Don't Get Audited with these 10 Tips - IRS Is Coming

Passed the Inflation Reduction act, whatever the heck that means. But there was $80 billion to double the size of the IRS. 87,000 plus new IRS agents. Don't know where they're going to get them. But when they show up, we got a big concern, and that is audits are going to be increasing. You've got to be on your game, making sure you're, you're the quarterback with your tax professionals. Maybe you're prepping your own returns. You got it. I've got 10 tips. 10 tips. I'm going to hit them hard. I'm going to give them to you fast. And we're going to talk about how to avoid an audit. Now for that are present during this live broadcast, I'm going to be giving away one of my kick ass books every three frickin minutes. Now don't, don't text and go, oh hey, I want a free book. Those are annoying. We're going to, you know, just choose random winners. It's all good. Also, little consumer alert here. Any posts there that have my face or anybody's face that's talking about some damn bitcoin thing, Avoid it. Ignore it. They're bots. It's a scam. Stay away. Just look at the core comments. Today I'm going to kick butt. I've got a description down there. The description. I've got a article on 10 Ways to Avoid an audit. So if you want to read it tonight, if you can't sleep, you pull that baby out, I promise you it'll knock you out. Okay? So we're going to have fun here. It's going to be rocking. I got my rock star. Everybody hear this? Okay? This is, this is a live, it's going to be bam. So good. Does that sound good? So good it's paying for my sponsor. All right now because I'm a rockstar accountant and we're going to kick ass. Okay, number one way to avoid an audit, people. We are eight weeks away from October 15th. Now, some of you may have filed your tax return six months ago. God bless you. Others like me, join the club. We have not filed our tax return yet. Now, filing an extension reduces your chances of an audit. Not filing your tax return by October 15th puts a target on your back. Make sure you file. And some of you got Mark, I don't have enough money to file this year. I made too much last year. I didn't make deposits. What file you, this is like you going on a date. You know, you got this hot new boyfriend, hot new girlfriend. And you're like chatting up and then you ghost them. What happens? Your car gets keyed. You don't want that. The IRS hates to be ghosted. They do not want to be ghosted. They want to know what the hell is going on. So you've got to file your tax return. Let the iron IRS know you're alive and well. If you owe them money, there's plenty of time to work out a payment plan, figure that crap out. But the number one way to get audited is, is not filing your tax return. So be on it eight weeks from now, October 15th. Be on it. Okay, number two way you're going to get audited. Now this goes down the small business route too, because I want all of you to have a side hustle. I want you making money driving Uber, selling crap on ebay, on Etsy, affiliate fees, making money as a consulting deal. 1099 here, 1099 there. People, that's how we build wealth, is we got a little side hustle going, right? So when you report that, make sure you follow. Make sure you don't put in round numbers. You know, like I had $400 in technology costs. Who has $400 in technology? I couldn't even try to spend $400. It's going to be $402.85, right? Whatever the hell it is. Do not use round numbers whenever you're reporting your taxes, even if you're doing mileage. Don't say I drove 2,000 miles for business. How in the hell are you going to drive exactly 2,000 miles in business? So don't use round numbers. Use the best numbers. Maybe if you're going to use a unique number round down. I'm not saying ever, ever lie and round up. That's how in an audit you get in trouble. Now I'd love you to have receipts. I love you have QuickBooks and some good Excel spreadsheets tracking your real crap. But sometimes you got to estimate and come up with a close number round down. Don't get in trouble with the irs. You. And don't use round numbers. All right, number three, let's choose some of my best ones here. Okay? Number three, don't inflate the home office deduction. I want all of my clients to take the home office deduction. Home office is a great freaking write off even if you just have rental properties. I've got articles on this. Just go to YouTube and type Kohler Home Office. And I've got and go on Google and I've got articles there too. Home office is not going to get you an audit. Taking too big of a home office gets you into problems. There was this case in San Francisco. It was awesome. It was like five, six years ago. This woman was doing as a tattoo artist, said, I'm taking the home office. She did tattoos out of her apartment and everybody, you know, used the sink and used the bathroom and da, da. So she wrote off 80% of her apartment as home office. Well, the IRS is like, you got to live there. You got a bedroom, you got this, you got that. She got out of it. They trimmed it down to about 35%, which I thought was still pretty generous. But folks, just don't overdo it. Take the home office, but don't overdo it. And I've got all sorts of videos and tricks and strategies on that. Now we're in two to three minutes. I'm giving away a damn book. I'm giving away the tax and legal playbook. Oh, this is a desktop reference. I love this book. I'll sign it for you. It's got 32 different chapters independently there to help you rock your American dream. Who's my winner? Come on, talk to me, Chan Lee. Do you want to say that a little more clearly so they get there? That's going to be Chan Lee. Chan Lee. That's their handle. All right, now if any of you win a book, you've got to email Diane. That's you, Diane, right?

