5 Year-End Tax Strategies the IRS Doesn’t Want You To Know

Hey everybody, thank you for joining me for this special live broadcast. This is not going to be a waste of your time. Some of you may have gotten sent this link. Some of you know me from many years of following my messages about the American dream. Saving taxes, building wealth, protecting it people. I'm a legit CPA attorney, partner in a law firm, accounting firm. We've got a trust company helping clients self direct their retirement accounts. And I've been teaching this for 20 plus years. Years. I'm going to throw down today, 5 of my 20 year end tax strategies. If you're a tax advisor, this is what you got to be talking about with your clients. If you're a business owner, you need to be bringing this up with your advisors, talking about it and making sure that you are captaining your ship. These are legit strategies. They're practical and they make sense. This is not fringe stuff. We're not talking about some stupid Delaware statutory trust or Nevada or Wyoming. Not that some of those strategies can work for about one out of 500 people. These are Main street everyday strategies. They're gonna save you thousands of dollars. So I'm gonna lay out my five, gonna talk about which five we're gonna cover the other 15 I'm gonna do next week. And three consecutive live broadcasts, you'd be watching for that. We're gonna go boom, boom, boom next week. Three in a row, three days in a row. And I'm gonna throw down the total of 20 strategies that I know can save you, gosh, could be in some cases $100,000 more. It depends on your equation. I'm going to lay out the five and then I'm going to make a special announcement of some other tax saving ways to learn, grow, network and build your business. A special announcement I've been talking about for two days. Okay, so here's the five. I'm going to. We're going to use the whiteboard here in a minute by the way. Robby, can you. I've got here in the studio, Robbie, you want to say give him a shout out. Can you move that little white thing there on the screen? We're going to keep it real today, people. I want you to throw out questions in the chat. Robbie, you're going to be taking chat, is that right?

Yeah, I'm here for your questions, Mark.

