Epic Real Estate Investing - 5 Tax Tips for the 4th Quarter| 515

Episode Date: November 6, 2018

Increase your passive income and decrease your tax liability with 5 tax tips! Brush up on the 2 ways to escape the rat race, why you should start a small business, and why you should buy an income property in the 4th quarter. Learn more about your ad choices. Visit megaphone.fm/adchoices

Hey, welcome to another episode of Tax Hacker Tuesday. And just a quick note before we get on with the show, a quick note about paying less to Uncle Sam this year. Waiting until April 14th, that's not the time to do it. There's nothing you can do. There's nothing your CPA or tax preparer can do at that point. And December 31st, that's not the time to do it either. It's too late. Besides, your CPA will probably be ringing in the new year and not picking up the phone on December 31st.

So if the thought of writing that big check to the IRS is as nauseating to you as I remember it being for me, then the time to deal with it and minimize the amount that you have to pay, that time is right now. I mean, we're in the fourth quarter. Tax planning needs to happen right now. I mean, consider this. If I offered to give you $2,000, I've got $2,000 in my hand, and I offered to give it to you for $1,000. $1,000, I give me $1,000, I give you $2,000 back.

Would you make that trade? Of course you would. You'd double your money with that simple exchange, right? That's what we call a no-brainer. Well, that's the very offer that Tim Berry has been extending to you all year long with the tax hacker blueprint. Normally $3,000 a year for this level of planning and consulting that he's offering. And the introductory offer is half off, just $1,500.

dollars. And if Tim and his team can't save you at least double that, then it's free. You pay nothing. So go to tax hacker.com, grab Tim's free book on how to navigate the loopholes and Trump's new tax plan. You're going to need that. And after, you'll have an opportunity to schedule some time with Tim and his team and just let them know that you heard this on the epic real estate investing podcast. And tell him, you want your tax hacker blueprint. Go to taxhacker.com and everything you need is right there. All righty. Now on with the show. This is Terrio Media. Did you know that up to 50% of your lifetime income will be wiped out by taxes?

What if you could stop this madness? Isn't it about time you play on a level playing field with the wealthiest 1%? Now you can. Tim Berry, attorney at law, shares here each and every week current tactics and strategies that anyone can implement to hack the tax code. Protect your assets and keep what's rightfully yours. It's time. for Tax Hacker Tuesday.

Hey, this is Matt over at the Real Estate Cashflow Savvy, and we help a lot of people over here escape the rat race. And there's two ways that you can do that. You can do that by either increasing your passive income, and we do that by helping people purchase income properties. Or the second way you can do it, and or the second way you can do it, is work on decreasing your expenses, and we help people with that as well. And our big advice is always to start with your biggest expenses,

and start there and reducing those and just kind of work in your way. way down. You know, Susie Ormond or have you start with your daily cup of coffee. Let's preserve that. Let's enjoy that. Let's start with our bigger expenses where we can make a bigger impact right away. And then if we get down to that point where we got to start minimizing our coffee, that means you've done some great work and you've probably got enough money to enjoy that coffee anyway. So let's just start with our biggest expense in life, which would be your taxes. It's your tax liability. It's going to take up to 50% of your lifetime's income. So that's a great place to go to work to have a significant impact and an immediate impact. on your escape of the rat race. So with it being a fourth quarter,

there's some things that you're going to want to do before the end of the year to really maximize your profit for this year. And so in the spring, when it's time to pay Uncle Sam, that tax liability is much lower. So a couple of, I've got five tips for you.

If you haven't started a small business, you want to do that. That's probably the number one tax advice or tax strategy, I should say, that any American can do to immediately reduce, reduce their tax liability because self-employed individuals, I wrote this down right here, so I'm just going to read from real loosely.

Self-employed individuals are eligible for a bunch of tax deductions. And a few of those expenses could include a business-related vehicle mileage, shipping, advertising, website fees, percent of home internet charges that you use for business, professional publications, dues, memberships, business-related travel, office supplies, and any expenses incurred that run your business. But a lot of those expenses that help you run your business are expenses. that you have already right now during or in your personal life so you can kind of collapse those a little bit and get a bunch of tax deductions that way the second reason for uh starting a small

business it just has to do with the way that uncle sam comes and gets their share you know as a w2 employee you you make your money uncle sam takes his cut and you get what's left over as a business owner whether small or large business you have the rights to the same advantages is you make your money, you go and pay for all of your stuff, and then you pay taxes on what's left over. Big impact to the bottom line. And thanks to my good friend Mark Kohler over at Kohler and Kohler. This is one of his top tax strategies for all Americans. So start a small business. If you own an income property, hey, you've already got a small business. So you've kind of killed two birds with one stone. So just know that. But go and discuss this with your CPA and make sure that's just going

to be the right thing for you. And in most situations it will be. It just might be the way that you do it is going to vary. So starting small business, that's number one that you can do this fourth quarter if you haven't done so already. Second thing is combine your vacation with a business trip. So if you've got a vacation coming up for the holidays or something like that, to see how you can put some, plan some business, I guess meetings or research around that. And then you can take some of that vacation expense and take that as a tax deduction as well. You really minimize the expense of your vacation. Third thing is sell losing of investment. If you have losses in your taxable accounts, you can turn those lemons into lemonade essentially.

Just cut your losses, cut those loose before the end of the year, and you can use those losses to offset capital gains in the new year. All right. And fourth is adjust the cost basis of your investments. Now, what that means is a lot of people think that, you know, say you have an income property and you blew an air conditioner this year and it cost, I don't know, a couple grand to replace it. People look at that, wow, they just went a whole year of my cash flow. my ROI went down the tube. Now, don't look at it that way. What you can do is you can take that and adjust your cost basis and offset it's going to

reduce your capital gain when you actually sell the investment. All right. So look at it that way. That's number four. Number five is to buy an income property. You want to get one or your next one. If you can get a couple, you want to do that by the end of the fourth quarter because this is why.

Because federal income tax rates, they vary. And it's possible to lower your taxes by reducing. your tax rate. So the tax rates, they range from 5% to 35%. And the IRS assesses tax on income earned from work at an ordinary income rate of up to 35%. In contrast, a lower tax rate applies to income earned on real estate investments. So when you're starting to take your active income and convert it into passive income by purchasing income properties, not only are you increasing your passive income and helping your escape with a rat race, but you're also decreasing your tax liability.

So you're really killing tubers with one stone. And that's why I like real estate so much, and especially income real estate. You know, you increase your passive income. You decrease your tax liability. And it's also, you get all the benefits of running a small business. So if there's anything that we can do to help, and you've been looking at a passive income,

or maybe you've got some passive income. You're a little bit frustrated right now. Go to frustrated investor, excuse me. It's Investors Guide to PassiveIncome.com. Mercedes and I put a document together that we give to all of our clients. You can have one for free. go to Investor's Guide to Passive Income. That'll get you started to help you take the next step in your escape of the rat race.

All right. So that's my tip for this quarter. Or actually my five tips to reduce your tax liability, maximize your profit for this year. You want to get that done before the end of the year. All right. I'll see you next time. Take care. That's it for today as we dream of a tax system that works just for you.

But until then, you have Tim Berry. See you next Tuesday for another episode of Tax Hacker Tuesday. Hey, Rockstar, if you have a question here for Tim that you'd like him to answer on the show, anything tax related, anything asset protection related, go to taxhacker.com forward slash questions. Post your question there and then we'll answer it live right here on Tax Hacker Tuesday. This podcast is a part of the C Suite Radio Network. For more top business podcasts, visit c-sweetradio.com.