. So what do you mean? What are the options on it? Well, let's play like this. We have a home right now. We live in my home office in my home. We've lived at home for five years now and I wasn't able to write off anything nothing at all. Now that I have a home office in my home, it changed.
Speaker 2:I ride off my home office square footage, all right off park, a percentage of my Election bill. My gas bill, yes. My solar bill, yes. Every unit bill. That bone bill, yes. All that, yep. Everything we already had is not a write-off if you go and we're saving a hundred, oh thousands, this year.
Speaker 1:And if you go, like, even if even if you go into, even on the business trips, seminars or anything like that, you guys got to find out how much their amount is. But that gets written off to like. So, like you know, besides me being a real estate agent here in Shasta County, monterey, in Orange County, last year I went a couple times to Monterey, all that from you know, it's a five-hour drive. Yeah, all that's written off, yep the place I say that because I had stayed at the state of the night Written off, yep, yep.
Speaker 2:Oh, certain, certain percentage written off, and those are all, just like there's all the deductions that you wouldn't know, or, yeah, the duchess that you wouldn't know to write off if you didn't, if your tax person didn't know to write a lot, exactly because you can be doing all this stuff and you'll never know To write it off until you go tax professionalists and be like, oh hey, you can write this off, this off, and you can research this stuff like that. But at the person that's doing your tax already knows it and you tell them how I have this as well. They're already triggered in the head. Okay, well, you have a whole office, so are you going to write off script footage? Are you going to do? Are you going to do percentage or what are you going to do? And you're thinking, you know what?
Speaker 2:Oh, I was script footage, what percentage, what? And they can, and they should already know a good tax specialist, should I know how to calculate this? What are the? What is the price per square foot? It should all know. Those are little things that are conference and what I know.
Speaker 1:I know you can write off a home office and what it.
Speaker 2:Well, how much is it per square foot? Yeah, exactly.
Speaker 1:Is it three, now is it five? I don't know.
Speaker 2:But that type of issue. But it's fine. Yes, it's always about or whatever you know, but they know top the head.
Speaker 1:Yeah, like that's a good, that's one of you know, like I was a good one, they know already even even when I show homes, show homes or after me, someone to to look at a house, to look at a house or help you know Anything with real estate and like the mouse, like it went up last year. I think it's like 65.
Speaker 1:Something like that, but that those calculations, like all those calculations, like they know, they know they should not. You're not gonna get at your h&r block. You're not gonna end up to your mom like these. There's a reason why they're called a professional.
Speaker 2:Yeah, yeah, yeah yeah, he's trying to google it. I think you can. I think you can do this. No, I don't want to think, man, this is a high risk, man, they give me that vibe where they're not sure, then this time to move on.
Speaker 2:Yeah, yeah, yeah pretty sure, because they're different levels. Just definitely, like I said, there's different levels. On the first day of my taxes, when I'm like you know, I want my or something like that, and then, as I was making more money, I got to h&r and h&r to now the tax professionalist yeah, there's levels and you're moving up.
Speaker 1:You're moving up, all right. The next one would be number three time saving, which is great because, like we were talking about before, average person doesn't know what would have the deductions and the credits. Work being with a tax professional um, they can manage your time precisely like they're handling yours. I meet with her on, you know, next week. Um, they not have, they not have to save valuable time for business and job responsibilities and then you keep on going to them. Then you have a rapport with them and then we're in. You y'all have a bond with each other, like, okay, I'll see you next year. Or you know, like, say, if you have a question like, how do I go about? You know it could be, you know, in mid part of the year, um, am I able to do this? It would do that If, if they're really good, they're gonna help you to the best of their ability.