That is I D I A N n e@markjkohler.com oh, you're so adorable.

D I A N N E marcjkohler.com she's my customer service director. She's great. Diane will send you this book. So Chan Lee, get on it. All right, the next tip, this is regarding 1099. Some of you may be getting a 1099 because you're a consultant or you're someone. Did you did some work for someone or you might be hiring someone in your business and you want to pay them under the table or they want to get paid under the table. You pay someone under the table, you're not getting a write off. You got to issue your frickin 1099. It's a bit a big audit risk. Now the IRS is sick of under the table crap. So issuing 1099s is critical. And I've got articles on that. One of my most viewed articles is the 1099 rule. So if you type Kohler how to issue 1099s or Kohler 1099, there's a great little article. Maybe. As I'm saying this, guys, you can pull those right off my blog. Let's throw them in the descript, right? Can we do that? Okay, so good one. Yes, sir. Yes, sir. Let's go. All right, man. And I'm going to see if there's a question that just really gets me excited here. Don't inflate the home office deduction. Love it. Todd Freaking in the live. You guys are getting into it. I love it. Okay. All right. Let's rock and roll. Okay, my next one to avoid an audit is getting excessive with another write off that I love, and that's dining and travel. Now, let's just say you made 10 or 20 grand last year in your little side hustle. Don't try to write off 10 or 15 grand in dining and travel. Now, if you brought in 100 grand, I might write off 10 or 15 grand of dining and travel. Make sure that your write offs look balanced with the amount of income you got coming in. If you made 3 million last year, you might be writing off a jet. If you made 13 grand last year, we might write off 2 grand in dining. So let's just be cautious. Don't overdo it. It's another write off that just freaks me out when you do too much. Another way to get an audit. Some of you are going to get a letter in the mail from the irs. We call these line item audits. Line item audits. What I said there. Okay, so the IRS is kind of like, what the hell's going on here? You know, we need some answers here. Don't ignore those letters. I've had clients come to my office and go, yeah, I've gotten letters from the IRS for about four months. And okay, this is. Goes back to ghosting the irs. When they send you letters, respond because they get pissed when you ignore them. Now here's a little big tip. I don't want to say little. The IRS will never, ever, ever, ever call you on the phone. If you get a phone call from the irs, it is a scam. Now, you don't want to go at them and fight with them, because you never know what a scammer might do with your identity or who knows what. Just say, oh, thank you. I'll take that under advisement. Got to go. Bye. Do not think that the IRS will ever call you. They send you letters and then you call them and you want to call them. You want to go, I'm sorry, I'm filing my tax return. Or, yeah, I want to get On a payment plan. Help me, please, please. So whenever the IRS reaches out, it will be via mail and make sure you respond. Okay, next tip. Then we'll give away another book here. I'm going to go with schedule C, as in Charlie, Schedule C. If you're making 10, 20, maybe 30 grand in your little side hustle, you're writing off dining and travel and home office, computers, electronics, and all those goodies, that's great. But once you start netting over 30 grand a year, meaning you maybe bring in 50 right off 20, it's all good. You're making around three grand a month. You want to be switching over to the S Corporation. Going from an LLC to the S Corporation. When you're in S, we're saving more taxes and you reduce Your chances by 1500%. 15 times less chance of an audit. Now you're going to spend a grand doing an S corp return, but we're going to save three, four, five times that in taxes. That's how we want to work it. You know what? I'm feeling it. I think I might go to the. I might go whiteboard. Can we do it? Can we go whiteboard? Calling an audible. This is Peyton Manning would call Omaha. Omaha. I'm going audible. Going audible. He's going audible, ladies and gentlemen. Okay, people, you got to know the trifecta. And this is about your master plan. And the trifecta looks like this it is. Let's see where I'm writing here. Perfect. There we go. That's your foundation. That's your revocable living Trust, or your 1040. That's your tax return. Now, everything flows down like water flows downhill. We're going to flow it down, and your life's going to be split into two sides. We're going to put your assets over here and we're going to put your ops over here. This is where operations would be your little side hustle. That you start out as a little llc. That's your side hustle. And some of you are already. And you're going to or graduate to the S Corp. You can take your LLC and just make an S election. Name doesn't change, EIN doesn't change. Then you're doing a W2 and a K1, and you're saving taxes out the butt. You're going to love it. So fricking awesome over here. You're just taking draws. You're just taking draws. Now, I've got so many different tax write offs that we love to talk about, but your operations are on the left. Your Assets are on the right. See, assets over here might be rentals, investments, things like that. And you're going to have an LLC. Here's the trifecta. The trust owns the LLC. The trust owns your business. The trust or 1040 is your base. So you got base, assets, operations. That's your trifecta. And we want to keep a firewall between your assets and your operations. Boom, bada bang. Okay, I'm giving away a book. I'm gonna give away the Business Owner's Guide to Financial Freedom. Because all of you here better be a freaking business owner. Let's take me off the whiteboard for a minute. And Diane, who's my winner on this one?

