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Carlotta Thompson - Ex IRS Auditor Saving Business Owners Millions · REL Freedom Podcast

• 0:00
  Carlotta Thompson: That's how people get to zero.
• 0:01
  Carlotta Thompson: Like everybody that's in real estate can get to zero just because if they make say they're a doctor and they're making a million dollars in revenue in W-2 income or in business income.
• 0:12
  Carlotta Thompson: And now they're like, okay, how can I pay zero taxes on that million dollars?
• 0:16
  Carlotta Thompson: Go invest $4 million and you don't even have to invest, right?
• 0:19
  Carlotta Thompson: You just need a loan.
• 0:20
  Carlotta Thompson: But go and buy $4 million worth of short-term rental, and now you can get to zero.
• 0:26
  Carlotta Thompson: Manage it through December 31st and then turn it over to a management company on January 1st.
• 0:32
  Mike Swenson: Welcome to the Real Freedom Show.
• 0:33
  Mike Swenson: We inspire you to pursue your passion to gain time and financial freedom through opportunities in real estate.
• 0:38
  Mike Swenson: I'm your host, Mike Swenson.
• 0:40
  Mike Swenson: Let's get some real freedom together.
• 0:42
  Mike Swenson: I'm your host, Mike Swenson.
• 1:03
  Mike Swenson: If you want to get started on your real estate investing journey, check out our website, freedom throughrealestate.com.
• 1:09
  Mike Swenson: That's freedomthroughrealestate.com.
• 1:11
  Mike Swenson: We've got lots of great content, all of our episodes and ways for you to determine what's gonna be your next best path if you're considering getting into real estate, doing something different in real estate.
• 1:21
  Mike Swenson: There's so many fun things that you can do, and we want to be here and be a resource for you.
• 1:26
  Mike Swenson: Today is just an amazing topic.
• 1:28
  Mike Swenson: Exciting for me.
• 1:29
  Mike Swenson: I love talking about this stuff.
• 1:30
  Mike Swenson: My birthday is in March.
• 1:32
  Mike Swenson: When I worked at my W-2 job, I would take the day of my birthday off of work to go have my tax appointment done because I like the finality of being done with that.
• 1:41
  Mike Swenson: But we're here to talk about taxes today.
• 1:43
  Mike Swenson: And so a lot of times people are thinking about other things inside of real estate, and we totally blow over the amazing opportunities of understanding tax laws and tax codes and how much money it can save you and put back into your business.
• 1:57
  Mike Swenson: So today we've got Carlotta Thompson here.
• 2:00
  Mike Swenson: She's founder and CEO of Tax Strategists of America, and she enjoyed being interested in IRS starting at the age of 14, started studying tax law, got her dream job with the IRS, and realized that they are kind of not in favor of who she was hoping that they'd be in favor of, which was the business owner.
• 2:16
  Mike Swenson: And so now your focus is really helping people on understanding taxes, saving money, and being able to pay the least amount of taxes as humanly possible.
• 2:25
  Mike Swenson: So we're so excited to have you on the show and share your story.
• 2:27
  Mike Swenson: Thank you.
• 2:28
  Carlotta Thompson: Thanks so much for having me here.
• 2:29
  Carlotta Thompson: And yeah, taxes uh is something that really no one should pay if they're actually doing something good for the economy.
• 2:37
  Carlotta Thompson: So think about this.
• 2:38
  Carlotta Thompson: If you are investing in real estate, you can always pay zero taxes.
• 2:43
  Carlotta Thompson: All you have to do is know exactly what to do in order to get that taxable income to zero.
• 2:48
  Carlotta Thompson: So if you have a W-2 job and you're making good money, you can always get that down to zero just by investing in real estate.
• 2:55
  Carlotta Thompson: So uh it is one of the one of the only ways to actually get to zero is investing in real estate.
• 3:01
  Carlotta Thompson: So I'm excited to go over that today and uh tell you guys all the things that I know about real estate.
• 3:06
  Carlotta Thompson: Um obviously, you already said I started studying tax law at 14.
• 3:11
  Carlotta Thompson: Um, I was an IRS agent and I thought I was going to the IRS to like change the world.
• 3:16
  Carlotta Thompson: Okay.
• 3:16
  Carlotta Thompson: I thought that, or at least the US.
• 3:18
  Carlotta Thompson: I thought that I was gonna be able to help business owners and real estate investors uh through the IRS.
• 3:24
  Carlotta Thompson: And I realized very quickly that was not gonna be my job.
• 3:27
  Carlotta Thompson: My job was to audit these people.
• 3:29
  Carlotta Thompson: And so what I would do is I was a very good auditor.
• 3:31
  Carlotta Thompson: So I always gave the taxpayer a large tax bill because I was very good at my job, meaning I understand taxes and I understand what the client is supposed to have.
• 3:42
  Carlotta Thompson: And so um, bad for the taxpayer that I was good at my job at the IRS.