Speaker 2:For sure, yeah, because I had all had. When I came to my tax professionalist I put my paperwork down. I had receipts, I had pronouns of my, my PGD, all these crowns, and I tried to organize as well as I possibly could. But it was a stack of stuff, right um of numbers, and I didn't have to organize it. But she was like, just leave it here. She literally was like I had a huge bullet. She's like, just leave it here, I'll go through it and I'll run through the numbers and I'll see what I can get you as far as your deduction stuff go. I'm like, thank you, my friend, because it was a time saver. I mean, organize it to where she can go through it easily. But she was able to run the numbers, that kind of add all the numbers up and I did all this stuff and I kind of struggled it. I'm like I'm going to do it again and make sure it's good. I'm like, oh my God, that's what I'm paying you for, because it's the IRS.
Speaker 2:They're going to get you for that penny, they're going to get you for everything If the number is off. You don't want to get out of there, you want to get in trouble, you want to pay a fee or something like that. So the fact that she's able to go through all that stuff and make it easier for me save me time, money, energy, headache. I was like I'll pay you. I'll pay you what you need. What do you think? What's coming?
Speaker 1:You did the old school way, was? There's nothing wrong because you didn't know? Yeah, because basically you can get an automated sheet online and you can break everything down, because that's how I go about doing it. That's when I meet her I'll show her everything, but it breaks it down. It breaks it down to if you pay for your glasses, extra medical coverage, like you said, all your utilities, advertisements, merchandising equipment. It breaks everything down for you.
Speaker 1:You add your numbers up, you put them in those slots. When you put them in those slots, now you have a better for the tax professional. It even makes their job their job is difficult in a lot of ways because they got to get all the numbers, but you're actually helping them out more because you've already calculated everything in each category and they can run off the numbers by that, which brings us to the next one. It says audit protection, ensuring audit protection, and then the role of tax professional in providing accuracy, support during IRS audits. So don't make sure everything is consistent. So you don't get audit. Yeah, you don't want to get audit.
Speaker 2:You don't want to get a red flag, exactly, you don't want to get audit, especially when you start now.
Speaker 1:Exactly, You're business. I've always been to the point where when I do all my calculations, when I take it to her, I always put on my automized form that I have all these receipts If anything happens. All right, what year do you need? There you go. Have a great day.
Speaker 2:Yeah, and I think it's good to say to you that they're there to run the numbers you give them. They're going to protect you for what they did for you. But if you're going in there and you don't have receipts for things, you're making things up and you know they would prove a trip or something like that. You're not only putting yourself in a risk, but you're putting your tax pressure in it.
Speaker 2:They got to go through that now they got to be like oh man, rocky lied to me. He said he did this much mileage or whatever. If you have your receipts and everything, we talk to them all the time, we don't start this business stuff off. Let's do it right, exactly. There's no shating this, just do it right the legal way and it's going to take time, but you don't want nothing to go fast.
Speaker 2:You want to take your time Because the better you at and you take your time at it, the more consistent and more credible everything is yeah, yeah, the credit, your credit at some point, your personal credit, everything your credibility with other people, with friends and family and hopefully with other business partners and stuff. You know you don't want to show an eye on your business or, you know, not have to prove it or anything like that Exactly. You don't want to show it to your professionalist. So you go through the numbers, you kind of organize your numbers together on an itemized page, you get to them. That's like your first audit and then the other one is like your tax officials are just going to run through those numbers for you. That's like another audit, so like you're kind of auditing yourself making sure you're doing it right, and then your tax officials is doing it before they submit it to the IRS. And, yeah, just having that extra person do it saves you that headache, you know.
Speaker 1:Hopefully, you don't have to go through that.
Speaker 2:Exactly.
Speaker 1:Yeah, and number five, strategic planning. Yet in this, we was talking about this earlier because you're planning for the future, and then that's when because, like, we're in investing that's where they help out a whole lot too. When it comes to say if you want to get a single family home or two plex for three plex, four plex, multi-family, you can discuss with them okay, what's going to be the tax benefits for this and what do I? What things do I need to? What's going to help me to use as deductions with taxes? They might not know all of it when it comes to real estate, but it's good to have someone that does. Yeah, and a good way to do that is go to a real estate agent that that has properties. Yeah, because they have a tax person, a tax professional, a professional person that prepares taxes on how things is done, which is going to help you in the long run Because, like you said, you don't want an audit.
