KEEP MORE MONEY! Ways to Pay Less in Taxes as Roofing Sales Rep or Owner

In roofing sales, we can earn a lot of money, which means we have a high tax exposure. We end up paying a lot in taxes. And believe me, when I look back, there's a lot of things that I could have done differently that would have saved me quite a bit in taxes. And in this video, we'll be showing you some of those strategies. So buckle up, because I'll be covering advanced ways to keep more of the money that you're earning as a 1099 sales rep or an owner. And again, that's the goal. Keep more the commissions that you earn. There's no sense in handing over money that you worked so dang hard to get. And we have a lot of risk being an independent salesperson or an owner. And it's our job to understand the rules, play by the rules, and reduce our tax exposure, our tax liability. So who this is for, unfortunately, none of this applies if you are a W2 employee, a true employee. This only applies to 1099 or independent contractor sales reps or business owners. So a couple disclaimers. I'm not giving you legal or financial advice. I. I am not an accountant or licensed professional in any way. And it is your responsibility to consult with a legal professional and someone who knows what they're doing, who's licensed in this field to guide you. And remember, laws change. All right? So it's your responsibility to understand your local or state and federal laws. And I do not guarantee the accuracy of this information because I am not a professional and I want you to proceed at your own risk. So that being said, laws change. Some of the stuff that's in place now due to the Trump, Trump's Tax Cut and Jobs act, we're will be expiring. So whether you're watching this video as it's publishing or a few years down the road, please do check to make sure that these laws still apply to you. The purpose of this video is to give you a ton of ideas and actionable strategies to bring to your accountant and say, hey, what do you think of this? And he or she can help guide you in the best way to put it together, but sometimes they don't bring it up. And it took me three accountants to get to one that brought this stuff up and it's been a huge help. So listen, if you're new here, welcome to the channel and, and the podcast. My name is Adam Bensman, the roof strategist, and everything I do here is designed to help you and your team smash your income goals. So to help you on that mission, if you haven't already done it, go here to the roofstrategist.com right now. Download a free copy of my pitch. Like a pro roofing sales training video library. It's every video I've ever done organized by category. It is a fantastic for new reps, for owners getting their team ramped up and even seasoned veterans who are looking to sharpen the sales ax. So go over to theroofstrategist.com right now, enter your name and email and get instant access for free. Free. Now back to today's video. Alright, what I'll be showing you is everything I wish I knew when I started in roofing sales, alright? Because believe me, when I paid my first tax bill I was like, how am I paying so much money? I look back now and it was way too much. The other thing I'm going to be showing you is how these strategies can reduce your tax exposure. The more we earn, the more we can owe. There are vessels and strategies for us to use intelligently and opportunities within the law to reduce that. So what I'll be teaching you is why to consider establishing yourself as an LLC if you're not already. This is basic to many why to consider filing an S election. This is a more advanced strategy and how to create your own 401k and how to double your 401k contributions using this really cool tactic I'll be showing you and what you should know about deducting your car and truck. There's a few opportunities, especially right now before the Trump's Tax Cut Jobs act expires, to write off your vehicle. I'll be sharing more on that. And then what other tax deductions may be available to you depending on your setup. So let's get started now. Reasons to set up an llc so many people would just, you know, work with a company as an independent contractor and they're just, it's me, Adam Mensman. You're hiring me? No, you want to be set up as an LLC. By the way, this is like a $40 fee through the, through the state and you can file this online and get your ein and all that, but it provides you legal protection. So God forbid you're working at someone's house, something go wrong, they go to sue you if you don't have this layer of protection that exposes you personally to legal action as well as financial responsibility. So if things go haywire, bad things happen on a roof or you fell off the roof, or you turn around and actually bumped a homeowner and they tumble off the roof or whatever happens, you want to be protected so that your business assets are the only thing at risk as opposed to every penny in your name. And the other thing is it does open you up to some some tax deductions and having an llc and it's one tax return, it's not one for your business and one for you personally. So do recommend the LLC from a legal. Let me take a step back. I don't recommend this disclaimer. I do not recommend this. I do this. You may consider doing this. All right. For that legal protection and reducing the financial liability. Now this is a bit more of an