• 3:47
  Carlotta Thompson: But what I did every time I gave a big tax bill, I would also give them tax strategy and say, look, this is what you need to do in the future.
• 3:54
  Carlotta Thompson: So you don't have a tax bill in the future.
• 3:56
  Carlotta Thompson: And so it was a double-edged sword, but sword, but I always wanted to make sure that the taxpayer, when they were paying that bill to the IRS, they felt like it was more of a consulting fee.
• 4:05
  Carlotta Thompson: And that what they really got out of it was some good strategy that they could use in the future.
• 4:10
  Carlotta Thompson: Because remember, our tax code is not created by the IRS, it was created by Congress.
• 4:15
  Carlotta Thompson: And Congress, all they want for us is to make sure that we are investing back in our economy.
• 4:22
  Carlotta Thompson: So uh if you are here and you are providing jobs for the economy, you're providing housing, which is real estate investors, right?
• 4:29
  Carlotta Thompson: Um, or you're providing other opportunities for other Americans, there are ways to get to zero.
• 4:34
  Carlotta Thompson: Because remember, Congress doesn't really care about you.
• 4:37
  Carlotta Thompson: They care about the people who are giving money to them, which are the really big real estate investors and the really big business owners.
• 4:45
  Carlotta Thompson: You're just a byproduct of that.
• 4:47
  Carlotta Thompson: So today, what I'm gonna do is tell you what the billionaires are doing.
• 4:51
  Carlotta Thompson: You can do the exact same thing.
• 4:53
  Carlotta Thompson: And remember, the reason why these laws are here is because the billionaires support congressmen and congressmen make the tax laws.
• 4:59
  Mike Swenson: And I understand for some people, taxes, it feels like something they don't understand.
• 5:04
  Mike Swenson: But just like any subject, you have to learn at least the basics, and then you're gonna learn more to get better.
• 5:09
  Mike Swenson: And so if you're running a business, there's a lot of basic things that you need to know to be able to operate your business and be more successful in it.
• 5:17
  Mike Swenson: But I know so many times people just judge their tax person.
• 5:20
  Mike Swenson: This is like nails on the chalkboard for you, but you know, judge your tax person like, oh, I got a rebate, so they did a good job for me, right?
• 5:26
  Mike Swenson: And it's like it doesn't matter.
• 5:27
  Mike Swenson: Doing a good job isn't depending on whether you get a refund or not, right?
• 5:31
  Mike Swenson: Because you're withhold, a lot of you are withholding taxes, right?
• 5:33
  Mike Swenson: And so if you just withheld the right amount or the wrong amount, that would dictate whether or not you got a rebate or not.
• 5:39
  Carlotta Thompson: Right.
• 5:39
  Carlotta Thompson: You need to be adding lines 18 and 23 on your federal tax return, and that'll tell you if you're paying taxes or not.
• 5:45
  Carlotta Thompson: Lines 18 and 23.
• 5:46
  Carlotta Thompson: That's really what you need to be looking at.
• 5:48
  Carlotta Thompson: Add those two lines together, and that will tell you how good of a job that your tax professional is doing.
• 5:53
  Mike Swenson: And to your point, you mentioned about strategy, right?
• 5:55
  Mike Swenson: So it's not just what happened last year in arrears, but it's what can we do to put ourselves in a position to continue to do well in the future.
• 6:04
  Mike Swenson: And so as people get more and more sophisticated in the businesses that they own or what they're doing, or what real estate that they're investing in, that strategy is key.
• 6:11
  Mike Swenson: So yeah, why don't you just kind of dig in and get started and talk about some of your key topics and talking points that you like to make sure that uh, you know, real estate investors need to know.
• 6:20
  Carlotta Thompson: Yeah.
• 6:21
  Carlotta Thompson: So remember in real estate investing, first of all, there are two different kinds of real estate investors.
• 6:27
  Carlotta Thompson: One that qualifies as a real estate pro and one that does not, right?
• 6:31
  Carlotta Thompson: And what's the difference?
• 6:32
  Carlotta Thompson: Well, you have to have 750 hours and real estate related services to qualify as a real estate pro.
• 6:38
  Carlotta Thompson: Now, I assume probably 50% of the audience is a real estate pro and 50% is not.
• 6:42
  Carlotta Thompson: So tip number one, being a real estate pro is the most highly audited thing on a tax return.
• 6:49
  Carlotta Thompson: So make sure if you're not like an a real estate agent or you're not a contract, a construction contract or something like that, that's like a job in real estate, there you're actually using something like Reps Tracker, R E P S, T R A, C K E R.
• 7:04
  Carlotta Thompson: That is going to help you be able to determine the number of hours that you spend in real estate.
• 7:09
  Carlotta Thompson: So tip number one hands down, realistic being a real estate pro is the number one thing that I've seen audited on tax returns.
• 7:17
  Carlotta Thompson: So make sure that you have your 750 hours in if you're going to claim to be one.
• 7:22
  Carlotta Thompson: On the flip side, if you're not a real estate pro, that's totally okay.
