ACCOUNTANT EXPLAINS: Why You NEED To File A Tax Extension

Happy Tax Day. I don't know that's from Christmas. Happy, you know, New Year, something. Anyway, my name is Mark Kohler. I'm a CPA attorney. And it is tax time. It's crunch time. We are just four days away from the tax deadline. But here is my message today. Please pay attention. I do not want you to stress. I do not want you to have any anxiety people. It is essentially first quarter. We can punt the ball. We do not have to stress about filing our tax return on Monday. Now, I'm going to explain why filing an extension can actually reduce your chances of an audit. It's proven. It does. It can help you save more in taxes. And I want to walk you through the steps of how to file this extension. And if you need to send money with it. I got to go to the whiteboard. I'm going to field your questions. I'm here for the next 30, 40 minutes, whatever you need. I want to help you file your taxes at the right time, which doesn't mean this weekend. Now, for some of you, you got all weekend. You're going to order some pizzas. You've got your forms. You're excited to file your tax return. And there's no pressure and no rush, and you have all your info, great. And knock yourself out. But if you had crypto transactions, if you had a side gig last year with the 1099, hell no, you do not need to file your tax return on Monday. And I'll teach you here, very straightforward, very easily, what to do. You're gonna love it. So please put your questions down in the chat. Let me know if you have any concerns about what I say. I want to take on anybody that wants to challenge me on this topic. I am ready to go with all sorts of good notes here. All right, now, number one, there is no penalty if you file an extension. There is no fee for filing an extension. It is not bad to file an extension. In fact, it is worse if you don't file an extension and wait to file your return later this year. What an extension allows you to do is. And it's one form. It is form 4868. Dylan, can you put down in the description, just go to Google Form 4868 and then put the link in the chat. All of you can get to the link. You can do your own fricking 4868. It is not that hard. You don't need to download software. You don't need to call your accountant. You can file Your gosh darn extension yourself and it gives you six months, six months to file your tax return, which is October 15. Now the big catch, and someone's going to try to freak you out is that it is not an extension to pay your tax. And that's right, if you owe, if you think you owe, we're going to do a little math, not a lot of math. We're going to do fifth grader math and we're going to send in a little deposit. Now sometimes I don't, sometimes I do not send in a deposit and I pay some interest and I pay a little penalty, a half a percent per month penalty. So if I take a couple months, I just pay 1% penalty. So if I owe $5,000, I have a $50 penalty. I can deal with that because I've got two months to get my tax return done, right? To focus on write offs, to think, dig up all the frickin write offs I can for last year. So filing extension buys you six months to file the return. But if you owe, owe any money, we want to send that in with your extension. But if you don't send in the money, the IRS is not going to come knocking on your door. No one's going to lien your bank account, no one's going to file a lawsuit, you're not going to jail. You just have to pay a penalty of a half a percent per month on what you owe until you pay. That's called the failure to pay penalty. So we want to kind of estimate and I've got five rules of thumb. I'm going to go through them here, five ways to estimate or figure out if you should send in money to the IRS with your extension. Now the biggest thing I want to repeat, you actually reduce your chances of an audit. Think of like a hunter tracking a herd of deer through a canyon. You know, some hunters waiting for these deer to come running through the canyon. Do you want to be the first one in the pack running through the canyon? Do you want to be the first one to file your tax return? When we have a new reinforced workforce of IRS agents all over the country working from home and remotely helping the IRS do more audits this year. $80 billion budget increase for the IRS, that's okay, but I don't know if I want to be the first one to file and get on their radar. I want to be the last one in the pack of deer running through the canyon. All the