All right, let's do it. Okay, everybody, I'm here for you. Please share this broadcast later if you freaking love it. It's going to be good. All right, here's the 5. The retroactive S selection, which means some of you may be an LLC this year. Is that the right move or not? You have until the end of the year to frickin fix it. If not, I'm going to unpack this later. Quickly nail your payroll down. That's number two. Do you have payroll in your S corp? Are you paying yourself out of your sole proprietorship? How do you pay yourself in your business? I want to deal with that because it's a year end strategy. Number three, make a sale. Now I'm going to be doing some kind of technical stuff this 20. Some of them are just basic you got to know. And one of them is making a sale before year end. I'll explain why here in a moment. Number four, holding your board meeting before year end during the holidays. You don't have to have a corporation, you don't have to have an LLC to have an advisory board. It could be an incredible tax write off for travel and dining this holiday season. So I'm going to break that down. And number five, the HSA policy, the health savings account. Open enrollment starts in about 10 days. November 1st through January 15th is open enrollment. If you don't take action during that time period, you're going to lose out on the entire HSA strategy next year. So this is a year end deal that saves you next year. And I have so many clients this year frustrated that they missed it last year end. So I want to cover that. That's just five. I'm not kidding you. I actually have 23. I'm going to whittle it down to 20 and we're going to kill it next week again. The next 15 will be released now. Here's the special announcement. This is going to help all of you and it can be a simple virtual situation. For some of you it could be the best experience of your business life. This year I'm doing a three day event. I do it every six months. It's called Tax and Legal 360. The biggest tax and legal conference for small business owners and tax professional lawyers to network and work together. We're going to. We've already going to double the size of our last event. It's in Phoenix. November 30th, December 1st and 2nd. Three day event. Doing a flash sale through Sunday. 20% off any of the tickets. A virtual ticket is 399. Holy crap. Why are we doing it? We're giving away too much. Robby. I'm not happy. Okay, that's 80 bucks off. And that's a virtual ticket for 30 topics, three panels, four main stage events, 15 different speakers, and the 20 tax strategies we're talking about. They're all at the event. The five strategies today are one hour topics that you can watch on a virtual broadcast. November 30th, December 1st or 2nd. And please come. It's at the freaking Hyatt Peak Resort. It's gonna be awesome. They got a Lazy River. We're gonna do a Denim and Diamonds concert on Friday night. It's gonna be a lot of fun. It's be gonna, it's going to freaking rock. I'm going to love it. All right, so we're going to have a good time. Get over to tax and legal, 360, 20% off over the next three days. Give your ticket away to a family member. It's a tax write off to buy the event whether it's virtual or in person. We got a room block that's cheaper than frickin Hampton Inn for this Hyatt Resort. It is kick ass. Go check it out. All right, so we're talking more about that. I want to answer your questions. Let's unpack these five. And for you again, business owners, you want to write down these five, bring them up with your tax advisor, be like, what the hell? Why aren't we doing these? And again, if you are a tax advisor or a tax attorney, this should be on your checklist. And by Main street tax pros, they know this, this is what they're doing. They're doing year end consults, covering these 20 and then tailoring it to clients. All right, so let's go. We got to get to the whiteboard. Can you take me over there, Robby? Okay, everybody, this is legit. We're not just going to screw around here with some, you know, fluffy little broadcast. As we talk about these five and this subsequent 15 strategies, we have to put it in perspective with what's called the trifecta. The Trifecta is a trademark strategy that I created five to 10 years ago. Somewhere in there, we filed for a patent trademark. And that is to explain how your tax and legal should be structured for anybody, someone just starting and someone worth $100 million. And I've got clients all in between that use this and freaking love it. So, okay, here's the whiteboard, here's what it looks like. It starts with at the bottom, your trust. Revocable living trust or 1040 tax return. Any of you that are, you know, regular followers of me, you're, you're sick of it. You could draw this on Your kitchen table all night long. But we are going to split your life into two sides. We're going to put operations over here and assets over here. This is your business entity that you make money. Maybe it's a sole prop, maybe it's an llc, maybe it's an S corp. We're going to talk more about that. And then over here is your llc which you're going to hold rental property in. And we're going to. Other strategies are short term rentals, long term rentals, self rentals. Buying a piece of real estate in the next freaking 60 days might be a great move. So we can be talking about that too. So this is the trifecta. Boom, boom, boom. This is where we're dealing with ordinary income which is taxed at the highest rates. And this is passive income. This is what wealthy as you see out there, influencers buying real estate, doing syndications, blah blah blah, crypto notes, real estate. We want to create passive income over here which is more tax preferred, which we love. And then over here is our ops. Okay, now