• 7:27
  Carlotta Thompson: The only difference is if you're not a real estate pro, we need to really focus on short-term rentals that you actively manage versus uh everyone else can do short-term, long-term, or syndications.
• 7:38
  Carlotta Thompson: So uh that's step number one.
• 7:40
  Carlotta Thompson: Make sure that you're investing in the right kind of property for your situation.
• 7:45
  Carlotta Thompson: Now, everyone on here can get to zero taxes by doing one thing.
• 7:50
  Carlotta Thompson: If your taxable income is $100,000, say you make $100,000 in wages or $100,000 in a business, you can get to zero by spending $400,000 in real estate for every $100,000 in taxable income.
• 8:06
  Carlotta Thompson: What how does that work?
• 8:08
  Carlotta Thompson: Well, like you had mentioned uh earlier today, cost segregation is what we do to get the largest amount of tax deductions for any kind of real estate we purchase.
• 8:19
  Carlotta Thompson: And it's usually a four to one scenario.
• 8:22
  Carlotta Thompson: So if I spend $400, $400,000 for every hundred thousand in real estate, then I'm going to be able to get to zero by simply being um simply doing a cost segregation.
• 8:33
  Carlotta Thompson: All right.
• 8:33
  Carlotta Thompson: Number two, the biggest reason why we want to be uh in real estate is because it has the best scenario for not paying taxes when you leave leave the money at the end of life.
• 8:47
  Carlotta Thompson: Okay.
• 8:48
  Carlotta Thompson: So think about this.
• 8:49
  Carlotta Thompson: Every other time that you leave uh something to someone, it may be a large taxable situation, but when you leave real estate, your heirs gonna step up in basis.
• 8:59
  Carlotta Thompson: So say you paid $100,000 for a property and you've deducted that over your lifetime.
• 9:05
  Carlotta Thompson: It's now the basis of that is zero and it's worth a million dollars.
• 9:10
  Carlotta Thompson: If you leave that to your heir up on death, it cannot go beforehand, up on death and say it's worth a million dollars now.
• 9:17
  Carlotta Thompson: That heir now gets to do a cost segregation on that million dollars and they get to deduct that over their lifetime.
• 9:24
  Carlotta Thompson: So that is a huge key factor.
• 9:26
  Carlotta Thompson: So if you have someone who's leaving you real estate, make sure they do it up on death and not before.
• 9:34
  Carlotta Thompson: A lot of times, older people will try to transfer their property beforehand so that they can get on Medicaid or they can, or you know, whatever, so they they don't lose it to Medicaid if they have to go into a nursing home or something like that.
• 9:46
  Carlotta Thompson: Usually um, if they're worried about that, the insurance that they can get for long-term care is going to be cheaper than the taxes you would pay if they wait uh to leave that to you until death.
• 9:58
  Carlotta Thompson: Okay.
• 9:59
  Carlotta Thompson: So that's number two.
• 10:00
  Carlotta Thompson: Uh number three, when you are buying a property, I want you to be looking at if it's in an opportunity zone.
• 10:09
  Carlotta Thompson: And if it is, you need to make sure that you set up an opportunity zone fund uh before you purchase that real estate because there are some great tax incentives.
• 10:20
  Carlotta Thompson: And a lot of times you will be surprised where the opportunity zones are.
• 10:24
  Carlotta Thompson: Like we have an opportunity zone right next to us.
• 10:27
  Carlotta Thompson: It's a great place for rental property.
• 10:28
  Carlotta Thompson: Uh, it's a college town and it's an opportunity zone, which is crazy to me.
• 10:32
  Carlotta Thompson: Uh, so make sure that you always check and you know where the opportunity zones are and that you are uh setting up your property beforehand, like before you purchase it, to go into um the fund.
• 10:44
  Carlotta Thompson: And that it's it's self-certification.
• 10:47
  Carlotta Thompson: It's not hard.
• 10:48
  Carlotta Thompson: You don't need anything special, but you do have to do that before you purchase the property.
• 10:52
  Carlotta Thompson: So make sure that you're watching out for opportunity zone funds uh when you're doing real estate.
• 10:58
  Carlotta Thompson: Um there are so many things that you can do with real estate.
• 11:04
  Carlotta Thompson: So cost segregation, step up and basis, OZ funds, um, opportunity, anything in the opportunity zones.
• 11:11
  Carlotta Thompson: But also when you start looking at purchasing property, you need to look at your exit strategies.
• 11:16
  Carlotta Thompson: So this could be things like uh exchanges where you're where you're exchanging one property for another.
• 11:22
  Carlotta Thompson: But as you are growing and you're you're trying to make money into this, you really need to determine what your exit strategy is going to be on each of those properties and then how you're gonna offset the taxes.
• 11:34
  Carlotta Thompson: Because everyone loves to be a real estate investor, and then they start selling off their properties and they don't know what their next step is.
• 11:41
  Carlotta Thompson: And a lot of times they don't even think about strategy until after the fact.