Marga.

Marga.

Marga.

That's the handle.

M A R G A. M A R, G A.

Okay, Marga, you're gonna email dianearkjkohler.com. all right, since the whiteboard's up, I'll finish that. Let's. If you're, if you win a book, you're going to email Diane D I A N N e@markj kohler.com. okay, let's see if they've got a good question in there and maybe we'll do that real quick. How long will they allow for payment plans? Todd? Okay, if any of you. Let's go off the whiteboard. Okay, if any of you get into a problem where you haven't paid the irs, there's a variety of ways to deal with it. The first thing is, most of the time, in the first 60 to 90 days, you can tell the IRS, I'm going to make a payment right away. And if you can wrap it up within 60 to 90 days, put it on a credit card, borrow money from family, trust me, you don't want the IRS hanging around. So if you can get the money somewhere else, do something illegal, whatever it takes. Pay the ir. That was a joke. Pay the irs, get them off your back. And they'll do that over the phone. It's really just kind of like, pay us by this day, send in the payment. Send it to me. Send it the. You're going to go into what's called collection status and you're going to get an agent that's going to be working with you to just get your money. Now let's say you're like, mark, I don't have the money within the first 69 days in which we're talking about kind of like Christmas, January of next year, then you can get on with a five year payment plan. That's typically the Deal. And basing on the threshold of how much you owe, it may not even show up on your credit. It's just an automatic. IRS says, oh, fill out this form and you get on payment plan. So you got a car payment for the next five years until you get rid of that year. Now you got to stay current with what you currently owe in order to keep the payment plan going. Now I've got some articles out there and this is guys one to pull from my blog. What if I can't pay the irs? I got a great article on that and I go through all the options of what to do if you can't pay the irs. So check that out. Todd, great question. I thought Mark J. Kohler was really talking to me. Scammers are out there. Oh, Lily, what are you talking about? I don't know. Sorry, I would not. Okay, I. What I was saying about scammers is be careful of anybody doing some sort of crazy bitcoin ad in there. And that wasn't you, Lily, I'm sure. Okay. All right, let's see what else we got here. I can't scroll, so I'm going to leave it alone. And I'm going to go to another tip on avoiding an audit. Here's the thing that I really think is critical about avoiding an audit is if you don't know what you're doing, don't file your own tax return. I know you want to save a few bucks and you're thinking, I'm going to go turbo or Tax Slayer. And that's great, they're great programs. But if you don't really kind of have a good feel of what you're doing and you're not reading my books and you're hanging out and getting all geeky with me on taxes, just pay a preparer. Now I'm building a new network of tax preparers around the country that are Mark Kohler Tax frickin certified. You know that's gonna be happening this coming year and I can hook you up with some people around the country and my EA's there that are watching my tax preparers, my CPAs. I. Oh, I've got a program coming out that to help you get dialed in. Every strategy I've ever thought of and the team that I work with that are so frickin smart, we're gonna have that ready for you. But in the meantime, people listen to the podcast. Study before year end. I'm gonna probably do two to three webinars on just year end tax tips. My workshop that I'll be doing in Phoenix at the year end. It's, I think it's December 1st and 2nd or the November 30th and no, December 2nd and 3rd. I'll be doing a live broadcast of every tax tip I know. Tune in and then get ready. And if you're going to prep your own return, deal with it. If not, find a preparer that is creative. And if you want to avoid an audit, just do it right. You know what I'm saying? That's, that's obviously pretty straightforward tip, but we got to talk about it. Okay. All right. I'm going to hit Chase's question. My S Corp doesn't get a home office deduction. Correct. However, it would pay me the homeowner rent. Correct. Ooh, Chase. Now this is a great comment. In my article on home office. I