hunters have already taken their shots. I'm okay, I file my tax return every year on October 14th, I'm not kidding you. And statistics show in all the big software that your chances of an audit go down by extending. Because the IRS is going to assign all of their regional audits, well, all of their audits by region to the different IRS offices around the country. They assign all their audits based on the tax returns that are filed. So be the last one in the door. Be the last one through the canyon. It's okay. All right, so let me give you these five rule. And if any of you have any questions, please start typing them in chat. I'm going to take those. Now, I want to talk about two penalties here. And then I'm going to go through these numbers here because this is very, very important. So let's go to the whiteboard. Dylan. There's the failure to file your tax return and there's the failure to pay. Now, the failure to pay on April 15, if you don't send in the dollar amount that you owe, it's going to be a.05%. So it's a half of 1% is times every month that you owe up to 25% that. Well, it is combined. But this is going to take a long time to get up to. But this penalty, failure to pay is if you don't send in your money on April 15th. And whether you pay it five months from now or five years from now, this is going to continue to accrue until it gets to a certain amount. Now, the failure to file, this is worse. This is 5%. See, if I owe $5,000 here, let's just say as an example, my penalty is $50 a month. All right, I can live with that while I go get my tax return done. But if you owe 5,000 here, your penalty is $250 a month until you file. And the combined penalty of both of these goes up to 47.5%. This is big. This is a big deal. So if you don't file an extension, then you are going to be subject to failure to file. So what we want to do is make sure we file the extension and then the failure to file is clean. I don't have to worry about this till October 15. Now if I don't file by October 15, then the failure to file kicks in. Okay, so that's it. Everybody take a breath. I'm not going to get any more technical. Failure to pay 0.5% per month. Failure to file 5% per month on whatever you owe. Here's the big loophole. Or reveal if you don't owe. There's no penalty. There's no penalty on the failure to pay or because you don't owe. And there's no penalty on failure to file because you don't know. Now, if you are deserving a refund and you wait three years, that refund's gone. Refund's gone. So we want to make sure we always file to get a refund, but there's no penalty if I don't owe. All right, now the five rules of thumb. Number one, let's go to the whiteboard again. Number one, when you're going to decide how much money to send in. In fact, I'm going to put this at the top. How much? I'm going to start with a new slide here. How much to send in dollars with my extension? And this is on April 15th. This is the big question. Everybody wants to know how much to send in. Okay, rule number one, new rule number one is if you made the same. I'm going to call this. If you made the same money in 2023 that you did in 2022 and you didn't owe, then you're good. You're going to send in nothing, zero. Because, see, if you made the same amount of money in 23 as you did in 22 and you didn't owe before, then send in zero. It's going to be. It's a pretty easy equation. Okay? Now number two, if you made the same as you did in 23, 2023, as you did in 2022, and you owed, so you did owe last year when you did your tax returns, did you owe money? Send in that same amount. Send in same amount. So think about this. You made the same amount in 2022 last year you sent in X dollars. And in 23, you made about the same amount of money. Well, then send in the same amount with your extension. And remember, the form is 4868 and the link is down there in this in the description. All right? So those are your first two options. Now, it gets a little crazy here. I'm going to go with number three. Number three is you say, well, I owed last year. I actually had to write a check to the irs. Or you didn't owe, okay, I don't care. But you made more money. You made more money in 2023 than 2022. So you made more money. So here's the equation. You're going to take whatever you owed before. What did you owe before or not? And then you're going to add that to plus. Here's the equation. I'm going to just ballpark. This is your safe harbor. This is an easy one. You're going to take 25% times the