• 11:45
  Carlotta Thompson: And that is not a smart way to do things.
• 11:48
  Carlotta Thompson: So when you are exchanging, um, you can exchange in other properties.
• 11:52
  Carlotta Thompson: We obviously know that, but you can also do some um OZ funds that are publicly traded or that are syndicated as well.
• 12:00
  Carlotta Thompson: So you can transfer, um, you can you can trade into those kinds of funds so that you can uh not pay the capital gains tax, all right?
• 12:10
  Carlotta Thompson: Um, another thing, look at what your capital gains is actually going to be.
• 12:14
  Carlotta Thompson: I have a client that just sold uh some some real estate and we did it in a year where uh she didn't have a lot of other income.
• 12:22
  Carlotta Thompson: And so she really the only good income she had was her capital gains.
• 12:27
  Carlotta Thompson: And because uh your capital gains are at a 0% rate up to a certain portion, she didn't have to pay taxes on any of that.
• 12:34
  Carlotta Thompson: So when you're looking at when to offload your properties, if you are doing a lot of stuff in real estate, make sure that you're timing those where you may cannot pay any taxes at all, and not because you traded it, but because you're in a low enough bracket where your capital gains are actually zero.
• 12:51
  Carlotta Thompson: So this is for the real estate investors, and that's that's what they're doing.
• 12:55
  Carlotta Thompson: They're investing in real estate and they're landlords or uh they're in a syndication, something like that.
• 13:00
  Carlotta Thompson: But I want to talk on the flip side because obviously in real estate, we have the people who are in the investment side, but then we also have the people who are in the flipping, uh, wholesaling, that kind of situation.
• 13:16
  Carlotta Thompson: Um, and I assume we have a lot of listeners here that that's their focus.
• 13:19
  Carlotta Thompson: And because usually when you're a real estate investor, you do kind of both, right?
• 13:23
  Carlotta Thompson: You'll have some deals where you're the landlord or you're in the syndication, but then you'll have other deals where you're flipping or you're wholesaling.
• 13:30
  Carlotta Thompson: And remember, they're two totally different things.
• 13:33
  Carlotta Thompson: So when you're flipping and wholesaling, that's actually a business.
• 13:36
  Carlotta Thompson: And you use all the same strategies as a business owner would use.
• 13:41
  Carlotta Thompson: So we can get into that uh if we want to, but that is what I'm gonna say is is the biggest things that I can think of for just plain real estate investors, uh, is obviously knowing the things that are just focused for real estate.
• 13:55
  Carlotta Thompson: And then remember, you know, if you're in if you're doing trainings or you're doing um any of those things, you can also put those in.
• 14:02
  Carlotta Thompson: Um, oh, another key thing that I always see real estate investors miss is they don't have a home office.
• 14:08
  Carlotta Thompson: You need a home office when you are in real estate because otherwise, when you travel to all of those properties, it is a commuting expense.
• 14:18
  Carlotta Thompson: So always have a home office if you are in real estate because otherwise the IRS will say, Hey, when you go to all those different houses, that's not deductible, it's commuting.
• 14:27
  Carlotta Thompson: So make sure you have a home office.
• 14:30
  Mike Swenson: Are you looking to get started or scale in real estate investing, but don't know your next step?
• 14:34
  Mike Swenson: Are you overwhelmed thinking about finding deals, analyzing deals, doing due diligence, and managing properties on top of it?
• 14:41
  Mike Swenson: Go ahead and push the easy button and invest with us.
• 14:44
  Mike Swenson: Real estate investing is what we do full time.
• 14:46
  Mike Swenson: We've done dozens of deals with hundreds of doors.
• 14:49
  Mike Swenson: We have the knowledge and experience to handpick the best deals that most investors can't find.
• 14:54
  Mike Swenson: We've at large off-market deals all the time where you can hopefully find returns and economies of scale that you just can't find on your own.
• 15:00
  Mike Swenson: The best thing is it's 100% passive to you for less capital than you put down trying to acquire a property on your own.
• 15:07
  Mike Swenson: Don't let this year go by where you don't make the leap, add to your portfolio, or you just sit in analysis by paralysis.
• 15:14
  Mike Swenson: To find out more, visit freedom throughrealestate.com and click on invest.
• 15:19
  Mike Swenson: You can book a call and learn more there.
• 15:21
  Mike Swenson: So get to scaling your portfolio now with us by your side.
• 15:24
  Mike Swenson: Can you just quick explain for people that haven't heard of cost segregation study, just quick break that down of what that is and why it's so important for investors?
• 15:34
  Carlotta Thompson: All right.
• 15:34
  Carlotta Thompson: So as you know, every house you purchase uh is depreciated.
• 15:38
  Carlotta Thompson: And what what's a simple term for depreciation?
• 15:41
  Carlotta Thompson: It just means that we're spreading the cost of our real estate over 27 and a half years if it's long term, 39 years if it's short-term rental.
• 15:50
  Carlotta Thompson: All right.