advanced strategy I'm sharing now. It's reasons to file an S election. So filing as an S election treats you like a corporation. There are a couple advantages to doing this, but mostly to reduce your tax exposure. In other words, reduce the amount of taxes that you owe. So when you file an S election, it tells the irs, hey, I am set up as an llc, but I want to be treated as an S corporation. And what you do is you end up paying yourself a salary, okay? And that salary, depending on what you read, is usually a percentage around half of the total income you bring in. What this does is you don't have to pay payroll taxes on what they consider shareholder distributions, which is the earned above and beyond your salary that you might draw out more of your commissions. Okay? And yes, if you're commission only, you can still pay yourself a salary. This opportunity allows you through the S corp to set up what they call a solo 401k which is an investment vessel that you put in pre tax dollars now. So money you're not paying taxes on. And then when you retire, you pull that money out, you'll pay taxes on it on the back end. But as we earn more money in roofing sales, this is a really great opportunity to leverage this personal or solo 401k. I'm going to touch on this in a minute. And again, it's still under one tax return. So traditionally with an S election or excuse me, as an S corporation, you'd have a corporate return and a personal return and it gets expensive with it with your accountant and all that. So filing an S election with an llc, everything is still on that one return. It will save you money and make it easier for your accountant to process. Now this 401k thing, we're going to get into this a bit. You can contribute up to 25% of your salary. So example, if I'm paying myself a $50,000 a year salary. Let's say I'm earning 100,000 a year in roofing sales. I want to pay myself about a $50,000 a year salary, and I can contribute to that 401k 25%, which is 12,500 bucks. Well, guess what? The company, your LLC, your own business. So this is. You can match your own contribution. So I'm putting in 12, five. My business says, hey, Adam, you put in 12, five. Here's another 12. This is called the profit sharing contribution. So I can match my own contribution from the business for another 12, five. Okay? So what this allows me to do is if I max out that 401k and the profit sharing contribution, that's 12,000, which I put in, the company matched me with another 12,5. That's $25,000. Now, that's income they don't have to pay taxes on this year. So If I earned 100 grand this year, I can. I'm only going to. I'm going to take out that 25,000. I'm only paying taxes on the $75,000. And that is all in an investment vessel of your 401k for retirement. Money management is an important thing, and this is a really awesome opportunity to increase those limits. Yes. There are other options that I did not include here in a Roth 401K. And the reason for that is many of us in roofing sales are going to exceed those limits and there will be financial penalties or those. Those opportunities just aren't open to us. So for most, we're going to exceed those limits for the Roth 401K. All right, next, what do you need to know about buying your truck and SUV under your business? This is an opportunity that so many people pass up. All right. When you have a truck or an SUV that you're using for work in roofing sales, it can be purchased or titled on the business. So you could even sell it to yourself. So if you have a truck, you can sell it to yourself, retitle it under the business. There's some advantages to this, which I'll touch on shortly. This will require commercial auto insurance. So if I title it under the business, I need to have commercial auto, not my. You have to have auto specifically for that. Okay. And there's only a couple of companies that are going to write a policy for an individual with a commercial vehicle. So they usually want fleets of like 15, 20, you know, but that is an option. You do pay a little bit more money, but it is deductible now here's where it gets fun. Your vehicle, if it has a 6,000 pound gross vehicle weight rating, which is any large, any truck base, you know, F150, Silverado, whatever, up, or an SUV that has a 6,000 pound gross vehicle weight rating, this has special rules right now, which I'll be touching on in the very next slide. And it's really important for you to know this because if you had a really great year, might be a good time to buy that truck that you were looking at, even if it's used because of some tax advantages. I'll touch on in a minute. And the other thing is that it is possible to deduct those vehicle expenses and maintenance. There are some little rules you need to know about. You have to use that vehicle for more than 50% needs to be dedicated to work. All right, so if you're buying a truck and you're only using, you know, using it a little bit for work, which I know is kind of unheard of in this business, I don't think this will ever be an issue for anyone in the roofing industry whatsoever because of the miles we put on. But I just need you to know this because there are some limitations. All right, so vehicles with a 6,000 pound gross vehicle weight rating, these open us up to some cool opportunities. So until December 31, 2022, there's a hundred percent first year bonus