have a section for S Corp owners. So let's go to the whiteboard. Let's hit it here for Chase. Okay, everybody, so if I'm here, let's go to our trifecta. Pretty straightforward. Got a whiteboard. There we go. Okay, so there's my trifecta. If you're doing home office deduction, you're going to take it over here on schedule E for your rental property or schedule C for your side hustle. But for, for Chase out there, he's got an S corporation. Well, corporations don't have homes. They're a freaking corporation. They've got Chase over here. He's the owner, shareholder, and W2 employee. So what we do is a rent reimbursement. It's as if Chase is saying, hey, I'm going to let my home office be used by this corporation and they're going to reimburse me. And you're going to come up with a number that would be similar to the home office deduction. A good accountant is going to create some little work papers and in Chase's situation, might be 2 or 300 bucks a month. And then we're going to take a rent deduction in the S Corp, and then it's tax free to Chase because it's just reimbursement. It's as if you work for Microsoft and they go, hey, will you use your home for us? Thank you. We'll give you a little extra money tax free to reimburse you for the use of your home. I don't know if Microsoft does that, but Chase's S Corporation can do that. And so you could do a journal entry at the end of the year and just book a write off. Or every month, Chase, you could just write yourself a check for two or three hundred dollars. I'm not sure if that's the amount I'm just using as an example. And say two or three hundred dollars and it just goes to rent to the S Corp. Tax free to you, baby. Boom. Catch that pen drop. So that's how you do it in an S Corp. So Chase, make sure it's on the books. You're doing great. Okay, now let's see. Oh, we got a question here. Once your S Corp distributes wages and a distribution, can you then take a standard deduction on your 1099 even if you have taken out all the business expenses through your S Corp? No, you cannot. And B Pain, bless your heart, this is the type of question that scares the hell out of me because you should be using a tax advisor for the preparation of your S Corp tax return because of this type of question. And you know what? Go to the whiteboard. I like B Pain's question. I want everybody to do this. Let's say that B Pain is driving Uber, selling some crap on ebay and doing a little consulting. Okay? So B Pain has an S Corp. All right? Now if you have an S Corp, B Pain might be getting multiple 1099s, right? They might be selling crap on, getting money on Venmo, they're getting money on Apple Pay, they're doing something on Etsy, and someone's giving them cash just directly. And B Pain's an honest US Citizen taxpayer, and B's going to claim all that income, going to claim it right on their S Corp. Then we're going to do a little allocation of W2 and then take draws. We're just going to take draws. So every time B wants money, if I want money out of my S Corp, I think I did a draw today and just take a draw. I just go online and I take a draw down into my personal bank account. And then I might stop by the grocery store on the way home today, which I will be, and I'm going to stop by the person and I'm going to use my personal bank account to go get groceries. So I let the S Corp pay for its business expenses and then take a draw and I put it into my personal bank account and I pay for groceries. Now, what B brought up was a standard deduction on your 1099 that would never take place. What's going to happen down here is on your 1040, after you take your K1 and your W2 and any other income on your 1040. Then you're going to take a standard deduction down here. And so 1099 are way up here. Everybody, they drop into your S Corp or your LLC. The standard deduction is down here on your 1040 level. And so there are totally two different spots. And that's okay. You just need to learn this. And that's why one of the tips here is, do not jack up your tax return by trying to do it yourself. Okay. Giving away another book. What your CPA isn't telling you. Love this book. It's a story. It'll put you to sleep at night. It's. It's a story. I want it to be a made for TV movie. So I even worked in a sex scene. I think you guys will like it. It's got little Viagra action. It's pg. Okay, what's. Who's my winner?