increase

of how much more you think you made, your more income. That's it. You're going to take these two things. This number, whatever that number is, plus this number, and that's going to equal. So that's A plus B equals C. This is the money we're going to send in with the extension. Okay, so let me say this real quick. If you may not know how much money more you made last year than compared to 2022, but guess you can say, oh yeah, I probably made 20,000 more, 10,000 more, 200,000 more. Whatever it is, you made more in 2023 compared to 2022. Multiply it by 25% just to be safe. Add it to what you sent in last year. And if you sent in zero last year, that's fine. There's your number and send that in with your extension next week. That's it. That's safe harbor number three. And you're going to kind of use this ballpark figure of 25%. Now here's a spoiler alert. If you live in a state that has state income tax, you're going to want to do the same thing, but you're going to send in kind of a 5% number. Now, some states have 7%, California, 13%. Other states are 4%. So you're going to find kind of a ballpark of what works for your state and then send that to the state as well. So you're going to file a state extension and send them some money, and you're going to send in your federal extension and send them some money. That's number three. Okay, now number four, here's what I'm going to do. This. I'm going to go back to the whiteboard. Number four is we're going to really. And I'm going to put this in red. We're just going to change this a little bit. What we're going to do, instead of ballparking 25%, you're going to go to the tax brackets and figure out where you're at. You might be in a 10% bracket, you might be in a 37% bracket. I don't know. I chose 25% because it's easy. But option four is you look at your tax brackets. Now let's just go here. So in my calendar that I sell on my website, you can go Google this, here are the tax brackets for 20, 23, single, married, filing, joint, married, filing, separate head of household. And you could look at, oh, it goes from 10% to 37%. And so just kind of guess this extra income that you made, which bracket would have fallen and you can kind of study it up and go, oh, I'm going to do 20%, I'm going to do 30%. So if you want to get a little more accurate on option four, you're going to, you're going to insert a percentage that you think is more accurate than 25% lower or higher. Okay, now number five, this is your number five. You could do a mock up meaning just do an example tax return, guess at all the numbers. It's not, you're not going to send it in. Whether you're using tax layer or TurboTax or software of some sort. Plug in all the figures for last year, maybe you've got a W2, maybe your missing a 1099, who knows? Throw it all in there and see what the software says. If it says you owe, send that in with your extension. It's a ballpark. But you're going to go to work on your tax return now and we're going to dig up every frickin write off we can and try to bring that number down. Boom, you're in the money now you're getting a refund later this year, but you played it safe. You sent in what you think you might owe and then we're going to go massage our tax return and then voila, we get a refund. So that's kind of where we want to go. Those are, those are five options of what to send in. Now I want to talk to all of you crypto traders out there. They say now that over 40% of Americans own some type of cryptocurrency or token or NFT something. If the question on the first question on the tax form now is did you receive, buy, sell, hold, whatever, any cryptocurrency last year? And if you did and you check the box, no, that's penalties of perjury, you can go to jail. So if you had any crypto transactions last year, you got to check the box. Yes. And then you're going to go, how in the hell do I report that? Do I have gains or I have losses? You got to report that. So filing an extension is going to give you time to figure it out. Now let me tell you the rule on that crypto. If I go into crypto.com and I go Buy Bitcoin and then. Oh, but I'm going to. I'm going to. I like the Gemini platform more. Oh, I'm going to move it to a Metamask wallet or something and you move it Bitcoin to another wallet. Bitcoin, no tax. Because all you did was transfer your Bitcoin to another wallet. But if you sold to Solana or Ethereum and then went back and bought Bitcoin later, that's a taxable transaction. The IRS wants you to pay tax on. Any difference there? Or maybe there was a loss in there. We don't know. Well, so many crypto traders are like, well, I didn't go back to US$, I didn't go back to USD, so I don't pay tax until I go back to USD. You pay tax whenever ever, ever. You trade your crypto or sell it or buy another cryptocurrency of any sort. So this is why you want to file an extension. So you can go get your coin ledger software, which is one of the biggest, and have them analyze all your wallets, including defi wallets, and come together on what you owe. Now, for all of you that had a side hustle or a side gig, oh, my gosh, I want to go back and look at your bank statements, your credit card statements and have you dig up home office and auto and D and travel and electronics and Best Buy and Apple Store and Home Depot. Did you pay your kids? Did you have any software you paid for cell phone service or power cords or cameras or tripods or drones or anything like this right here is a write off. My phone is a write off. This speaker over here is a write off. I've got this desk is a write off. Anything in your little YouTube studio is a write off. It takes time to dig up all those expenses. File a freaking extension. Do not stress out your parents that were freaking out telling you you had to file by April 15th. Old school. That's old rule. You can chill. You can chill. All right, well, everybody, my time is now yours. I want to answer any questions you might have about filing your return, your extension, whatever the case may be. Do not stress. I got you. It's going to be all right. I've got Dylan and Zach here in the studio. Guys, who's our first caller here? What do we got?

We have Jacob from YouTube and he asks, if I have multiple businesses, can I write off my home office for each or for just one?

