🚨THE TAX CODE WAS BUILT TO HELP YOU AVOID TAXES! | 100% CAR WRITE-OFF, LLC SECRETS & $40K DEDUCTION

0:00This is an iHeart Podcast. Guaranteed Human. Earners, what's up? Look, building wealth isn't just about making money. It's about knowing where your money is working for you. That's why we partnered with Empower. Empower is all about helping you invest well so you can go out and live a little. Their free Empower personal dashboard gives you a complete view of your financial life in one place. Track your net worth, monitor your budget, analyze your investments, set retirement goals, and more. You worked hard for your money. Now make sure it's working hard for you. Download the Empower personal dashboard or visit Empower.com.

0:37Not an Empower client paid or sponsored. Today's episode is brought to you by ChatGPT for Business. As a listener of this podcast, you're looking for ways to help teams move faster, make sharper decisions, and turn scattered context into work they can use. ChatGPT for Business can help. Chat GPT for Business gives teams a shared workspace with admin controls, permissions, and access to work and codecs in Chat GPT. This means your business can move from question to answer and code to rollout quicker. Join over 10 million business and enterprise users worldwide already using Chat GPT for Work. Download the Chat GPT desktop app or contact sales to learn more.

1:19Remember FDIC. They don't realize smart people use smartphones, huh? Seeing through BS they thought was going to slide. Download TextNow because it cuts out clownery. You can literally activate it from your couch. Nationwide 5G with the same towers the other companies use. Pay what you want or not at all. You're in control. Show these ridiculous carriers we ain't paying for stupid. Because we're way too smart to pay dumb. Free app-based talking text. The TextNow app requires Wi-Fi or data connection. Data plans sold separately. 5G where available. when traveling for events or festivals throughout the country every dollar matters we compare flights prices hotel rates and restaurant options so why wouldn't we compare rides personally i always check lift before booking a ride prices can change throughout the day depending on traffic weather and what's happening in the city if you're headed to a concert out to dinner or catching up with your friends on a friday night taking a few seconds to check lift could leave you with more money to Enjoy the experience.

2:19Save money. Check live. Tax code is made up of 77 ,000 pages. 1 % is telling us how to pay taxes. The other 99 % is saying, hey, if you follow this, you don't have to pay taxes. What's the biggest mistake that business owners are making when it comes to taxes? Waiting until the next year to file their taxes. Your first steps need to be, okay, how can I get on the right side of the tax code so therefore I can save on taxes? You talk to a lot of entrepreneurs. What's the biggest misconception or lie that they think is true when it comes to taxes? That the tax code was put in place to make them pay taxes.

2:52The tax code is a wealth map. Everything that you need to generate wealth is a tax deduction. What's some advice for real estate owners? If you want to live tax-free, you have to have real estate. Because when it comes to the tax code, the government's like, listen, we can't house everyone. You do us this solid, we'll allow you to keep your money. Warren Buffett said, thanks to the many loopholes put in place by the IRS, I pay a lower tax rate than my secretary. If you have an LLC and you're trading in that LLC, that doesn't automatically make it business income. You have to be doing it full time.

3:23So is there qualifications that make you full time? It's a thousand hours. That's probably like three hours a day. The tax code does not incentivize you for working more. They incentivize you for generating income as passively as possible. All right, ladies and gentlemen, welcome back. we have a friend of the show, friend of the program. She has been on the show more than anybody. For sure. I have? Yes. I didn't know that. Yes, you've been on multiple platforms. I have. You were our first guest and our most returning guest. I love that. Yeah, yeah. Miss Business, somebody that's a vendor marketplace sponsor.

4:05When you think of the vendor marketplace, she had the best booth for so many years that she actually just took over the whole thing and invest fest and rightfully so it was it was only right you changed the look of what the vendor marketplace was so rightfully so yeah you spoke at invest fest every year so yeah yeah you know i don't think we have to introduce you everybody already knows who you are if they watch her in your leisure they obviously know miss business so how you been i've been great under a lot of pressure i gotta make sure that invest fest is you know it is great i gotta make sure that the people are feeling me.

