Latest / Earn Your Leisure / EYL#310: How to Legally Avoid & Lower Taxes (Tax Secrets The Rich Don’t Want You to Know!)

Transcript

EYL#310: How to Legally Avoid & Lower Taxes (Tax Secrets The Rich Don’t Want You to Know!) · Earn Your Leisure

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  Speaker 1: Turners.
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  Speaker 2: What's going on?
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  Speaker 3: Listen, Eylu is relaunching, revamping Retoom. That's why we're creating
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  Speaker 4: We gods twenty twenty three.
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  Speaker 5: We got a lot.
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  Speaker 4: It's still a lot planning for you guys. So you
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  Speaker 4: know that Eylu already includes monthly financial planning calls with me,
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  Speaker 4: book club calls with Troy, real estate calls with MG
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  Speaker 4: to mortgage Guy, access to the home Buying Blueprint Volume
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  Speaker 4: one and Volume two. Part of the revamp will include
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  Speaker 4: twenty seven local chapters from across the United States, live
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  Speaker 4: interactive teaching, hands on not just pre recorded videos, plus
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  Speaker 4: fifteen brand new curriculums.
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  Speaker 2: The biggest just got viger.
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  Speaker 6: Head over to eyl university dot com. That's EYL. You
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  Speaker 6: n I V E R s I t y dot com.
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  Speaker 2: See it there.
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  Speaker 7: An illegal alien from Guatemala charged with raping a child
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  Speaker 7: in Massachusetts and MS thir two gang member from Al
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  Speaker 7: with filming and selling child pornography in Michigan. These are
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  Speaker 7: President Donald J. Trump's leadership. I'm Christy Noman, the United
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  Speaker 7: return legally. Do what's right.
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  Speaker 1: Leave now.
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  Speaker 7: Under President Trump, America's laws, border and families will be protected.
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  Speaker 8: Sponsored by the United States Department of Homeland Security.
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  Speaker 5: Okay, yes, welcome back to part three, Yeah, man of
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  Speaker 5: our how to series.
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  Speaker 3: Uh.
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  Speaker 5: Two weeks ago we talked about relal estate, Mortgage Guy
• 2:08
  Speaker 5: and all things you need to know about buying home.
• 2:11
  Speaker 5: Make sure you check that episode out. And last week
• 2:13
  Speaker 5: we had a great episode with x something great to
• 2:16
  Speaker 5: understand for sure, absolute classic talking about artificial intelligence, something
• 2:21
  Speaker 5: that's very very important. Time we walked how too really
• 2:26
  Speaker 5: on artificial intelligence. You know everything that you need to know,
• 2:30
  Speaker 5: So keeping in theme with you know, the educational series
• 2:34
  Speaker 5: that we've been doing on these Thursdays. Tonight we're going
• 2:38
  Speaker 5: to be talking about a very important topic and another,
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  Speaker 5: you know, one of these topics that we don't learn
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  Speaker 5: about in school, and cause it's so many problems. You
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  Speaker 5: look at so many entertainers that old millions of dollars
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  Speaker 5: on taxes, and so many people go bankrupt because of taxes,
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  Speaker 5: and so many people just don't understand how to actually
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  Speaker 5: you know, play. The tax code is very complicated and
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  Speaker 5: it changes all the time, so you can never just
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  Speaker 5: have one understanding of the tax code. It has to
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  Speaker 5: always be updated. And there's millions of dollars that can
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  Speaker 5: be potentially saved and lost if you don't understand taxes.
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  Speaker 5: So we're going to be talking about taxes tonight, very
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  Speaker 5: important and the words.
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  Speaker 3: Of Lauren Hill and about what you cop is what
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  Speaker 3: you keep and uh, it's good to make the money,
• 3:23
  Speaker 3: but mostly important, most so important how you managed to
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  Speaker 3: keep the money rather than paying it in tax. And
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  Speaker 3: we already know about state tax and federal tax, income tax,
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  Speaker 3: all types of tax. We're going to be covering a
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  Speaker 3: plethora of information. So went for a treat another one.
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  Speaker 5: So whatever further do, let's bring up our good friend.
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  Speaker 5: Let's do that business.
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  Speaker 2: Yes, yes, yes, hello.
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  Speaker 1: Thank you for having me again and again and again
• 3:49
  Speaker 1: and again.
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  Speaker 3: You know, the last time we went on the Educadle's
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  Speaker 3: educational journey with you, it changed the way that people
• 3:55
  Speaker 3: were consuming and buying vehicles.
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  Speaker 1: Know, I said that all the time, like I did.
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  Speaker 1: We did that video back in twenty nineteen. I feel
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  Speaker 1: like from then I have seen so many different videos.
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  Speaker 1: Everyone's an expert, everyone's adame now changed the game, It
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  Speaker 1: definitely changed the game.
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  Speaker 5: Let's do it again, for sure. So miss business with
• 4:17
  Speaker 5: Brooks Alliance CPA. Right, so you're actually qualified to speak
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  Speaker 5: about taxes, not just somebody that does it part time,
• 4:27
  Speaker 5: has their own firm and has worked with businesses and
• 4:29
  Speaker 5: individuals for a long time. So somebody that we've developed
• 4:35
  Speaker 5: a great relationship, which she's done investmentst every year, then
• 4:39
  Speaker 5: Legion multiple times, market mondays and actually works closely with
• 4:44
  Speaker 5: us on our taxes as well, so our tax advisor.
• 4:48
  Speaker 3: So your CPA could never could never, could never for sure.
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  Speaker 5: So first and foremost, thank you for join us.
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  Speaker 1: Appreciate it, You're welcome, thank you for having me.
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  Speaker 5: Yes, all right, So it's a lot to go over
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  Speaker 5: in this In this session, we want to we want
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  Speaker 5: to go over you know, how business owners can save
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  Speaker 5: money on taxes, how individuals can save money on taxes.
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  Speaker 5: We're gonna go over retirement plans. We're want to go
• 5:12
  Speaker 5: over you know, payroll, putting your kids on and all
• 5:15
  Speaker 5: that type of stuff. We're gonna be going to actually
• 5:17
  Speaker 5: go over actionable items that you can actually utilize to
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  Speaker 5: to you know, make your life better. When it comes
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  Speaker 5: to taxes, Let's get into how people can actually you know,
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  Speaker 5: save money, learn about tax code deductions with you know,
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  Speaker 5: what is most important for the average person. Right, So
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  Speaker 5: where do you want to start.
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  Speaker 1: Let's start talk about the cycle. Let's talk about the
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  Speaker 1: cycle of reducing taxes. And I love this quadrant because
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  Speaker 1: it makes it so easy for people to understand exactly
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  Speaker 1: where you are and what is the cycle and how
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  Speaker 1: do you actually go about saving on taxes and what
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  Speaker 1: does that look like? And tonight I want to basically
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  Speaker 1: touch all of these topics so that way people can
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  Speaker 1: get like picture in terms of like, hey, this is
• 6:02
  Speaker 1: you know, this is what you really need to do
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  Speaker 1: if you want to save on taxes. And I tell
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  Speaker 1: people all the time, if you really follow the strategy
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  Speaker 1: in terms of how to actually save you will really
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  Speaker 1: set yourself up for the future, which I'm really scared
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  Speaker 1: about because I find that not enough people are investing
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  Speaker 1: for their future. You know, we're in this space where
• 6:22
  Speaker 1: everybody's like hustling and trying to figure it out, and
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  Speaker 1: you know, they're starting these businesses and operating these businesses,
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  Speaker 1: and then no one's really thinking about retirement. But if
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  Speaker 1: you think about if you think about how taxes go
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  Speaker 1: and the things that you can invest in and what
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  Speaker 1: helps you save on taxes, you would have no problem
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  Speaker 1: one being wealthy and two saving on taxes. So let's
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  Speaker 1: talk about the cycle of reducing your taxes. Okay, So
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  Speaker 1: first you start out right, this and this is my
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  Speaker 1: this is my this is my flow. This is you
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  Speaker 1: guys flow too, right in terms of how it went right,
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  Speaker 1: you guys, well not Rashad, Rashad, I know you talked
• 7:02
  Speaker 1: about all the time. I don't think you ever had
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  Speaker 1: a job, right, you know? Okay, all right, So for
• 7:11
  Speaker 1: most people, this is how you start you are you know,
• 7:13
  Speaker 1: you start out as an employee. And then once you
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  Speaker 1: start out as an employee, I want you to understand
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  Speaker 1: that one thing about the tax code. The more you work,
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  Speaker 1: the more taxes you pay. It just is what it is.
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  Speaker 1: So another thing about being an employee is you have
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  Speaker 1: you don't have much flexibility. So when I say you
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  Speaker 1: don't have much flexibility, what I mean is your your
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  Speaker 1: pay rate is your I mean your pay rate is
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  Speaker 1: your pay rate? Your tax rate? Right, is your tax rate.
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  Speaker 1: There are some deductions which will talk about, but there
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  Speaker 1: aren't many, right, there aren't many for employees. So the
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  Speaker 1: taxes that you pay are kind of set. Right now,
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  Speaker 1: Then what happens is you move into being self employed.
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  Speaker 1: That's when you give yourself a job. Right, you give
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  Speaker 1: yourself a job. You don't really have much help, it's
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  Speaker 1: just you. You're wearing so many hats. Now, that's when
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  Speaker 1: you start to form your LLC. You may convert over
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  Speaker 1: to an escort. That's when you start taking advantage of deductions.
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  Speaker 1: You may implement some sort of retirement account in place,
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  Speaker 1: and so that's when you know it's you. And now
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  Speaker 1: you're starting to catch on. You're like, all right, cool.
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  Speaker 1: Then what happens is you become a business owner. A
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  Speaker 1: business owner, this is where you have the oh, you know,
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  Speaker 1: you have way more flexibility. You now have employees, You're
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  Speaker 1: now delegating things. Everything isn't on you. Then that's where
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  Speaker 1: you may switch over and find a beneficial to be
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  Speaker 1: a C corporation. Now you have employees, you're able to
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  Speaker 1: take additional deductions because now you're able to benefit them,
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  Speaker 1: you know, by whether it's bonuses or And that's what
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  Speaker 1: we talked about on the when I first when I
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  Speaker 1: was a guest. We talked about Amazon and how they
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  Speaker 1: were able to reduce their taxes, and a big part
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  Speaker 1: of it it was the stock options, right, and the
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  Speaker 1: value of the stock options that they were able to
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  Speaker 1: reduce their income. Right. So now once you start getting employees,
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  Speaker 1: now you're playing a whole nother game, right, because now
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  Speaker 1: you're able to contribute and you have stocks and all
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  Speaker 1: those things. Then you contribute to like higher type of
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  Speaker 1: retirement accounts, and then you go to being an investor.
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  Speaker 1: Being an investor is the ultimate tax tax. I tell
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  Speaker 1: people all the time. Everyone does not love real estate.
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  Speaker 1: Real estate is not the best business right in the world. However,
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  Speaker 1: it provides you a lot of tax deductions and benefits.
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  Speaker 1: So a lot of people when they get to a
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  Speaker 1: certain point are like Okay, I'm going to have to
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  Speaker 1: get into real estate. So, yes, some people enjoy it
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  Speaker 1: and it is an amazing tool and an amazing resource.
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  Speaker 1: But I want people to also think about what are
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  Speaker 1: the things that you have to do or the investments
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  Speaker 1: that you have to make in order to help you,
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  Speaker 1: you know, live tax free. The same thing goes with
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  Speaker 1: investment in the stock market. It's passive, it has a
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  Speaker 1: lower tax rate. So even if you put your money,
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  Speaker 1: if you made the exact same money in the stock
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  Speaker 1: market that you made in W two income, you would
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  Speaker 1: be paying like a much lower tax Ruder, Like I
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  Speaker 1: just told you guys, somebody could have a gain. A
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  Speaker 1: married couple would have a gain in the stock market
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  Speaker 1: of ninety thousand dollars. They would have to pay zero taxes. Well,
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  Speaker 1: if they had a if they made W two income,
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  Speaker 1: they would be looking at on the federal side alone,
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  Speaker 1: about twenty five percent in taxes. Right, that's not including state. Right,
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  Speaker 1: Like me live in New York City, right, local. Right,
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  Speaker 1: So now you have all of these different taxes, and
• 10:38
  Speaker 1: you know it can be pricey. So when we're talking
• 10:42
  Speaker 1: about reducing taxes, I want us to talk about like
• 10:44
  Speaker 1: the flow and really understanding that we have to look
• 10:47
  Speaker 1: at everything. So before we start talking about business owners,
• 10:51
  Speaker 1: let's just quickly talk about what tax deductions are there
• 10:55
  Speaker 1: for individuals, and then we'll go on to being a
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  Speaker 1: business owner, because honestly, being starting a business is a
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  Speaker 1: tax strategy for people that have W two income. Right.
• 11:08
  Speaker 1: And when I say starting a business, that could be
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  Speaker 1: you know, starting a business that can be invested in
• 11:13
  Speaker 1: real estate. But you have to do something, right. I
• 11:15
  Speaker 1: always say, if you want to kind of change your
• 11:17
  Speaker 1: tax situation, you got to change what's happening, right. You
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  Speaker 1: gotta change your facts and what's actually being put down
• 11:23
  Speaker 1: on paper if you want to make that change. So
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  Speaker 1: let's talk tax minimization as it relates to individuals. Right,
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  Speaker 1: So you can do things like invest in in thissible bonds,
• 11:34
  Speaker 1: long term capital gains. So I like to list long
• 11:37
  Speaker 1: term capital gains because a lot of people that are
• 11:41
  Speaker 1: that are looking for a way to say, hey, well,
• 11:44
  Speaker 1: how can I take my income and generate additional income
• 11:48
  Speaker 1: and not have to pay as much taxes? So again
• 11:50
  Speaker 1: we talked about this, you know a good amount already
• 11:53
  Speaker 1: just investing that is one way that can be done
• 11:56
  Speaker 1: starting a business. So we'll talk about that on the
• 12:00
  Speaker 1: next what we'll continue to talk about that, just like
• 12:02
  Speaker 1: being a business owner and how you can shift a
• 12:04
  Speaker 1: lot of those expenses that you guys are paying with
• 12:08
  Speaker 1: after tax dollars and shift it up into your business.
