In this episode, we talk with Steve from Seeing Beyond the Numbers about the 7 Ways to Lower Your Tax Liability. Steve is a CPA and has over 30 years of experience in the finance industry. He is a serial entrepreneur and has been involved in a lot of the same endeavors as many of your clients. He has been in business for decades and has a great perspective on what it takes to be a successful entrepreneur and how to manage your finances so you can get the most out of your money. If you're not part of the game, you can't win the money game. And if you are part of that game, then you're going to lose. In this episode we cover the 7 ways to lower your tax liability and how you can do your part to help reduce your tax bill. We also cover the benefits of having an accountant in the house. Thanks for listening and Happy Taxing! - The Fresh Fit Team Subscribe, Like, Share, and Retweet this episode to let us know what you thought of it! Timestamps: 1:00 - What's your favorite accountant? 2:30 - How do you manage your money? 3:15 - What does it take to be successful in business? 4:20 - What are you looking for? 5:40 - What is your biggest financial goals? 6:00- What do you're looking for in a good accountant 7:35 - How can you save money on your taxes? 8:10 - How does your accountant help you keep up to par? 9: What kind of accountant do you need? 11:30- How much money do you get? 12:00 How much do you like to save? 13:10- What does an accountant do for you? 14: Does your accountant look at your finances? 15:40- What can you like? 16:50 - How often do you have a good deal? 17:20- How do I get paid? 18:30 What do I need to write off? 19:00 Do you need a tax deduction? 21: What's a tax write-off? 22:00 What is a tax break? 23:00 15 - How much tax break should I get in return? 26:00 Can I get a discount? 27:00 Should I write off a tenant?
00:02:48.000So, you know, this is some stuff that you guys can, you know, take away and, you know, potentially go to your accountant.
00:02:53.000Maybe it'll make you find a new accountant or whatever, but we're gonna go into seven ways to lower your tax liability, man.
00:02:58.000This is probably gonna be one of the most important episodes we've done in a very long time, especially when it comes to finances because, guys, at the end of the day, man, You've got to understand how the tax code works and how to put yourself in a position where you're saving money on taxes.
00:03:14.000Because a lot of you guys overpay on taxes.
00:03:16.000There's a money game being played here, guys.
00:03:17.000And if you're not part of the game, you can't win.
00:03:19.000So, you know the system, then you're going to win.
00:04:18.000And kind of what makes me a little bit different from everybody else, at least I think so, is I'm also a serial entrepreneur.
00:04:23.000So I've had my own businesses start them out.
00:04:25.000So I exactly know what owners go through as hiring employees, trying to launch businesses, doing business startups and stuff like that, investing.
00:04:33.000I did a lot of real estate investing, had a medical practice for many years, sold that to a national company, and a host of other businesses that I've been involved with too as well.
00:04:45.000So I look at it from a strategic standpoint as when a client comes to me.
00:04:49.000I love entrepreneurs and startups because that's kind of what my wheelhouse is.
00:04:54.000Yeah, and he's able to, you're able to better empathize with your clients too, because as an entrepreneur in different realms, like I know when me and you talk real estate, you've done real estate before.
00:05:03.000So you have experience to be like, okay, no, actually we can write this off.
00:05:06.000We can, you know, oh, this tenant didn't pay rent this month.
00:05:10.000So it's really good to have an accountant that is also an entrepreneur and involved in a lot of the same endeavors that many of your clients are in.
00:06:47.000Now the only thing that you have to kind of Yeah.
00:07:09.000In most cases, you probably could be treated as an independent contractor, but you have to kind of be careful that you don't make sure that they don't control your schedule.
00:07:18.000Like, hey, this is what time you got to show up.
00:07:20.000This is what time you're going to leave.
00:07:30.000Living Reality Fresh, if a man has his S together in the U.S., does he really need to be a passport, bro?
00:07:36.000Also, is there a right way and wrong way to do it?
00:07:38.000Can you guys make an episode about this?
00:07:40.000Yeah, it's preference, bro, because I think for a guy, once you make your money, you can understand what you want to do for your dating experience.
00:07:46.000But, again, traveling for girls, I think, personally, it's not necessary.
00:08:39.000So I'm assuming you're saying high rental P&L, meaning that you're making a lot of profit on the income tax return, in which case the IRS is never going to be sad about that.
00:09:20.000So we're going to go over seven ways, guys, to lower your tax liability.
00:09:26.000I see here that there's a different array of types, whether you're involved in real estate, you're a business owner, you're just a regular person, and you might just want to bring down your tax liability.
00:09:35.000And we're going to count down from seven to one.
00:09:38.000So the first one I see here, Steve, that you got is the 1031 Exchange Exchange.
00:09:47.000And again, the reason why I have this as number seven on the list is because your listeners, I know not everybody's involved with real estate, but maybe a lot of them want to be.
00:09:55.000So this kind of goes to those that want to be involved in real estate or maybe they are involved with real estate.
00:10:00.000So if you have a property and you want to sell that property, You have to face the capital gains tax.
00:10:08.000So what Congress did, and this is an interesting one.
00:10:11.000Can you tell them real quick what a capital gains tax is?
00:10:15.000So if I buy a property for $100,000 and three years from now I go and sell it because it appreciates in value, I sell it for $300,000, I have hypothetically a $200,000 capital gain.
00:10:51.000The guys that are making these laws, they own real estate themselves.
00:10:54.000They don't want to shoot themselves in the foot.
00:10:55.000So they have multi-million dollar properties that they want to sell.
00:11:01.000And they want the economy of real estate, because it's such a huge part of the economy, to keep moving.
00:11:06.000And they want buyers and sellers to be in the market to stimulate the market.
00:11:11.000So by stifling Owners that want to sell their property from hitting them with high capital gains tax, they understand that that's going to stifle the market.
00:11:21.000People will wind up holding onto these properties and not selling them and doing other things that they shouldn't be doing.
00:11:29.000They're not true arm's length transactions.
00:11:35.000What that means is basically a like-kind exchange.
00:11:38.000There used to be a time when you could do this to businesses and other different types of assets, but now they just limited it to real estate because it's such a big part of the segment of the economy.
00:11:48.000So a light kind of exchange means that you could take a property, like the ones that you're buying now.
00:11:54.000Let's say one of those properties, you just want to unload it.
00:11:58.000Maybe there's something coming in the neighborhood.
00:12:00.000Or you see something else you want to purchase.
00:12:04.000You could liquidate that property, sell it.
00:12:07.000As long as you go and take the money, the proceeds for that, and you invest it into another property that's of equal or greater value, you could defer the entire tax on that and not pay anything on it.