Let's say, Jake, you've got three businesses and one home office. You're damn right. I'm going to take your home office deduction, but I can't take the same one three times. So I'm going to take your home office deduction and divide it in three and I'll write it off in each spot, which is good. It kind of spreads out the write off. It's more under the radar. I love it. And do not worry about the home office deduction, people. It's a great write off. So let's say your home office deduction is 1500. I'm going to take 500 in each business. So you can't triple down, double down. But you're gonna take the write off. Do it. All right, next question.

Next question comes from Instagram and they ask, I'm a non resident taxpayer, haven't received my ITIN yet. Should I request an extension? Actually without an itin, can I even ask for an extension?

Well, no, you cannot get and file an extension without your ITIN and you are going to be filing the 1040 NR which is okay. And if you owe, there will be some penalties and interest. I hate to say that I don't think you have much of a choice. I would try to expedite that. Now I would say this too. Will you put your email in our chat? Dylan, can you get her email or his email? And let's get that over to Diva. I know that sometimes you can file the return with the application for certain things. Now the ITIN is a unique process and you want to use an ITIN processor and we have a one of our certified tax advisors in our program. I have over 600 accountants around the country that follow work with me weekly in training and follow all my training. And I learned from them. They learn from me. If you need a certified tax advisor that can help you file your return, crypto, real estate, whatever it is, go to markjkohler.com and you're going to go to the TaxPro network. I will put that in the link as well. But if you put your name and email in the chat, we're going to get you over to Diva Maharis. She's one of our certified advisors that helps foreign taxpayers, us non resident aliens, non resident aliens, all the above. So let's get her over to Diva. All right, next question.

Next question comes from Patrick on YouTube and he asks if I sell NFTs for an NFT project, do I pay sales tax on the profit or capital gains tax when I sell the coin?

Coins. Neither. NFTs are not subject to sales tax. They are subject I've got it. I've got to know if These are collectible NFTs or utility NFTs. Now most NFTs now are collectibles. Collectible NFTs pay a flat tax rate whether it's short term or long term. You don't get capital gain short term or long term capital gain. You don't get ordinary tax rates. You have to pay what's called the collectible tax rate which is 28%. Now that's an NFT, that is a collectible. Now if you have an NFT, utility NFT which are a little more rare, some of you might be selling or trading those or creating them, then you're going to pay. Well, if you created the utility nft, that's going to be subject to self employment tax too. But a utility NFT that you buy and sell is going to be subject to capital gains. Yes. And it's going to be short term capital gain if you held it less than a year or long term capital gain if you held it more than a year. I would recommend if you're making more than a few thousand dollars, please get a consultation with one of my tax lawyers. I've got two tax lawyers that specialize in cryptocurrency. They meet with clients around the country. They're very affordable. I know you may go three or four hundred dollars or whatever. Oh my gosh. Do you know what you're going to pay in taxes and penalties if you F this up? So use my French. So call KKOS lawyers. That's Dylan, make sure that's in the description as well. Kkoslawyers.com and you're going to want to talk to Darren or Max. Darren or Max. Now you can Google this right now while you're listening to me, but go to kkos lawyers.com make an appointment with Darren or Max and have them analyze your NFT portfolio and what you're doing. You're one of a hundred in the crypto space. Not Everybody is trading NFTs and we need to know if they're collectibles or utility. All right, next question. Dylan,

next question comes From Teresa on YouTube and she asks, I started a holding company last year but have not done anything with it since. Do I need to file taxes for it though, even though it's set idle and no money has flowed through it?

Theresa, great question. The answer is no, you don't need to file a tax return. But everybody listen, if you have an LLC that you created before this year or an INC you set up A corporation. You are now required by the end of the year to file what's called a BOI, business owner information form with the federal government under FinCEN, the financial crimes Network, and it's the sister to the irs. This law was passed three years ago, and they said it's going to be in effect in 2024. No one paid attention. They're like, when 2024 comes, I'll worry about it. Every LLC, there's 23 exemptions. Trust me, none of my clients have even qualified, nor will I they. The exemptions are very, very rare for a business owner to qualify. 1 in 100 to qualify. So I'm going to just say this out. 98% of every LLC in America has to file this form before the end of the year. Theresa, now we're charging 200 bucks. It's not that bad. Plus, you need to do your minutes and all these things. Don't go out and set up a new LLC later. Don't dissolve this one. If you already set it up, let's put it to work. Let's get using it. What was this holding company for real estate, Small business? I don't know. But you've got to file this form. Any of you that need to file this form, we have got to get you to mainstreet business.com, mainstreetbusinessservices.com, get to kqslawyers.com we are filing these for our clients. Down in the description, you'll be able to get a link and it'll say, I need to file my BOI and I will have a link for you. So get over there. But, Theresa, no tax firm. You're good with taxes. Just make sure you file this BOI form. Next question. Dylan.