when I talk about 20 strategies, my 20 strategies pervade this whole diagram. Like we have, we have to say, what are the 20 ways I can save taxes this year? And if I don't do it before December 31st, I'm SOL and I'm not talking statute of limitations. I guess I kind of am. I'm talking about two different things. All right, okay, so save your questions up. We're going to dive into this now. Number one strategy and I'm not going to say they're in the importance. I'm just going to throw down 20 of them. I just want to lead with this one because so many Americans, small business owners set up an LLC and think it's saving them taxes. It doesn't. An llc, limited liability company, whether you set it up in your own state or frickin Wyoming or Delaware or Florida, I do not care. Does not save you taxes. It's for asset protection and the ability to convert to an S corp when the time is right. Let me explain what's wrong with an LLC in certain situations and then why we want to be able to do a retroactive selection. This is a huge topic. We're not going to be here all day. So I'm going to move through this fairly quickly. I've got YouTube videos, I've got, I've got best selling books on Amazon on this. No one has more books, YouTube videos, downloads and podcasts and blog articles than me on this. This is it, you guys are at the right spot. Okay, so Robby, let's show them here. Let's say you have an LLC and you are a landscaper, you're a realtor, you're selling online, you're an influencer, you're an affiliate fee, you're doing consulting. Any of those things, you'd be driving Uber. That is a small business. And you could have an llc, which is good. It's not saving you taxes, but it's giving you flexibility. Let's say you bring in 100 grand and this and you take expenses of 25,000. So 25,000 in expenses. Some of those are year end strategies. We're going to come to auto dining, travel, computers, electronics, blah blah, blah. That's not the point. You're going to net 75 grand. So you're making about six grand a month. Let's say you're making six grand a month. What hits you first is self employment tax. Now many of you that follow me, you know this, but hang with me because there's a trick here. The self employment tax is 15.3%. That's going to nail you for 10 grand. Then you're going to pay fed state, not the state tax where you freaking set up your llc. Like a Wyoming or a Nevada where you live and do business. You can't get out of this. You Californians, Illinoisans, New Yorkers, you're gonna get, you're gonna get hit with this at the state level too. So you're a 10k fed state, you're getting hit with three different taxes. Not good. This sucks. So the strategy we want to do, which is going to bleed into strategy number two is we could do an S corp. Now this is where the I'm going to come back to strategy one, which is a retroactive election which you got to do before year end. So the S corp says I make the same hundred grand, I spend the same 25 grand on a bunch of freaking expenses. I'm killing it. I make 75 grand. But instead of paying the F word, FICA self employment tax on the whole damn 75 grand, I split it. And let's say, and some of you accountants might freak out here, do not freak out when I say what I'm about to say. Because reasonable comp, everybody's got to stick up their butt in the accounting industry on reasonable comp. I don't know why in 25 years I've never had a client audited for taking inappropriate, legitimate, legitimate reasonable comp. Now just so Robbie, let's Show what reasonable comp means is you're going to take a W2 and the rest is going to fall out as a K1 or a distribution or a draw. There's all these different words for it. Okay? But you're going to take part as a W2 in this equation. Accountants buckle up because you're going to want to freak out. I might do a 1/3 allocation. I have a payroll matrix. We're going to come to that in a minute on strategy number two. But again, I stand behind these tax returns and sign them and if a client gets audited, I'll pay the frickin bill. I know this works. I teach CE on this. And I'm a licensed CPA and attorney in I don't know how many states helping clients all over the country with this for 20 plus years. So keep your pants on. So we're going to go with a 33% allocation. I'm going to take 25 grand in salary and 50 grand in a draw or distribution. K1. Now look what happened, everybody. I only pay FICA here. I just saved 15.3% on 50 grand. So this 50,000 is protected with the S Corporation. So now I just saved around $7,500. 15% times 50 grand. And the more you make, the more you save. So boom. That's savings. $7,500 is not chump change. And the cool thing is the more money you make, the more you save. And some of you may like, well this has got to be high risk. Not everybody address it. Joe Biden had a freaking S corp the year he became president because he got a book deal for like $13 million. You know, his payroll was 700 grand. He took about a 5% allocation on payroll and saved over 500 grand in Medicare and Obamacare. It was on like page 32 of the wall Street Journal. Donald Trump, real estate professional, owns real estate, takes depreciation, pays $600 in tax and it's like he's a criminal. Holy shit. Front page, right? S Corps. Everybody does S Corps. Everybody does real estate. I don't care if it's Biden or Trump. Can we get over the politics on this and know that we are all in business together? If there's a good freaking strategy, let's take advantage of it. It's not anything illegal. It's not like we're bad or unethical. This is the beauty of the American dream. The people that know the rules save more money. Rich people know the rules. You want to be rich, know the rules. Now I know I'm preaching the choir because you