00:12:21.000All you have to do is contact an intermediary, typically a lawyer that handles those types of transactions, identify that property, say, hey, I'm gonna sell this property on 8th Avenue, I'm gonna buy this property on 11th Avenue, this one I'm selling for 400,000, The one I'm buying is $500,000,
00:12:47.000Now, there's a couple of things on this one which, you know, sometimes you don't have that opportunity to get that replacement property.
00:12:55.000And then you also have the time limit on it.
00:12:57.000You have 45 days in which to identify three replacement properties that qualify.
00:13:03.000And then you have 180 days in which to close on that new one.
00:13:08.000And then the thing is, that money has to go into escrow, sit there until you close on the other one.
00:13:13.000Can you explain to the people what an escrow account is?
00:13:15.000So escrow is basically when you go into your attorney, so the proceeds, when you sell your property, that money doesn't go into your bank account, it goes into the attorney's bank account.
00:13:24.000He has an escrow account that's bonded, of course.
00:13:27.000And it sits there until you get ready to close on your new property, and then the money comes out of there.
00:13:33.000Keeps things honest in the real estate game, guys.
00:13:35.000The money doesn't ever come to you, actually.
00:13:37.000It always goes to a middleman, almost, that holds the money on both parties so that it can ensure it goes where it's supposed to go.
00:13:47.000Yeah, and it's a paper trail, too, for the IRS. So these are handled in a very specific way.
00:13:52.000A lot of times, you know, you got to be careful with that because you don't want, you know, sometimes people are pressured because they don't want to pay the taxes and then they're kind of locking themselves into buying a property that maybe they're not really in love with and they don't want to, you know, want to buy.
00:14:05.000So sometimes, you know, in those cases, I've had clients who are like, I can't find anything because it's been a very competitive market recently.
00:14:13.000So can they file an extension if 180 days passes?
00:14:17.000There's a few things that you can do in case, yeah, you know, it's a little bit beyond the scope of this podcast here, but there's some things that you can get an extension when extenuating circumstances happen.
00:14:46.000Yeah, so it works in my favor because it's good to deal with those kinds of sellers because they're motivated, they want to get rid of it, and they want to be able to get that money and move it over to another property.
00:15:34.000And when that happens, because as a matter of fact, I just had a client recently that this happened to.
00:15:39.000And when that happens, let's say, like I said in that example, you sell a $400,000 property and then you buy a property that's only $350,000.
00:16:09.000Now y'all see why I love real estate so much, man.
00:16:11.000I don't personally sell, so this isn't my wheelhouse, but...
00:16:15.000And I think this is how a lot of Fix and Flippers as well keep their money, right?
00:16:20.000This is one of the big secrets of Fix and Flippers because they buy the house for a certain amount of money, they sell it, and then they do a 1031 exchange to make sure that whatever they make, they don't necessarily have to give to the government because for them, they want to do it again and again and again.
00:17:45.000Can you explain the fixing and flipping process real quick for the audience, how that works?
00:17:49.000Yeah, so I would see a property that was kind of maybe not in the best condition and I could put a certain amount of money in it.
00:17:54.000So let's say I buy a property and typically my It was like $300,000, $400,000 properties, nothing more than that, where I could put maybe $50,000 to $60,000 into it, and then the market was kind of just going up and up and up.
00:18:08.000It was not a normal market, and I would try to flip that within like three to, not more than six months, hold it, for not more than six months, and then I would just flip that over into another property.
00:18:20.000I didn't do the 1031 exchange, so I just paid the capital gains tax on it because The price appreciation and what I put in to the properties, it was going up so fast that I could flip a property and make $100,000, $150,000 within a couple months, 90 to 180 days, and just keep doing that.
00:18:38.000So I didn't want to get into the rental deal because...
00:18:42.000I just, for some reason, maybe I should have, maybe I should have kept a couple of those properties for that purpose, but I didn't.
00:18:47.000And I kind of lost out on it, but I just saw the money there.
00:18:49.000I was like, okay, okay, I'm going to, you know, and I put very little money down on the deal, you know, maybe put 20% down and then walk away.
00:18:57.000Like, you know, so I'm putting $100,000 down or $150,000 and walk away with $300,000.
00:19:01.000For me, back then, at that time, that was like, Big win.
00:19:21.000So you were probably making more money on the side with this than...
00:19:24.000Oh yeah, yeah, and that's how I got into the medical practice.
00:19:28.000I invested into that, and then I started my own.
00:19:30.000So I had enough to do my own thing and feel safe that I had enough of a cushion there.
00:19:35.000Yeah, so you took your earned income from being a CPA, and you, I tell you guys this all the time, it's one of the best ways to segue into entrepreneurship.
00:19:43.000Have a real job, a higher income skill, Make that money, take that money, invest it into another endeavor that makes you even more money, which you did with flipping, and then you were eventually able to segue that into creating your own business and then leaving that firm.
00:20:18.000Are you interested in talking to them?
00:20:21.000They knew that after you did a couple of deals with a certain real estate agent, they would bring these pocket deals to you because they knew you had a higher chance.
00:20:35.000You're not going to You know, kick tires and waste their time.
00:20:39.000You're going to come in and you're going to know exactly what you're doing because you've done it before and they could come to the table and close.
00:20:44.000Because in Florida, I mean, no deal is a deal until you get to the closing table.
00:20:54.000So 1031 exchange, guys, which summarized basically you have a home, you sell it, and the proceeds that you get from that sale, you're able to go ahead and reinvest into another home of equal or greater value, and you don't pay taxes on that sale that you made on that home.
00:21:12.000And that allows you to kind of just...
00:21:15.000Leapfrog into the next home without paying taxes.
00:21:17.000Matter of fact, Donald Trump utilized this a lot, guys.
00:21:19.000A lot of you guys wonder, well, how do the wealthy stay wealthy for generations?
00:21:23.0001031 Exchange is a huge way they do it, guys.
00:21:25.000And they're able to pass property on to family members.
00:21:27.000They're able to sell property and then move on and pick up another one without necessarily paying taxes.
00:21:33.000And the 1031 Exchange is a huge part of that, man.
00:21:36.000I mean, all these guys in Congress that are passing these laws, they don't want these provisions to sunset because they have a lot of substantial wealth in real estate, and they're going to shoot themselves in the foot.
00:22:13.000So when you buy a property, let's say it's a rental real estate property, I buy a property for $400,000, and what most CPAs or tax professionals might do is just depreciate that property over 27 and a half years.