depreciation, which means the 100% first year bonus depreciation write off will reduce your federal income tax bill and self employment tax bill if applicable. You might get a state tax income deduction too. And the source is on this. So by the way, all these slides are coming to your inbox. If you're not receiving my emails, click the link in the video or podcast description and go to the far. Snapchat should be the second link in there and you can enter your email and that will ensure that all the new episodes I publish you get these slides sent to your inbox. So if you have your email handy, pop into there, click on this source, it'll bring you to that page. What this means is if let's say you buy a $60,000 truck, you can depreciate that full 100% of that purchase on your taxes right away. And this is a big deal. This can really reduce your taxable income and maybe even drop you down a tax bracket depending on how much money you're earning. So again, consider this. If it's under that 6,000 pound gross vehicle weight rating, it doesn't apply. So if you want like some electric economy car does not apply. Only for heavyweight vehicles with a 6,000 pound gross vehicle weight rating. Alright, now I want to hit a few other potential write offs and deductions. Any equipment that you buy, ladders, tape measures, drones, a file box, computer, calculator, anything. These are considered depreciating assets. You can write them off and then they will be on your. They do count as a depreciating asset on future returns. Any clothes that you get for work, you get these nice polos. I work with companies that say hey, just bring us your shirts, we'll logo them up. If you're buying clothes for work, that can be deducted any utilities and software subscriptions. So if you're paying for any software on your own, any utilities, like your Internet bill, things like that, that all can be deducted. Travel expenses, duh. And then the potential home office. So if you do have a home office, a dedicated room, you can write off for your whole house square footage, let's say Your office is 100 square feet and you have a 2,000 square foot home, you can write off that ratio of all of your bills. 100 square feet of the 200 or excuse me, of the 2,000 square feet. So do consider that. But this is a fun one. And I'm going to shamelessly plug another advantage of grabbing my programs, any courses, programs, books or conferences. This is considered education. So anyone out there, if you've already purchased my programs, make sure that you categorize that as education or marketing material. So the battle pack might fall under marketing expenses. All the programs, the roofing sales success formula would fall under education. So these are deductible. So at the time you end up investing it and then taking the deduction, it costs even less and it'll make you money. So anyway, whether it's my stuff or someone else's, it doesn't matter. I but this also qualifies to books and I do link to books and recommended books and I get people reaching out. Oh, I read that book because of you. So remember, all your books you can purchase through the business. All right. Recommended resources I did link. And again, these are only hyperlinked here in the far snapshot which is in your inbox to the first two articles to help you with your vehicle deduction. It's important to navigate this and understand where your options are. Do talk with someone because everyone's got a unique situation and there's no blanket advice that's best for everybody. And then there's another article I put here the reader reasons to file an S election so you can see the advantages and how that all works. Okay, Now I do recommend that you reach out to a qualified accountant, like a CPA for help and guidance. Everyone's different. Whether you're married, whether you're single, whether you have children or not, whether you have multiple vehicles or one vehicle, whether you have a home office, how much income you earn, how much income your wife earns, how much income you have extra for your investment. So all these are going to factor in. You really want that strategy to appeal to you. So I hope you can take some of these ideas and bring them to life because they can save you a substantial amount of money and create new opportunities for you that you might not have thought about. Alright, so the other thing that I want to wrap up with, which I did not mention, is I recently released my recommended reading list so I put it on a Google Doc. It's organized by category. I'm going to be updating it and if you ever want to copy that, just email me adamrootstrategist.com I'll pop it over to you. In there is a book that I just decided I want to add on here. It's called Profit first by Mike Michalowicz and you've probably heard other people talk about this because it's amazing. His accounting system I recommend for an individual sales rep for an owner. I run it and swear by it personally and professionally. It is a really great resource to help. So do consider checking that out now. Just because this video is about to come to an end doesn't mean our time together has to. If you haven't already done it, click here to download a free copy of my pitch Like a Pro Roofing Sales Training Video Library and you can click here for more videos on how to become a $100,000 plus earner in roofing sales. I'll see you on the next one.