• 12:11
  Speaker 1: So now it's a tax eduction. Right. There's major power
• 12:15
  Speaker 1: in that maxing out your retirement plans. So most people
• 12:20
  Speaker 1: are not actually maxing out their retirement plans at work
• 12:24
  Speaker 1: that is done with before tax dollars. So if that's
• 12:27
  Speaker 1: done with before tax dollars, go ahead, invest in your
• 12:30
  Speaker 1: retirement plan. So therefore you're able to get to maximize
• 12:34
  Speaker 1: all your money and take advantage of that compound interest.
• 12:37
  Speaker 1: So employee benefits, HSA accounts, and then your tax credits, right,
• 12:42
  Speaker 1: so your earn Income Credit, your American Opportunity Credit, child
• 12:46
  Speaker 1: and Child and Dependent Care credits, so all of those
• 12:49
  Speaker 1: are credits. One credit that I did not well, one
• 12:54
  Speaker 1: really good deduction that I didn't put up here, which
• 12:56
  Speaker 1: I just thought about because we were talking about real estate,
• 12:59
  Speaker 1: is the homestead Exemption credit for realism for all of
• 13:05
  Speaker 1: my individuals that are selling their property. Right, so I
• 13:08
  Speaker 1: talked about ten thirty one exchange, A really good one
• 13:11
  Speaker 1: for individuals when they sell is they are able to
• 13:16
  Speaker 1: exempt up to two hundred and fifty thousand dollars of
• 13:19
  Speaker 1: a capital game if you're single, right, if you're married,
• 13:22
  Speaker 1: you get to exempt up to five hundred thousand. So
• 13:25
  Speaker 1: I've had clients in so many different scenarios where there
• 13:28
  Speaker 1: was one client she literally sold, she helped, she had
• 13:31
  Speaker 1: a property. Eleven and a half months she sold the property.
• 13:36
  Speaker 1: And I'm like, no, no, sorry, it was a year. Sorry,
• 13:39
  Speaker 1: it wasn't a year. It was one year and eleven month,
• 13:41
  Speaker 1: eleven and a half months. And the exemption, I mean,
• 13:45
  Speaker 1: the credit says that if you live in this home
• 13:48
  Speaker 1: two out of the five years that you that you've
• 13:50
  Speaker 1: owned it, that you get to exempt this two hundred
• 13:53
  Speaker 1: and fifty thousand dollars. And so I was like, oh
• 13:56
  Speaker 1: my god, why didn't you call us? Because now what
• 13:59
  Speaker 1: happens is because she sold it before the two years,
• 14:01
  Speaker 1: now she can't. Right now she can't take advantage of
• 14:05
  Speaker 1: the credit. But has she just known and held on
• 14:08
  Speaker 1: to it for freaking fifty months things?
• 14:11
  Speaker 2: Yeah, yeah, she's two months away.
• 14:13
  Speaker 1: Yeah dang, yeah, no, actually she was fifteen days she
• 14:17
  Speaker 1: was it was one year and eleven months. She only
• 14:19
  Speaker 1: needed to hold on to it for two years, so
• 14:24
  Speaker 1: she would have been she would have been exempt from taxes,
• 14:27
  Speaker 1: you know. So it's like knowing things like that is
• 14:30
  Speaker 1: really important because again, you're giving away money. Be offended,
• 14:35
  Speaker 1: like be I want people to get offended. I always say,
• 14:37
  Speaker 1: if I came to you and said, listen, I want
• 14:39
  Speaker 1: twenty percent of your house sales, sell your house and
• 14:41
  Speaker 1: then give me twenty percent, you would be highly offended.
• 14:45
  Speaker 1: You probably want to punch me right like, you would
• 14:48
  Speaker 1: be highly offended. But when it comes to taxes, people
• 14:52
  Speaker 1: don't understand it. So they just be like, Okay, I'm
• 14:53
  Speaker 1: gonna just pay it, but I want you I want
• 14:55
  Speaker 1: you guys to get offended and really do whatever you
• 14:58
  Speaker 1: feel that you can do to minimize your taxes, which
• 15:01
  Speaker 1: is just have the conversation right with with your CPA
• 15:04
  Speaker 1: or your accountant. And if you can't have that conversation
• 15:07
  Speaker 1: with them, then that means that you need to fire them, right,
• 15:09
  Speaker 1: because then that means that they're not for you anymore.
• 15:13
  Speaker 5: All right, So yeah, so we're gonna we're gonna get
• 15:15
  Speaker 5: into different type of tax deductions in detail. First, everybody
• 15:21
  Speaker 5: hit the like button and share please about to get
• 15:25
  Speaker 5: deep into it, but let's go over just the actual
• 15:29
  Speaker 5: brackets if we can, before we go into the different
• 15:33
  Speaker 5: type of strategy.
• 15:35
  Speaker 1: Yeah. So brackets are important, right, Brackets are important because
• 15:39
  Speaker 1: when you fall into a particular bracket, that is going
• 15:42
  Speaker 1: to determine the amount of taxes that you are going
• 15:45
  Speaker 1: to pay. Right, So, earlier I talked a lot about Hey, well,
• 15:49
  Speaker 1: you know, if you had a couple that weren't that
• 15:51
  Speaker 1: was investing in the stock market, and if they were
• 15:54
  Speaker 1: invested in the stock market, then they would be able
• 15:56
  Speaker 1: to you know, take a you know, sorry, they would
• 16:00
  Speaker 1: be able to make ninety thousand dollars an income and
• 16:02
  Speaker 1: pay zero taxes. But if you have that same person
• 16:05
  Speaker 1: that was like married, right they what are we looking at? Okay,
• 16:09
  Speaker 1: well we're looking at twelve percent right in taxes. So
• 16:12
  Speaker 1: I want you guys just to understand, as I mentioned,
• 16:14
  Speaker 1: the harder you work, the harder you the more taxes
• 16:17
  Speaker 1: you are going to pay. So at the top, what
• 16:19
  Speaker 1: you see under earn income, these are this is my
• 16:22
  Speaker 1: w two earners. This is my business owners right that
• 16:25
  Speaker 1: are that have LLCs, that has s corporations, partnerships. This
• 16:30
  Speaker 1: is your tax bracket. Okay, So it can be as
• 16:33
  Speaker 1: low as ten percent, and it can be as high
• 16:35
  Speaker 1: as thirty seven percent. What you have below is your
• 16:39
  Speaker 1: investment income. So your investment income can be as low
• 16:44
  Speaker 1: as zero percent, right, and then it can go as
• 16:47
  Speaker 1: high as twenty percent. I want you guys to realize.
• 16:51
  Speaker 1: Do you realize that no point is your earn income
• 16:53
  Speaker 1: not taxed at all? Do you see that it starts
• 16:57
  Speaker 1: out at ten percent, that's it, from zero to eleven,
• 17:01
  Speaker 1: like it's going to start out at ten percent. So
• 17:04
  Speaker 1: I want you guys to just really really understand, like
• 17:07
  Speaker 1: you know what this really means. And then I want
• 17:10
  Speaker 1: to highlight the corporate tax rate, because I know I
• 17:14
  Speaker 1: spoke a lot just about the you know, the corporate
• 17:16
  Speaker 1: tax rate and it being much lower. So somebody may,
• 17:19
  Speaker 1: you know, look at this and be like, Okay, well
• 17:21
  Speaker 1: I'm not going to be an LLC. I'm going to
• 17:22
  Speaker 1: be a corporation. But you have to just hold on.
• 17:26
  Speaker 1: Let's talk about corporations and how they're tax So corporations,
• 17:30
  Speaker 1: the business itself does pay twenty one percent in taxes,
• 17:34
  Speaker 1: so they do, they do pay twenty one percent in taxes.
• 17:37
  Speaker 1: But what happens is a corporation deals with what's called
• 17:40
  Speaker 1: double taxation. Right, So every person that invests in the
• 17:44
  Speaker 1: stop what happens they invest in this stop the company,
• 17:50
  Speaker 1: Let's just say they invest in Apple, Apple files their
• 17:54
  Speaker 1: corporate tax return and Apple pays taxes. Right, So Apple
• 17:58
  Speaker 1: pays taxes. Then what happens is they send you dividends.
• 18:01
  Speaker 1: And what happens when they send you a dibdend, you
• 18:06
  Speaker 1: got to pay taxes on it.
• 18:07
  Speaker 3: Unlucky reinvested, you can reinvest it, However, you have to
• 18:14
  Speaker 3: pay taxes on the dividends that they send you.
• 18:17
  Speaker 1: Right, they're going to send you your form. They're going
• 18:20
  Speaker 1: to send you have to file your the dividend income
• 18:24
  Speaker 1: that you receive from this business. So that's called double taxation.
• 18:27
  Speaker 1: So you as a shareholder, right, you have to pay taxes.
• 18:31
  Speaker 1: And then Apple had to pay taxes. So that's why
• 18:34
  Speaker 1: all the ultimately just forming a C corporation may not
• 18:38
  Speaker 1: be the best idea because now you're paying twenty one
• 18:41
  Speaker 1: percent on the corporate side. And now if it's just
• 18:44
  Speaker 1: you and the business, you are the shareholder. So now
• 18:47
  Speaker 1: that then goes over to you. So now you you
• 18:50
  Speaker 1: know you're looking at an additional twenty percent on the
• 18:53
  Speaker 1: dividend income.
• 18:54
  Speaker 5: Well, let's let's talk about that before we move on,
• 18:56
  Speaker 5: because that's a question a lot of people have. As
• 18:58
  Speaker 5: far as lcses corps and C corps. The difference is
• 19:03
  Speaker 5: and what is most beneficial as far as taxes.
• 19:06
  Speaker 1: Absolutely so my rule of thumb is if you are
• 19:10
  Speaker 1: making anywhere and this is profit, guys, if you are
• 19:14
  Speaker 1: profiting thirty five to forty thousand dollars or more I
• 19:19
  Speaker 1: mean sorry, or less, So thirty five to forty thousand
• 19:22
  Speaker 1: dollars or less, you should be an LLC. About again,
• 19:27
  Speaker 1: thirty five to forty thousand, I would let's just give
• 19:28
  Speaker 1: it a number. So let's just give it one number.
• 19:31
  Speaker 1: I would say, forty thousand dollars or less. You should
• 19:34
  Speaker 1: be an LLC. Forty thousand dollars to about four hundred
• 19:39
  Speaker 1: and fifty thousand dollars in the business, I would say
• 19:41
  Speaker 1: an escort. Anything above that the four hundred and fifty
• 19:45
  Speaker 1: thousand dollars. Now is time to consider being a C corporation, right, so,
• 19:51
  Speaker 1: and we'll talk about the reasons and why so with
• 19:55
  Speaker 1: an LLC. With an LLC, what happens is you are
• 19:59
  Speaker 1: the owner, Your profit is seen as your payroll. So
• 20:03
  Speaker 1: because your profit is considered your payroll, what happens is
• 20:07
  Speaker 1: that you have to pay Social Security tax on that
• 20:11
  Speaker 1: profit because they're looking at it as your payroll. Right,
• 20:14
  Speaker 1: So if they're looking at it as your payroll, they're like,
• 20:16
  Speaker 1: all right, well you have to pay Social Security tax
• 20:18
  Speaker 1: and Medicare tax. So you can have one person that
• 20:21
  Speaker 1: has making one hundred thousand dollars in this LLC. What
• 20:24
  Speaker 1: may what's going to happen is that you have to
• 20:27
  Speaker 1: pay self employment tax, which is fifteen point three percent.
• 20:31
  Speaker 1: So off the bat, you're paying fifteen thousand, three hundred
• 20:34
  Speaker 1: dollars a loan in self employment tax. I call it
• 20:37
  Speaker 1: the invisible tax. Everybody doesn't know they're paying tax, and
• 20:40
  Speaker 1: so like we'll show them their taxes and they're like,
• 20:42
  Speaker 1: oh my god, I never knew that I was paying
• 20:44
  Speaker 1: that tax. So it's a separate tax from income tax.
• 20:49
  Speaker 1: So then what happens is you have to pay that
• 20:51
  Speaker 1: self employment tax, which is made up of your Social
• 20:53
  Speaker 1: Security tax and Medicare tax. And then what happens is
• 20:57
  Speaker 1: you still have to pay your income taxes on that money.
• 21:00
  Speaker 1: So now what we do to reduce the amount of
• 21:04
  Speaker 1: money that we're paying in self employment taxes. Is we
• 21:07
  Speaker 1: will go ahead and we will start an S corporation.
• 21:11
  Speaker 1: So we'll convert our LLC over to an escort. Right,
• 21:14
  Speaker 1: So just keep in mind, guys, S corporation is not
• 21:17
  Speaker 1: an entity type. It is a tax election, which means
• 21:21
  Speaker 1: that if you're an LLC, you will need to fill
• 21:23
  Speaker 1: out Form twenty five p. Fifty three. And when you
• 21:26
  Speaker 1: fill out Form twenty five to fifty three, you would
• 21:28
  Speaker 1: then be able to send it into the IRS and
• 21:30
  Speaker 1: they'll acknowledge you and say, okay, we'll allow you to
• 21:33
  Speaker 1: be taxed as an S corporation. But what does that mean?
• 21:36
  Speaker 1: What are the requirements? The requirement is one, you have
• 21:40
  Speaker 1: to put yourself on salary. You have to pay yourself
• 21:42
  Speaker 1: a salary. And the other requirement is you have to
• 21:45
  Speaker 1: file your taxes every single year, regardless of how much
• 21:49
  Speaker 1: money you make. It's not an option that difference within
• 21:52
  Speaker 1: LLC and LLC. If you make four hundred dollars or less,
• 21:56
  Speaker 1: you don't have to file. That's fine with the ES
• 21:59
  Speaker 1: corpor doesn't matter. You have to file your taxes, okay.
• 22:02
  Speaker 1: So that is something that's really really important to understand now, corporations.