• 15:50
  Carlotta Thompson: So essentially, if you buy a house that's $100,000 and you rent it out short term, you will get to spread that $100,000 over 27 and a half years and you will take a little bit of that expense every year, which is really cool because it is the only thing you actually get to depreciate or deduct expense for that's actually going up in value, uh, which is which is unheard of in taxes, right?
• 16:11
  Carlotta Thompson: Uh so that's why we love real estate as well.
• 16:14
  Carlotta Thompson: But when you do a cost segregation, what it does is it takes that property and instead of flatline, straightlining, dividing it over 27 and a half or 39 years, it takes a portion of that and it says, okay, this property uh has this much that should be five years, this much that should be 15 years, this much that should be 27 and a half years, this much that should be 39 years.
• 16:35
  Carlotta Thompson: And everything that's 15 year or below, you get to deduct that the first year at 100%.
• 16:40
  Carlotta Thompson: And that's usually going to amount to about 25% of the purchase price less land value.
• 16:46
  Carlotta Thompson: So um usually about 25%, because remember, land, you don't get any expense for that.
• 16:51
  Carlotta Thompson: You only get expense for the house, the structures that are on the property.
• 16:55
  Carlotta Thompson: So uh 25% is usually the ratio.
• 16:59
  Carlotta Thompson: And then uh the rest of the 75% is deducted over the 27 and a half or 39 years.
• 17:06
  Mike Swenson: And for people, like it's hard to understand how impactful that is.
• 17:10
  Mike Swenson: But as somebody that's now been doing that for the last couple of years, like that is so huge, it makes such a big difference and really frees up more cash to be able to continue to invest in real estate and keep that snowball going.
• 17:22
  Carlotta Thompson: Well, and it's that's how people get to zero.
• 17:25
  Carlotta Thompson: Like everybody that's in real estate can get to zero just because if they make, say they're a doctor and they're making a million dollars in revenue in W-2 income or in business income.
• 17:35
  Carlotta Thompson: And now they're like, okay, how can I pay zero taxes on that million dollars?
• 17:39
  Carlotta Thompson: Go invest $4 million and you don't even have to invest, right?
• 17:43
  Carlotta Thompson: You just need a loan.
• 17:44
  Carlotta Thompson: But go and buy four million dollars worth of short-term rental, and now you can get to zero.
• 17:50
  Carlotta Thompson: Manage it through December 31st and then turn it over to a management company on January 1st.
• 17:54
  Mike Swenson: It's amazing.
• 17:55
  Mike Swenson: And and I think because people don't understand taxes very well, they don't lean into this stuff, right?
• 18:01
  Mike Swenson: And so it's, you know, you're giving away tens of thousands of dollars of value here, and you know, people will probably listen to that and be like, oh, that was an interesting podcast episode, or oh, they talked about taxes, I'm gonna go listen to something else, right?
• 18:13
  Mike Swenson: And it's like there is so much value here that you guys are just leaving money on the table by not figuring out how to implement these strategies.
• 18:22
  Carlotta Thompson: Well, because think about it, if you're a doctor and you're making a million dollars, you're probably paying $300 to $400,000 in taxes, maybe $500,000 if you live in California.
• 18:31
  Carlotta Thompson: What if you could just keep that money and go invest it in real estate instead of giving it to the government?
• 18:35
  Carlotta Thompson: That's the impact.
• 18:37
  Carlotta Thompson: It's not that you don't have to pay, it's the impact of what your wealth can do for you that is so impactful.
• 18:44
  Carlotta Thompson: Like, think about this.
• 18:46
  Carlotta Thompson: I mean, as we're adults, we just have come to think, oh, taxes is just gonna be something we do.
• 18:52
  Carlotta Thompson: That's actually why I start teaching kids at seven years old about buying businesses and buying real estate.
• 18:57
  Carlotta Thompson: And I teach them, like, okay, what's gonna get your Airbnb value up?
• 19:00
  Carlotta Thompson: What's gonna get this stuff?
• 19:01
  Carlotta Thompson: But at seven years old, because if not, when you're 18, you become so indoctrinated to the tax system that you can't think outside the box of like, okay, what are the billionaires doing to not pay taxes?
• 19:12
  Carlotta Thompson: And I don't care if you like our president or you hate him.
• 19:15
  Carlotta Thompson: A few years ago, when he was running again against Hillary Clinton, what did he say?
• 19:19
  Carlotta Thompson: He said, not paying taxes makes him smart.
• 19:22
  Carlotta Thompson: So if a billionaire can not pay taxes, yet you're over here making a million dollars and you're paying $500,000 in taxes.
• 19:30
  Carlotta Thompson: We clearly know that the problem is not the tax system.
• 19:33
  Carlotta Thompson: The problem is you are not making sure that you have the education to not pay taxes.
• 19:40
  Carlotta Thompson: And then you're teaching your kids, oh, go be a lawyer or a doctor.
• 19:43
  Carlotta Thompson: Why?
• 19:43
  Carlotta Thompson: So they can pay more taxes than anyone else in the country?