00:24:51.000Like, anything that you do in the house or anything that you...
00:24:55.000Additions or fixes that you make to the house, you can depreciate that at a more aggressive rate.
00:25:00.000Because instead of doing 27 and a half years for the home, now you can do it over a period of five years, right?
00:25:05.000So now you can go ahead and aggressively write something off so you can get more tax benefits and savings for the year.
00:25:12.000And keep in mind that you can do this in addition to the 27 and a half year write-off for regular depreciation of the home.
00:25:20.000So, sorry, you were going to say something?
00:25:21.000No, I think for most people, they don't look at it as an option, but if you have a CPA, go to them and say, hey, I want to get into this because most people don't know about it.
00:25:29.000Yeah, this is a much more advanced technique that allows you to basically kind of double dip.
00:25:35.000So not only are you able to go ahead and get the tax deduction through the depreciation over the 27 and a half years for a residential property, Now you're able to more aggressively deduct things in the house that are non-structural that are required,
00:25:51.000Maybe you redo the bathroom, you redo the kitchen, stove, new microwave, refrigerator, you replace the cupboards, you update the garage, whatever.
00:25:59.000You're able to more aggressively write off all that stuff.
00:26:02.000So let's say you spent $100,000 renovating the house.
00:26:04.000You can go ahead and depreciate that over five years.
00:26:28.000Let's say someone spends $100,000 on fixing up the house non-structural.
00:26:32.000That allows them to deduct an extra, what, like 20K? Yeah, but again, that rehab, depending on what you're putting in there, there's certain things, component pieces are going to be assigned different lives.
00:26:48.000But there's firms that actually make a living just on providing cost segregation studies because people buy multi-million dollars, for instance, this building here, and they're depreciating it.
00:26:59.000So someone comes in with a notepad and paper, guys.
00:27:03.000Yeah, they literally go ahead and look through the property and they write all the stuff that they could write off, etc.
00:27:07.000And then you get someone to professionally do this, it can literally save you.
00:27:10.000You spend a couple thousand dollars to hire this guy to come in and do this, it could save you tens of thousands, depending on how big the building is, it could save you tens of thousands, maybe even millions of dollars.
00:28:08.000Because they're showing you the receipts, and sometimes they'll keep like, hey, look what I did to their property, and they're showing you the receipts, basically.
00:28:14.000So they show me what they did to fix it, and I have that information, and I'm able to use that and write it off.
00:28:20.000So that's why some people might say, Myron, why do you buy turnkeys, man?
00:28:24.000Why don't you just buy a house and fix it yourself?
00:28:26.000Well, because I'm able to get the tax benefits of that turnkey, because pretty much the rehabbers I buy from tell me how much it costs them to fix the house, And I pretty much, I'm able to get on that savings.
00:28:36.000So question, if the previous owner did that already, can you do it for yourself?
00:28:41.000Yeah, because it's a new purchase to him.
00:28:57.000And I tell them, listen guys, look, I'm not going to be mad at you because if you made me overpay, just tell me how much y'all spent on fixing the house, right?
00:29:40.000Yeah, I mean, I would definitely, you know, guys, look that up.
00:29:42.000There's a lot of stuff on, I think, YouTube on there where you can get, you know, basically a little bit breakdown and get a little bit more of a understanding of what it is.
00:29:49.000There's some really good videos on there.
00:29:50.000Yeah, but these are, we're just giving y'all the, you know, a quick summary of what it is without going into detail, but we're going over, obviously, a bunch of different ways to save...
00:29:57.000I think you should write these down, go to your CPA, and see if they can do it for you.
00:32:33.000Like, in the beginning, you're going to have to fund your business, guys, with your real job.
00:32:36.000And then once that business gets off the ground, you're able to go ahead and use the proceeds from that job and reinvest it right back into the business while your earned income from your main job allows you to live and you can continue.
00:32:47.000And you can slowly start to Cut off how much you invest from your real income.
00:32:51.000That is way better than getting a loan.
00:32:53.000I always try to avoid getting into debt at all costs.
00:33:00.000You want to keep your overhead as low as possible in the beginning.
00:33:02.000This is why I like online service-based businesses because your overhead is low.
00:33:06.000But yes, guys, the best way to get into entrepreneurship is actually through having a job first.
00:33:11.000Taking that money and investing it into your business because you're going to be able to kind of accelerate your growth and your progress from the beginning.
00:33:20.000If I didn't have a job, I wouldn't have been able to invest into good equipment, good cameras and good sound equipment from the beginning.
00:33:26.000We would have had to use BS, maybe Blue Yeti mics, maybe only one camera.
00:33:30.000So that would have slowed down the acceleration and growth of the pod because I wouldn't have been able to invest as aggressively from the beginning.
00:33:35.000But when you have that capital, you're able to invest aggressively from the beginning, get that good equipment in, and then Accelerate that process.
00:33:42.000So it really comes down to you and how hard you're willing to work.
00:33:46.000That's why I said, yo, there is no option for failure.
00:33:48.000And also you can pay your bills because you've got to still pay your bills at the end of the day.
00:34:59.000Should the LLC be in Maryland annual fee 300 or where I live in Virginia annual fee 50?
00:35:07.000I went to the LLC where it is, where the property is located, to be honest with you.
00:35:12.000Since the activity is going to automatically trigger a filing probably in Maryland, I don't know what the filing requirement is for that particular one, but just keep it there, yeah.
00:35:47.000So this is getting back into the tax planning stuff.
00:35:50.000So a lot of my clients get down to this area and they project forward to see what their profitability is going to be and maybe potentially what their tax bill is going to be.
00:35:59.000And maybe they got some money built up in their cash and they want to go out and buy a vehicle or something like that, trade up.
00:36:05.000Or trade in some of their business vehicles.
00:36:07.000So a lot of times we'll do that at this time of year or maybe they want to buy some equipment.
00:36:13.000For instance, for some of my medical practices, they buy medical equipment that's pretty expensive.
00:36:18.000And then if they're in a position to do that, rather than pay a big tax bill, they can get their taxes way down and we can write the whole thing off.
00:36:25.000So, I mean, the only stipulation on that is you got to use the property for 50% more for business use.
00:36:32.000And it's qualified as a small business, so you can't purchase more than $4 million worth of equipment to qualify for the Section 179.
00:37:20.000It could be an older car or whatever, but you want to get a new car.
00:37:23.000And I know you're getting into that where we could talk about that maybe tomorrow on the show as far as Section 179 for renting out your cars.
00:37:30.000You're not using Turo, are you, to do that?