Next question comes from Maria Rodriguez on Facebook and she asks for business LLC S. What form do I have to

fill out for business llc?

She said an llc dash S. Okay,

what I think Maria is saying is she has a S corporation. So some people will have an LLC taxed as an S, as in small corporation, which is very common. Love it. You can have an inc taxed as an S corporation. Corporation. You can have an LLC taxed as an S corporation. Now, Marie, if that's not the case, repost your question. But if you do have an LLC taxed as an S corporation, you're required to file 1120s. You know, let's do whiteboard. That got really complicated. People file a 1040. Businesses are going to file either an 1120, which is a C corp, or they're going to file an 1120s if they're an S corp, or they're going to file a 1065 if they're a partnership. Now, the funny thing is, people, you can have an LLC that's taxed as an 1120. You can have an LLC that's taxed as an S corp. You can have an LLC that's a partnership. Don't worry about llc. You got to figure out, how is this thing being taxed. Once you file these returns, then you come down and you do the 1040 over here. Now, if you have an LLC that's owned 100% by the individual, now we're going to look at different forms. It might be a Schedule C if it's a small business, a Schedule E if it's a rental, a Schedule F if it's a farm. And the list goes on and on. So if this looks confusing, then this is why you're going to get some help. Go to markjcolder.com, go to the Tax Network. You can choose an accountant to work with across the country in your neighborhood. Don't care. I don't make any money off my network. When you hire someone, I'm training my network, they pay me to get trained and we work together. They come to conferences. That's great. Find someone that knows what the hell they're doing and it'll be very, very helpful to you. Next question, Dylan.

Next question comes from YouTube user DHMAA. And they ask, would it be a problem if I fil an extension and my accountant filed one for us as well, Basically double filing the extension.

No, there's no problem with that. In fact, everybody, if you're not sure if your accountant filed an extension, file anyone. There's no penalty. Who cares if the IRS gets three extensions for you, one of them is going to count. The other two are going to go in the trash can. So you are good. Don't worry about it. File an extension when in doubt. And I would say this to you parents out there, if your kids made any money at all, and well, in the rule this year for last for 2023, is if they made more than $13,850, your kids are going to have to file a federal tax return. So file an extension form. It wouldn't hurt. Now, many business owners are paying their kids in their business, which I've been teaching for years. And if you're paying your kids in your business, it wouldn't hurt to file a federal or a state Extension, too, until the dust settles. Because again, extensions don't cost you. File a freaking extension. No big deal. All right, next question.

This question actually is very closely related to what you just stated. And so I wanted to ask it for clarification. So Jacob on YouTube asks, I'm a delivery driver. Do I need to form an entity, a sole, Proper LLC, to pay my 6 year old to clean my car daily? Thinking $1,000 a year for their Roth?

Okay. And his business is what?

Delivery driver.

Okay, so I'm going to say. Let's just say Jake is delivering Grubhub or DoorDash or maybe some other more official company, and he's doing deliveries. Jake is a sole proprietor. Okay, so you're not going to. You're. You have no choice. You are a sole proprietor first. The question is, are you going to file an LLC to get some personal protection while you're out driving around the road? If you get in a car accident as a sole proprietor, they can sue you and get at your home and all of your assets. The purpose of the LLC is to protect you while you're out there driving as a delivery entrepreneur, a sole proprietor. Okay. Number two, if you want to pay your kids, you don't have to have an LLC to do that. And you can pay your kids for helping in the business, washing the car, washing the truck, stuffing envelopes, doing marketing, doing cleaning the home office, helping you out on the deliveries. I love it when you get your kids involved and maybe they're even helping with social media so you can pay them out of your business with or without an LLC. I've got videos on YouTube about this. Say, pay your kids Kohler. And you're gonna see tons of videos from me on it. You know you're gonna get the right answer. Please watch them. I want to show the trifecta, but I'll pass. Keep going, Dylan. Next question.