• 19:46
  Carlotta Thompson: Have them get into real estate.
• 19:48
  Carlotta Thompson: It is the number one way to grow your wealth tax-free.
• 19:53
  Mike Swenson: Or if you want to be a doctor and a lawyer, great.
• 19:55
  Mike Swenson: And go buy real estate.
• 19:56
  Mike Swenson: Find leverage through other people to help you buy real estate if you're really passionate about doing those things.
• 20:04
  Mike Swenson: And I think, yeah, to your point, when I hear something like that, yeah, my brain goes towards, well, if they can do it, I can do it too, right?
• 20:10
  Mike Swenson: And so it's just figuring out how do you get started, how do you do something in real estate.
• 20:15
  Mike Swenson: And I just had a conversation today with somebody where we were talking about buying an investment property.
• 20:20
  Mike Swenson: And I said, you know, at some point you have to take that risk.
• 20:24
  Mike Swenson: And once you do that, like then you can go figure out how to problem solve that.
• 20:28
  Mike Swenson: You can realize if it was a good risk or not, but you're not gonna know as long as you're sitting on the sidelines.
• 20:33
  Mike Swenson: And over the last couple of years now, doing more real estate investing, I've been able to see the power of taxes or lack of taxes in that case, because I'm investing in real estate.
• 20:43
  Mike Swenson: And so if you're listening to this and you haven't gotten started, figure out a way to get started so that you can be on this side of the conversation.
• 20:50
  Carlotta Thompson: Right.
• 20:50
  Carlotta Thompson: Most people that are in real estate never pay taxes.
• 20:52
  Carlotta Thompson: Like, I can't even do tax strategy for them because they're not even paying taxes, right?
• 20:56
  Carlotta Thompson: Because they're doing so much with real estate already, they don't need any tax strategy.
• 21:01
  Carlotta Thompson: But when I'm talking to a business owner or a W-2 employee and they haven't done real estate, I'm trying to, you know, get them over to real estate.
• 21:10
  Carlotta Thompson: And for some reason, people don't look, they they hear about, you know, oh, well, you don't want to have to deal with uh a tenant or whatever.
• 21:17
  Carlotta Thompson: That's what your that's what your management company is for, right?
• 21:21
  Carlotta Thompson: Like, yes, you need to manage that through December 31st of the year you buy it so you can get all the tax benefits.
• 21:26
  Carlotta Thompson: But after that, turn that sucker over to a real estate management company and don't think about it or do a syndication, right?
• 21:33
  Carlotta Thompson: You don't have to do everything yourself.
• 21:36
  Carlotta Thompson: But I think uh real estate has gotten a bad uh reputation, which is so crazy to me because it is one of it is the easiest way to not pay taxes in the US.
• 21:46
  Mike Swenson: So talk a little bit more about tax strategists of America, what you do and how you're helping people.
• 21:52
  Carlotta Thompson: Yeah, so we help people pay zero taxes, and you can always get to zero taxes uh through two ways, real estate and business acquisitions.
• 22:02
  Carlotta Thompson: And if you think real estate acquisitions is scary, then don't even look at business acquisitions because it is a little bit harder.
• 22:08
  Carlotta Thompson: But either way, you can get to zero with those two things.
• 22:11
  Carlotta Thompson: Now, before we ever get to those two things, though, we've got to make sure that you're doing all your personal strategies, all the business strategies, all the real estate strategies that you already qualify for, because that's money that's just sitting out there that you just don't even know about because you're not doing those strategies.
• 22:23
  Carlotta Thompson: So, first of all, we put people through uh the personal strategies, business strategies, real estate strategies on things you already own.
• 22:30
  Carlotta Thompson: Okay, so we're not gonna tell you to go buy more real estate, go buy more businesses when you aren't even doing strategy on the things you already have.
• 22:36
  Carlotta Thompson: And that is what Tax Strategists of America does.
• 22:39
  Carlotta Thompson: We're making sure that anything that you already qualify for, your accountants probably leaving it on the table because they don't even know you qualify for it.
• 22:46
  Carlotta Thompson: Um, accountants are really good at putting things into a computer system and spitting out a tax return.
• 22:54
  Carlotta Thompson: Uh, they're not great at things that they don't understand.
• 22:56
  Carlotta Thompson: So make sure if you're working with a strategist that they personally are into real estate, right?
• 23:01
  Carlotta Thompson: We own uh 40, 42 doors and uh we've been doing real estate longer than I've been doing uh this business, right?
• 23:10
  Carlotta Thompson: Because I started it when I was at the IRS.
• 23:13
  Carlotta Thompson: Um and then make sure that they're actual business owners and they're not just accountants, okay?
• 23:17
  Carlotta Thompson: Because accountants don't really understand tax strategy.
• 23:20
  Carlotta Thompson: Entrepreneurs do because they realize like that is the biggest tax they're paying, which is so crazy to me, right?