00:37:56.000So, purchasing a vehicle and putting it on Turo can count as purchasing equipment?
00:38:01.000Yeah, because they're going to treat you as an independent contractor and you're renting it out, so it's equipment and then you can write it off.
00:40:08.000But, let's say it's a car, it's a sedan, right?
00:40:11.000And you want to use it on Turo or something like that, or using it for business.
00:40:14.000But it doesn't match the 6,000 pounds.
00:40:15.000You can depreciate it over a more, I guess, over a shorter period of time, which gives you more savings.
00:40:21.000Now, the careful thing I advise my clients to is...
00:40:26.000You've got to be careful when you list a car, and it's very rare that I, you know, unless it's being exclusively used for business, that I list it for 100%, because there's always going to be some personal use on there.
00:40:38.000The IRS will fight you back on that stuff.
00:40:40.000So you want to figure out how much you're using it for business, what percentage, or is it 75, is it 80?
00:40:45.000What's the magic ratio that will keep you from getting audited?
00:40:49.000As long as you can support it and say, you know, I mean, typically it's mileage logs.
00:40:53.000They'll do, you know, so you say, okay, this is the 100%.
00:40:55.000You know, I drove 30,000 miles this year and 20,000 of that was, you know, for business.
00:41:00.000So then you can take the ratio of that and that's the percentage that you listed for.
00:41:03.000So you got to be careful with that one too sometimes because they know that's kind of like, you know, you can't, every car, you know, if you had three or four cars, not all of them are going to be 100%.
00:41:12.000And there's always going to be personal use.
00:41:13.000So as long as you're putting some personal use in there, be reasonable, you know what I mean?
00:41:17.000And someone's going to ask the question, what is better, to lease or finance for the best tax write-offs, you would say?
00:41:23.000That's a great question, and it all depends on what the purpose of that car was.
00:41:26.000And I think we did a show on that where I said, okay, there's four scenarios where you've got a mid-price car, you've got a luxury car, and are you going to keep it?
00:41:41.000I forgot what show that was, and it was a good...
00:41:43.000I think I did the whiteboard on that thing, where I really break that down pretty good.
00:41:48.000So if you guys are listening to this...
00:41:57.000So it gives you the scenarios of when to decide whether to lease or buy.
00:42:05.000Because I mentioned on the show as well, what I would do personally, if I had a business, I would lease, just because that payment would go towards...
00:43:54.000And it seems to me, if you're buying a car that's under 6,000 pounds, or if you're procuring a car that's under 6,000 pounds, that's where you get into the lease or buy.
00:44:05.000But if the car's over 6,000 pounds, it seems to me like you might as well just buy it.
00:44:21.000Yeah, and it's all going to depend on the business usage of that vehicle and what you can substantiate, and yeah, definitely, and that's the vehicle that you want.
00:44:31.000And you're going to, it's got a good, you know, business purpose use, then definitely I would.
00:44:35.000If we use that as a example where he buys a car and gets the deduction, 80% of the total value of the car, can you still write off the payments for financing the car?
00:44:50.000So you can do the interest if there's interest, you know, there's an interest rate because you're financing it.
00:44:55.000So you deduct the interest on the loan, but you can't, you can't, you're double dipping, yeah, because the depreciation represents the purchase price and then the principal payment of the loan represents the purchase price, so that's double dipping.
00:45:09.000But it seems to me there's different routes you can go.
00:45:11.000It seems to me if the car is 6,000 pounds or above, you're probably better off going the purchase option, and you're using it for business, so you can get 80% of the price of the vehicle.
00:45:22.000Yeah, most people that do the 6,000 pounds and above, because that was really put in place for industrial stuff that they knew- For trucks.
00:46:11.000And the reason why I put this one at number four a little bit higher than the other one is because it pertains to both W-2 wage earners, which, again, a lot of your audience can benefit from this, and also for business owners.
00:46:21.000So, for instance, if you're working a job and you're Employer offers a 401k, and let's say they do a 3% match, I would say, hey, put in 3% of your wages, dollar for dollar.
00:46:35.000Don't go above that, but do the actual 3% because you're getting 100% return on your money right off the bat.
00:46:54.000But for business owners, I like the solo 401k.
00:46:58.000Now the reason why I did Roth versus traditional, the theory is...
00:47:02.000Can you explain what a Roth is versus a traditional and what a 401k is in general?
00:47:07.000Because a lot of the audience might be young and not understand what this even is.
00:47:11.000So for retirement savings, basically, and not everybody's a big proponent of retirement savings, I know.
00:47:15.000Everybody says, take your money, be in charge of it, invest it in your own assets.
00:47:19.000But not everybody wants to invest in their own assets.
00:47:22.000Not everybody's going to be a real estate owner.
00:47:23.000Not everybody's going to be a business owner.
00:47:25.000Some people have a good job, a good career, and they can see their future in that, and they're going to make a lot of money, and they just want to put money away.
00:47:32.000So if that's the case, I would definitely take advantage of the IRAs.
00:47:42.000The Roth means that today you put the money away and I don't get a tax deduction for it right now.
00:47:48.000When I go to pull the money out, I get the tax deduction for it.
00:47:52.000The traditional, basically, I get the tax deduction now for it and I let it grow tax-free.
00:47:56.000And then when I go to pull it out of retirement age, then I'm going to get taxed on it.
00:48:01.000Some people like the Roth because they're thinking that they're going to be in a higher tax bracket down the line, and they're going to get whacked with taxes, and they like the idea that, yeah, I could take the money out and not get taxed on it.
00:49:14.000Yeah, whatever you contribute, because I remember this being in the government, you had the option of Roth.
00:49:19.000So with the government, it was called the Thrift Savings Plan, right, which is basically their version of the 401k.
00:49:23.000They match up to 5% of whatever you put in, you would have a traditional and you could set up a Roth.
00:49:30.000I think you could put up to, before I left, around $18,500 per year in there, and then that would offset your income so that you would be in a lower tax bracket.
00:49:40.000So let's say you made $100,000 per year, and you put away, to make things simple, $20,000 into your Into your IRA, traditional IRA. Now they would only tax you as making about $80,000 a year versus $100,000.
00:49:54.000Even though you grossed $100,000, you put $20,000 away in that savings account.
00:49:58.000So what they do is they're like, okay, we're going to reward you for putting money into your 401k, so we're going to go ahead and tax you as if you only make $80,000 even though we know you made $100,000.
00:50:08.000So that's the benefit of what he means when he says getting that tax benefit up front with a traditional account versus an IRA. Sorry, with a Roth.