• 22:09
  Speaker 1: Corporations are great because corporations you're able to do. You're
• 22:15
  Speaker 1: able to have your corporate So I just talked about
• 22:18
  Speaker 1: the double taxation. But what some corporations will do, right
• 22:22
  Speaker 1: if you're if you're building, or you have any sort
• 22:24
  Speaker 1: of research and development, or any plans in place that
• 22:27
  Speaker 1: you that you intend to do. What corporations have the
• 22:31
  Speaker 1: ability to do is they're able to issue what's called
• 22:35
  Speaker 1: a plan and say, okay, well we are going we're
• 22:38
  Speaker 1: a technology company and we plan to I don't know,
• 22:42
  Speaker 1: invest in some AI and it's going to do all
• 22:44
  Speaker 1: these things in order to do that. I know, we
• 22:46
  Speaker 1: have a profit of two million dollars, but we need
• 22:50
  Speaker 1: to use a million dollars of that for this. What
• 22:53
  Speaker 1: happens is you are then able to draw up a
• 22:56
  Speaker 1: plan and show how you're going to allocate those funds.
• 22:59
  Speaker 1: And when you do that, then you'll be able to
• 23:02
  Speaker 1: basically back out that income. So now you would only
• 23:05
  Speaker 1: be paying taxes on a million dollars of it. Right,
• 23:07
  Speaker 1: So they're able to do that. They're also able to
• 23:10
  Speaker 1: give out stop options. So that's how the Amazon's the
• 23:12
  Speaker 1: general electorates the Googles. That's how they're able to save
• 23:16
  Speaker 1: so much in taxes because now they're giving out stop
• 23:18
  Speaker 1: options to their to their employees, right, which is a
• 23:22
  Speaker 1: tax benefit to them. So those are like when you
• 23:27
  Speaker 1: should be doing those things in terms of income. And
• 23:29
  Speaker 1: I did include like a little bit of strategies in
• 23:31
  Speaker 1: there as well, but yes, that's when you should be
• 23:34
  Speaker 1: kind of using those.
• 23:36
  Speaker 3: You know, when we were younger, man, we would go
• 23:38
  Speaker 3: out to eat, and this is kind of like one
• 23:40
  Speaker 3: of the benefits of being around an entrepreneur when you're
• 23:42
  Speaker 3: an employee working in the school district, and Rashall would
• 23:46
  Speaker 3: always ask.
• 23:47
  Speaker 2: Yeah, let me get the receipt, let me get the seat.
• 23:51
  Speaker 3: And I had no idea why he was taking their
• 23:53
  Speaker 3: receipts until I started to get educated on the process
• 23:55
  Speaker 3: and I'm like, oh, man, that's why he's thinking receipts.
• 23:58
  Speaker 1: That's why he wanted early talk.
• 24:00
  Speaker 3: I was like early twenties. It's like really like twenty
• 24:02
  Speaker 3: years ago at this point. And it goes to the
• 24:05
  Speaker 3: point where now you see a lot of people on
• 24:07
  Speaker 3: entrepreneurs they're in business or then I'll take care, I'm
• 24:11
  Speaker 3: gonna write this off. I'm gonna write that off. Can
• 24:13
  Speaker 3: we just get a breakdown on the things that actually
• 24:16
  Speaker 3: qualify as things that can be expensed. I remember being
• 24:19
  Speaker 3: a teacher and saying I'm a buy sneakers, and that's
• 24:21
  Speaker 3: part of my uniform code for I'm like, like, that's
• 24:23
  Speaker 3: not how.
• 24:24
  Speaker 1: You cannot do that.
• 24:26
  Speaker 2: Try this was a young this is exactly. This is
• 24:31
  Speaker 2: a younger me. I advocated myself that's fair.
• 24:34
  Speaker 5: But before you do, I just want to make this
• 24:36
  Speaker 5: point because a lot of people have questions. You can
• 24:38
  Speaker 5: if the LLC, you can always start as an LLC
• 24:42
  Speaker 5: and then transfer over to a C corp escorp. Because
• 24:45
  Speaker 5: that's something that's the common misconception. People think that like, oh,
• 24:49
  Speaker 5: you have to you like you have to start with
• 24:51
  Speaker 5: like a C corp or escort. Like, you can start
• 24:54
  Speaker 5: as an LLC, which is the easiest because you don't
• 24:56
  Speaker 5: have to pay yourself salary, you don't have to have
• 24:58
  Speaker 5: a board, you don't have have to have a lot
• 25:00
  Speaker 5: of other requirements that those other ones have. Right, But then,
• 25:03
  Speaker 5: like you said, once your once your business really starts
• 25:05
  Speaker 5: to boom, then you can always change the classification over right.
• 25:11
  Speaker 1: Absolutely, So I love ellcs because I think LLC's are well.
• 25:15
  Speaker 1: LLCs is what I call it. The flexible entity, like
• 25:18
  Speaker 1: you can start an LLC and then convert over to
• 25:20
  Speaker 1: an S corp, convert convert over to a C corp.
• 25:23
  Speaker 1: So I always recommend when you're starting a business to
• 25:26
  Speaker 1: start out as an LLC because now you can, you know,
• 25:29
  Speaker 1: change over to different entity types. Right, And that's another thing.
• 25:32
  Speaker 1: So I'm happy you bring that up for Shad. You
• 25:35
  Speaker 1: all have to understand that where you start is not
• 25:37
  Speaker 1: where you're going to finish. You have to be willing
• 25:39
  Speaker 1: to switch things up, change things up right in order
• 25:43
  Speaker 1: to save on taxes. So you can't be like, Okay,
• 25:45
  Speaker 1: I'm an LLC. I'm just going to remain an LLC. No,
• 25:48
  Speaker 1: you don't have to remain in LLC. You are going
• 25:50
  Speaker 1: to you know, you can then become an S corporation.
• 25:54
  Speaker 1: You can, you know, change your ownership, you can whatever
• 25:57
  Speaker 1: it is that you need to do to you know,
• 26:00
  Speaker 1: to uh fit the growth of your business. You have
• 26:04
  Speaker 1: to do it. We cannot stay stuck.
• 26:06
  Speaker 5: That was a great point, all right, Yeah, so let's
• 26:09
  Speaker 5: talk about these deductions if we can some of the
• 26:11
  Speaker 5: some of the deductions that people can take.
• 26:13
  Speaker 2: And obviously the Sneakers is not one of them.
• 26:15
  Speaker 1: Sneakers is not one of these. Come on, that is
• 26:21
  Speaker 1: not your uniform. It not a uniform. Okay, so let's
• 26:26
  Speaker 1: talk about first of all, let's get let's get Troy
• 26:29
  Speaker 1: sneakers out the way. Let's talk about how you can
• 26:33
  Speaker 1: make that as a business owner a deduction if you
• 26:36
  Speaker 1: put if you purchase a pair of sneakers and you
• 26:41
  Speaker 1: put your logo on them, then you can now write
• 26:45
  Speaker 1: them off like I've seen you guys with y y'all
• 26:47
  Speaker 1: sneakers before. That can now make it a tax deduction, right.
• 26:52
  Speaker 1: But you cannot just purchase sneakers, you know, when you
• 26:57
  Speaker 1: were an employee and just be like, oh, because I
• 26:59
  Speaker 1: went to put and I brought these sneakers, they are
• 27:01
  Speaker 1: now at tax deduction, right. And that also goes with clothes.
• 27:04
  Speaker 1: So a lot of people will say, well, how can
• 27:05
  Speaker 1: I write off this clothing? So you can write off,
• 27:08
  Speaker 1: you know, clothing that you purchase, however, and you have
• 27:11
  Speaker 1: to stit your logo in it. And it also can't
• 27:13
  Speaker 1: be excessive, like you can't say, oh, I'm gonna go
• 27:16
  Speaker 1: out and buy a Gucci shirt and then I'm gonna
• 27:18
  Speaker 1: like put my business on there, and then I'm gonna
• 27:21
  Speaker 1: be able to write it off, right, So it has
• 27:22
  Speaker 1: to be reasonable. You purchase a reasonable shirt you want to,
• 27:25
  Speaker 1: you know, put your logo on it, you can then
• 27:28
  Speaker 1: you know, write that off. So that's how that works,
• 27:31
  Speaker 1: all right. But let's talk about expenses, right, What does
• 27:34
  Speaker 1: it mean? Because I do get a lot of outlandish
• 27:37
  Speaker 1: requests and inquiries about what can be written off. And
• 27:41
  Speaker 1: keep in mind, guys, there's hundreds of things that can
• 27:43
  Speaker 1: be written off. This is like the number one question
• 27:47
  Speaker 1: that I get all the time. So I like literally
• 27:51
  Speaker 1: wrote a book about it, like there's hundreds of deductions
• 27:56
  Speaker 1: because I mean I wrote the book because there's literally
• 28:00
  Speaker 1: hundreds of the deductions that you guys can write off.
• 28:02
  Speaker 6: Right.
• 28:02
  Speaker 1: But let's talk about what classifies something as an expense.
• 28:06
  Speaker 1: According to the IRS, it has to be an ordinary
• 28:10
  Speaker 1: and necessary expense. Ordinary meaning ordinarily in your industry people
• 28:15
  Speaker 1: are spending money on it. Necessary meaning that it is
• 28:18
  Speaker 1: necessary for you to spend this money or encour this
• 28:22
  Speaker 1: expense in order for you to operate your business. Okay,
• 28:26
  Speaker 1: So just to get that out the way, and I
• 28:29
  Speaker 1: always say to people, when you want to start talking
• 28:32
  Speaker 1: about how outlandish the things are, right, think about if
• 28:34
  Speaker 1: you were sitting across from an IRS agent and you
• 28:37
  Speaker 1: had to explain to them like, yeah, I needed to
• 28:41
  Speaker 1: purchase this right in order to make this happen. Like
• 28:44
  Speaker 1: does that sound logical? Right? Because sometimes people will try
• 28:47
  Speaker 1: to take it to the moon and I'm like, yeah, no,
• 28:50
  Speaker 1: let's keep it, you know, let's keep it reasonable. That
• 28:53
  Speaker 1: is what the IRS is all about. Things being reasonable
• 28:57
  Speaker 1: and you being able to and you having your documentation. Okay,
• 29:01
  Speaker 1: you need documentation. So let's just talk about a few
• 29:05
  Speaker 1: very popular expenses. So your CPA services. That put me first,
• 29:09
  Speaker 1: just because I need you guys to understand that you
• 29:12
  Speaker 1: need a CPA and you need an accountant, and an
• 29:15
  Speaker 1: accountant is going to be able to guess you'll have
• 29:17
  Speaker 1: to pay your accountant, but it is a tax deduction
• 29:20
  Speaker 1: and then they should also be able to save you money,
• 29:22
  Speaker 1: so it is a win win. So any legal services. Education,
• 29:26
  Speaker 1: so you guys are going to conferences, you know, investing
• 29:29
  Speaker 1: in your education, purchasing books, you know, investing in mentorships,
• 29:35
  Speaker 1: like all of these things are tax deductible. Why because
• 29:38
  Speaker 1: it is a necessary expense in order for you to
• 29:41
  Speaker 1: develop in your business. And that's what I love about business, right,
• 29:44
  Speaker 1: Like we get to really invest in ourselves and it's
• 29:47
  Speaker 1: a tax deduction, so consultants meals.
• 29:52
  Speaker 5: So this and this is for business. This is for
• 29:53
  Speaker 5: business owners only.
• 29:54
  Speaker 1: Right, this business owners.
• 29:56
  Speaker 5: So so if for a business owner, if you we're
• 30:00
  Speaker 5: going to invest Fest, let's say, right, and you buy
• 30:02
  Speaker 5: a ticket to invest Fest, and then you know the
• 30:05
  Speaker 5: travel of course you gotta fly and get a hotel,
• 30:08
  Speaker 5: so you can you can deduct that.
• 30:10
  Speaker 1: Absolutely, you can deduct the ticket, purchase the flight, the hotel,
• 30:15
  Speaker 1: the meals while you're there, the transportation get into and from.
• 30:19
  Speaker 5: Absolutely, because because it would be for the betterment of
• 30:23
  Speaker 5: your business. You're there and you're promoting your business, you're marketing,
• 30:27
  Speaker 5: you're talking to different people, so you're you're right, that's why.
• 30:32
  Speaker 1: And the only thing you need to do is you
• 30:34
  Speaker 1: need to keep confirmation that you purchase your ticket, obviously,
• 30:37
  Speaker 1: and a good thing about all of these things is
• 30:39
  Speaker 1: they're digital, right, so you know you keep that, you
• 30:42
  Speaker 1: keep your hotel record and obviously all of your receipts,
• 30:46
  Speaker 1: and it is a text deduction. Okay, reason you haven't
• 30:53
  Speaker 1: especially played yourself. You double played.
• 30:55
  Speaker 5: Yourself, all right, So consultants, you said, consultants.
• 31:02
  Speaker 1: Yep, consultants meals travel, so business travel, though, I want
• 31:06
  Speaker 1: to make me talk about.
• 31:08
  Speaker 5: Let's talk about the meals. Okay, there's some that's you
• 31:12
  Speaker 5: gotta let's explain that.
• 31:14
  Speaker 1: Let's explain meals. Okay, guys, meals. Meals. You can write
• 31:19
  Speaker 1: off fifty percent. Here's the idea. If you are having
• 31:23
  Speaker 1: a meeting with a client, the IRS says, hey, you
• 31:26
  Speaker 1: can write off and no way are we paying for
• 31:29
  Speaker 1: your meals? Right, but you can write all fifty percent
• 31:33
  Speaker 1: of it because the idea is that you are having
• 31:37
  Speaker 1: you are having dinner with clients. And then if you
• 31:41
  Speaker 1: are having dinner with clients, then you know their portion
• 31:45
  Speaker 1: is deductible, yours is not. So that's why you can
• 31:49
  Speaker 1: write all fifty percent of your meal. So fifty percent
• 31:52
  Speaker 1: of your meals can be deducted. I want you all
• 31:55
  Speaker 1: to understand that this line item is and thank you
• 31:58
  Speaker 1: for shop for making me go back to this, because
• 32:00
  Speaker 1: this is one of the highest U audit line items.
• 32:05
  Speaker 1: And the reason why is because people are on like
• 32:08
  Speaker 1: for shot, like oh let me get that receipt You
• 32:10
  Speaker 1: have to keep your receipts because the government is like, okay,
• 32:14
  Speaker 1: well we know I'm going to tell you it is
• 32:17
  Speaker 1: the highest audit line items on a business owner's tax
• 32:20
  Speaker 1: return is meals, travel, and vehicle Okay, And the reason
• 32:26
  Speaker 1: why is because you need extensive documentation to support these things.