guys are freaking here. All right, so here's the strategy, okay? If you were an LLC in 2023 and you're like, oh my gosh, Mark, this is freaking awesome. I don't want to pay FICA on all of my income. You can back date your LLC to an S corporation all the way back to 1123. And I going to nail my payroll amount, which I'm going to come to in a minute. That reasonable comp I talked about, we're going to nail that before January 15th. You got to be doing it before year end so you can do your payroll. You can't say you're an S corp without doing payroll. You've got to file some damn reports before year end or right there in January. And you got to engage with the payroll person before year end. And you want to make this S election before you're in. If you don't do the payroll in the s election, you miss out on the strategy for 2023. You have to do the back date and the payroll. That's the tip. So any of you, I have clients that drive Uber. They're on a board of directors, they're doing affiliate fees, they're a landscaper, they're a plumber. Resident aliens that don't even have a green card can do this. They're working their asses off mowing lawns and paying self employment tax out the butt. We want to make sure that we're all doing this as small business owners, no matter what side of the aisle or you're on the American dream. So we don't take that LLC and backdate. Now again, some of you accounts out there are freaking. Well, Mark, you got to make an s election within 75 days. Oh my gosh, that was back there on March 15th and you missed it. No, we're okay. There's a ref proct ruling from 1996. You attach to the 2553 so you can do a retroactive selection to the beginning of the year. Yes, it works. And I know it's expensive. Everybody out there, it's expensive. Our firm, we charge $200. $200 to do this. I'm not even trying to sell that here. I just want you guys to follow and learn and grow and work together as a tribe here. You want to get to my law firm? We'll make sure it's down here in the link. You want to get to your certified tax advisor. I'm training tax advisors around the country@markjcohler.com. There's a link to tax advisors you can find that know this that only charge a few hundred dollars to make this election. Okay, so strategy number one. If you're a small business owner and made more than 40 grand this year and you don't make this retroactive s election, you're going to pay over 3,000 to $4,000 more in tax than you should have. And I've got dentists and realtors and brokers and contractors and landscapers and plumbers and blah, blah, blah that make 100 or 200 grand and never see this coming because their accountant afraid to take a strategy. Guys, you don't need the accountant. That was a band buddy up in the bleachers in high school. You need the accountant that was under the bleacher smoking pot. That was me. I'm just joking. Was that my inside voice? Okay, sorry. Get an accountant that's not afraid to take a freaking risk in a strategy here. All right, Now I'm going to add strategy number two because they go hand in hand. And then. Robby. Any questions on this? Let's unpack it. I'm here for you guys. This is good. Okay, so back to the whiteboard. When you do your trifecta, okay? So here's your trifecta again. You're going to take this LLC and you're going to convert it to an LLC taxed as an S corp. It's one freaking form. It's not hard. Your accountant should be excited to do this for you. If your accountant says Mark Kohler's full of crap or you're crazy, this accountant has got to be fired. I've got hundreds of accountants that follow me around the country, soon to be thousands that are certified being on a weekly basis doing trainings that'll do this for you in a heartbeat. This is normal stuff. This is not high risk. Okay? So you make your S election and you backdate it to 11 23. Number two strategy. That's number one strategy number two is you've got to nail your W2. You got to choose what is that payroll figure going to be. And it's going to depend. It's going to depend on the type of business, how much time you put in, what do you do, how much money you make, do you have a day job? Are you married? Do your spouse have a day job? Are they helping you in the business, blah, blah, blah. And this is where a tax advisor or one of our attorneys, we're going to help you peg this number and whatever you Pay us. We're going to save you 10 times doing this. You don't have to use my firm or one of my advisors. Find an account that knows what the hell they're doing and whatever you pay them to do, this should save you 10 times in that amount. It was that easy. Okay, now, here's the payroll matrix. Has been taking the country by storm doing this for years. In the matrix, the more money you make, okay? And I should say, the more distributions you take, you accountants, you know what I'm saying? The more distributions you take, your payroll goes down. What, Mark? Payroll goes down. Payroll as a percentage of your distributions. So if I have a client that's making 100 grand, their payroll might be 40%, but if they're making 400 grand, their payroll might be 20% because it's reasonable comp. So your payroll percentage goes down, it's counterintuitive to the money you're taking out of your business. It's called Kohler Payroll Matrix. Got articles on this on Entrepreneur magazine, all over the Web. I stand behind it. I've never had a client audited following the parameters of the payroll matrix. It's okay. It's okay, people. Holy crap. This is Main street planning. If your account's not talking like this. And I'm on strategy number two. All right, Robbie, tell me, do we have some good questions here? Anybody want to debate me? Want to throw down, by the way? Whiteboard still up. Maybe put. Drop that.