• 23:25
  Carlotta Thompson: Because you would expect your accountant to understand tax strategy, but they don't.
• 23:30
  Carlotta Thompson: And I don't know if I know they're not taught it in school.
• 23:33
  Carlotta Thompson: Um, so it's something that they have to kind of uh grow on their own.
• 23:37
  Carlotta Thompson: When I was at the IRS, every situation I looked at, I I determined, okay, what would what would get this uh IRS uh bill to zero?
• 23:48
  Carlotta Thompson: Every every time I was I was looking, every time I audited somebody, I was like, okay, what can they do to get this a zero or what can they do to maximize their expenses?
• 23:56
  Carlotta Thompson: And I guess it's just the way my brain uh thought through things.
• 23:59
  Carlotta Thompson: So now I've taken that back down and I've created a pathway to get you to zero taxes.
• 24:04
  Carlotta Thompson: And so um the shortcut, invest uh four for every dollar that you make in income, invest four into real estate and you'll always be at zero and you won't need anything else.
• 24:15
  Carlotta Thompson: But um if you're wondering what all money you're leaving on the table and you're wondering all the strategies that you could do right now that don't cost you anything to invest, then um definitely look at the pathway to zero.
• 24:28
  Carlotta Thompson: Come to one of our trainings, and I promise you it will be the most you've learned in two hours in your entire life.
• 24:35
  Mike Swenson: Well, we were just talking offline beforehand, because you mentioned about how uh all accountants aren't necessarily good tax strategists.
• 24:41
  Mike Swenson: It's kind of similar.
• 24:42
  Mike Swenson: Real estate agents aren't necessarily investors, right?
• 24:45
  Mike Swenson: Even though they're in the same space, they don't understand the opportunity with investment.
• 24:49
  Mike Swenson: And so, you know, that's where it's just a different type of personality or a different type of passion because I talk to real estate agents all the time and they don't know how to analyze a deal to tell if it's a good investment or not.
• 25:00
  Mike Swenson: But yet they can sell a home really well and help a client buy a home really well, not necessarily an investment property.
• 25:06
  Mike Swenson: Real quick before we go, just because we do have a segment of the population that, you know, maybe are agents and are working to get towards investors, maybe just some quick tips or some thoughts of things that people can do tax-wise with where they're at as they then focus on going to invest in real estate and take your advice.
• 25:22
  Carlotta Thompson: Yeah, so I'm gonna say this this this segment will be for all real estate agents, anybody that has a business whatsoever, every 1099 contractor, everybody that's flipping houses, and everybody that's wholesaling.
• 25:33
  Carlotta Thompson: Listen to this part because this is going to be you're a business, okay?
• 25:38
  Carlotta Thompson: Your focus needs to be on business strategies and business deductions.
• 25:42
  Carlotta Thompson: So, what are some things that you guys are missing that you could be doing?
• 25:45
  Carlotta Thompson: Obviously, you need to make sure that you're hitting the basic strategies.
• 25:49
  Carlotta Thompson: Pay your kids, figure out a way to have your kids working in that business.
• 25:52
  Carlotta Thompson: I mean, it's very easy for real estate agents.
• 25:54
  Carlotta Thompson: They can have their kids in a video uh showing a home or uh doing a little thing on TikTok or something like that.
• 26:00
  Carlotta Thompson: Get your kids working in the business.
• 26:01
  Carlotta Thompson: Everybody makes $40,000 a year.
• 26:03
  Carlotta Thompson: Your kids, your kids can work in your business, pay them for their name, image, and likeness.
• 26:07
  Carlotta Thompson: Um, also, they could be running your social media, things like that, but pay your kids.
• 26:11
  Carlotta Thompson: The reason why is because this is money they are already spending on your kids.
• 26:14
  Carlotta Thompson: So uh put it in their bank account, pay for their daycare, pay for their clothes.
• 26:18
  Carlotta Thompson: You can't pay for household expenses out of there, but you can pay for their personal expenses.
• 26:22
  Carlotta Thompson: Um, so always make sure you're paying your kids.
• 26:24
  Carlotta Thompson: Always make sure you're doing the Augusta role.
• 26:26
  Carlotta Thompson: Uh so the Augustor is where you rent your home to yourself uh for 14 days a year, you rent it to the business for 14 days a year.
• 26:33
  Carlotta Thompson: Um, and it's a tax deduction of the business, tax-free income to you.
• 26:36
  Carlotta Thompson: So this is a business deduction and you don't have to pay any taxes on it.
• 26:40
  Carlotta Thompson: Like you're just shifting money from one thing to the other.
• 26:42
  Carlotta Thompson: And that's what tax strategy is for the most part until you get into real estate investing and business acquisitions.
• 26:48
  Carlotta Thompson: Tax strategy should not cost you anything to uh it shouldn't be an expense.
• 26:53
  Carlotta Thompson: It shouldn't be like, like, think about this.
• 26:55
  Carlotta Thompson: Most strategists or most accountants, when they're doing strategy, they go tell their client to go buy a car, go buy something they don't really need uh in order to not pay taxes.