Okay, next question comes From Jason on YouTube and he states, I've filed an extension for 2021 in 2022 and about to file for 2023. I did send in a payment with each of those. I've been sorting through all my crypto holdings and getting paperwork in order, and I'm about to send in all three years. Is there a red flag for being so many years behind?

I mean, it's not great that you're filing three years tax returns all at once. Your chance of an audit will go up, but it's not terrible. And the fact is, I'm proud of you. You're doing the right thing, rather than file a crappy wrong return. Do it right. Because if you do get audited, you're like, bring it, bring it. You know? And it's not that the IRS is evil. America costs. We get to live in a great country, we gotta pay our fair share, but we only have to pay what we have to. And so you want to do your books, right? You want to do all of your software reports and all of your crypto transactions and then file all three years. Now, I will tell you this. File, paper, don't electronically file, because then which one's going to get there first? It's a mess. I would paper file all three years. And I would make sure, Jake, you've got an accountant looking over your shoulder when you're filing three years all at once. I've got CPAs and enrolled agents in my network that actually do resolution work with the irs. And so they kind of know what the IRS is looking for. Sometimes you can put your best foot forward and spend a few hundred bucks or more to have an account and file it for you. And it could reduce your exposure substantially because you don't know what you don't know. So the sooner you file, the better. And if you send in the right amount of money with all your extensions, you're not. You're not going to owe, you know, that's cool. So get that done. I want to say this, too, Dylan, people, your extension is only good to October, so even this wonderful caller file an extension for 21 and 22. The extension is worthless. Now, it's just going to come down to how much they owe and did they send in enough money. If they send enough money, there's no penalty. Remember, if you don't owe, there's no penalty, but get it done right away. All right, next question.

Next question comes from Instagram from user Natalie Service. She asks, do I file an individual extension for each ein?

Oh, wow. Okay. Your extension, everybody is. Is on your Social Security number. You are not filing an extension for any freaking ein. That boat has already left, shipped off the trains, left the station. It's over. Dylan, let's go to the whiteboard. So when you file a 1040 extension, that's form 4868. That's based on your Social Security number. That's what you're doing. These other extensions, the 7002, that's based on an EIN. Is that right? Is it 7004 or 7002? Look at 1065 extension. I'm embarrassed. I gotta. I can't Move on without having that closed in my loop and someone's watching, going, mark, come on. You should know that off the top of your head, hey, you come on here and be on YouTube in front of hundreds, if not thousands of people, and you gotta make sure you've got all these form numbers in your head. All right? Okay. Yep. 7004. So 7004 Ein, 7004 Ein and 7004. That's where you file the extensions related to your businesses. That was due March 15th. That's gone now. But let me just say before you freak out, if you're doing a sole proprietorship with 100% owned LLC, which is going to have its own EIN, it's captured on your 1040 extension. So if you guys have an LLC with an EIN, as long as you own 100% of it and it's not an S corp. So if you have an LLC taxed as an S corp, you needed to do the extension a month ago, but don't. So you're going to file the Form 4868 under your Social Security number, and it's going to Capture all the eins of any single member LLCs you might have. So I think you're going to be okay based on your situation. So I think you're good.

Next question is a doozy coming from Sandy on Facebook.

It's a doozy that's from Groundhog Day. Ned, remember? Ned Ryerson? All right, keep going.

She says, I received a gift from the IRS last week. A full research audit. Womb to tomb, the revenue agent said the last one she did lasted three years.

Oh, my God.

Advice do you have?