Okay, we've got some good questions, Mark. We've got Glenn Hirsch. He's merging a smaller company that he owns into another one that he owns. What's the benefit and disadvantages in closing the book sometime before year end as opposed to.

Okay, Glenn, I'm not. I apologize, Glenn. I'm not going to take that question. I want to take questions related to this topic. You. You're now. I do an open forum podcast. I'm gonna be going live every week. You're merging books between two companies before you end? Hell, yeah. You got a big conversation. Get to my law firm at kqs. Lawyers pay for a lawyer for one hour to talk about this. I could talk about this for 45 minutes. That's a very complex question. So. And no offense, Glenn. I love it. It's just beyond the parameters. I want questions on this topic. Anybody that's trying to do an LLC or trying to do an S corp, if you're not feeling it's cool, I'm gonna go to strategy number three. Anything, Robbie?

I've got a Good question from Cindy. She wants to know if someone with an ITIN that lives in the US can be considered a resident alien and choose to tax their LLC as an escort.

Hell yes. Sorry, that's a technical term. Did I say that out loud? Okay, let me repeat. What's her first name?

That's Cindy.

Cindy. Okay, Cindy said everybody. What if you have someone that's working their butt off and as a non citizen here in the United States and they're working hard and they have a little LLC and an ITIN and they can they really do an S corp as well? Yes. Under the substantial presence test, you become a resident alien. Resident aliens can make an S election under the rules of the 1120s. All of my tax advisors know this now. You're still going to kick out a W2 and you're like, well, I don't have a Social Security number. That's a different topic. Lots of little strategies there. But you're going to take your LLC with an EIN and turn it into an S Corp back to 1123 and you're going to put your ITIN down as a shareholder on the second page of the 2523. It's all good. We've been helping clients do this. This is great. There's no risk here. I've got, I've got get to Mark J. Kohler.com certified tax pro Network is the one of the main menu bars. And, and find an advisor that speaks Spanish or does small business. They all know this. So yes, you can do it. It's a great strategy and there's a lot of hard working non resident aliens here in the US that are helping all of us. And we, and they're working hard and they're paying taxes because paying taxes gets them to citizenship. But you don't have to pay more than your fair share. That's the trick. Okay, Robbie, any others on this?

We got a good one from Daniela. She wants to know if she's a sole proprietor and not an LLC. Is she basically screwed for 2023?