• 32:31
  Speaker 1: And when I say extensive, I mean that it's a
• 32:33
  Speaker 1: lot of small transactions right that equal off into this
• 32:36
  Speaker 1: big transaction. So for your meals, you need to hold
• 32:39
  Speaker 1: on to your receipts.
• 32:41
  Speaker 5: So for the receive things though, because most people are
• 32:43
  Speaker 5: not going to carry their receipts. So what's the best
• 32:46
  Speaker 5: option outside of that? Is it to use a credit card,
• 32:48
  Speaker 5: a business credit card where it can track your transactions.
• 32:51
  Speaker 2: Or or is it an app?
• 32:52
  Speaker 3: I know sometimes people are using app that takes a
• 32:55
  Speaker 3: picture to seat and now it's saved this from digitally.
• 32:57
  Speaker 1: Absolutely, so it's both. So let's just talk about when
• 32:59
  Speaker 1: you go out in the receipt and what it should have. Right,
• 33:02
  Speaker 1: if you have a meal, the receipt that you have,
• 33:06
  Speaker 1: So let's talk about the receipt and then let's talk
• 33:07
  Speaker 1: about how to actually hold on to the receipt and
• 33:10
  Speaker 1: what you need to do. So for the receipt, right,
• 33:13
  Speaker 1: the receipt needs to have the date, the amount, who
• 33:17
  Speaker 1: you went to dinner with or lunch with or whoever,
• 33:21
  Speaker 1: like who was the like who did you go with?
• 33:23
  Speaker 1: What did you guys discuss? Right, so you need to
• 33:27
  Speaker 1: have all of these things written down, like you need
• 33:29
  Speaker 1: to know all of these things. And what I do is,
• 33:32
  Speaker 1: when I get the receipt, I'll say, Okay, I went
• 33:34
  Speaker 1: out with Sean and Troy. You know this is what
• 33:37
  Speaker 1: we you know, talked about, like this is what you know,
• 33:41
  Speaker 1: like we were meeting to review taxes. And then you
• 33:45
  Speaker 1: know then out well, all the date, the amount, and
• 33:49
  Speaker 1: the place is already on the It's on the receipt, right,
• 33:53
  Speaker 1: so you just need to identify, like what was your
• 33:54
  Speaker 1: business reason for being there? That's the only thing that
• 33:57
  Speaker 1: the IRS wants to know, right, what was your business
• 33:59
  Speaker 1: reason for being there? So then from there, Rasha to
• 34:02
  Speaker 1: your point, you have to hold onto those receipts, right,
• 34:06
  Speaker 1: So you have to hold onto those receipts. But not
• 34:08
  Speaker 1: everyone is going to be able to hold onto a
• 34:10
  Speaker 1: physical receipt. I'm one of those people. Receipts they crumble,
• 34:14
  Speaker 1: they fade, they're all over the place. So what I
• 34:16
  Speaker 1: do is I take a photo of them. I'll take
• 34:19
  Speaker 1: a photo of them on my phone and then what
• 34:20
  Speaker 1: I do is I and my account and software, so
• 34:24
  Speaker 1: I use quick Books. So quick Books has a feature
• 34:27
  Speaker 1: where it allows you to upload the receipt and attach
• 34:29
  Speaker 1: it to the transaction. So that makes it really helpful
• 34:33
  Speaker 1: to do that. Or if you're a person that you know,
• 34:35
  Speaker 1: let's say you want to upload into your Google drive
• 34:38
  Speaker 1: or and you know what's so crazy, Troy, you gave
• 34:40
  Speaker 1: me that idea one year when you were like, I
• 34:43
  Speaker 1: was asking you for a receipt for something and you
• 34:45
  Speaker 1: were like, oh, let me just go back in my
• 34:47
  Speaker 1: photos and I could just look in my photos because
• 34:51
  Speaker 1: it'll match to D And so now I give that
• 34:53
  Speaker 1: that strategy out to everybody.
• 34:54
  Speaker 2: So thank you trusting me.
• 34:57
  Speaker 1: I thank you because a lot of times, if you,
• 35:01
  Speaker 1: let's say you you know, you'll know when the transaction happens.
• 35:04
  Speaker 1: So if you put the date in the search bar
• 35:06
  Speaker 1: of your phone, you'll be able to pull it up.
• 35:08
  Speaker 1: You'll know exactly who you were with while you were there.
• 35:10
  Speaker 1: You know, you should have a photo in your phone
• 35:12
  Speaker 1: of the of the receipt. I wouldn't say keep all
• 35:15
  Speaker 1: don't keep the photos there, right, but originally take the
• 35:17
  Speaker 1: photo on your phone and then you know, attach it
• 35:20
  Speaker 1: to quick bolts or upload it into Google drive, like whatever,
• 35:22
  Speaker 1: whatever your process is, figure out the process and stick
• 35:26
  Speaker 1: to it.
• 35:26
  Speaker 3: Yeah, I would just just add to that what you're
• 35:30
  Speaker 3: saying is one hundred percent factual. Having documentation is super important.
• 35:34
  Speaker 3: The last thing you want to see at the end
• 35:35
  Speaker 3: of the year, especially if you're a business owner. It's
• 35:38
  Speaker 3: uncategorized transactions.
• 35:42
  Speaker 2: It is.
• 35:43
  Speaker 3: It's the most tedious thing you ever have to look at.
• 35:46
  Speaker 3: You don't want to do it. So the best thing
• 35:48
  Speaker 3: to do is make sure just document it. When when
• 35:50
  Speaker 3: you're doing something, document it, label it. When you send
• 35:52
  Speaker 3: the money, just label it. It's going to say yourself
• 35:55
  Speaker 3: a lot of time and energy and hassle. So just
• 35:57
  Speaker 3: document the process.
• 35:58
  Speaker 1: Speaking from experience, you know, you know, you know, and
• 36:04
  Speaker 1: then try to do it on a more frequent basis.
• 36:06
  Speaker 1: Like now we're like sending over those uncategorized transactions over
• 36:10
  Speaker 1: to you guys, like every two weeks, every two to
• 36:13
  Speaker 1: three weeks. I know. Try. I'm so sorry, but it
• 36:15
  Speaker 1: makes the part, It makes it easy about the taxes later.
• 36:18
  Speaker 2: I appreciate you, no problem.
• 36:22
  Speaker 1: All right, So let's talk about some deductions. Right, Let's
• 36:25
  Speaker 1: talk about some other deductions. So we're clear on that right.
• 36:28
  Speaker 1: If it is deductive, I mean, if it is ordinary
• 36:31
  Speaker 1: or necessary, you can expense it as a business owner.
• 36:35
  Speaker 1: All right, So now let's talk about. What I want
• 36:37
  Speaker 1: to talk about is the shifting of expenses from your
• 36:42
  Speaker 1: personal over into your business. And this income ship, I mean,
• 36:45
  Speaker 1: this extensive thing really is just saying, hey, these are
• 36:48
  Speaker 1: expenses that you're already utilizing in your business. So if
• 36:51
  Speaker 1: there's expenses that you're already utilizing in your business, how
• 36:55
  Speaker 1: about we, you know, switch those like over to your
• 36:58
  Speaker 1: business because you're utilizing them. So let's talk about the infamous.
• 37:02
  Speaker 1: Let's take it back real quick. Let's talk about vehicles.
• 37:04
  Speaker 1: Let's talk vehicles. Let's take it back and let's start
• 37:10
  Speaker 1: out there. So with a vehicle, if you are leasing
• 37:14
  Speaker 1: your vehicle, if you are financing your vehicle, there's still
• 37:17
  Speaker 1: an opportunity for you to take a tax deduction. So
• 37:20
  Speaker 1: if you're leasing the vehicle, and guys, keep in mind,
• 37:22
  Speaker 1: because I get this question all the time. In order
• 37:25
  Speaker 1: for me to write off my vehicle, do I have
• 37:26
  Speaker 1: to own it? The irs does not care who owns
• 37:30
  Speaker 1: your vehicle. They don't care if it's you or the business.
• 37:33
  Speaker 1: What they care about is your business use of the vehicle. Okay.
• 37:38
  Speaker 1: So if you have your personal vehicle and you are
• 37:41
  Speaker 1: utilizing it for business, you can still take the tax deduction. Okay.
• 37:45
  Speaker 1: So if you're leasing the vehicle and you utilize the
• 37:47
  Speaker 1: vehicle fifty percent of you know, fifty percent of the
• 37:50
  Speaker 1: time for business, you can take fifty percent of the
• 37:52
  Speaker 1: lease payments, fuel repairs, registration, you can take all of
• 37:57
  Speaker 1: those expenses up to fifty percent. Right. So if your
• 38:00
  Speaker 1: finance and the vehicle, then we have to do what's
• 38:03
  Speaker 1: called depreciation because now that's an asset. You own it.
• 38:06
  Speaker 1: You're not leasing it in renting it, right, so you're
• 38:08
  Speaker 1: owning it, so you have to do what's called depreciation. Depreciation.
• 38:12
  Speaker 1: All depreciation is is the process of being able to
• 38:17
  Speaker 1: deduct the value of your asset. That's all it is
• 38:20
  Speaker 1: over time. And the IRS says what that time is.
• 38:23
  Speaker 1: They determine what the time is, so they say, okay,
• 38:26
  Speaker 1: well a home is I mean not a home. Sorry.
• 38:28
  Speaker 1: They'll say a vehicle can be depreciated over five years.
• 38:33
  Speaker 1: They'll say a cell phone can be depreciated over five years.
• 38:37
  Speaker 1: A home can be depreciated over twenty seven and a
• 38:39
  Speaker 1: half years. So the IRS gives you what you know
• 38:42
  Speaker 1: what that looks like. So if there is no guesswork,
• 38:46
  Speaker 1: So what happens is if you do have a vehicle
• 38:48
  Speaker 1: that you're financing, and you utilize it fifty percent, then
• 38:52
  Speaker 1: you will your depreciation. So let's just say you had
• 38:55
  Speaker 1: a vehicle fifty thousand dollars. What will happen is that
• 38:58
  Speaker 1: you'll be able to depreciate fifty percent of it. Right,
• 39:01
  Speaker 1: So let's say the the tax deduction should have been
• 39:05
  Speaker 1: ten thousand dollars because you divided by five, what would
• 39:08
  Speaker 1: have What would happen is that you would be able
• 39:11
  Speaker 1: to take a tax deduction of five thousand dollars in
• 39:14
  Speaker 1: depreciation expense on top of your fuel and the maintenance
• 39:18
  Speaker 1: and all those things. Right, that wouldn't change, But it's
• 39:21
  Speaker 1: just about how you treat that actual payment if it's
• 39:25
  Speaker 1: least versus if it is finance. Now let's just go
• 39:28
  Speaker 1: back real quick. Let's take it back twenty nineteen. We
• 39:31
  Speaker 1: talked about six thousand pound roll and at that moment
• 39:36
  Speaker 1: I broke down how if your vehicle is over six
• 39:39
  Speaker 1: thousand pounds that you would be able to write off
• 39:42
  Speaker 1: one hundred percent of it. What happens now is you
• 39:45
  Speaker 1: only can write a sixty percent of it, so let's
• 39:47
  Speaker 1: just talk about why and all of those things. That's
• 39:50
  Speaker 1: gorl So in twenty nineteen we were still in the
• 39:53
  Speaker 1: window of being able to write off the being able
• 39:57
  Speaker 1: to write off one hundred percent. So the tax and
• 40:00
  Speaker 1: jobs at implements it what's called bonus suit Erners.
• 40:04
  Speaker 2: What's up?
• 40:04
  Speaker 3: You ever walk into a small business and everything just
• 40:07
  Speaker 3: works like the checkout is fast, the receipts are digital,
• 40:10
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• 40:13
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• 40:18
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• 40:30
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• 40:34
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• 40:37
  Speaker 3: just thinking about launching something soon, Square is hands down
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• 40:58
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• 41:07
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  Speaker 7: An illegal alien from Guatemala charged with raping a child
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• 42:10
  Speaker 7: some of the heinous migrant criminals caught because of President
• 42:13
  Speaker 7: Donald J. Trump's leadership. I'm Christy Noman, the United States
• 42:17
  Speaker 7: Secretary of Homeland Security. Under President Trump, attempted illegal border
• 42:22
  Speaker 7: crossings are at the lowest levels ever recorded, and over
• 42:25
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• 42:29
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• 42:33
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• 42:40
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• 42:44
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• 42:46
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• 42:47
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• 42:52
  Speaker 8: Sponsored by the United States Department of Homeland.
• 42:53
  Speaker 1: Security Appreciation Bonus Appreciation start it on November twenty seventh
• 42:59
  Speaker 1: and twenty seven andeen, and basically it's going to go
• 43:02
  Speaker 1: all the way into twenty twenty seven. However, as of
• 43:05
  Speaker 1: twenty twenty two, that was the last year you'll be
• 43:08
  Speaker 1: able to take one hundred percent, right, So that's the
• 43:11
  Speaker 1: last year you'll be able to take one hundred percent.
• 43:14
  Speaker 1: Every single year after that, it's going to decrease by
• 43:16
  Speaker 1: twenty percent until it phases out. So what that means
• 43:20
  Speaker 1: is in twenty twenty three you only can take eighty percent,
• 43:23
  Speaker 1: and twenty twenty four you only can take sixty percent.
• 43:25
  Speaker 1: So if any of you are new to this conversation
• 43:28
  Speaker 1: about bonus appreciation and writing the asset off, and you
• 43:32
  Speaker 1: know all of those things, and what happens is, you
• 43:34
  Speaker 1: know you you miss you missed the train, but you
• 43:39
  Speaker 1: didn't totally miss it, right, you you're still here. You
• 43:42
  Speaker 1: can take sixty percent, you just can't take one hundred
• 43:44
  Speaker 1: and so next year it'll be forty percent, twenty percent
• 43:47
  Speaker 1: until it completely phases out in twenty twenty seven.