4:37That's my main objective when I'm there. It's nothing like it. It's nothing like it. I think what's beautiful is that 2019, we first meet. Yes. A lot has changed since then. Our business has grown. I mean, your business has grown. I feel like you're everywhere. I feel like I need to be on some of these retreats that are happening. Talk to us about the growth over the past year or so. Over the past year? Oh my God. Okay. So I really just transitioned. So marketing has always been at the forefront of everything that I've done, but I feel that it was more important for me to really get to the people and really get them to understand that business can really be their pathway to wealth.

5:25I think that a lot of times our mindset is business is our pathway to paying our bills or leaving our job, but not really thinking about like, wow, if I stop overpaying in taxes, if I take this money and I invest it, that that's my pathway. And so just doing that, I've just been trying to figure out different ways to touch people. So like, you know, InvestFest, Miss Business for the People, just really making sure that I'm touching people and then creating more moments where I can be in person. So I'm doing retreats. You know, I'm on a webinar consistently right i just feel like i have to touch people i can't just it just it can't it can be a distance between me and the people yeah support yeah so let's get right to it um you know this is always going to be informational session whenever we sit down with you so what's the biggest mistake that business owners are making when it comes to taxes Oh, waiting until the next year to file their taxes.

6:25I think that right now in 2026, I think most people know that there are tax deductions available. They know that there are strategies that they can implement. But most business owners and individuals, they're waiting until, let's say in our case, right now, they're waiting until 2026 when they shouldn't wait to 2026. They have to focus on tax strategy in 2025. And more importantly than just not focusing on tax planning, what they're also missing is paying attention to who's in office, not being emotional about it. Because the reality is every single president has someone that they have to literally please, whether it be themselves or whether it be someone that contributed to their campaign.

7:17everyone has a have someone that they have to please and so with looking at that it's very important that when you're a business owner or even if you're an individual so let's start with an individual right if you're individual you have w-2 income your first steps needs to be okay how can i get on the right side of the tax code so therefore i can save on taxes okay once you do that you now have to make a decision am i going to invest or am i going to start a business and And it really is just that I tell people all the time, like, listen, if you're looking for a strategy for W2 employees, they're very slim.

7:51It's just not there. And so really focusing on and making a decision and say, OK, you know what? I'm going to start a business, whether big or small, or I'm going to start to invest. Then after that, you have to say, you know what? I'm going to look at my income throughout the year and make a decision on how much I want to pay the IRS. We don't treat the IRS as though it's a decision. We treat it as though it's something we have to pay, right? Because we were never really taught. We were taught, go to school, get a job, make money, get a promotion, make more money, buy that house, pay, you know?

8:28And so with that, what happens? We start making more money. We start paying more taxes. But if we're never really focused on any sort of strategy and implementation, then we end up in a really bad place. So what are the things, right? Like we have conversations all the time and again, paying attention to what's happening in the task call. I mean, we had a conversation about the salt tax, like all the things. Yes. What are the things that people should be considering before we get to December 31st of each year? Right. Cause we got to plan this thing out. Absolutely. If you are a business owner, your entity structure.

8:59So you have to start at your foundation, LLC, S-Corp, C-Corp, nonprofit trust. How do you need to actually structure your entities? What is important to you? I think a lot of business owners don't think about that. So they're not really considering and saying, hey, you know what? I want to go for funding. I want to apply for a house. I want to do certain things. You have the leverage to make all of those decisions. So you have to understand where you're going. You need to make sure that your structure is correct. And then you need to actually tap into the tax code. So now, based on the big, beautiful bill, there's been so many changes that has been at the benefit of taxpayers.

9:35Granted, guys, Trump is taking them when he leave in 2028, but they are here. So some of them being the which actually parents can start contributing to their Trump account. Right. They have the Trump account. And so that's really important because a lot of people, one, there's a lot of misconception around that. So I do want to just take a moment to explain that, because when it comes to the Trump account, most people think when you filed your taxes, you were supposed to fill out form 4547 to say, hey, I want my child to actually get this. 4547? 4547. That guy's incredible. Yes. Yes. You know Trump.