If you already drink, stop, because this will put you into aa. So I'm going to say that no, here's what you need to do. For anybody that's getting in any audit, you do not want to do it by yourself. If I got audited tomorrow, I would hire a CPA or tax lawyer that specializes in that type of audit. I really would. I mean, I talked to the IRS last week. I mean, I help clients with IRS issues. But if you're in an audit like this, you need someone that's doing it every fricking day and they know what they're doing. I've got a great referral for you. If you want to email me markjkohler.com and say, I need a referral for a resolution CPA. That's what CPAs that resolve issues with the IRS and handle audits, they're called a Resolution practice or cpa. And you can get a tax lawyer to do that too, but they're more expensive. That's when you're fighting. But under an audit like this. Get a resolution specialist, CPA that knows what they're doing. Send me a referral. And just in the subject line, go, Mark, I need your resolution specialist. And I'll send you a couple that you can interview. They don't have to live in your town. They can be anywhere in the country. Get someone that you, that you trust to help you. Because there's companies out there that will totally take advantage of you. And I'll tell you, if they're in my network and they take advantage of you, I'll kick them out of the frickin network. I want to hear about it. So you're going to have someone good. I trust. Trust me. Now, does that mean it's going to go perfectly? No. Does it mean it's going to suck? Yeah. I would also recommend this, honestly. Get a life coach. Get something that you can meet with every couple weeks to help you keep your mindset straight. Because I know people that an audit in the irs, it's literally killed them. I had a client once that committed suicide and they didn't need to. It was okay. They weren't in problems with the irs, but the stress, it killed them. It doesn't have to get that bad. Get a coach to help you keep your head straight. The IRS is not evil. They're just doing their job. They're just making sure that it's like going through the TSA once in a while. You get that random beep and you're like, bam, I'm going to get felt up. It's okay. They don't like doing it either. Trust me. I know a lot of IRS agents, they don't like doing these audits either. So the sky is not falling. Get a coach, get an advisor and it's going to be all right. This too will pass. All right, next question.

Next question comes From Jamie on YouTube and they ask, why are people always being told to write off things? This makes them broke and at zero at the end of the year. So you're always starting over each year.

Oh, my gosh, I love this question. What's their first name? Jamie. Jamie. Oh my gosh. You are going to have light bulbs go off like crazy. Okay, everybody, did you hear her question? Now Jamie can be a boy like Jamie in Yellowstone. He's freaking stud. Or Jamie can be a woman like Jamie Lee Curtis, who's totally hot. So you've got one of those names where you never know. All right, okay. True Lies, one of the best. By the way, I heard Arnold Schwarzenegger speak in person last week, and he was like, I love True Lies. Jamie Lee Curtis, he was like, you know. Okay, now here's the deal. Everybody hear me out. Jamie says, why are people telling me to write stuff off? Because I don't want to go back to zero. Okay? Now, Jamie, writing things off and spending money on crap you're not supposed to. Those are two different things. Okay, Hear me out. Let's go. Can you still have my face on the whiteboard a little bit? Okay. All right, so let's say we have taxpayer A and taxpayer B, and taxpayer A has a day job, W2, and taxpayer B has a day job, W2. Okay? Now they. This client also drives Uber, and this client sells Uber. Online marketing. They do online sales. Okay? All right, you with me, Jamie? Now this person has a day job with a W2 that makes 50 grand, and they have a W2 that makes 100 grand. Okay? But on their Uber on the side, they bring in, let's say, $20,000. All right? And over here, this person, they do online sales and bring in $20,000. Now, when they say write things off, you have a choice. You can say, oh, I'm going to write off mileage. I'm going to write off my cell phone. I'm going to write off my laptop because I use it for my business. I'm going to write off a little home office. I'm going to write off the water and treats that I give people in my Uber car. And all of this stuff adds up to $10,000. I'm going to spend it anyway because I'm driving for Uber. These are what you call write offs. I get to write them off as an expense for doing business. So what do I net? I net $10,000, and I only pay tax on this $10,000 at my rate, and let's say it's 20%. So I'm going to pay $2,000 in tax on my Uber income. Okay? Now, Jamie, did you go out and spend money on something you weren't supposed to? No. You're spending money on a cell phone and a laptop and all these things you were supposed to. Those are called write offs. Now option two over here on online sales, they're like, oh, I don't want to write anything off. I'm just going to take the money and put it in my bank account and I'm going to still report it. You still got a 1099 that comes in from, you know, square or in some sort of Wayfarer online processing thing. And so you got 20,000 of income but you take no write offs. For some reason someone told you do not take any write offs for some crazy reason. Well, you're going to pay tax on $20,000. And if you're in the same 20% rate, you're going to pay $4,000 in tax. That's it. Now Jamie may be thinking about this. Someone may be saying go spend the $20,000 on a new truck. Go buy some cool kick ass F150. And you go buy this truck so that you can get a write off. Do I need a truck? No. Should I go buy a truck? No. With some idiot telling you to go buy a truck so you can get a write off? Yes. You don't listen to those people. So Jamie, there's a difference between spending stupid money to get a write off and taking write offs on things that you need to to run your business. So write offs aren't bad. Write offs are great. I love write offs. This is why I want you people to extend. So you can go back and find all the kick ass write offs and save money on taxes, but don't go spend money on stupid things to get a write off. Oh, Jamie, I loved your question. What'd you guys think? Was that all right? I think makes sense, people. 40 million Americans now have a side hustle or side gig and they're getting these 1099s and they're like, what do I do? What do I write off? Anything related to the business you can frickin write off. That's what you do. And it's okay, it's good, that's what the government wants you to do. And then you pay tax on the net. Pen drop. There we go. Next question. Maybe one or two more. Dylan, I'm having so much fun. What's in the solo cup? Is that the problem? I mean, we have a solo cup, you never know what's in it. All right, next.