00:50:18.000So as a business owner, you could do a solo 401k, but you could set up that solo 401k as a Roth and not get a tax deduction for it or set it up as a traditional and get the tax deduction for it today.
00:50:29.000So whereas if you're a W-2 employee and you're going to participate in the company's 401k plan, such as yourself, you're going to get, your income's going to be lower because you're putting that money away and not being taxed on it.
00:50:41.000So I would only go up to the match of whatever your company's offering and not put in more than that.
00:50:46.000If you get a Roth, can you pull that money out to get a property like 401k?
00:50:51.000So that's a great question because that's why I like the 401k structure because you can go in and you can still have access to that money and borrow against it as long as you pay it back.
00:51:03.000Over a certain amount of time but then you're paying interest on it but you're paying yourself interest back.
00:51:07.000So you become your own bank basically.
00:51:09.000And there's scenarios where you can take the money out too.
00:51:11.000Like let's say you're going to be a first time home buyer and not get penalized on it.
00:51:15.000Yeah, I remember when I was working for the government, you could borrow against your TSP to buy a home that you were going to live in.
00:51:21.000You couldn't do it as an investor, but you could use it to buy a home that you were going to live in.
00:51:25.000But you have to pay yourself back and stuff like that.
00:51:29.000It was typically frowned upon to borrow against your TSP, but a lot of people do it.
00:51:33.000Because what ends up happening is you throttle the money that you're making because when you pull money out, well, you're messing with the compound interest.
00:51:47.000It depends on your strategy for success because ultimately I want the money now because I know what I'm going to invest in versus waiting because I feel like later on I might not know what I want to do.
00:51:56.000I'm assuming I know what the future is going to hold versus now, real estate.
00:51:59.000If you're smart about it and you know how to invest properly, then you're good.
00:52:03.000But most, let's be honest here, most government employees, most W2 employees, they're not entrepreneurs.
00:52:07.000They don't understand investing in asset classes, etc.
00:52:10.000So they don't know how to assess the deal properly, whatever.
00:52:13.000And I'm telling you guys, this is a former government employee.
00:52:15.000I didn't know any of this stuff until I learned.
00:52:17.000And once I learned, I was like, oh, okay.
00:52:19.000But most government employees don't know this crap.
00:52:21.000It's like you're leaving your success and your future up to someone else.
00:53:13.000So he wants to know our biggest learning experiences running a business and then favorite part of being an entrepreneur.
00:53:20.000You work a lot more as an entrepreneur than as a regular employee.
00:53:23.000You start to realize that everything you do kind of centers around your business and there's no real turning it off and like, I'm taking a break.
00:53:32.000It's like, no, everything you do is typically centered towards your business to a degree.
00:53:37.000And then, I mean, It's cool to see something that you built up yourself grow, in my opinion.
00:54:02.000So I wake up every day thinking about the podcast, how we can improve, how we can bring bigger guests.
00:54:07.000To me, that's more, I want to say, fulfilling.
00:54:09.000And then, for example, favorite part, I would say, is the freedom to have access to pretty much referrals, recommendations, having a network.
00:54:39.000And I stood after trying to figure out, you know, solve some problems, figure out, okay, what are we going to do to solve this?
00:54:43.000There was a lot of times when that happened, you know, especially when I was doing the medical company, you know, sometimes the insurance company, checks were not coming in.
00:54:52.000So you had to figure out how to float that.
00:56:50.000I know a lot of people don't agree with this, but this is what I think.
00:56:52.000And then the money that, you know, because a lot of times they take the whole life policy And it's, you know, a whole life variable policy, and they're taking your money, and they're investing it, getting a nice rate of return, and then getting you a small piece of it.
00:57:04.000Yeah, because people don't understand, when you give them your money for the whole, and for, like, for example, IULs, they take a portion for fees, and then they put a small portion towards your actual cash value.
00:57:21.000Yeah, let's say you're paying $200 a month.
00:57:23.000They're taking $50 by the term, basically, what you would pay for a term.
00:57:27.000They're taking $150 and investing that money, and then they're giving you a small portion of return to build a cash value.
00:57:33.000Let's say, for easy math purposes, if you have $100,000 in one of these life insurance policies, how much can you actually borrow against it?
00:59:07.000So they're going to sell you on all the gravy, all the sexiness on it, and you can pull this money out tax-free, this and that and all the things, but it takes years and years to build it up.
00:59:15.000It sounds good, but to build that money up takes a lot of time.
00:59:52.000They're all, how much you want to put away, spending $200 or $300 a month for a whole life.
00:59:57.000I'd rather take the 85 just and pay my term and then take the rest of the money I have and invest that And myself and my business and things that I can grow.
01:00:05.000There's a layer of protection you can use for insurance, I would say for safety reasons.
01:00:09.000Obviously speaking, you want to protect your assets, but ultimately what you're just saying is term is going to be better because you're just getting the insurance with all the fees and hidden costs.
01:00:17.000And for you guys out there, I mean, you got a young demographic here.
01:00:29.000What did we do with the HSA? What's the difference between a 1099 NEC versus getting an LLC? I have a 1099 NEC for home cares as a medical doctor, but not sure if it would benefit me if I should get an LLC. Okay,
01:00:44.000so a 1099 NEC versus getting an LLC. Okay, so a 1099, it's just a form that somebody that paid you filed with the government saying that you're a non-employee.
01:00:57.000NEC stands for non-employee compensation.
01:01:00.000So they hired you to do something, they paid you, and then they have to go to the government because they want to deduct it on their taxes.
01:01:06.000So they're going to do the deduction, they're going to fill out that form, you get it, they file it with the IRS, and now You want to be an LLC treated as an S Corp because that 1099, if you don't become an S Corp,
01:01:23.000is going to be taxed extra 15.3% self-employment tax if you don't do the subchapter S Corp.
01:01:29.000So that's what we talked about on your show the last time.
01:02:01.000So I would charge my client like, I don't know, $350, $400 if they came to my office and they had an LLC and they were a sole member, right?
01:02:09.000And I would convert them, fill out the form.
01:02:18.000And then you guys can learn it to the point where you can give it to somebody else and then even somebody could pay you to do one for them.
01:02:40.000If you join the Patreon, that's one of them you're going to get for free.
01:02:42.000So every month I'm going to try to put a book out there for really cheap for these guys, you know, so you guys can level up and get financial literacy.
01:02:49.000The more you know, the more you can save.
01:02:50.000That's pretty much what we're telling you here today.
01:02:52.000Versus, and you could do it yourself, versus hiring someone that's going to charge you $300, $400, $500.