10:18Yes. So you know it's so crazy. I never even picked up on that. I know how your mind works. So, yeah. So, yeah, you had to complete form 4547 to say, hey, I want my child to actually be able to receive this thousand dollars contribution, retirement contribution. Most people did not do that. Now, most people are like, oh, my God, I missed my opportunity. You didn't miss your opportunity. You can still download the app, sign your child up, and then you can complete the 4547 form online. And so that's really important. They do contribute$1 ,000 to it for children that were born January 1st, 2025 through December 31st, 2028.

10:59So it's not something that's ongoing. So if you've had a child within that time frame, then make sure that you go ahead and get that for your child. now the big thing here is that what most people don't know is that you also can make contributions to you can make personal contributions it's not a tax deductions but still an actual benefit to your child so that's one that i definitely want everyone capped i think is it capped at like 5 000 yeah it's capped at 5 000 yeah in terms of the personal contribution i know you've got no kids right at that age but you know trying to help people okay yes but yes it is um 6 000 well 5 000 additional that you can contribute.

11:39So that's a good one. And I want everyone to take advantage of it. I think the big thing, sometimes people like, oh, I'm not going to do it. Oh, I have to do some additional work. No, if it's there, if it's available, take advantage of it. So that's one that I think is current that we really need to focus on. The other, now when we really start getting into the tax deductions, right? I love the fact that they brung bonus depreciation back, right that is amazing you've used bonus depreciation with your g-wagon right and so i think that is so important for us to really tap into bonus appreciation because we were losing it we were losing it we were down to only being able to take 40 of the value of your asset just explain explain what that is so bonus so basically when you have an asset the irs says listen, you have an asset.

12:28You cannot just, in all cases, take the full value, right? It's not an actual expense. An asset, we're talking specifically about cars? It can be cars, it can be equipment. It doesn't necessarily just have to be cars. It can be any asset, but a vehicle in the case of a business is considered an asset. So if you have any asset in your business, the IRS typically says, listen, you can depreciate the value of that asset over a specific period of time. So that's standard depreciation, right? Vehicle is five years, a home is 27 and a half years. Every asset has a different life. They call it a useful life.

13:07But bonus depreciation says, listen, we're going to allow you to accelerate some of that. We'll allow you, depending on the asset, to take 100 % of the value of the vehicle or the value of the machine, the machinery, whatever it is, whatever asset that you purchase. And so that is key, right that's key because i use that for business clients i use it for real estate clients and i am wiping out hundreds of thousands of dollars right because the tax code says so the tax code says that we can do it and so bonus depreciation is a really really really good uh strategy that i'm always encouraging like you know i've i got you we had the phone this is this phone We had this phone call in 2024 when it was getting down to 40 percent.

13:57And we're like, we might lose this, but just wait on getting the car because potentially it could come back and hear it's coming back. It's coming back. Now we have another conversation about potentially investing in your business, but also maybe using another business. Right. Where there's multiple partners where there might be two partners. So it changes the amount of depreciation that goes to you as an individual. We really be on the phone. We be on the phone. We be talking. it's okay because guess what when you're making money i don't and i tell people i don't care how much money you make most people think okay you know what i'm gonna make more money and i'm just gonna focus on making money no when you make more money the first step is making more money the second is keeping it the second is keeping it and so i know you guys are always like listen do i have to pay that what what is this what is the tax deductions let's make sure that i'm doing these things and that's how it should be but the reality is most business owners don't have a a CPA that they can consistently communicate with.

14:51They're filing their taxes with like tax preparers and they're there January through April and then they're out after that. And so that's important as well. My brother actually called me recently. He was doing his taxes and he was talking about the SALT deduction, which actually changed. You want to just give the people the info on that? Yes. I love that the SALT deduction increased because back in 2018, the SALT deduction was decreased to$10 ,000, which means the SALT deduction just means your state and local taxes. So you get a deduction for all of the state and local taxes that you pay. And it was a hard tax season for us that year because a lot of homeowners were being impacted because under the SALT, you have your state taxes, your local taxes, you also have your property taxes.