Next question comes From Tizio on YouTube, they ask, if I find that I need to amend my taxes, can I file an extension to let the IRS know it's coming? But I'm not ready to refile yet.

No if. Wow, this is a really unique question we were dealing with the other day. So let me see if I get the question right. We're now on April 11th. What are we at? What are we at today? April 11th. So we're on April 11th and you've already filed your tax return, but you know you want to amend it. So you're saying I'm going to file an extension just to let them know I might have another one coming. Unnecessary. I wouldn't. No. If you've already filed your taxes, you're going to file an amendment, and an extension is not going to help you at all because you already met the deadline. You already filed. So get with an accountant that knows what the hell they're doing and file your amendment. So, yeah, don't file an extension. Waste of time.

Last question.

All right, last question.

Last question comes from YouTube.

And yes, I do like long walks on the beach right at sunset more than sunrise. I really like those. Oh, that's not the question. I was trying to read ahead. Okay.

They asked a firm, filed an extension for us for 2023. Can we have a different CPA help us file our actual 2023 ITR?

Yes. Yes. This is a technical term. Hell, yeah. You can have anybody file your return. You can file your extension and go hire someone. You can have someone file your extension and have someone else prep it. Now, I will say this. If someone went to the effort of filing an extension for you, they might charge you 50 bucks, they might charge you 80 bucks. I can't imagine more than 100. But that's a fee. There may be a service charge for that because they did that for you. So don't be pissed. But you don't have to use them to do your tax return. You're all good. Now, in summary, people, taxes are not bad. Filing a tax return is not bad. You know what's good about it? It teaches us to do an accounting. How much money did I make? What worked, what didn't work? What's my plan? And I want to remind you, you have three days left to put money in an ira, to put money in a Coverdell, to put money in a health savings account. And for those of you that had a small business, you. You file an extension, you have until October to do a solo 401k. Still, you could do a SEP, which is like a supercharged IRA. So there are more strategies you can take advantage of by filing an extension. So, people, I just don't want you to stress. I don't want you to have any anxiety about this. Filing taxes can be fun. Did I just say that filing taxes can save you money as much? Sometimes it's easier to save money than make money. All right, Anyway, people, I'll be here every week. I'm not going anywhere. I got books on Amazon. I got podcasts, I got a great YouTube channel. And here's the biggest thing at all. I am doing a three day event in June in Salt Lake that you can come to. It's called the tax and legal360. You can associate with other accountants and business owners. And yeah, it's super expensive. 500 bucks. 500 bucks for a general ticket to come. Party on Saturday night. We're having a huge party. It's going to be a blast. Please. I think it's Friday night of our event, not Saturday night. Check it out at tax and legal 360. This is the Tax and Legal event you want to come to so you can better captain your ship. Thanks, everybody. See you next week.