• 43:50
  Speaker 5: So so all right, So for six thousand pounds, if
• 43:53
  Speaker 5: you buy a car a SUV, and it was started
• 43:55
  Speaker 5: by George Bush, I think originally to give it incentives
• 44:00
  Speaker 5: to the gas companies because SUVs obviously used more gas,
• 44:05
  Speaker 5: so he wanted to incentivize people to buy SUVs. So
• 44:08
  Speaker 5: they started to rule the six thousand pounds rule. Right, So, okay,
• 44:11
  Speaker 5: if you buy a car that's over six thousand pounds,
• 44:13
  Speaker 5: let's say a g wagon, right, it's over six thousand pounds. Yes,
• 44:19
  Speaker 5: And let's say you buy it for two hundred thousand dollars, right,
• 44:22
  Speaker 5: So now you buy a two hundred thousand dollars g
• 44:24
  Speaker 5: Wagon for It's so currently in twenty twenty four is
• 44:30
  Speaker 5: sixty percent, and then in twenty twenty five is forty percent.
• 44:33
  Speaker 5: So what is that? What does that actually mean? Because
• 44:36
  Speaker 5: most people aren't going to pay two hundred thousand dollars cash,
• 44:39
  Speaker 5: but let's say hypothetically they were. Let's say hypothetically they
• 44:41
  Speaker 5: paid twenty thousand dollars gas, and let's do what most
• 44:44
  Speaker 5: people would do. They would probably finance the car, right,
• 44:49
  Speaker 5: or at least the car finance. So let's kind of explain, like,
• 44:52
  Speaker 5: how what is sixty percent of your car payments? What
• 44:56
  Speaker 5: is it?
• 44:57
  Speaker 1: It's sixty percent of the value because it is an asset.
• 45:01
  Speaker 1: So because it is an asset, what happens is that
• 45:04
  Speaker 1: you are able to deduct the value of the asset.
• 45:09
  Speaker 1: So with so to your point, it's if you finance it,
• 45:14
  Speaker 1: it is not the payment, it is the asset value.
• 45:16
  Speaker 1: So if let's say in your case where you just mentioned,
• 45:19
  Speaker 1: someone purchased a g Wagon it's two hundred thousand dollars
• 45:22
  Speaker 1: in twenty twenty four, they'll be able to take one
• 45:25
  Speaker 1: hundred and twenty thousand dollars tax deduction right against their income.
• 45:29
  Speaker 1: It is now going to it's a line item. They
• 45:31
  Speaker 1: can take that deduction. Now, what happens is the remaining
• 45:34
  Speaker 1: what is that the remaining eighty thousand dollars, they'll depreciate
• 45:38
  Speaker 1: it over the remaining four years. Right, So now that
• 45:41
  Speaker 1: would just be a tax deduction that they'll receive over
• 45:43
  Speaker 1: the remaining four years. So twenty thousand dollars every single year.
• 45:48
  Speaker 3: Now, that's if you if you finance it, right, But
• 45:50
  Speaker 3: also if you finance it, leasing is also an option too,
• 45:53
  Speaker 3: And I think we covered that, like obviously on the
• 45:57
  Speaker 3: personal we said all right, well let's figure out this
• 45:59
  Speaker 3: six thousand pound rule. We did that, but then this
• 46:01
  Speaker 3: year we said we still can need some deductions. So
• 46:05
  Speaker 3: talk about having an EV and how that can help,
• 46:07
  Speaker 3: especially in different states.
• 46:08
  Speaker 1: Yes, so an EV, the EV credit, And one thing
• 46:11
  Speaker 1: I want to point out to people that the EV
• 46:12
  Speaker 1: credit is a reflection of understanding that when the government
• 46:17
  Speaker 1: wants us to do something, they're going to incentivize us
• 46:19
  Speaker 1: through tax credits. Right, It's just as simple. They know
• 46:22
  Speaker 1: what's going to get us moving, They know you give
• 46:25
  Speaker 1: them money, they gonna do it. Right. So basically the
• 46:28
  Speaker 1: EV credit, you can get up to seventy five hundred
• 46:31
  Speaker 1: dollars credit, right, And the difference between a tax deduction
• 46:34
  Speaker 1: and a credit is a credit is like cash, Like, hey,
• 46:37
  Speaker 1: dollar for dollar, here's the money to you. You can
• 46:41
  Speaker 1: have this seven up to seventy five hundred dollars right
• 46:43
  Speaker 1: for the EV credit. So what happened, Well, now what
• 46:47
  Speaker 1: they're doing. Prior to twenty twenty four, they were allowing
• 46:50
  Speaker 1: you to file it on your taxes and then you
• 46:52
  Speaker 1: will get the tax refund through your taxes. Now what
• 46:56
  Speaker 1: they are doing, which I don't I think the previous
• 46:59
  Speaker 1: wave was better, but they are allowed they are deducting
• 47:04
  Speaker 1: that EV credit from the value of the vehicle, so
• 47:08
  Speaker 1: you can get the seventy five hundred dollars, but then
• 47:10
  Speaker 1: interest is going to eat it up. So that's why
• 47:12
  Speaker 1: I'm like, yeah, I don't really like that way, but again,
• 47:16
  Speaker 1: it's still a credit. It's still reducing the value of
• 47:18
  Speaker 1: your vehicle. Buy the seventy five hundred dollars. So you guys, listen,
• 47:22
  Speaker 1: if you're interested in the electric vehicle, then go for it.
• 47:25
  Speaker 1: You can get up seventy five hundred dollars simply by
• 47:29
  Speaker 1: you know, getting an electric vehicle.
• 47:31
  Speaker 3: Yeah, and then some states have like New York has
• 47:33
  Speaker 3: a drive clean rebate, So if you have an EV
• 47:35
  Speaker 3: car that's a drive clean rebate, you can get up
• 47:37
  Speaker 3: to another twenty five hundred. So you're talking about almost
• 47:39
  Speaker 3: ten thousand dollars.
• 47:40
  Speaker 1: Now you have state side. Yep, you have your state
• 47:42
  Speaker 1: side as well. And that's the same thing with solar
• 47:44
  Speaker 1: panels like you have. If you ever sat down and
• 47:46
  Speaker 1: talked to someone about solar panels, they're like, no, it's
• 47:48
  Speaker 1: like basically one hundred percent free because you're going to
• 47:50
  Speaker 1: get the tax credit, which is true. You get a
• 47:53
  Speaker 1: tax credit on the federal side, and you get a
• 47:54
  Speaker 1: tax credit on the state side. Right, because again, they
• 47:58
  Speaker 1: want us to have these things, and they know how
• 48:00
  Speaker 1: to get people moving. Tax deduction's tax credits. It's just
• 48:04
  Speaker 1: the name of the game for sure. All right. So
• 48:07
  Speaker 1: let's talk about king.
• 48:09
  Speaker 5: Before we go there. So what is it better to
• 48:12
  Speaker 5: lease a car or is it better to buy a car?
• 48:15
  Speaker 1: It depends on the car. So it depends on the car.
• 48:19
  Speaker 1: In terms from a tax perspective, it really depends. It
• 48:24
  Speaker 1: really depends because you could have those lease payments, and
• 48:27
  Speaker 1: depending on how much your lease payments is, it can
• 48:29
  Speaker 1: still be pretty significant. But and that's what I hate
• 48:34
  Speaker 1: to give the answer like it depends, But this is
• 48:36
  Speaker 1: really one of those things where it's like the factors
• 48:39
  Speaker 1: that I look at is how much are your lease payments?
• 48:42
  Speaker 1: How much is the value of your vehicle? Because sometimes
• 48:45
  Speaker 1: we can't we have to look at things from all sides,
• 48:47
  Speaker 1: So we have to understand does it cost you more
• 48:50
  Speaker 1: to finance? Do you really want to hold onto this vehicle?
• 48:53
  Speaker 1: Obviously it's a vehicle, so it is going to depreciate.
• 48:56
  Speaker 1: Do you have plans to sell it? Are you the
• 48:58
  Speaker 1: type of person to sell your vehicles after one or
• 49:01
  Speaker 1: two years? So for my people that's like in and
• 49:03
  Speaker 1: out of cars consistently, it may make more sense to lease,
• 49:07
  Speaker 1: right because you have to look at the tax credit. Yes,
• 49:10
  Speaker 1: but then now looking at the value of the vehicle,
• 49:12
  Speaker 1: and that trade and value may not be as worth
• 49:14
  Speaker 1: it where something like a g wagon it sustains its value, right,
• 49:19
  Speaker 1: So financing it is like a no brainer because it's like,
• 49:22
  Speaker 1: you know, you can literally go trade it in years
• 49:25
  Speaker 1: from now and it'll still have a really good value.
• 49:28
  Speaker 1: So I do think it really depends on the value,
• 49:33
  Speaker 1: you know, because again, like you could have a you
• 49:35
  Speaker 1: can have a you know, a vehicle that's not as much,
• 49:38
  Speaker 1: so that means your depreciation isn't as much, you know,
• 49:42
  Speaker 1: So I would just always compare it. But guys, these
• 49:44
  Speaker 1: are conversations that you should be having with your CPA.
• 49:46
  Speaker 1: They can compare it, like we can compare that. That's
• 49:49
  Speaker 1: like a tax plan. Guys, Hey, should I lease or
• 49:52
  Speaker 1: should I finance?
• 49:53
  Speaker 5: Either way? Is it still a deduction?
• 49:57
  Speaker 1: Yes, yes, yes, it's still a deduction. So yes, I
• 49:59
  Speaker 1: started out by saying the least payments is still a
• 50:01
  Speaker 1: tax deduction when you do it, it'll be let's say,
• 50:04
  Speaker 1: if it's let's say you utilize this vehicle. Let's say
• 50:07
  Speaker 1: you have two vehicles, and you utilize this one vehicle
• 50:10
  Speaker 1: one hundred percent of the time for business, one hundred
• 50:12
  Speaker 1: percent of the lease payments will be a tax deduction.
• 50:15
  Speaker 1: One hundred percent of the fuel, the registration, all of
• 50:18
  Speaker 1: those things will be still be a tax deduction. Yep,
• 50:22
  Speaker 1: if you lease.
• 50:24
  Speaker 3: All right, huh, So let's talk about your children with
• 50:27
  Speaker 3: these kids, man, let's put.
• 50:31
  Speaker 1: These kids to work, all right. Let's talk about hiring
• 50:35
  Speaker 1: your children. I know that we've talked about this a
• 50:38
  Speaker 1: lot in terms of like hiring your children, or you
• 50:41
  Speaker 1: guys may see like hiring your children and what that
• 50:44
  Speaker 1: all means, and you know how to really maximize and
• 50:49
  Speaker 1: I love the concept of hiring your children, but I
• 50:51
  Speaker 1: want to allow you, guys, and I want to talk
• 50:53
  Speaker 1: about taking it a step further and really investing in
• 50:55
  Speaker 1: your child's future and making it like a triple tax deduction.
• 50:59
  Speaker 1: So let's talk about hiring your children. Right. So, hiring
• 51:02
  Speaker 1: your children in the year twenty twenty four, you can
• 51:05
  Speaker 1: pay them up to fourteen than six hundred dollars. Okay.
• 51:08
  Speaker 1: What you cannot do is you cannot contribute take that
• 51:11
  Speaker 1: money and contribute it towards food and shelter. So you
• 51:14
  Speaker 1: cannot have them work and then say you owe me
• 51:17
  Speaker 1: rent and pay for your own food. You cannot do that, okay.
• 51:21
  Speaker 1: But what you can do with the money is you
• 51:23
  Speaker 1: can pay for extracurricular activities. It's their money. But what
• 51:28
  Speaker 1: you should be considered and what you should be thinking
• 51:30
  Speaker 1: about is taking it and investing it into a roth ira.
• 51:34
  Speaker 1: So if you take that money and you invest it
• 51:35
  Speaker 1: into a roth ira, here's how you're able to get
• 51:38
  Speaker 1: a triple tax deduction. One, it's a tax deduction from
• 51:42
  Speaker 1: your business. Then when your child receives the fourteen thousand,
• 51:46
  Speaker 1: six hundred dollars, it is not a tax. It's not taxable. Right,
• 51:50
  Speaker 1: it's not taxable because it's under the standard deduction amount.
• 51:54
  Speaker 1: And then what happens when you invest in a roth
• 51:56
  Speaker 1: ira It is going to be able to take advantage
• 51:59
  Speaker 1: and take into account compound interest. Right, So now you're
• 52:02
  Speaker 1: building a retirement account and you're able to do that,
• 52:06
  Speaker 1: and when it's time to get the money out of
• 52:08
  Speaker 1: that account, it's going to be tax free. So that's
• 52:11
  Speaker 1: why I love the conversation about paying your children, because
• 52:14
  Speaker 1: now it's like, all right, now, let's think about paying
• 52:16
  Speaker 1: your children and taking it a step further versus just saying, okay,
• 52:20
  Speaker 1: it's just a tax deduction. No, let's let's get a
• 52:22
  Speaker 1: triple tax deduction out of this. Right, So I think
• 52:26
  Speaker 1: that that I love.
• 52:27
  Speaker 5: Let's let's put a plan. I know you're going to
• 52:29
  Speaker 5: go through like an example for that, But so for parents,
• 52:34
  Speaker 5: like you know, if you have a business, you can
• 52:37
  Speaker 5: pay fourteen six hundred, fourteen thousand, six hundred to year
• 52:41
  Speaker 5: child So the benefit with that, like you said, is
• 52:43
  Speaker 5: that if you're going to give your child money anyway,
• 52:46
  Speaker 5: then you might as well give them money and have
• 52:48
  Speaker 5: them as an employee. You don't have to go through
• 52:51
  Speaker 5: all of the like have them on like officially on
• 52:54
  Speaker 5: a payroll, right, and it's a tax deduction to you
• 52:58
  Speaker 5: as opposed to you just giving them allowed. Now you
• 53:00
  Speaker 5: don't benefit from that.
• 53:02
  Speaker 1: That should be done through an LLC because I get
• 53:05
  Speaker 1: that a lot, and I get that question a lot.
• 53:07
  Speaker 1: That should be done through an LLC, not anes corporation
• 53:09
  Speaker 1: because if you have ANX corporation, you have to put
• 53:12
  Speaker 1: them on payroll, right, that has to be done through
• 53:14
  Speaker 1: an LLC.