01:03:44.000I don't know if it's his truck or he's using the company's truck.
01:03:46.000But basically, you're going to save the self-employment tax, 15.3%, by getting paid as an independent contractor and getting an LLC, turning that into an S-Corp, and then just...
01:04:00.000Paying a portion of that money, constring it as payroll, where you pay the self-employment tax.
01:04:14.000Hunter says, Steve, currently putting $1,000 a month into my IUL, which is another insurance policy, at 21, and using that for investments and as well as tax-free retirement, which is very good.
01:04:25.000What's your thoughts on using insurance for tax-free retirement and other purchases?
01:05:36.000I'll wait for my tax return to buy another property with the offer of 1% of Rocket Mortgage and take that property, divide the land, and put a few RV or mobile homes and rent it out.
01:07:02.000As long as 50% business use, you're going to list it for 50% of whatever the purchase price is, and you're going to depreciate it from there.
01:07:33.000Basically, he said, I'm waiting for my tax return to buy another property with the offer of 1% Rocket Mortgage and take that property, divide the land, and put a few RV and mobile homes to rent it, and then it goes, what should y'all recommend?
01:08:13.000And I've actually experimented with this.
01:08:15.000It's way easier to buy the property under your personal name and then switch it to a business after the fact, guys.
01:08:20.000If you try to buy under a business up front, like let's say you make the LLC and then you try to buy it Through that, it's going to be a pain in the ass because you're not going to qualify for as good of rates.
01:08:30.000The terms aren't going to be as good because they're going to look at it like, oh, you're a business.
01:09:42.000You just went from converting it to a personal asset into a business, essentially.
01:09:47.000And you're able to keep the good terms that you got on it.
01:09:51.000You probably got a pretty good 30-year fixed rate A 30-year mortgage with a fixed rate, maybe you got it through an FHA loan, whatever it may be, but you convert it, and then bam, you're good.
01:10:02.000Yo, bro, you don't learn this at school, man.
01:10:06.000And kudos to you, because you just mentioned a really big thing, that they don't overlook the fact that you have to take that EIN number and your LLC to the bank and open up a bank account.
01:10:17.000For the LLC. And the reason why is because the LLC protection that you're getting provided can be pierced if you just put that money, the rental money, in your personal bank account.
01:10:51.000It's going to take you six months to a year to kind of get your properties established, get all your paperwork in order and everything else like that.
01:10:58.000But once you do, get it settled and then make that transition where you have bank accounts for each of your real estate properties under the LLC name.
01:11:14.000We're like 90% of the way there where I'm going to have a bookkeeper and everything else, but I'm using a CERN app to collect all the rent.
01:11:21.000I'm going to talk to you guys about how I set that up, how to do it with bank accounts and everything else like that.
01:11:25.000We'll do a full episode for you guys on how to run your real estate portfolio to properly collect the money and put yourself in a position where you don't mess yourself up.
01:11:33.000But as far as procuring the property, what you're asking, buy under your personal name, bro.
01:11:38.000Most of the time it's going to be easier.
01:11:39.000Unless you're like a Grant Cardone and you got like 10x LLC, you're not gonna get the most favorable loan terms.
01:11:47.000Like Grant Cardone, Ken McElroy, some of these big real estate investors, they can acquire debt that me and you can't get.
01:11:54.000And they could probably do it under a business.
01:11:56.000They can go ahead and get these really good terms.
01:11:57.000They build a relationship with those banks.
01:12:07.000You know, once you have a relationship with a bank, then maybe you can go the route of having an LLC and going there, but in general, it's better to buy it under your personal name.
01:12:14.000Could you explain the Augusta rule in real estate?
01:12:18.000Yeah, so basically you can rent out your personal residence for up to 14 days every year for rent and basically not have to declare the rental income on it.
01:12:31.000So a lot of people, the Augusta rule is basically because where their masters is played, a lot of people that own homes in there, because you remember so many people fly from all these areas, they go to Augusta, Georgia.
01:12:42.000And they rent homes to be there for the masters for all that period of time.
01:12:46.000So a lot of people will just rent their home for like 14 days and they're getting a lot of rent for these homes, you know, because it's in the band.
01:12:56.000So they just came up with this like, as long as it's 14 days or less, they call it the Augusta rule because that's where they're doing the golf tournament there.
01:14:13.000I mean, yeah, because, I mean, there's some first-class flights, like, from, you know, Miami to New York, where you're going to pay a couple grand, at least, you know?
01:14:20.000By the way, that was my first ever private jet flight on my birthday.
01:14:35.000Yeah, he says, how much do you have to make a month to start using private jet because I hate traveling with other passengers that have heard it costs like 100k a year.
01:15:08.000They need to make sure that they don't want to go through TSA. They don't want to go through commercial and have it delayed.
01:15:14.000If your business warrants that and you're in a position where you can do that, then I'd say more power to you, but that's not for everybody.
01:18:25.000So there's a list of things that even fall out, you know, because a lot of times your health insurance plan doesn't cover everything.
01:18:31.000But the only caveat on that is you have to have a high deductible insurance plan, meaning that your deductible That you pay on your insurance plan has to be $1,500 at least.
01:18:41.000So, you know, in all these high deductible insurance plans, they have low premiums.
01:18:46.000So the higher the deductible, the lower the premium.
01:18:49.000And, you know, sometimes, so deductible means that basically you're going to have to, like, if you go see the doctor and your insurance plan, then you're going to be on the hook for the first $1,500.
01:19:52.000Typically, if your company doesn't offer or whatever, just go down to a bank or something like that, open up an account, and then you could just...
01:19:58.000And if you're an employee, you just go to HR, hey, I want to sign up for HR. Yeah, or do it that way.
01:20:02.000If they administer it for you and they do it that way, then that's the easier way to do it.
01:20:05.000But if they don't, then you could just go on your own, go to your own bank and just set up a health savings account.
01:20:09.000Are there any companies that you tell people that are best, or is it depending on region and where you live?
01:20:14.000No, pretty much it's pretty much very general.
01:20:51.000It gives you information throughout the year to make decisions on your business.
01:20:54.000And you want somebody that's a full-charge bookkeeper that knows, you know, get hooked up with some program online, whether it's Xero or it's, you know, QuickBooks Online that is...
01:21:04.000Proficient in that, that knows how to take your bank account, link it to get all the download for the transactions and bucket those and code those transactions.
01:21:13.000So you have, you know, they reconcile the bank statement every month or maybe every quarter.
01:21:18.000You should at least every quarter, every three months have something financial-wise where you have a profit and loss and you know exactly where you stand in your business so you can make decisions.