Speaker 2:And it's definitely, it's whoever you know it when it helps out too, because that's how I phone my tax person. Because we found my wife was talking to someone that had an LLC that owned business and she asked them oh, my husband's going to start an LLC but he doesn't know who to go to. And she's like, oh, she's going to my lady. So I threw her through my wife, I went to his lady, I found out, taught her to give my taxes and went out Great. And now I'm like awesome. And then you're like, hey, I'm looking for someone to go and like, hey, I just went to here check her out, if you like her to go with.
Speaker 2:You know, I was like, oh, you know, if you can find something that's already in the business, like a real estate, um, someone in real estate already. And then you can tell me, hey, what do you do? How do you go about it? And like they can, they can show you the ways and how they plan. You know how these to see, to see if we plan, like you know how they're doing their taxes and what kind of forms they're filling out, and you know, go LLC to S quarter and all that stuff we're talking about. Yeah, um, there's different benefits of different um tax filing because, depending on how you fire taxes, you might get a huge, a huge break on like deductions and you start really coming into money. Yes, you're coming in hundreds of thousands of dollars. You know, one day, right, um, you know you can switch your tax filing strategies and you won't know that until you run the numbers. And to run the numbers correctly and safely, I'll get on it. You know that's that practice tax professionals going to do that for you.
Speaker 1:Yeah, and that's I'm moving on too fast, because that was number six real estate expertise, leveraging real estate expertise um the guidance of depreciation, rental income reporting and other real estate specific tax um considerations. That's, that's huge, because there's so much out there. That's the thing about there is so much out there. That is why the wealthy 90% they said that the wealthy have real estate and then that's the reason why they don't pay taxes Because they use the real estate so much leverage for it. Because it's not us, it's the government that structured this.
Speaker 2:Yeah, it's crazy. If you have a tax official list or anyone that deals with the law, irs, government, anything like that, it's always good to have them in your corner Because you're talking about those millionaires, those who they have, they all have a great great tax person. Y'all have a great great lawyer to do with all those two. Every millionaire you look at them up, they all have a great tax person and a great lawyer to do with. All their different kind of lawyers too right for divorce and stuff. But there's a space for that, for having those two in your life for sure. If you get to that level, you know like a tax person everyone, if you're doing a tax every year, you need someone.
Speaker 1:Yes, you need someone, because you might be losing out a lot of money, a lot of money.
Speaker 2:I remember way back when you had to buy new boots for work or new scrubs or something like that, you know it was, you always should have said, oh, you can write it off, you can write it off, you can write it off. I remember I took my receipts for my scrubs. It was only like maybe like $200,000 for the whole year. I took it to like I'm pretty sure it was like HR or something like that HR block whatever. And I was like, oh, I got this much to receive. Like, oh well, you know it needs to be. They're saying it needs to be over like $500,000 or whatever to even file it and then and to even get that deduction or whatever. Because, oh okay, well, all right, whatever. And that was that Literally.
Speaker 2:I know it was just another form that had to fill out and it just took. It took longer, but they didn't want to do it or maybe they didn't know how to do it, but it's like those little things. Are you telling me that I just brought in my scrubs and I could write it off if I had more deductions which I could have? I had shoes, you know, safety goggles, things like that, and if I could have brought all that in. Then I would have been to write it off more, more write-offs. But the fact that, oh, you can't because not enough, is like, okay, it was done. Now I'm going to be here bringing receipts, like legit receipts, you know I'm talking about. You know $100,000 in PG bills and stuff like that, and then look at my tax liability, like yeah, yeah, let me, just let me see what we can do and the thing is, even with what you just said about, like your scrubs and your set of scope and everything like those, are write-offs like you have a license.
Speaker 1:So whatever you buy you actually, that's to keep your license. You have to buy this, yes, To do your scope of practice.