15:44So if you are making a certain amount of money, let's say you make$100 ,000, let's say you live in New York, New York City, between state and local, you're already at that$10 ,000. So that means you are used to getting a bigger refund because your real estate taxes were going to also be added to that, but they were capping it at$10 ,000. So that was a very hard tax season, a hard pill to swallow, but they've now increased it to$40 ,000 and it has been a game changer. Everyone's happy this year because they are seeing larger refunds, which is really good. But yeah, so I definitely think that paying attention to the tax code is so important because of little things like that.

16:27Some people don't even know why they're getting a larger refund and you must know why you're getting a larger refund. What do you, what do you, what's some advice for our business owners, not business owners, real estate owners and real estate investors. Oh yeah, real estate. So one thing I want to say, real estate, come, come, come to me. I need you all to understand that real estate is great for cashflow. Yes, real estate is great for appreciation, obviously if it's purchased right, but real estate is also great for tax purposes. And that is really the secret weapon that most people don't acknowledge.

17:01And they're mostly like, oh my God, invest in real estate because it could produce cashflow. So invest in real estate because, you know, it's going to appreciate and you can leave it. And all of those things can be true. But what most people don't talk about is that real estate is the ultimate tax asset. And it is the way to help you live tax free. So if you want to live tax free, you have to have real estate. And why is because when it comes to the tax code, the government's like, listen, we need you guys. We need you guys to be landlords. We can't house everyone. You do us this solid. We'll allow you to keep your money, right?

17:35You house these people and we'll allow you to keep your money and you do that through depreciation So I was just talking to you about cause um about bonus depreciation I implement that um in a in cost segregation So just how um how it works with real estate is instead of going in when you have real estate If you have real estate which and i'm going to say this because while it is a requirement Most people aren't doing it. You must depreciate your home if you are investing in real estate, not your primary residence. So if you're investing in real estate, you must depreciate your home every year, but that's 27 and a half years.

18:12So obviously, you know, you're dividing something by 27 and a half years. That's a big number. So while you do get some depreciation expense, it's not the largest. So what you should do is you should perform a cost segregation study. And what a cost segregation study does is it dissects the property. When you have a building, Your building is made up of the building, land improvements, a roof, HVAC. It has so many different compartments. It's not just the building. And so me as a tax strategist, I'm like, well, let's dissect that building because the IRS says land improvements can be depreciated over 15 years.

18:49And they say, OK, well, personal property can be depreciated over five years. So how about I dissect the property versus making my client just only divided over 27 and a half years? And so that has to be done through a cost segregation analysis. You dissect the property. And then what happens there is then bonus depreciation comes into play. So bonus depreciation says, okay, well, you have these assets. Let's accelerate some of that depreciation. Let's take 100 % of it. Now, just to be clear, you cannot take 100 % of the value of a building, but you can take 100 % of the value of, let's say, personal property or land improvements.

19:32So on average, what happens when I do a cost segregation study, most clients are looking at about 25 to 30 % of the value of the real estate property. So therefore, now they're able to deduct that. And the great thing is there's so many different strategies. That's like probably a whole another episode, but there's so many different strategies to make sure that you can use those losses from your real estate to wipe out your real estate income, your business income, even your W-2 income. So therefore, now it puts you in a position where you're getting larger refunds and lowering your taxes. So we talk about investing a lot and a lot of people have made substantial gains.

20:13I've seen. Don't you guys have like the thousand, thousand percent club? Shout out to the green jacket community. Right. So these people have made hopefully long-term capital gains, which is going to be taxed at a different rate. it feels like is real estate the next move to offset some of those gains or depending on obviously how much they've made like when we ask about mistakes like the first thing is like yes we have the money it's exciting and wow i've never had this much in your mind you know that part of this is going to the government the person who's doing it is not thinking that because they're in the excitement is that the next phase or there's other things that we should be looking at to offset some of this so we can keep more?