01:21:25.000It's worth its weight in gold because this way not only do you have the information all year, But when you go see your tax professional at the end of the year, everything's done.
01:21:39.000So definitely just spend the money to do that.
01:21:41.000If you're not proficient in doing it, I get a lot of clients where they try to do it themselves, and it takes us more time to unravel that and do it.
01:21:48.000Sometimes we just got to start from scratch and re-download everything and just re-bucket everything.
01:21:52.000And we're not cheap in doing it sometimes.
01:21:54.000You know, because when we're doing it when we're the most busy and we don't have the most resources, So you're better off just getting it done throughout.
01:22:10.000Because if you don't have good information going into your tax preparer, you're going to miss the opportunity to get a lot of tax deductions.
01:22:26.000Don't just use your business card to spend on personal stuff out of there.
01:22:29.000If you need money, just take a draw, put it in your personal account, separate the business between the personal, and just have everything in your business account that's really business as much as possible.
01:22:40.000Sometimes we can't do it because things come up.
01:23:15.000And guys, especially when you have real estate property and you have, like right now I got like 30 plus tenants, that becomes a pain to track.
01:23:23.000I mean, right now as we speak, I'm like going with Roger and we're like tracking down who still owes money and stuff like that.
01:23:33.000Yeah, but it's really important for you to have a bookkeeper.
01:23:37.000Steve actually hooked me up with his bookkeeper, and she's going to probably start taking over here next month or so, but she's going to start taking over here very soon once we have everybody fully enrolled in the app that we're using to collect rent, and she's going to be handling all that stuff with making sure.
01:24:00.000Then I go in there and I manually pay it.
01:24:03.000But you want someone to handle that all for you because it starts to get very...
01:24:08.000Chaotic, once you have, you know, at this point, man, I got 14 properties, guys, and, you know, 30 plus cents.
01:24:13.000It's very difficult to manage all that in different states.
01:24:15.000So this is where Bookkeeper becomes very important in the situation.
01:24:20.000So my mom used to manage her own stuff, and she became like her own spreadsheet analyst, and she would just put everything in there, keep track of it.
01:24:32.000And again, the level of transactions that you have per month in there, some business, like a rental property, it's not going to have too many transactions in there, right?
01:24:40.000But he's got a lot of rental properties.
01:24:45.000But if you only had one rental property, I wouldn't say, just go get a bookkeeper.
01:24:48.000Because basically, when you have one rent check a month, you have to pay your mortgage, you have to pay your real estate taxes, insurance, maybe some repairs and maintenance, right?
01:24:57.000So there's not a lot of activity in there.
01:24:58.000So I'm saying more for an operational business where you have more transactions.
01:25:04.000Some people can take care of it themselves because they're proficient and they feel comfortable.
01:25:07.000But once you get to a couple hundred transactions, two or three hundred and even beyond, you're going to want somebody that knows what they're doing.
01:25:15.000And bookkeeping is really important, too, because like Steve was saying, he kind of glossed over it, but I want to bring importance to it.
01:25:22.000That's going to help your tax preparer with appropriately writing things off.
01:25:27.000For example, if people didn't pay rent, or you experienced losses, or you had vacancy, whatever, that's going to be very important for you for real estate.
01:25:34.000And it makes their job easier, and they're able to look at the numbers and be like, oh, dude, you actually took a loss here.
01:25:39.000And then you're able to apply that against your income, and it helps significantly.
01:25:43.000So, you know, so even when you got annoying tenants that don't pay rent or you have to evict them or whatever, I've had to hire lawyers to kick people out, you know what I mean?
01:25:54.000But also, too, you were always asking me at a moment's notice, you got a deal coming on, what's the first thing that the bank will ask you for?
01:26:34.000And then you've got to give them another one.
01:26:35.000And it's just annoying because underwriters are super weary nowadays because, you know, thanks to the real estate market crash from before and then the pandemic, they've been weary, man, with giving out loans.
01:26:46.000So, yeah, you need someone in your corner that can help hook you up.
01:26:49.000I mean, obviously, I'm lucky I got Steve.
01:26:50.000He's able to, you know, get me a profit loss statement within 24 hours a lot of the times, man.
01:26:56.000A lot of you niggas don't got Steve, so you guys gotta go get somebody, man.
01:27:02.000But yeah, Steve hooks me up with the private law statements, and then obviously with the real estate stuff, he's gonna give me one of his people to help me with that.
01:27:09.000And now, we're giving you Steve to hook you guys up.
01:28:25.000Anyone that sells insurance, they don't want you to hear some things that happen behind the scenes because here's your money.
01:28:31.000I'm going to sell you on the best benefits you can hear from my mouth about the product and then, yeah, it's a good deal versus, okay, just so you know, here's some hidden fees that you might not be aware of and some other stuff.
01:28:42.000I mean, the fact that life insurance has dedicated sales teams tells you that they're clearly profiting well.
01:30:16.000So that's a good investment as far as parking your money.
01:30:19.000I have friends that they'll buy a piece of art from artists that they know very well, and they know it's going to appreciate, and then they sell it later on for a way higher price.
01:30:26.000Yeah, so they're going to have a capital gain on that.
01:30:33.000I've done case studies on IUL versus 401k and between managed fees, it's managed fees, taxes, etc.
01:30:40.000They take out more over 30 years in a 401k than an IUL. I work in finance and IULs have way more advantages than 401ks and Roths.
01:30:48.000I will agree because I actually had IUL as well and I weighed versus getting a 401k or Roth.
01:30:54.000It was way better because once again, you get the death benefit, you can borrow from it and let's say you die You don't have to pay it back.
01:31:01.000We'll just take it out of what the penalty would be for...
01:31:03.000Sorry, the cash bonus would be when you die.
01:34:56.000So I have a lot of questions, but I saved two years and I'm going to do a big movement with money to buy a mobile home with enough land to divide it, then buy a RV and put it into rent for more earnings.
01:38:11.000You can put the $100K in there, and then I think you just have to leave $2,000 in.
01:38:15.000And then you can put in the 100, pull it out, have the account opened, and then maintain at least 1 to 2,000 in there, and you'll get that 5%.
01:39:24.000And if you get divorced or someone comes after you, like government, courts, they can't look into your policy to take any cash value you have in the policy.
01:39:33.000Another good way to protect your cash is IUL. Shout out to you, man.
01:39:39.000Since a one-member LLC is a disregarded entity and must report on personal sum list, a random S-Corp they have as the second member to get their rental LLC as an EIN number and K1 status, less audits?