Well, Danielle, that's a great point. So if we go to the whiteboard here and we look at, well Mark, I was not an LLC throughout 2023. I've been a sole proprietorship all year. Well, here's the problem. You're right here in almost November 1st. So we've got two months left, November and December. And so we're trying to figure out what do we do in this realm. You've already made X number of dollars here and you're going to Pay self employment tax. And so, Daniel, yes, you are screwed for this. 10 months. The big debate is should you do an LLC immediately and make it an S corp immediately, just for two months. That's a big question mark. Sometimes I've done that for clients. Sometimes we do the selection in the last two months because you've got enough revenue that you're going to save enough to do it with a lot of clients. However, those two months are not worth harvesting, if you will. But what you do is you still set up the freaking llc and we make an S election to start right here. Can we go whiteboard on 11 24? So you're still going to do an LLC and an S election, but we're going to, we're going to take it in the shorts for 23. It's the way it is. Unless you want to capture something here again, do a consult with one of our certified tax advisors in the network. I make no money on my network helping you. They're very affordable. Just get there and find one that you like around the country. There are all countless states. Or meet with one of my tax lawyers that will build a trifecta and a plan for you. We want to save you 10 times that amount. You got to kind of strategically look at this. Two months. Okay, move on to number three. All right, number three strategy. Number three strategy was called make a sale. Okay, now what do I mean by that? People, remember, take a breath. Remember when you were a little entrepreneur in high in elementary school and you owned a lemonade stand? When did the IRS say you were in business? When are you in business? Think of that lemonade stand. I go buy lemons, sugar cups, ice. I make this crazy awesome sign, I go set up on the street. Am I in business? No, you're in startup mode. And that's how the IRS treats it. So any of you this year that have been to real estate conferences, note conferences, you've been getting trained on lemonade making techniques at Country Time Lemonade headquarters. You've been doing all of this stuff, paying for cell phone and conferences and laptops and blah blah, blah, marketing, but you haven't made a sale. You don't get a write off this year for those write offs, they go into a bucket called a startup cost. So let's go whiteboard here for a minute. So here again, if we're in 2023 and you've got all these expenses, I'm spending for this, I'm spending for this, I'm spending for that against cell phone and this and that blah blah, blah, I'm spending all this money. You are. All of those costs go into a bucket called startup. Now you'll get to write them off, but not until next year. And they could be limited too. So there are startup cost. We want to unlock that. And so if any of you haven't had a sale yet, we want to make a sale right here by November 1st. Go freaking sell something. For example, let's say you're doing an online business and you're preparing to go live or whatever, turn it on and have your brother in law buy your product. If you're doing any sort of consulting, have your mom hire you as a consultant and pay you bink, you're in business. Generate a sale, get your business account open, get your LLC open. Just so you can say, by the way, opening the LLC doesn't put you in business. You got to have a sale, but they got to put the money somewhere. Venmo, through Zelle, through Apple, pay whatever you want. All to go to your business account. So you can show the IRS, I opened my entity, I made a sale. Now you're in business. Now I can take the startup cost right back to whiteboard. I can take this, this startup cost and write it off this year. I can write it off in 2023 if I have a sale. I gotta have this sale right now in 2023. So if I don't, this is why this is a year end strategy. Clients call me up in January, hey, can I write off all these costs of going to Tony Robbins and going here and da da da. Did you make a sale? No. Then you don't get a write off. Well why didn't someone tell me that back on October 19, 2023? Well, I'm telling you now, that's strategy number three. All right, any questions on that, Robby? Any coming in on the startup cost? We're good. All right, strategy number four, by the way, if you just join me, I got 20 freaking strategies. You're going to love this. I'm going to roll out the other 15 next week. And any of you that want to learn about every one of these strategies, I've got a three day conference starting November 30th, December 1st and 2nd, three days, 30 topics, six main stage events, parties every night to network 15 different speakers. And if you want a discount, we're doing a flash sale between now, literally right now and the Sunday night. 20% off. It's giving away a lot. I mean this is not expensive. I think our VIP is 2,500 bucks. Holy crap. You can get off $500 this weekend. That's a big deal. Our premium with classroom seating and lunch every day, the whole nine yards is 9 99. So I know there's bigger and more expensive conferences that are about we're gonna make money. Guess what my conference is about saving money. It's about building your frickin business. 30 different breakout sessions. Every one of these topics today is a breakout session. Alright, so let's go to board number four board meetings. This is number four. Okay, so here's what's cool in our trifecta. Remember you could have an LLC with some rental properties. You could have an LLC driving uber, selling online, being an influencer, whatever. You could have an S corp with a legitimate storefront or just a 1099 as a realtor driving around town or a consultant or broker. Okay, all that's good. You could even be a sole proprietorship like Danielle, just kind of getting going in every one of these situations you can form a board just like Microsoft has a board of directors or Apple or General Mills or whatever. So your S Corp holds a board meeting and your LLC could create a board of advisors. B of A. You could have a board of directors, your LLC could have a board of directors and your sole prop could have a board of advisors. You don't report it to the state, you don't report the notes to the irs. You sit down and have a meeting. Now why are you going to do this? Why is this a year end strategy? Because guess who's going to be on your board? Can we go off the whiteboard? Guess who's going to be on your mom, your dad, your brother, your sister, your best friend, your kids, your spouse. And let me see, every November we have a board meeting. It's on a Thursday, everybody sits around the table. I remember us eating turkey for some reason. And then after dinner we all sit around and talk about trying to build wealth and real estate and our small businesses. And we engage the children in conversations about money because heaven forbid they learn about financial literacy and effing school. So we're gonna sit around after turkey dinner and have a meeting about our business that's called a board meeting. And guess what you get to write off? Travel wherever it's at, 100% travel to get there to have that meeting, all the dining and the hotel for at least two days to get there, have the meeting and get out. I can't write off 10 days in the Caymans for your little business, but we could write off two to three days. Somewhere where you're going to meet. You may just be taking a flight to Duluth, Minnesota to go have your meeting with your parents. That's a write off. Engage your grandma. You know what's crazy, which is really an interesting emotional, spiritual part of this. Call up your mom or dad or your grandparents or your best friend and go, you know what? I need your advice. I'm trying to build my business. I'm trying to better live the American dream. It's hard, I'm lonely. I need some advice. I was listening to Mark Kohler. I'm going to have a board meeting. There's no liability to you. We're going to take notes. I'm going to take advantage of tax strategies in that meeting called Accountable Plans. I want to write off my home, office, my auto, all these things. And our Office has a $200 board meeting experience. We give you 20 questions to talk about, document it, put it in your corporate book and maintain your company every year for $200. We've been doing it for 15 years. And there's rip off companies out there that aren't even lawyers that do it for 600. We help you have the meeting. Call the law firm, we'll help you have the meeting. Document your LLC or corporation. Maybe your books are a mess, let's clean them up at the same time. But when you call your mom and dad and go, hey, would you, can I get some advice? They're gonna feel it. It's special. Your best friends are like, what? You want my advice about business?