• 53:16
  Speaker 5: So it's tax reduction to the business, you save money,
• 53:19
  Speaker 5: and then it's tax free income for them. Now they
• 53:22
  Speaker 5: do have to actually be able to perform a job, right, absolutely,
• 53:26
  Speaker 5: that's obvious. Yeah, But there is also there's no age requirement, right,
• 53:33
  Speaker 5: It just has to make sense, right.
• 53:35
  Speaker 1: So there isn't an age requirement, but yeah, like you said,
• 53:38
  Speaker 1: it has to make sense. I typically tell people like
• 53:40
  Speaker 1: try to stay between like seven and seventeen. But if
• 53:44
  Speaker 1: you have a child that's younger and let's say they
• 53:46
  Speaker 1: are able let's say, listen, these kids know how to
• 53:48
  Speaker 1: take photos. Now, they know how to work phones, computers,
• 53:52
  Speaker 1: they know, so if you could hire them and have
• 53:54
  Speaker 1: them help you with that, that's great. If they could
• 53:56
  Speaker 1: be a model.
• 53:57
  Speaker 5: But I thought I was going to say a model.
• 53:58
  Speaker 1: If you have a kiss, they could be a model.
• 54:00
  Speaker 5: You can have a kid that's younger that that's a model,
• 54:02
  Speaker 5: and you could pay them for models and services, because
• 54:04
  Speaker 5: you know what you gotta because there's always there's always
• 54:07
  Speaker 5: somebody that's going to try to figure out how something
• 54:09
  Speaker 5: doesn't work. And those are usually people that have never
• 54:12
  Speaker 5: done anything. So it's like, well, you know, technically, you
• 54:15
  Speaker 5: can't have a kid working if they're not working. That's obvious.
• 54:20
  Speaker 5: That's obvious. But it's like you're trying to find ways
• 54:22
  Speaker 5: around to make it not work when it's a workable model. Right, Like,
• 54:27
  Speaker 5: if you have a child eleven, twelve, thirteen, they're old
• 54:31
  Speaker 5: enough to perform tasks, they can post on social media,
• 54:35
  Speaker 5: they can come with you, they can be an assistant,
• 54:37
  Speaker 5: they can do a variety of different things. Right, It's
• 54:39
  Speaker 5: like you're trying to talk yourself out of it. This
• 54:41
  Speaker 5: is how this doesn't make sense. It's not difficult to work.
• 54:44
  Speaker 5: That's not a difficult thing to do, and there's a
• 54:46
  Speaker 5: variety of different jobs that you can do now for
• 54:49
  Speaker 5: one year old is going to be difficult obviously to
• 54:51
  Speaker 5: have them as a computer programmer, that's not something that
• 54:54
  Speaker 5: is beneficial. But like I said, I mean you could
• 54:56
  Speaker 5: pay somebody to be a model at any age really
• 54:59
  Speaker 5: and the benefit with that as just a regular because
• 55:01
  Speaker 5: you could put money to a wild fire rate for
• 55:03
  Speaker 5: a regular kid. But that's not if you don't have
• 55:05
  Speaker 5: a business. But they have to actually work a job
• 55:09
  Speaker 5: that's hiring them, and they have to be of working age.
• 55:13
  Speaker 5: So you have to have working papers to work a
• 55:16
  Speaker 5: job like thirteen fourteen something like that, depending on I
• 55:18
  Speaker 5: guess what, depending on what state you are. But you
• 55:20
  Speaker 5: can hire your child at a younger age than that, right,
• 55:24
  Speaker 5: and it's more flexible. They don't have to go to
• 55:27
  Speaker 5: CBS from you know, six o'clock to nine o'clock every night.
• 55:31
  Speaker 5: Like they can just work for you and you can
• 55:34
  Speaker 5: dictate what they do and tell them what to do.
• 55:36
  Speaker 5: And now, so they're gaining real life experience from working
• 55:39
  Speaker 5: for you, and you're saving money, they're gaining money. It's
• 55:45
  Speaker 5: a it's a win win situation. So that's very important
• 55:48
  Speaker 5: for people to understand. Even if you take a trip,
• 55:51
  Speaker 5: like you know, if they're working for you, then if
• 55:53
  Speaker 5: you take if you go somewhere with them, then that
• 55:55
  Speaker 5: could be all counted in the business trip, right if
• 55:58
  Speaker 5: it's business related, Yes, So that's real powerful, like I said,
• 56:02
  Speaker 5: as opposed to just parents going and give their kids
• 56:05
  Speaker 5: money anyway, So going to pay for some paying.
• 56:08
  Speaker 1: For road bloods, you're paying for ection, you paying for sneakers,
• 56:11
  Speaker 1: you're paying for extra curricular activities, outing with friends. They
• 56:15
  Speaker 1: have their own money paying them make them work. I've
• 56:18
  Speaker 1: been working since I was.
• 56:18
  Speaker 2: Six, so yeah, come on, we've been making I've been
• 56:21
  Speaker 2: working longer than that.
• 56:23
  Speaker 3: But I mean think about what this sending your kid's
• 56:25
  Speaker 3: up for, right, Like, just what the information If you're
• 56:28
  Speaker 3: seven to seventeen, you do fourteen six for ten years
• 56:31
  Speaker 3: on almost a hundred and fifty thousand, Like how many
• 56:34
  Speaker 3: of us had one hundred or anything waiting for us
• 56:37
  Speaker 3: at the age of seventeen or eighteen where they're about
• 56:39
  Speaker 3: to make a decision of whether they're going to school
• 56:41
  Speaker 3: or now, maybe I have enough money to start my
• 56:44
  Speaker 3: own business, right, this is the seed round for my
• 56:47
  Speaker 3: business it's ready and then my account. It just sets
• 56:50
  Speaker 3: your family up. And I've got two kids, and now
• 56:52
  Speaker 3: that's twice, so now they both have the same amount.
• 56:55
  Speaker 3: And obviously there's different avenues that they can invest. But
• 56:58
  Speaker 3: just think about what you're seting your kid is up
• 57:00
  Speaker 3: for at the age of seventeen.
• 57:01
  Speaker 2: It's priceless.
• 57:02
  Speaker 5: So you're going to go through an example, right.
• 57:05
  Speaker 1: Yeah, let's just let's talk about it. Let's talk about
• 57:08
  Speaker 1: and just put numbers to it, because I find that
• 57:11
  Speaker 1: when you talk numbers, people really understand you know, something
• 57:16
  Speaker 1: as as you know small as putting dollars away into
• 57:20
  Speaker 1: a roth ira. So so one thing to note guys
• 57:24
  Speaker 1: is that when you take money out of a wroth
• 57:27
  Speaker 1: ira when it's time for retirement, it is going to
• 57:30
  Speaker 1: be tax free. Right, so you're going to receive one
• 57:33
  Speaker 1: hundred percent of those payments. You do not have to
• 57:35
  Speaker 1: worry about it being tax and the the idea behind
• 57:40
  Speaker 1: a wroth ira being like non t mean non taxable
• 57:44
  Speaker 1: or tax free when it's time, when it's retirement agent,
• 57:46
  Speaker 1: it's time for you to pull it out. It's simply
• 57:49
  Speaker 1: that you've done it with quote unquote after tax dollars, right,
• 57:53
  Speaker 1: which is different from like a traditional ira. Right. When
• 57:56
  Speaker 1: you talk traditional ira, you're pretty much talking more so like, hey,
• 58:00
  Speaker 1: you're contributing to this with pre tax dollars. So if
• 58:04
  Speaker 1: you're contributing to this with pre tax dollars, then you know,
• 58:07
  Speaker 1: obviously they're like, all right, we're gonna get our taxes
• 58:09
  Speaker 1: one way or another. But the great thing about hiring
• 58:12
  Speaker 1: your children is you can take that money, put it
• 58:15
  Speaker 1: into a roth ira, and then what happens is, let's
• 58:18
  Speaker 1: just say you started your child out, and then your
• 58:20
  Speaker 1: child now has that concept in that mindset of hey,
• 58:23
  Speaker 1: I now have to contribute to my wroth ira. What
• 58:27
  Speaker 1: would happen if they invested freaking seven thousand dollars from
• 58:31
  Speaker 1: the age of seven when you hired them. I didn't
• 58:33
  Speaker 1: even do from one, right, Let's just do from seven
• 58:36
  Speaker 1: to age sixty five. The total contributions inside of that
• 58:42
  Speaker 1: roth ira would have been four hundred and six thousand,
• 58:45
  Speaker 1: but the value would be five thousand, I mean five million,
• 58:49
  Speaker 1: three hundred and eight thousand dollars. So I want you
• 58:53
  Speaker 1: guys to really understand that compound interest is something that
• 58:57
  Speaker 1: we need to take advantage of. Understanding taxes and how
• 59:01
  Speaker 1: we can minimize taxes. It's something that we need to
• 59:04
  Speaker 1: really lean into and really figuring out, like, okay, well
• 59:07
  Speaker 1: if this is a tax reduction, how can I really
• 59:10
  Speaker 1: take advantage of this? Because so many people are like, okay,
• 59:13
  Speaker 1: I can pay my child. Yes, that's great, you can
• 59:15
  Speaker 1: pay your child, But how about you pay your child
• 59:17
  Speaker 1: and you invest into a retirement account. You teach them
• 59:20
  Speaker 1: about this retirement account, and then it's you know, also
• 59:23
  Speaker 1: going to be instilled in their mind that they have
• 59:25
  Speaker 1: to keep this retirement account going, and then when it's
• 59:28
  Speaker 1: retirement age, they're going to be set for life. I
• 59:30
  Speaker 1: know so many people want to set their kids up
• 59:32
  Speaker 1: for life. Right, So we need to focus and lean
• 59:35
  Speaker 1: more into things like this.
• 59:37
  Speaker 5: No, that's that's that's vitally important, and it could be
• 59:41
  Speaker 5: invested in a variety of different things too, right, So
• 59:45
  Speaker 5: it's like even the rate of return that you get
• 59:47
  Speaker 5: is all dependent. So just another example because people might say,
• 59:52
  Speaker 5: well all right, well, you know people always gonna find
• 59:55
  Speaker 5: ways to try to put holes in things. So it's like,
• 59:57
  Speaker 5: all right, let's say let's make it even more real
• 1:00:00
  Speaker 5: liistic standpoint where we just go from age ten to eighteen, right,
• 1:00:04
  Speaker 5: so you're just putting money. They're not even putting money.
• 1:00:07
  Speaker 5: They don't even put a dollar in after the only
• 1:00:09
  Speaker 5: you only put money in for them. They don't even
• 1:00:11
  Speaker 5: they don't put no money in themselves at all. So
• 1:00:13
  Speaker 5: let's say if you put five thousand dollars in, which
• 1:00:15
  Speaker 5: is even lower than the maximum amount that you can
• 1:00:18
  Speaker 5: put in. If you put five thousand dollars in every
• 1:00:22
  Speaker 5: year for your child from ages ten to eighteen, and
• 1:00:27
  Speaker 5: then they just left it alone, they didn't do anything
• 1:00:30
  Speaker 5: at their age sixty. If there was a seven percent
• 1:00:32
  Speaker 5: rate of return, which is a very realistic number, they
• 1:00:35
  Speaker 5: would have all they would have a million dollars a million,
• 1:00:37
  Speaker 5: twenty six thousand, a big zac. Now, assuming that it
• 1:00:40
  Speaker 5: was a ten percent rate of return annual average, which
• 1:00:44
  Speaker 5: I mean that's what if you look at what the
• 1:00:45
  Speaker 5: S ANDP has done over the last twenty years, that's
• 1:00:47
  Speaker 5: what it's actually been closer to ten than seven, then
• 1:00:51
  Speaker 5: that would be three point seven million dollars. So this
• 1:00:54
  Speaker 5: is people are like, well, they got to wait. I
• 1:00:58
  Speaker 5: already know the pestimist, so I'm already get it. So
• 1:01:02
  Speaker 5: it's like, oh, you gotta wait till to sixty who
• 1:01:05
  Speaker 5: wants to wait? Okay, well, if somebody had a million
• 1:01:09
  Speaker 5: dollars for you and you did nothing for it outside
• 1:01:12
  Speaker 5: of working relatively minimum work as a child for your parents,
• 1:01:17
  Speaker 5: if they if somebody had a million dollars for you
• 1:01:20
  Speaker 5: when you were sixty years old, would you be mad
• 1:01:22
  Speaker 5: about that? Tax free? By the way, you don't have
• 1:01:23
  Speaker 5: takes on it. Would that be something that you would
• 1:01:26
  Speaker 5: be mad discouraged about because nine times out of ten,
• 1:01:30
  Speaker 5: when you get to retirement, and we're going to talk
• 1:01:32
  Speaker 5: about retirement plans, but most people don't have anywhere close
• 1:01:35
  Speaker 5: to a million dollars when they get to retirement after
• 1:01:37
  Speaker 5: they work their whole entire life. So most people work
• 1:01:39
  Speaker 5: their whole entire life and don't have a million dollars
• 1:01:43
  Speaker 5: or more when this You could have had a million
• 1:01:46
  Speaker 5: dollars just from having your parents put money away for
• 1:01:49
  Speaker 5: a couple of years when you was a child, and
• 1:01:52
  Speaker 5: let alone other money that you put into it a
• 1:01:55
  Speaker 5: wrought fra as you're indulged on IRA or four and
• 1:01:58
  Speaker 5: one K or all. The type of retirement plans like
• 1:02:00
  Speaker 5: this is just the extra bonus that was set up
• 1:02:04
  Speaker 5: for you when you were young. So it's just important
• 1:02:07
  Speaker 5: to plan for It's important to plan for the future
• 1:02:10
  Speaker 5: because of a compound and interests, Like you could really
• 1:02:12
  Speaker 5: literally make your child a millionaire with a relatively little
• 1:02:16
  Speaker 5: a little bit of amount of money, so a relative
• 1:02:18
  Speaker 5: but a little amount of money for a short period
• 1:02:21
  Speaker 5: of time and it's almost guaranteed as long as you
• 1:02:24
  Speaker 5: follow those principles. So that's something that I think should
• 1:02:29
  Speaker 5: be important because, like you said, you get the tax
• 1:02:30
  Speaker 5: deduction anyway, and they still could spend money too, So
• 1:02:34
  Speaker 5: it's not like if you put five thousand dollars, if
• 1:02:36
  Speaker 5: you pay them fourteen thousand, well they still have nine
• 1:02:39
  Speaker 5: thousand dollars surplus, so they could still have discretionary income
• 1:02:44
  Speaker 5: that they can utilize to buy stuff for themselves Jordans
• 1:02:47
  Speaker 5: or whatever they want to buy that you're actually paying
• 1:02:50
  Speaker 5: for anyway. But at least you're getting a tax deduction.