Lily Lopez.

Louis Lopez.

Lily Lopez, Lily.

Lily Lopez, Lily Lopez, you're a winner. Email Diane and go, Diane, I won. And then she's going to get your mailing address and send you the book. Okay, next, I've only got a couple more tips here to avoid an IRS audit. The next one is payroll. And I love this. If you're doing S Corp, see this up. S Corp right here. We're still on the screen. If you got an S Corp, you got to give yourself a fricking W2. And you have to do that quarterly. And you're going to be issuing it in April, July, October, and then again in January. So at the end of each quarter, first, second, third quarter, fourth quarter, you're going to do a little payroll report. It's called the 941. Now, we do this at our office. We charge about 200 bucks a quarter. We do all your payroll. This is a service service at Costco. I mean, you can get payroll services anywhere. Adp, paychecks, whatever. But you. What you need to be involved in is choosing the payroll number because too many accounts are way too conservative, and they're going to make you take more payroll than I want you to. So be careful there. Don't take more payroll than you need to. Then you do your. You got to do your payroll reports. You're going to freaking get audited. Okay, sure. Two says facts. I'm interested. IRS won't call you, Todd. Good job. Okay. In my first year, county line convenience says it's my first year getting a 1099 from eBay and Facebook Marketplace. Congrats. That's awesome. Should be around 20 grand. Any specific items I might not be thinking about for write offs. Oh, let's have fun, everybody. Let's play with this. Okay, let's just screw around here for a minute. So county line is going to have a 1040 down here. So 1040 tax return. County line made 20 grand in 1099. So we know we're going to want to be an LLC to grow into the future into an S corp. County line is going to be doing a schedule C, as in Charlie. All right, now this schedule C is a form that feeds into your 1040. Okay. And county line says, what should I be thinking about? Let's have fun. Okay, so 1099, drop in about 20 grand. I want to do dining. I want to do travel. Definitely going to do some auto. You got to drive to the Apple store at the very least, or Best Buy. We're going to do electronics. I want to be writing off cell phone. Cell phone service, computers, supplies. I'm going to put supplies down here. Anything. Office Max, Staples, Home Depot, which brings in equipment. You might have equipment scenarios maybe you're running. This could be a schedule E. For those of you that are doing a rental property, you're going to have some different ones there. I want to put the kids on payroll. The kids may be helping out. Quit paying taxes and giving your kids money. Have the kids help out with home janitorial, shredding, paper marketing. You're going to have some marketing expenses. Don't forget about that. You might have a little bit of legal getting your LLC set up. I want to be funding your retirement account. I'm going to be thinking about, are we going to be doing a little roth? Are we going to be doing an ira? We got to be thinking about health care write offs. What are you doing? Are you doing an hsa? Do you have health insurance? And you say, well, health insurance is paid for at my work. Okay, well, do they pay for everything? Could we be doing something on the side? Should we do it? Doing an hra? What else is in my normal list of things that I love? Gosh, there's something I'm missing here. I think this is pretty good. That's what I want you thinking about people. We want to be taking rhinos for all that jazz. All right. Okay. Couple last items here and then I'm going to give away our last of our books. Okay, of my 10 tips, which one am I missing here? Attaching additional statements and comments that goes along with preparing your return with a professional or really knowing what you're doing? Okay, I think I'm on the last one here that is going to be be aware of industry averages or common expenses. If you're a realtor, you're going to have a lot in mileage, auto dining because you're out on the road whining and dining. A dentist is going to have a lot in payroll, rent, supplies, equipment. So whenever I see a dentist with a lot of auto expense, I'm like, whoa, whoa, whoa. That doesn't look right. You're going to get audited. You want to be kind of be in certain boundaries. Now. If you're using good software or tax professional, they're going to be able to look at your business. If you're a landscaper, a consultant, whatever, and go based on your industry code, you got some expenses here that are kind of weird. Like, why do you have that expense? No one else does in your industry. You kind of want to be thinking logically. Is this going to grab attention? You want to be. You want to be under the radar. You don't want to be Michael Anthony Holland Sixteen Candles at Jake's party, getting noticed. You don't want to do that. You want to be under the radar. You want to be Jason Bourne. You're just blending. Just blended. No one sees you coming. All right, KitKat