Yeah.

Young or old, male or female, corporate or entrepreneur, it doesn't matter. I normally like three to five people on your board. And you're gonna hold that board meeting. I want to write off travel to go have your board meeting and the dining experience with it. When I say travel, that's hotel, air, Uber, Airbnb, taxi, blah blah, blah. All of that is travel. I got articles on this. I've been writing about it for years. My experienced business owners have a board meeting. You have a question on this, Robbie?

I have a good question on this. Cunning wants to know that if he deducts a seven day hotel stay, three of which is board meeting and four personal, can he still use his personal car to make the seven day reservation?

First name again? Cunning, Connie.

Okay, Cunning.

Cunning. Okay. So Cunning says I'm going to go somewhere for seven days. Let's say it's Thanksgiving week and he's going to have his board meeting for one day and he wants to write off the airfare there, and you don't want to sleep on the couch. Your mom and dad's. Seriously, go get a hotel or an Airbnb. I'm with you. And how do you pay for this? Okay, we know it's going to be a write off for the airfare to get there and get home, but we got seven days of hotel, seven days of food in there, and we can only really write off two of those. The day to get there, the day to get back, or in the meeting. So we might write off three of the seven days. Okay, so how do we do that practically? Well, to be honest, I'd have your business pay for the plane ticket. That's easy. Done. Business place for your plane ticket. If you are staying at a hotel, you either have to have your business pay for the hotel, and then you're going to do some journal entries. You're going to let your accountant know. Yeah, I can only write off 25% of that trip because it was. It was 75% personal. And they do a little journal entry. So we clean up your books before you give it to the irs. You could pay for it personally, but then you got to go to your account or when you do your taxes and say, ah, oh, that expense, I need to take 25% of that on my books. Here's what I find happens if people use their personal account to pay for this stuff. They miss it, they lose it, they never do it. Let your business pay for it. It's not commingling if it's partial business, and then you extract the personal part. So let your business card your Amex. And you don't have to have a business credit card. You could just say, my Amex or my Capital One or my Visa or MasterCard is dedicated to business. Just use it for business. Let it pay for the airfare, the hotel, the Airbnb, the Uber, the travel, blah, blah, blah, and then whittle off whatever percentage is personal. That way it's in the books. It's in the books, you're not going to miss it. And then you whittle it off later. That's what I like to do. Cummings. Any other questions on the board? All right, last strategy today. This is number five, a big strategy. I love this strategy. So many Americans think they're young. I've got young kids in their 20s, and they're like, you get to write off your health care, don't you? Don't you? I'm like, not really. If you just go onto your 1040. Okay, let's do this. Let's go. Whiteboard. So let's say you've got your 1040 tax return here, Robbie. 1040. And I'm going to try to write off my medical expense. Well, you go out there and you add it all up. CO pays, deductibles, eyes, dental, prescription drugs. And let's say whatever it is, if you try to itemize and write this off, that's what they call it, itemize. It's a schedule a deduction. You can only write off every expense over 7.5% of your income. It's called adjusted gross income. So if you make 50 grand, you take the math and you go 7.5% times 50 grand. I can only write off every expense above 3750. That's stupid. If I make 100 grand, I can only write off any expense above 7500. And that gets worse and worse. Trying to itemize is terrible. I never recommend it. Okay, so you go, mark, how do I write off my medical? Next rule. If you're a small business and you are an LLC or an S corp, you are entitled to write off all of your health insurance. Health insurance is 100% write off. When we talk about medical, we're talking about again, the CO pays the deductibles, the eyes, the dental, the prescription drugs, all that stuff. How do I write that off? There's only two ways to do it. As a small business owner, you might have a flexible spending account at work, use it or lose it, whatever. But if you're a small business owner, you have two options. You can do a health reimbursement or a health savings account. HRA or HSA. Uh oh, spoiler alert. This might be one of my other 15 that we're going to cover next week. The HSA is what I'm talking about. Now the HSA is super cool Health savings account. In order to have a health savings account and take a write off for all for up to, let's see, this year it's up to 3,700, 3,750 for single people, about 7,500 for married or head of household. So to write off all that medical plus your health insurance, you have to have a high deductible health care plan. HDHCP, high deductible health care plan. You can go on healthcare.gov, you can go to an independent agent, but you have to buy this plan and have it effective in 2024. Well, the enrollment period is November 1st through January 15th. Now if you buy it before January 15th, it'll be effective February 1st. That's fine, whatever. Just get it effective in 2024. So you want to be shopping right now. You want to be shopping for a high deductible plan to be effective February 1st or January 1st in 2024. Now here's what's cool. The Health Savings Account lets you take a write off right here on the front of your tax return. And if you don't spend it, it goes into a bucket and carries forward. It's not a use it or lose it. So this bucket starts to grow and you can invest it, you can buy real estate with it and have all the profit go back in there. You can have it the rest of your life. And this HSA pays for all your medical. You don't have to wait till you're 59 and a half like an IRA. You can take it out tomorrow. If you're young, you can put the money in, take a huge tax write off and turn around and use it or invest it. And as it grows, it'll pay for your medical for the rest of your life. If you die, it goes to your spouse's hsa. There's we have a whole class at tax and legal.360 on HSAs. It's that critical. Your accountant should be talking to you about this. So get to the conference. Sign up for the virtual. At least the flash sale this weekend will save you several hundred dollars. That link is down below. Tax and legal 360, 30 classes. One of them is on the HSA. I've got articles. Go Google Kohler HSA, Kohler, get on YouTube. I've got videos on YouTube. There's a lot to unpack and so when you get into the learning about the hsa, you're going to find out real quick. The first step is to have the policy. If you don't have the policy, you can't do it. And so that's why it's a year end strategy. If you want to take the Write off in 2024 and build this money tax free and get a tax write off to do it and pull it out tax free. Look at this. You get a write off, it grows tax free, it comes out tax free. Holy hell, it's better than a Roth IRA for medical for the rest of your life. The year end strategy is you got to get your insurance in place. Now for 2024, it's called the Health Savings Account. So much to learn there. It's cool. Maybe we have a few questions. On the health savings account, any of you that have been down this path, you want to know what, how to deal with it? These are my top. Not top five. These are the first five I'm going to talk about of 20 next week. We're going to. I'm going to roll out the other 15. I've been doing this for years. These are legit. I want you to be able to use these. Robby, any questions on the hsa?

Caesar Revas. He wants to know if he can purchase an HD hcp. Is he. If he has coverage from his employer and has dual coverage. Can. Can he do that?

You could. So if some of you have. Okay, here. There's several ways to look at this. Let's go with a single individual. A single individual has a day job and they give you in health insurance. Better than. What's better than going and buying a high deductible plan tomorrow. Hi, H.R.

hey.