• 1:02:53
  Speaker 5: So it's just about being smart. You know, the tax
• 1:02:55
  Speaker 5: code was always made for business owners and investors. It
• 1:02:58
  Speaker 5: wasn't made for employees. And when you understand that, then
• 1:03:01
  Speaker 5: you understand why it's so important to establish a business
• 1:03:05
  Speaker 5: and to be an investor.
• 1:03:07
  Speaker 1: That's a fact. I love when you guys validate the
• 1:03:10
  Speaker 1: things that I.
• 1:03:11
  Speaker 3: Say, I mean really, I mean we people talk about
• 1:03:15
  Speaker 3: generational wealth and sustainable wealth, but like if you're not
• 1:03:17
  Speaker 3: taking these steps to create it, how does it exist?
• 1:03:20
  Speaker 3: So like these are just very like that is generational,
• 1:03:22
  Speaker 3: Like that's something that you get at eighteen your parents
• 1:03:25
  Speaker 3: do you when you have kids, you should be doing
• 1:03:27
  Speaker 3: the same thing. That's that's generational, right, Like we got
• 1:03:31
  Speaker 3: in those lenses. But you brought up retirement plans, So
• 1:03:34
  Speaker 3: let's talk about some retirement contributions because that's something again taxes.
• 1:03:39
  Speaker 3: They're not going to teach you retirement plans. They forget
• 1:03:42
  Speaker 3: about it. Like this is just like language for so
• 1:03:45
  Speaker 3: many so let's dive into that.
• 1:03:47
  Speaker 1: They just literally you start. Even when you start a job,
• 1:03:49
  Speaker 1: they're like, yeah, here, click, what do you what do
• 1:03:52
  Speaker 1: you want to do? Like what I will never forget.
• 1:03:55
  Speaker 1: When I first started corporate, I'm like what, I don't
• 1:03:58
  Speaker 1: know what? Well, how am I going to make the
• 1:04:00
  Speaker 1: best decision anybody for me to consult with? No, you
• 1:04:03
  Speaker 1: just have to choose.
• 1:04:04
  Speaker 3: They tell you, like yo, that there's a guy coming
• 1:04:06
  Speaker 3: on Thursday, and he's coming during your lunch break, So
• 1:04:08
  Speaker 3: if you have time, just go sit with him and
• 1:04:11
  Speaker 3: then he'll play some things to you and then you
• 1:04:12
  Speaker 3: never see the guy for the rest of the year.
• 1:04:14
  Speaker 1: Yeah.
• 1:04:16
  Speaker 5: Fact, this is for people. A lot of stuff that
• 1:04:20
  Speaker 5: we went over so far was only for entrepreneurs, So
• 1:04:22
  Speaker 5: this is for people that's not entrepreneurs also.
• 1:04:25
  Speaker 1: Yeah, absolutely, absolutely, So let's talk about retirement contributions because
• 1:04:31
  Speaker 1: we do need to think about the future, right. So, Rashad,
• 1:04:35
  Speaker 1: you've mentioned it, you know a few times, especially when
• 1:04:39
  Speaker 1: when we've spoken just in terms of like retirement and
• 1:04:42
  Speaker 1: do we even have enough money, and you know, really
• 1:04:45
  Speaker 1: understanding that and knowing what your limits are like, so
• 1:04:48
  Speaker 1: many people aren't aware or have an understanding of Okay,
• 1:04:52
  Speaker 1: well this is how much you know I can actually
• 1:04:55
  Speaker 1: contribute and am I actually maxing it out? So one
• 1:04:58
  Speaker 1: of the things that I mentioned, and as it relates
• 1:05:01
  Speaker 1: to employees earlier, was hey, you need to max out
• 1:05:05
  Speaker 1: your retirement contribute, I mean your yeah, your retirement contribution.
• 1:05:09
  Speaker 1: And then for my business owners, I need you all
• 1:05:12
  Speaker 1: to take retirement a lot more serious.
• 1:05:14
  Speaker 6: Right.
• 1:05:15
  Speaker 1: So, we have thousands of clients and Brooks Alliance, and
• 1:05:19
  Speaker 1: I can tell you that retirement is not at the forefront.
• 1:05:22
  Speaker 1: If we mention it, then it's like yeah, I want
• 1:05:25
  Speaker 1: to retire, like I want to have retirement. But because
• 1:05:28
  Speaker 1: everyone's so like consumed with you know, getting their business
• 1:05:33
  Speaker 1: together and put you know, and serving their clients and
• 1:05:35
  Speaker 1: doing all these things, they're not necessarily focused on their retirement.
• 1:05:39
  Speaker 1: And it is a tax deduction. It is a tax deduction.
• 1:05:42
  Speaker 1: You can match it, right, So you can literally put
• 1:05:45
  Speaker 1: yourself on payroll. You can contribute to a retirement account
• 1:05:50
  Speaker 1: and have your company match it the same way that
• 1:05:52
  Speaker 1: they do at your you know, when you were working
• 1:05:54
  Speaker 1: W two. So I need you all to lean more
• 1:05:57
  Speaker 1: into retirement and understand that this is really really important.
• 1:06:01
  Speaker 1: And we can't just be like, oh, well, I'm going
• 1:06:03
  Speaker 1: to make enough money through my business. Wealthy people still
• 1:06:06
  Speaker 1: plan for retirement. It doesn't matter how much money you
• 1:06:09
  Speaker 1: plan on having, you still have to plan for retirement.
• 1:06:11
  Speaker 1: So let's just talk about your contribution limits. So for
• 1:06:17
  Speaker 1: all of my four to one k's four three bs
• 1:06:20
  Speaker 1: for four fifty seven b's, your contribution limit for twenty
• 1:06:24
  Speaker 1: twenty four is twenty three thousand dollars. It surprised me
• 1:06:28
  Speaker 1: that they only increase these limits by five hundred dollars,
• 1:06:31
  Speaker 1: Like I feel like they were pretty reasonable with a
• 1:06:34
  Speaker 1: lot of different things that they increased this year. They
• 1:06:38
  Speaker 1: increase it a lot more than they typically do. But anyway,
• 1:06:41
  Speaker 1: it's up five hundred dollars from twenty twenty three. So
• 1:06:44
  Speaker 1: if you're doing a ketchup contribution, obviously rashad, what's the
• 1:06:48
  Speaker 1: age if you're over fifty, you.
• 1:06:51
  Speaker 5: Get to do yeah, fifty fifty.
• 1:06:53
  Speaker 1: Yeah, So if you're over fifty, then you can contribute
• 1:06:56
  Speaker 1: an additional eight thousand dollars. So traditional Iron contribution roth
• 1:07:01
  Speaker 1: IRA contribution is seven thousand dollars. So if you are
• 1:07:06
  Speaker 1: doing the Ketchup contribution of eight thousand, I mean, if
• 1:07:09
  Speaker 1: you are doing a Ketchup contribution, you can contribute eight
• 1:07:12
  Speaker 1: thousand dollars. And then HSA accounts. So I talked about
• 1:07:16
  Speaker 1: this earlier, right like he's saying, hey, these are things
• 1:07:19
  Speaker 1: that you can actually invest, I mean, you can actually
• 1:07:22
  Speaker 1: contribute to to help you, you know, just save on taxes.
• 1:07:27
  Speaker 1: So the contribution limit for twenty twenty four is four thousand,
• 1:07:30
  Speaker 1: one hundred and fifty dollars, and if you have a
• 1:07:32
  Speaker 1: family it is eighty three hundred. All right, so let's
• 1:07:36
  Speaker 1: let's take a step back, and let's because there's a
• 1:07:39
  Speaker 1: lot of people that have W two income and they
• 1:07:41
  Speaker 1: also have they also have retirement income Rayce. So one
• 1:07:46
  Speaker 1: thing as a business owner that I want you all
• 1:07:48
  Speaker 1: to understand is that your max contribution or everyone your
• 1:07:52
  Speaker 1: max your max contribution in terms of other investment, vehicles
• 1:07:58
  Speaker 1: and everything for the year for two is sixty nine
• 1:08:01
  Speaker 1: thousand dollars. So let's just talk about it, and I'll
• 1:08:05
  Speaker 1: just use a business owner. The business owner, they're like,
• 1:08:07
  Speaker 1: all right, well, listen to this business. I want to
• 1:08:09
  Speaker 1: contribute more than twenty three thousand dollars. You told me
• 1:08:12
  Speaker 1: that I can contribute up to sixty nine thousand, But
• 1:08:15
  Speaker 1: then you're telling me that my four oh one K
• 1:08:16
  Speaker 1: contribution limit is sixty nine I mean it's twenty three hundred. Like,
• 1:08:19
  Speaker 1: it's not making sense, right, So what does that mean?
• 1:08:22
  Speaker 1: What that means is that again I told you guys,
• 1:08:24
  Speaker 1: where you start is not necessarily where you're going to finish.
• 1:08:26
  Speaker 1: So when you're a smaller business owner, you may be
• 1:08:29
  Speaker 1: looking into things like solo four one K traditional Iraise
• 1:08:32
  Speaker 1: contribute in to rock Irase. But what happens is now
• 1:08:37
  Speaker 1: once you start making more money, now you're considering, hey,
• 1:08:41
  Speaker 1: I need to maybe consider investing into a step IR, right,
• 1:08:46
  Speaker 1: or hey, I need a four to one K plan.
• 1:08:49
  Speaker 1: And keep in mind, guys, this falls along the lines
• 1:08:51
  Speaker 1: of you are not going to where you start is
• 1:08:56
  Speaker 1: not where you're going to finish, right, because you having
• 1:08:59
  Speaker 1: a four to one K is a little bit more
• 1:09:00
  Speaker 1: pricier than obviously doing like a simple IRA or traditional IRA.
• 1:09:05
  Speaker 1: It is even a little bit more chea it's cheaper
• 1:09:07
  Speaker 1: than having a step IR. But again, once you start
• 1:09:10
  Speaker 1: having employees and when you start making more money and
• 1:09:14
  Speaker 1: you need to start doing more things, a four to
• 1:09:16
  Speaker 1: one K is a little bit more advantageous because what
• 1:09:19
  Speaker 1: happens is you now can not only have your four
• 1:09:22
  Speaker 1: to one K and pay yourself, but you also can
• 1:09:24
  Speaker 1: do what's called profit sharing. Right, So while the max
• 1:09:27
  Speaker 1: of that four oh one K is twenty three thousand,
• 1:09:30
  Speaker 1: for the remaining balance, you can do a profit share
• 1:09:32
  Speaker 1: and contribute into that four to one K in to
• 1:09:34
  Speaker 1: your retirement. Right. So now it's a situation where now
• 1:09:38
  Speaker 1: you can contribute up to that sixty nine thousand every
• 1:09:40
  Speaker 1: single year. So I think that it's important that we
• 1:09:43
  Speaker 1: understand that there are different retirement accounts and you just
• 1:09:46
  Speaker 1: have to figure out like, okay, well where am I
• 1:09:49
  Speaker 1: right now? And what's the best retirement account for me
• 1:09:51
  Speaker 1: right now? And I think that if we understand that,
• 1:09:55
  Speaker 1: then we'll, you know, definitely be able to take advantage
• 1:09:57
  Speaker 1: of the tax code and be able to invest for
• 1:10:00
  Speaker 1: a retirement.
• 1:10:01
  Speaker 5: Can you talk about real estate quickly? Because they know
• 1:10:04
  Speaker 5: there's course segregation, there's a lot of different stuff like that,
• 1:10:06
  Speaker 5: So I know that that's something that people might probably
• 1:10:09
  Speaker 5: want to be interested in.
• 1:10:10
  Speaker 1: Absolutely. So what I'm going to do here is I'm
• 1:10:12
  Speaker 1: not sure if you guys caught my presentation. I know
• 1:10:14
  Speaker 1: you guys were going you were going crazy during invest Fest,
• 1:10:17
  Speaker 1: But I did a presentation during invest Pest, and I
• 1:10:21
  Speaker 1: want to talk about I want to talk about real
• 1:10:25
  Speaker 1: estate and cost segregation and what it means. And a
• 1:10:29
  Speaker 1: lot of times people are like, listen, I need to
• 1:10:32
  Speaker 1: make a change, I need to do something. I need
• 1:10:34
  Speaker 1: to invest in real estate. But what happens is they
• 1:10:38
  Speaker 1: may get between depreciation expenses and so between depreciation expenses
• 1:10:44
  Speaker 1: and between the deductions of operating the real estate, they
• 1:10:49
  Speaker 1: may just come up with it like being tax free, right,
• 1:10:51
  Speaker 1: So you may just like be tax free. You can
• 1:10:54
  Speaker 1: get that really real estate income. But a lot of
• 1:10:57
  Speaker 1: times people have business income, Right, you have business income
• 1:11:01
  Speaker 1: that you're like, listen, I need to offset this business income,
• 1:11:04
  Speaker 1: and I need an asset that's going to help me
• 1:11:06
  Speaker 1: do that. So what exactly do I need to do? Right?
• 1:11:09
  Speaker 1: So that's great. I was able to you know, utilize
• 1:11:12
  Speaker 1: and I say all the time. Real estate is one
• 1:11:14
  Speaker 1: of those amazing, amazing tax deductions where you can win
• 1:11:20
  Speaker 1: in real life and lose on paper. And all that
• 1:11:23
  Speaker 1: means is that in real life you're bringing in money,
• 1:11:25
  Speaker 1: but on paper because of depreciation, which we talked about
• 1:11:29
  Speaker 1: when we were talking about vehicles, you're able to now
• 1:11:33
  Speaker 1: lose on paper. Right, you're now most likely reporting a
• 1:11:36
  Speaker 1: loss because you're able to take all those deductions. So basically,
• 1:11:40
  Speaker 1: what we do to take it a step further, Right,
• 1:11:43
  Speaker 1: So all of my people that's like, listen, I need
• 1:11:45
  Speaker 1: a hire depreciation expense. So therefore I'm now able to
• 1:11:50
  Speaker 1: you know, go and deduct all of my you know,
• 1:11:54
  Speaker 1: deduct my real estate losses and have it offset my
• 1:11:58
  Speaker 1: business income. Right, So how can we do that? So
• 1:12:01
  Speaker 1: we do what's called cost segregation. Cost surrogation is pretty
• 1:12:05
  Speaker 1: much just the study, right, is a process that looks
• 1:12:08
  Speaker 1: at each element of your property it is. It is
• 1:12:12
  Speaker 1: not something that you can go off and do by yourself.