Speaker 2:Yep, yeah, and it's crazy because they know, or maybe they didn't want to know or it was lazy. That's true, because every so what I learned from my tax liability if she was like you know the more paperwork we have to file I have to charge them with, because it does take more work and time. I totally get it, because my wife she, your wife too right, she is a notary. Yes, so every single signature you write down, she gets paid for it. Yes, so I totally get why, hey, I have to do another form. That's more money. I got to do another form for, yeah, I'll see you this one. I have no form for this, I'll get it. I get it. It sucks. You got to pay more for another piece of paper that you just write it out, but I get it yeah exactly.
Speaker 1:And then we was talking about this early number seven business structure advice, choosing the right business structure. So you have your LLC, you have your S-Corp. You can go, keep on going and going and going, but it's going to what benefits you best for your business. So we were talking about the LLC, and then we were talking about the S-Corp, and then you know the pros and cons, you know the the it's best, it's best to have an S-Corp. But do you need the S-Corp at the right time? At the right time?
Speaker 1:Yeah, that's what's needed, and that's where the tax professional helps out the most. As to what your business structure should be at the time, it's going to be an LLC starting off, but it can go. It can go, keep on going up further and further and further.
Speaker 2:Yeah, yeah, c-cpa and in the EA they're both able to run the numbers and then technically, then they're not going to tell you what you should do, but they're going to be like, hey, you can do this and this and this and these are the benefits. So you know, because you don't want, they're not there to run your business, they're there to run the numbers for you in the taxes. But if they know, if they're a good, for they're a good text prepper and they can prep your stuff and know what the options are and Say, oh, I'm gonna run it this way and you get like a thousand dollars in deduction. But well, if you want it this way, you add these up. We can actually get you five thousand dollars of that.
Speaker 2:But you have to Do your taxes this style, this, this, this way, and then having that option right there in there You're, you're able to like, oh man, like thank you for telling me that now Maybe I should do it that you have to go do your research instead of see that's best for you in your business, your company. Yes, but the fact that they knew that and they're able to look those numbers and give you that option is like that right there could literally just change your entire Business structure. Yeah, right in there because we can do this. You know you make a lot more money to save a lot more of this and that right, there is worth it.
Speaker 1:It is worth it and no matter what the price is, like these here. And that's what brings number eight compliance assurance thing, compliant with the tax laws, importance of ongoing compliance to avoid penalties and legal issues. Yeah, cuz I mean I think, god, that you found a good one, because I've been searching and searching and searching like crazy because I mean I don't want, I wasn't gonna go to him, you know, in H&R block, because the thing about it is there's nothing wrong with each and our block, but when you deal with business, when you deal with the business structure, when you deal with rental properties, that's a whole another level, that's a whole another ball game. And people who work for you know the Turbo tax and the H&R blocks, they're just basically dealt more, they're more structured. For that 9 to 5 person yes, that's one job, they've been not a set up for that. Basically the 9 to 5 person, not the 9 to 5 to 5 to 9 person, yeah, yeah yeah, there's a lot more than that and it's, yeah, like you say.
Speaker 2:It's not that they're bad. Is this their, their nest not set up for people to have extra stuff coming in?
Speaker 1:Is that what it is? And then deals with, I think, more than it does with volume. Yeah, there's a volume with how much you know.
Speaker 2:Alright, yeah, this person because they can do it like they have all the forms there. But you're sitting there, you, as a regular tax person, you know 9 to 5er. You know you don't know all these extra forms. I remember I did my time. Oh yeah, now we're gonna open up a Gotta file, file 822, and then your 1040 is gonna be affected and you have to do a K file now and all this stuff. What's the K?
Speaker 1:What's the 820? What's on these? I?
Speaker 2:don't know what that is. Are she's like well, we do it Lc to s crop to see curve, and you probably not. You have to do a schedule. See you, look, what is that? What are you talking? About speaking foreign is foreign, but I knew enough to. I know like that's part of your corporation, that's different. I'm gonna text lesson this on that. I knew enough to be like, no, but man, you don't know, that thing goes a whole different world. Yes, exactly.