• 27:05
  Carlotta Thompson: I'm gonna say that's terrible tax strategy.
• 27:07
  Carlotta Thompson: That's lazy tax strategy.
• 27:09
  Carlotta Thompson: The tax strategy that you should be doing are the things that don't cost you anything extra, right?
• 27:12
  Carlotta Thompson: It's just moving money from one place to the other.
• 27:15
  Carlotta Thompson: Um, so make sure that you're you're doing those things.
• 27:17
  Carlotta Thompson: Uh QBI maximization, make sure you're becoming an S-corporation.
• 27:21
  Carlotta Thompson: Whenever you need to become an S-corporation, that can save you lots of money.
• 27:24
  Carlotta Thompson: Um, a real estate agent can save probably $10,000 uh becoming an S-corp and doing reasonable comp.
• 27:32
  Carlotta Thompson: But also, if you're really uh good at your job, a real estate agent may um a QBI maximization could save you up to $150,000 in taxes.
• 27:41
  Carlotta Thompson: So just knowing the basic strategies, and again, those are some I'm throwing out at you.
• 27:46
  Carlotta Thompson: We go over lots of strategies on our call that's two hours.
• 27:49
  Carlotta Thompson: Oh, also, you know what I forgot about.
• 27:51
  Carlotta Thompson: Um, when you are in real estate and you are, or if you're a regular business owner and you're doing anything on a property that makes it um easier for somebody that's disabled to use it, did you know you can get a credit for that?
• 28:04
  Carlotta Thompson: So if you're doing um, I know we just on our um real estate office, we just made a wheelchair ramp.
• 28:11
  Carlotta Thompson: That's a hundred, that's all deductible.
• 28:13
  Carlotta Thompson: That's a credit.
• 28:13
  Carlotta Thompson: There's a credit.
• 28:14
  Carlotta Thompson: It's not a deduction, it's an actual credit that the government paid me for creating that ramp.
• 28:20
  Carlotta Thompson: So don't forget those things.
• 28:21
  Carlotta Thompson: That's another thing that I forgot uh whenever I was going through the real estate section.
• 28:25
  Carlotta Thompson: But bottom line, know your strategies, do your strategies.
• 28:28
  Carlotta Thompson: And if you don't know them, come learn about them because sometimes it's just a little tweak that can save you 10, 15, 100,000.
• 28:36
  Mike Swenson: That's awesome.
• 28:37
  Mike Swenson: You're just tossing gold nuggets out here left and right.
• 28:40
  Mike Swenson: And uh for people listening to that, like there's tons of value, like you said, tens of thousands of dollars.
• 28:45
  Mike Swenson: You know, we talk about like, oh, try to save some money, let's let's not go to Starbucks once a week and save ourselves.
• 28:51
  Carlotta Thompson: Oh, that's never gonna get you anywhere.
• 28:53
  Mike Swenson: Right, right.
• 28:54
  Mike Swenson: That's like that's like little grains of sand, and and you're tossing out gold nuggets here.
• 28:58
  Mike Swenson: So obviously, if if you're listening to this, take some time, understand tax strategy, get educated on that so that you can put yourself into a position to yeah, save so much money on taxes.
• 29:08
  Mike Swenson: So thank you so much for coming and sharing.
• 29:10
  Mike Swenson: Just such an awesome wealth of knowledge.
• 29:12
  Mike Swenson: And so thank you for what you're doing.
• 29:14
  Mike Swenson: Where can people go check you out to be able to learn more?
• 29:17
  Carlotta Thompson: You'll have a link in your uh show notes for the next training.
• 29:21
  Carlotta Thompson: Also, you can go to Tax Strategists of America.
• 29:24
  Carlotta Thompson: You can find me on any social media that is uh just putting Carlotta Thompson.
• 29:28
  Carlotta Thompson: My name is Super Rare.
• 29:29
  Carlotta Thompson: So if it's talking about finance, hey, that's me.
• 29:32
  Carlotta Thompson: And um, I'm on TikTok, Instagram, Facebook, everywhere.
• 29:35
  Carlotta Thompson: But every place you find me, there will be a link to my next training, which is where I go over tax strategies.
• 29:41
  Carlotta Thompson: And I promise you, our our training, it's not a sales pitch, it is two hours of gold.
• 29:48
  Carlotta Thompson: You will leave there knowing uh more strategy than you probably ever wanted to know.
• 29:52
  Carlotta Thompson: I always tell people I sent my daughter to college for accounting, and she tells me, she's like, Mom, you teach more in that two hours than I've learned.
• 29:59
  Carlotta Thompson: two years of accounting classes.
• 30:01
  Carlotta Thompson: So come uh learn and let's start strategizing.
• 30:05
  Mike Swenson: Awesome.
• 30:06
  Mike Swenson: Well thank you so much for coming on sharing.
• 30:07
  Mike Swenson: Yeah go check out the website go check her out and best of luck to you Carlotta in the future