• 1:12:14
  Speaker 1: It is an actual analysis that has to be done
• 1:12:18
  Speaker 1: of your property. And then when it comes to the
• 1:12:21
  Speaker 1: cost surrogation, what happens is you can also So we
• 1:12:24
  Speaker 1: talked earlier about bonus depreciation. Right, so bonus appreciation pretty
• 1:12:29
  Speaker 1: much up until twenty twenty two, it was one hundred percent,
• 1:12:32
  Speaker 1: but then up until I mean now it's only sixty percent.
• 1:12:36
  Speaker 1: But what happens is the IRS says, okay, every single
• 1:12:39
  Speaker 1: asset has its specific asset class, right like it says, hey,
• 1:12:43
  Speaker 1: this is a building can be written off over twenty
• 1:12:45
  Speaker 1: seven and a half years. Personal property can be written
• 1:12:48
  Speaker 1: off over five years. Land improvements can be written off
• 1:12:51
  Speaker 1: over fifteen years. But how do we utilize bonus appreciation
• 1:12:55
  Speaker 1: to like magnify or give us more of a depreciation expense.
• 1:13:01
  Speaker 1: What we can do is, so in this example, we
• 1:13:04
  Speaker 1: have a house that's five hundred thousand dollars. Keep in mind, guys,
• 1:13:07
  Speaker 1: you cannot take bonus depreciation on a building, and you
• 1:13:11
  Speaker 1: cannot depreciate land. Okay, So in this example, you see
• 1:13:15
  Speaker 1: that the home is five hundred thousand dollars, the building
• 1:13:18
  Speaker 1: is two hundred and fifty thousand dollars. You're going to
• 1:13:21
  Speaker 1: still divide that over twenty seven and a half years.
• 1:13:23
  Speaker 1: You cannot take bonus appreciation on it, so the depreciation
• 1:13:27
  Speaker 1: expense there is going to be nine thousand, three hundred
• 1:13:29
  Speaker 1: and eighty two dollars. Then you have personal property eighty
• 1:13:34
  Speaker 1: seven thousand. The depreciation you can take sixty percent on that,
• 1:13:38
  Speaker 1: So that's going to be fifty two thousand, two hundred
• 1:13:40
  Speaker 1: dollars depreciation expense that you'll be able to take off
• 1:13:43
  Speaker 1: of the personal property of your of your of your
• 1:13:47
  Speaker 1: home right. And people are like, oh my god, like
• 1:13:49
  Speaker 1: all of the like, how can you break it up
• 1:13:51
  Speaker 1: like this? But you break it up because your house
• 1:13:53
  Speaker 1: is not just a building, right, Your house is made
• 1:13:55
  Speaker 1: up of different things. So let's dissect the property and
• 1:13:58
  Speaker 1: really maximize on this depreciation expense. Then you have land improvements.
• 1:14:03
  Speaker 1: Land improvements so this is like your driveway, So that
• 1:14:07
  Speaker 1: is twenty five thousand dollars depreciation expense. You could take
• 1:14:11
  Speaker 1: sixty percent of it is fifteen thousand. That's going to
• 1:14:13
  Speaker 1: give you a total depreciation expense of seventy six thousand,
• 1:14:16
  Speaker 1: five hundred and eighty two dollars right. So now let's
• 1:14:20
  Speaker 1: just say you did not do cost segregation, and you
• 1:14:24
  Speaker 1: just said, okay, well I have my home of five
• 1:14:26
  Speaker 1: thousand dollars and then I had land of one hundred
• 1:14:28
  Speaker 1: and thirty thousand. I need to back that out. You
• 1:14:31
  Speaker 1: have about a thirteen thirteen thousand, five hundred dollars expence
• 1:14:35
  Speaker 1: depreciation expense. But when you do cost segregation, now you're
• 1:14:39
  Speaker 1: able to have a depreciation expense of seventy six thousand dollars. Right,
• 1:14:44
  Speaker 1: And so now what that does is, let's say for
• 1:14:46
  Speaker 1: my you know, for my people that are let's say
• 1:14:52
  Speaker 1: let's just say you're in real estate, and this is
• 1:14:53
  Speaker 1: what you're you know, you're doing. You're doing real estate
• 1:14:57
  Speaker 1: full time. And let's just say you're investing in another
• 1:14:58
  Speaker 1: business that's more passive, right, you don't you don't really
• 1:15:01
  Speaker 1: have to be that active in that business, but you
• 1:15:03
  Speaker 1: have this money that's coming in. You need something to
• 1:15:06
  Speaker 1: offset that money. And so why not utilize cost segregation?
• 1:15:10
  Speaker 1: Why not dig deeper and really understand, like, Okay, how
• 1:15:14
  Speaker 1: can I really utilize the tax code and things, these
• 1:15:17
  Speaker 1: things to my advantage? And so many people are entitled
• 1:15:20
  Speaker 1: to these things, but they're not aware that they're available.
• 1:15:23
  Speaker 1: So I love cost segregation. I love real estate. It
• 1:15:26
  Speaker 1: just helps. I love depreciate anything depreciation is involved in.
• 1:15:30
  Speaker 1: I love it. Like just starts wiping stuff out. So
• 1:15:32
  Speaker 1: I love it.
• 1:15:34
  Speaker 2: That's a fact. That's a fact. You know.
• 1:15:36
  Speaker 3: One of the things we always hear from from the
• 1:15:38
  Speaker 3: news is the state tax.
• 1:15:40
  Speaker 2: The state tax, and we've seen.
• 1:15:41
  Speaker 3: A lot of our celebrities fall victim to it because
• 1:15:44
  Speaker 3: the planning wasn't done in place, so they thought the
• 1:15:46
  Speaker 3: planning was done and it wasn't. This is a conversation
• 1:15:49
  Speaker 3: again that doesn't get talked about, like how do we
• 1:15:51
  Speaker 3: prepare for when.
• 1:15:53
  Speaker 2: We're not here?
• 1:15:53
  Speaker 3: We talked about life insurance, but the state planning is
• 1:15:57
  Speaker 3: important and state's tax just as important.
• 1:15:59
  Speaker 2: Can you touch on that.
• 1:16:00
  Speaker 1: Absolutely, let's talk about it. Let's talk about estate taxes.
• 1:16:04
  Speaker 1: So what people are not aware of is that there's
• 1:16:07
  Speaker 1: something called death taxes, right, So a state taxes death taxes.
• 1:16:12
  Speaker 1: These are taxes that you have to pay when you
• 1:16:15
  Speaker 1: die if your assets is over a certain amount. Okay,
• 1:16:19
  Speaker 1: so if you are an individual and your assets is
• 1:16:21
  Speaker 1: over thirteen thousand, six hundred and ten thousand, I'm sorry,
• 1:16:24
  Speaker 1: thirty sorry. If you are an individual and your assets
• 1:16:28
  Speaker 1: are over thirteen million, six hundred and ten thousand dollars,
• 1:16:33
  Speaker 1: you have to pay estate taxes. And what I want
• 1:16:36
  Speaker 1: to let you guys know that estate taxes are higher
• 1:16:39
  Speaker 1: than income taxes. Okay, estate taxes go all the way
• 1:16:44
  Speaker 1: up to forty percent. So I actually I think it's
• 1:16:48
  Speaker 1: the most ridiculous thing ever, Like, how do you tax
• 1:16:50
  Speaker 1: me more when I'm dead than when I was alive working? Right,
• 1:16:53
  Speaker 1: It's insane, But this is the name of the game.
• 1:16:58
  Speaker 1: So if you are a couple, if your assets is
• 1:17:02
  Speaker 1: twenty seven million dollars or more, you do have to
• 1:17:05
  Speaker 1: pay death taxes. So a lot of times when we're
• 1:17:09
  Speaker 1: seeing these celebrities and they're you know, they're they haven't
• 1:17:12
  Speaker 1: set up anything, and now it's a situation where you
• 1:17:15
  Speaker 1: know they are now paying death taxes. Now it becomes
• 1:17:19
  Speaker 1: I mean, you know, now they owe death taxes. And
• 1:17:21
  Speaker 1: now people are like, oh my god, they owe taxes.
• 1:17:23
  Speaker 1: Oh my god. The state has been held up in
• 1:17:26
  Speaker 1: probate for all this time, like why what's happening? But
• 1:17:29
  Speaker 1: they fail to plan. Right, So, as I mentioned, when
• 1:17:33
  Speaker 1: we're thinking about a state taxes, state taxes are higher,
• 1:17:37
  Speaker 1: as you can see it goes all the way up
• 1:17:39
  Speaker 1: to forty percent. So let's just say if you're an
• 1:17:43
  Speaker 1: individual and your your assets are fourteen million dollars, right,
• 1:17:50
  Speaker 1: what's happening is that you're now at forty percent, right
• 1:17:53
  Speaker 1: because it says over a million dollars. So I just
• 1:17:57
  Speaker 1: think that we have to understand that while we're having
• 1:18:00
  Speaker 1: this conversation of estate taxes and a state planet, like,
• 1:18:04
  Speaker 1: we have to understand exactly what we are going to do.
• 1:18:07
  Speaker 1: The taxes are going to be due. And another thing.
• 1:18:10
  Speaker 5: Is that is that so is that an exemption of like, okay,
• 1:18:14
  Speaker 5: the first thirteen million, six hundred you don't get taxed on.
• 1:18:17
  Speaker 5: Then this scale starts at that, starting at zero, yes, yes,
• 1:18:26
  Speaker 5: so more than fourteen six that's when you hit forty percent.
• 1:18:33
  Speaker 2: Yes, okay, yeah, fourteen turning eight real quick.
• 1:18:38
  Speaker 1: Yeah. So now it's a.
• 1:18:40
  Speaker 5: Situation that what it's fourteen, you know, it's fourteen. The
• 1:18:46
  Speaker 5: thirteen million is never going to get taxed, right, it's
• 1:18:48
  Speaker 5: the fourteen. Like if you have fifteen million, then that
• 1:18:52
  Speaker 5: one million dollars you have to pay four un so
• 1:18:54
  Speaker 5: you have to pay four hundred thousand dollars, right, what's
• 1:18:57
  Speaker 5: the differences the overage.
• 1:18:58
  Speaker 1: Yes, it's the op whatever's an excess of the thirteen million,
• 1:19:03
  Speaker 1: thank you? Okay, yeah, so anything in excess of that, right,
• 1:19:06
  Speaker 1: And so again someone has to pay the taxes. So
• 1:19:08
  Speaker 1: many times we're like always thinking like oh my god,
• 1:19:11
  Speaker 1: like I don't want to pay taxes. And I've heard
• 1:19:13
  Speaker 1: people say, look, I ain't gonna start this additional business,
• 1:19:16
  Speaker 1: so I'm not going to do certain things because I
• 1:19:17
  Speaker 1: don't want to pay taxes. So it may be somebody
• 1:19:20
  Speaker 1: in here, you know that's like, oh, well, you know
• 1:19:22
  Speaker 1: what I'm not. I'm never going to try to get
• 1:19:23
  Speaker 1: my assets to thirteen million because I don't want to
• 1:19:25
  Speaker 1: have to pay I mean, you know, well fifteen million, right,
• 1:19:28
  Speaker 1: because I don't want my family to have to pay. No,
• 1:19:30
  Speaker 1: somebody's gonna have to pay. You know this, So you
• 1:19:32
  Speaker 1: get a life insurance policy, you put your assets in
• 1:19:34
  Speaker 1: the trust, you actually plan for that. That's a part
• 1:19:38
  Speaker 1: of a state planet. Thinking about your taxes is a
• 1:19:41
  Speaker 1: part of a state planet. So we can't just be like, oh, okay,
• 1:19:44
  Speaker 1: we're going to have insurance and another thing, stop dying
• 1:19:47
  Speaker 1: with tax that because guess what, before anybody get paid,
• 1:19:51
  Speaker 1: the IRS is coming for their money. Right, and that
• 1:19:54
  Speaker 1: don't matter if you over thirteen million or not. You
• 1:19:58
  Speaker 1: could be at one hundred thousand, right. They will come
• 1:20:02
  Speaker 1: for their money. So you guys have to make sure
• 1:20:04
  Speaker 1: that you all aren't leaving debt and you're you're handling
• 1:20:08
  Speaker 1: your business if you you know you're serious about building
• 1:20:11
  Speaker 1: wealth and starting businesses and you know, building assets, we
• 1:20:15
  Speaker 1: have to focus on taxes.
• 1:20:18
  Speaker 5: Well, thank you, Thank you for your time. Very valuable information,
• 1:20:24
  Speaker 5: So much information. People don't learn about this kind of stuff,
• 1:20:26
  Speaker 5: like how can they follow you? What's your Instagram? Website?
• 1:20:30
  Speaker 5: All of that information if they want to kind of
• 1:20:32
  Speaker 5: you know, tap in with.
• 1:20:34
  Speaker 1: You, absolutely, guys, tapping with me. My Instagram is miss
• 1:20:37
  Speaker 1: Business one on one, so that's MS dot business one
• 1:20:41
  Speaker 1: zero one. My website is miss Business one on one
• 1:20:45
  Speaker 1: dot com very consistently, so you can follow me on
• 1:20:47
  Speaker 1: Instagram on TikTok under the same exact handle.
• 1:20:52
  Speaker 5: There you have it. I appreciate you as always.
• 1:20:54
  Speaker 1: Thank you, problem, thank you for having me.
• 1:20:57
  Speaker 2: All right, all right, good night y'all. Love is love.
• 1:21:00
  Speaker 1: Oh, good night, guys.
• 1:21:02
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