Speaker 1:Yeah, and then number nine, maximizing retirement contributions. So the retirement planning contributions, which is lose how much early. The 401k or 403 in the IRA, like that helps out a whole lot as to how you want stuff structured. I know some people who have, who do have rentals, and then whatever money that they have they use a certain part to go into a IRA fund, which is better than a 401 or 403 because that's a whole nother topic.
Speaker 2:Yeah, it's all maximizing your time. Your country is all Depends on how you want, how your strategy is going to work for you on the long end they day.
Speaker 2:People Want their foreign K, they still believe in that, they still believe in the put money in the IRA and their IRA and investing in like index funds or Whatever company that's. You know, I was a good one, I know they bunch of these different companies you can invest in and If this works for you, if you have the energy and time and you don't have it in your time, and this is what you want to do is some very passive way to just hopefully build your investments for retirement, something that and you know that's fine for you. But I want to go do it. Real estate I feel like in the very it could be passive, but in the beginning very active. Yes, you have like you have to research. You gotta go see the properties and stuff for the beginning of this. I mean, yeah, I watched a lot of podcasts where these, the professional real estate investors, like obviously the property.
Speaker 1:Yeah, yeah, I'm probably numbers, they work out.
Speaker 2:I buy it.
Speaker 1:Yeah, some of them. Some of them live in one state and they have properties in another state. I never see the property there was. There's one gentleman. I listened to him Pretty regularly. Yeah, he bought several properties and other states but he never seen them. But the numbers were right and he had the right management team and everything and it worked. Everything worked out for me. So going full throttle, full straw right now.
Speaker 2:Yeah, it's taking all his money out and just invested it and having his.
Speaker 2:He's actively invested his money and His return might be good, might not be bad, might be bad, but you know you, he's, he's risking it on his own skin, right, and bless you this. You know some of us pay into 401k yours you're actually Investing it to but you think your risk is less lower because you think this is for one's safe. And you see, the company 2008, right as as one friend, she's getting ready to try to say like a million dollars reform, okay, and she lost. I think she was over from one to seven hundred and something dollars the mark. So stop, market stuff, crash. And she was like I don't think I retire anytime soon now that what? So that's crazy.
Speaker 2:I mean like safety with the house. They can buy house and give them a workout. And then let's say the plumbing. That's not, it goes bad. They got your whole plumbing house, but it was a risk. But it depends on who, how. You know if it works out for you. Is that what you want to do? That's what you want to do, go for it, but Defends your strategy, your plan, your goal, the person you are. Yeah, okay, I'm, I'm sure, I'll tell you, I'll tell you they man, my house worth quite a bit now. Sell today.
Speaker 1:And that's another thing and that's such a topic. But when me and Marcus, we, when we talking everything and that's what they were talking about with the wealthy the wealthy really don't buy a house they ran out of housing but they do. They do buy rentals and and eat like over. It is like it's a conglomerate, just everything. As long as you got a good tax professionalist man, the sky's the limit, because they can show you so many different ways that the average person can. Yeah, what does we say? And number 10 peace of mind.
Speaker 1:Oh, this might be the most important one right here. Peace of mind that you know you can sleep at night. Yeah, you can get all these deductions. And yeah, yeah, because you have a lot of people have no knowledge. I'm still learning. I'm still learning a lot. I'm not a type of professionalist, by no means, but I have. I have a good, I have some good books that show you, like, what you can write off and everything. And I'm glad you went with the tax Lady that you had all your receipts. You're like, no, you don't need all those just right now, in this, on my form, yep, and you go about that way, and then she'll do the numbers and she'll make sure that everything is good to go. Oh man, I mean peace of mind, knowing that you can sleep at night and that the IRS is not gonna mess with you.
Speaker 2:Yeah, that's a beautiful thing right there, yeah, and it's, and it is a person with a new LLC. And it's kind of weird when you're like, oh, I'll get a right, I'm gonna write this Computer off, I'm gonna write my square footage of my house, oh, it feels weird because it's like what that's you know.