01:40:22.000A disregarded entity means that you're going to file it on your 1040.
01:40:26.000You're going to have that business active.
01:40:27.000So you're basically giving the IRS jurisdiction over that entity along with your personal stuff.
01:40:33.000Yeah, that's the whole purpose of going to...
01:40:34.000Guys, the reason why we tell y'all to switch from an LLC to an S-Corp is because when you don't switch over to an S-Corp, you end up being...
01:40:42.000And you stay in an LLC and you have like a regular W-2 job.
01:40:44.000What ends up happening is you get double-texted and then you go into an IRS pile that is going to be more highly audited.
01:41:40.000Watch that episode, get the book, because the episode's gonna tell you why you need to do it, and then Steve's gonna teach you how to do it.
01:41:52.000And we'll go 50 and up from here, because we gotta close this thing out.
01:41:55.000Since I have a house in Maryland fully paid, and that rent pays for my house mortgage in Virginia that I currently live, how should I get another property?
01:42:02.000Save money up to 20% and get a loan, or something else?
01:42:35.000And then the other thing too you got to remember is if it's a single family home and you live in it, you're on the hook for paying a higher mortgage.
01:42:42.000So that's why it's always better if you're going to do an FHA to have at least a duplex or a triplex because that way you can offset the mortgage on your tenants.
01:42:52.000But if you're going to live in it yourself, be prepared to pay a higher rent because you're only putting 3.5% down.
01:42:56.000And you're going to have to pay PMI. When I did it at three units, I was living it for free.
01:43:12.000In some markets, it might be better to just get the single-family home.
01:43:15.000In some other markets, you'd be like, hell no, I'm not going to do a single-family home.
01:43:18.000I need to do a duplex or a triplex for this to make sense.
01:43:20.000So it really, really depends on what it is.
01:43:23.000That's why I always use the metric of cash on cash return.
01:43:26.000That's why I tell you guys, use cash on cash returns because that's going to give you the best bird's eye view of your returns of the money that you actually put in.
01:43:35.000That's why I like to use the cash on cash.
01:43:59.000When I've sold my companies, I had non-competes too.
01:44:01.000I mean, typically it's going to be like a three-year deal.
01:44:04.000Typically not more than five years, but I mean, it's a risk that you take, and I don't know how much you're paying for that non-compete, because there's going to be some price you're paying on it.
01:44:11.000So as long as you follow, and maybe outside of the jurisdiction and the radius of where you can't compete with them, That's where you gotta assess the risk, my friend, and figure it out.
01:44:24.000But typically, most non-competes, I mean, if the guy's smart, he has it in a very big, broad way where they can come after you if they find out that you're competing.
01:45:07.000But real estate, you gotta have money for reserves, have money to invest.
01:45:12.000Steve, real quick for you, did you have a team, when you were doing the fixing and flipping, did you have a team of contractors that you would just call, hey, I'm closing on this, I need you to go in there and fix immediately?
01:45:22.000Yeah, I had three guys that I used to hire and pretty much they were working for me almost full time all the time because they were on these projects.
01:45:27.000So you had almost infrastructure set up for your fixing and flipping.
01:45:30.000Yeah, there's like three or four guys that I can.
01:45:31.000You're closing on the house, they're there pretty much the next day fixing stuff up.
01:46:16.000And how long would you hold it before you...
01:46:18.000I mean, you know, I've never had one more than six months.
01:46:22.000You know, three months was typically the turnaround time because the guys kind of knew what we had to do and what we had to do to get it back.
01:46:28.000So I want to say this real quick because too many people talk about fixing and flipping and fixing and flipping and yeah, this is what I want to get into.
01:46:36.000One thing I want all you guys that want to get into real estate and want to go through the fixing and flipping route, you're going to need contractors.
01:46:43.000You're going to need guys that you can pretty much call and they're on site doing the job that you trust that aren't going to nickel and dime you and can get materials for cheap because the other thing too that happened during the pandemic that a lot of people don't talk about is the cost of lumber went up, the cost of products went up, the cost of labor went up.
01:47:37.000So he wasn't at the mercy of a high-interest loan through a private lender or some private equity that's charging him 50% interest or something crazy like that.
01:49:22.000But once again, that's way more luxury than a Mercedes or a BMW, which is just A to B. So it just depends.
01:49:29.000When you don't own it, you don't trade it the same.
01:49:31.000So I'm not saying that to discourage you guys, but I want you guys to understand that like, you know, There's a lot of entrepreneur porn out there telling you you can go ahead and buy fix and flip houses.
01:52:18.000We're going to try to bring Steve on more frequently.
01:52:21.000We're trying to convince him to move, so we'll see what happens.
01:52:24.000But yeah, you'll see Steve more, because I think you guys really benefit from this, and having someone like him who's a professional when it comes to taxes is, you know, you can't lose.
01:52:34.000Speaking of the right CPA, Wesley Snipes.
01:52:41.000Yeah, so basically, and I'm starting to do a couple of reels on this.
01:52:44.000Some of the content creators, and I don't have anything personal against these guys, obviously, you know.
01:52:48.000So, I mean, there's some red flags out there you gotta watch for.
01:52:51.000So there is, you can Google it, go to the IRS Dirty Dozen, you go in there, and every year the IRS publishes 12 The Dirty Dozen things that are tax strategies and loopholes and things that these promoters use.
01:53:03.000And I've seen a lot of videos out there on social media that are promoting these things.
01:53:07.000Go in there and you can see what the 12, every year they publish it and they update it.
01:53:14.000So if you've got somebody who wants to promote and push you like an insurance captive or something like that, like, whoa, these are things that the IRS are coming after.
01:53:24.000These are red flags that some people tell me, like, oh, yeah, create this business and make a loss, produce a loss and put it on your tax return and offset it against your W-2 wages.
01:53:39.000Also, if you do the Patreon, I forgot to add, you're going to get the three books I already have for free.
01:53:44.000So instead of buying them, so the guys I know they wanted to go out there and buy them, it might be cheaper just to do the Patreon thing and you're going to get those books already.
01:54:15.000And then number one, obviously having the right CPA. These are all things that are critical and necessary to cutting back your tax liability, guys.
01:54:23.000And then if you're a W-2 earner, Steve has a thing pretty much for $1, 10 ways to cut your tax liability as W2 earner, because as you guys know, you guys get taxed at the highest level.
01:54:35.000But these are the top seven ways to pretty much save on paying Uncle Sam legally, of course, so that you don't get Wesley sniped.
01:54:43.000We're going to be back with some girls here probably in the next 30 minutes or so.