20:55Yes. So to my green jacket community and those approaching, one thing to note is that you, there are different buckets of income, some buckets. So you, I just mentioned how you can use real estate losses to offset business losses. If you have capital gains, long-term capital gains, you can't take that and offset your business or you, you know, it won't be added to your business. It is going to be in a separate bucket and it's going to be taxed. So the only thing that can offset a long-term capital gain is a short-term capital gain, right? So you have to have it in that bucket now, right? Because again, and I want to just stay on this.

21:39Actually, before I go into, before I go a little further in terms of talking about how you can navigate that and all those things, one thing I want everyone that invests to know is that Warren Buffett said, thanks to the many loopholes put in place by the IRS, I pay a lower tax rate than my secretary. And I want you guys to really lean into that and understand what that means. That means that Warren Buffett, one of the most wealthy people in the world, the highest tax rate he will ever pay is 20 % on any gains that he makes. while his secretary, the highest that he will. And again, I'm only talking federal.

22:16I'm not talking state, local, social security tax, Medicare tax, right? The most that she will pay is 37%. So we first have to understand, okay, well, maybe if you are, you do have that earned income that could be at 37%. Maybe a strategy is to shift some of that income into trading. So therefore, now those gains are only going to be taxed at 20%. That's a 17 % reduction in the taxes that you would pay. All right. So that's the first thing. Now for all my green jacket people, I know you guys are probably like, listen, I'm about to be out of here. I'm about to do this full time. For those people, you can become what's called trader status.

22:52You can elect for trader status. Trader status says that the IRS is looking at your business, looking at your trading like a business. Because what happens now is when you trade, your fees aren't deductible. Your education isn't deductible. None of those things are deductible. But when you become trader status, the government says, okay, we're going to actually look at this as a business. And now your income, instead of it being looked at as capital gains or income, it's just looked at as income. And now you can deduct your vehicle, your education, the fees that you're paying, and all of those things.

23:26So now that is a strategy that can also help. But it'd be higher income. It'd be higher tax rate. But it depends. And it would be a higher tax rate. And that's why tax planning and tax strategy is so important because now you have to understand and say, okay, well, do I have enough expenses or how can I plan and position myself? We talk a lot about ownership and one of the most important assets you can own is your digital real estate. Too many entrepreneurs rely on social media platforms they don't control. Your website should be the center of your business. Framer helps you build a professional website without all the friction.

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24:45That's Framer.com slash earn for 30 % off. Framer.com slash earn. Rules and restrictions may apply. Earners, what's up? Look, building wealth isn't just about making money. It's about knowing where your money is working for you. That's why we partner with Empower. Empower is all about helping you invest well so you can go out and live a little. Their free Empower Personal Dashboard gives you a complete view of your financial life in one place. Track your net worth, monitor your budget, analyze your investments, set retirement goals, and more. You've worked hard for your money. Now make sure it's working hard for you.

25:20Download the Empower Personal Dashboard or visit Empower.com. Not an Empower client paid or sponsored. Quick one before you jump back in. You're listening for ways to help teams move faster, make sharper decisions, and turn scattered context into work they can use. ChatGPT for Business can help. ChatGPT for Business gives teams a shared workspace with admin controls, permissions, and access to work and codecs in ChatGPT. This means your business can move from question to answer and code to rollout quicker. Join over 10 million business and enterprise users worldwide already using ChatGPT for Work.

25:58Download the ChatGPT desktop app or contact sales to learn more.

26:36to because let's just say that scenario i may say to you okay well if you're investing in stocks we don't want to just leave it as just business income and have the expenses depending on how much profit you have we may now also need to go out and purchase some real estate or you may need to go and purchase a brand new computer system, right? You have the ability to then say, okay, what do I need to do? But what happens when you just have trading income, it's kind of stuck at whatever that rate is. So in that example, Warren Buffett is trading, well, they're trading stocks, but they're doing under Berkshire Hathaway.