Speaker 2:I'm like you can do that you can write, write off and learn your tax point come like what. It feels weird, but, like you said earlier, like it's that confirmation when the tax professionalist that's been doing it for years she looks at you and she doesn't even hesitate, she's like yeah, we're gonna write that off, but yeah, yeah, if anything she's like, why aren't you right now, exactly yeah, so.
Speaker 2:Man, it made me feel so good that I found someone like, yeah, we can write that off. Matter of fact, we can. You write off more if you atomize the server, just taking that standard direction of your square footage, so we can actually write off more. Let she like we. So I was like, oh, I told her my first time doing my taxes on my LLC, let's just do the standard induction. So it just get done. And she's like no hold on.
Speaker 1:You got all the numbers here overseas.
Speaker 2:Let me run the numbers and see if it works better for you. I'll nice it and she did it and she said like to to the measure. Email me saying it's done and we're gonna see. We like two thousand dollars one now because we do that this way. I told you I'm like See the stress of doing my taxes with a new business and the stress of like the induction. So with that she is lifted up. My shoulders.
Speaker 1:Are you kidding me?
Speaker 2:Yes.
Speaker 1:Also think of it this way, especially when it comes to peace of mind, and you and I can relate to it. Also deals with, like your background. So, like our parents work to nine to five, my parents date back in the day on their own janitorial business, but I was younger and I didn't know like the taxes in this net and everything. But I also think also deals with your background, like what's the motto? Yeah, you, you know, you go to school, go through elementary school, junior high school, high school, go to college or look for a good job, work to death For a nine to five and that's it. And that's like how, like sometimes a lot of us are wired that way.
Speaker 1:Yeah, so then, but then when you step out and you find out, hold on just different ways. Like how are these people? Well, well, they're not wealthy by chance. There had to be some type of structure, like, like you know, the Rockefeller family, the Vanderbilt's, like there is a certain type of structure, how they went about making the name themselves to this very day in 2024, like there, in their ways, is still being used. It is very dead. Yeah, so I think also, too is like with our background also, it change. It changes in everything and I like with my I said in an earlier podcast with with my daughter, I'm gonna teach you a lot about the real estate game because, yeah, it's actually really, really beautiful, but it takes time.
Speaker 1:Yeah, there's gonna be Me, I know me and you. We're gonna probably work on some deals, but there's gonna be a. The majority of times we're gonna be saying nope, nope, nope, this don't work. But then I was watching One podcast a couple days ago and the guy said that he went through 500 different Properties but, the numbers didn't add up and they were only able to choose about five.
Speaker 1:I believe it because you're gonna take, you're gonna, there's gonna be a lot of nose, nose, nose, but there's only gonna be a couple yeses, oh yeah, yeah, look at that, 2023, 60 a homes and you go there, you look at you know a MLS, zulu, whatever, and to find these homes.
Speaker 2:Or you can drive around, you know with a town or whatever, you know all that house over sell. Then you're looking up it's not on Zulu, it's not on LLS, mls, it's probably like for clothes or something like that. So, who knows, if you don't monkey yet and you're looking it up, you're looking out like let's go good, location, everything, but the numbers don't work out, so that I'll move on to the next, you know, until next, and you have done that so many times. So, yeah, you can look at, you can look at hundreds of homes and like now that's not gonna work, but you can claim all. You can claim all those mileage on your taxes.
Speaker 1:Yes, you do, yes, you do yeah all right.
Speaker 1:So, yeah, the 10, it was a 10 steps. The 10 topics of Mastering your taxes, how a professional can help save you. A tax professional can save you time and money. One complex tax laws to deductions and credits. Three time saving for audit protection. Five strategic planning. Six real estate expertise. Seven business structure advice. Eight compliance assurance. Nine maximizing retirement contributions. 10 and this is not the last, but it could be the first piece of mine, so you sleep at night, oh yeah, yeah. So, alright, that's another episode of the professional estate investing podcast. My boy Rocky, y'all have a great day, peace, peace.