I want a high deductible plan. Can I have a high deductible plan? Well, sure. Why were you at the meeting in the lunchroom three months ago when we talked about this? Because I didn't know it mattered. And I listened to Mark Kohler and it freaking matters. Oh, okay. Well, now you want a high deductible plan. Fill out this paperwork. We'll get you into one. Really? Is that easy? Yeah. Oh, your employer can give you a high deductible health care plan. Freaking A. Now you can go open an investment account called a health savings account, anywhere you want. You don't have to do it with the employer. You just have to have the plan. Now you may go, well, they want a high deductible plan. I don't want a high deductible. I want to pay $5 wherever I go. How often do you go to the doctor? Never. So you are paying for health insurance you never use, but you're afraid to have a high deductible when you can build the hsa. And if you have a problem, the HSA will pay you the deductible. Oh, so it's a game. Yeah. Don't hate the player, hate the game. I'm going to show you how to play this. You can win the game. You just have to think outside the box. The HSA is what my wealthy clients do, so that's if you're single. Go to your employer, have them change it to a high deductible plan. I don't want you to pay for two plans. Get out of the plan at work, say, I don't want it. Give me some other cafeteria plan, benefit, life insurance, dental, something, and then go get your high deductible plan. If you're married, you might be covered under your spouse. That's cool. It could be free for you to have coverage with your spouse. Have your spouse go in and get a high deductible plan. Or go get a high deductible plan and drop off your spouse's plan. Get a high deductible plan, include your spouse and you both drop off so your employer plan can be modified. Go talk to your employer tomorrow and go, I need a high deductible plan. And you're in the game. You're in the game. You're in the stadium at that point. Now we got to get you in the field by putting some money in this thing. Freaking love it. All right, next question.

This is a good question. Jake wants to know if he can take tax free distributions from his HSA even if he doesn't have an HDHP in the future.

Yes. This is a great question. Because people, what you can do is build up this, this bucket, this HSA bucket. So let's put it over here. Let's go back to the whiteboard. So I build up this HSA bucket and it's growing. Well, next, next year I go, well, I'm not going to do a health savings account. My employer gave me a kick ass policy. I'm just going to go with that. Okay, your HSA is still alive and well, but you can't put new money in it. But you can keep investing it and you can pull it out anytime you want. For medical, pulling it out and growing it. So this is investing. So in fact, I'll use a different diagram. So with an hsa, the HSA bucket, you can take distributions anytime. No matter what policy you have hdhcp, you don't need it. You can take distributions anytime. For medical, or I can grow it. I can grow and invest all I want with no HD HCP the rest of my life. But the year I want to put money into it and get a write off, which is what we normally want to do. This year is 3,750 single, 7,500 married or head of household. In that situation, to do a contribution and to take a write off, I've got to have hdhcp. So that's how it works. You got to have the plan to get the write off. When you put the money in, you don't have to have the plan to take money out. Grow it and keep it, keep growing it, it's all good. All right, any final questions? All right, people, thanks for being here. I like I said, please stay tuned, look for the next three broadcasts where I'm going to share the other 50 year end strategies that this was it. The guys, there's not like some mastermind in Vegas for 10 grand come to a workshop for 500 bucks in Phoenix in December. Who doesn't want to come to Phoenix in December for 500 bucks and just sit on a lazy river and come learn tax strategies and legal strategies during the day to make more money. It's not just about learning how to sell crap at some big event in Orlando with 2,500 people of I'm going to make money. How about we learn how to do the books? How about we learn to take the freaking write off? How about we learn what an LLC and an S corp is at a board meeting? How do I write off my travel? How do I write off my auto? Oh, my accountant will do it. Really? You got an accountant that meets with you and gives you good strategies, you're that lucky? Well, no, then you got a freaking captain your ship. Come to the freaking event and find a good advisor. There's going to be 2 to 300 advisors, 2 to 300 business owners, networking, partying, having a great time. You want to see some CPAs lit up, man, it's like it's on, it's off the hook. All right, people, tax and legal, 360 get there. You're going to have a great time. I promise you. You're going to have an incredible time. I need to do some sort of guarantee, like I don't save you at least 500 bucks in taxes by coming to the event, I'll give you a damn ticket back. I know that. I'm going to put it right, I'm putting it on record right now. If you come to the event and you don't screw around in the swimming pool all day and you don't learn a strategy, this saves you the cost of your ticket. You can play this damn video back to me and I'll write you a check and give you your money back. Now I'm going to ask you a few questions. What class did you go to? What'd you learn? What you didn't? I mean, I'll own it with you. We're going to have a conversation. But people, I know, I'll save you 10 freaking times your ticket price. But if you feel like you come or you watch on virtual and you pay attention and I don't save you the cost of your ticket in taxes or more, I'll give you a freaking ticket back. People, the American dreams. Real small business is freaking awesome. But you gotta take care of the business. You gotta take care of the business at home. Going out and making money and doing deals and watching some influencer online make money, that's cool. But at the end of the day, there's a bank account, there's a checkbook, and we got to make sense of all this. So that's where I come in. I love building that foundation for you, for success. That's what rich people do. See you next week and see you at 360.