says is your office taking new clients? Here's. Thank you, KitKat, for throwing me a little softball there. Let me. Kit Kat, let me say this, everybody out there, one of the first things I recommend is get a tax consult with one of my tax lawyers and build a trifecta plan. Do you need to do entity. Do you need to clean up one of your LLC or corporations that's laying around? We can look at a couple of years tax returns. I want to save you 10 times whatever you pay us now. We've got all sorts of options. You might just pay for one hour. You know, we do a full consult. It's going to be around a thousand bucks or something like that. Some of you are just starting your business. Don't pay for that. Take your time. Soak up our podcasts, my YouTube videos. Come to one of my workshops this fall. I got five workshops. Get over to markjkohler.com, great workshops you can watch online, come in person. But KitKat, we are not doing new clients for tax returns for last year. We have a list. We're getting a list of all of our clients that want to be new patrons that want to be clients this coming year. So call the office. You want to. Gosh, can you put some of those links down in there knee CPAs and the law firm. Some of the phone numbers I would start out with just going to kkos lawyers or ke-cpas.com those will be down in the description and just line up an initial consult, get a review of your tax returns, get a plan. Now between now and October 15, the accounting firm swamped. It's a good time between October and Christmas to get a little consult at the accounting firm law firm. We can we'll find a spot for you within the next 10 days, two weeks and really kind of help you get on a plan. Adam says can you speak to how when we take our most maximum deduction but then if we want to sell people want to see their taxes might not look as good as profit and loss. Okay, can you speak to how when we take our most maximum tax then we want to sell people we want to see the taxes might look look as good as profit. Okay, here's what I think. Adam Whitney's saying, Mark, you make my taxes look so low I can't go to the bank and get a loan. And so your write offs are great. I'm not getting audited and it's freaking awesome. But now I got to go get a bank loan and I want to show more profit in my business. That's a balancing act. One of the best things to do is be working with a lender that understands small business and they're freaking not going to beat you up for having a really smart tax return. If you walk into your local credit union and you don't fit in our little box, you're not going to get a loan. Right. And so you want to be aggressive and networking to find the right lender. If you're trying to show a tax return that has profit but also not getting screwed by the irs. And it's a balance. It really is. Some clients will Show More Revenue 1 year to refinance their home or buy a new home and then next year they get back to writing off everything under the sun. So be careful. B. Pain says with this new $80 billion going to the IRS, what is your gut feeling on how this will affect small business owners? Well, that's the whole point of this frickin broadcast be pain. And that is the IRS is going to be auditing more people. That's what I'm trying to say. That's why I want to tell you these are some tricks to avoid the audit. And the IRS doesn't know who the cheats are. They're going to throw a big net out there, they're going to audit, you know, a random selection based on these 10 things that I'm talking about. So you don't want to be in that cast of a net. And the IRS is wondering if you're using round numbers, if you're cheating, if you've got out of line numbers or you're not filing on time or you're not filing payroll or is all these little tips I'm giving you is going to keep you hopefully out of the fray when the IRS starts doing more audits, which they're going to do. They're doubling the size of the irs. Kazusi says. How backed up are you at the office? I need a trifecta. I can get you with one of my tax lawyers the next two weeks easily to get your trifecta built for you people. And what? Oh, my gosh, they look so freaking cool. I do a trifecta with all these bubbles and where's your money going? And how's your IRA and your 401k and your dad at that? And we build a plan for your next year, and we're not talking 5, $10,000, and some of these companies that are not even freaking lawyers that are ripping people off, watch out for them. If you're not talking to a real lawyer that's affordable and simple and making sense, you're at the wrong space. And we are. I really am worried about customer service. You call my office if you're frustrated and you talk to us about what you received and what you paid for and the team. The scheduling paralegals are amazing. They'll make sure you get the right person. All right, let's see if there's any final. I'm going to give away another book. Let's give away a tax and legal playbook. Diane, Give me a winner. Todd E. O. Todd E. O. Toddy O has been. Boom. Look at. He's been asking questions. We love you, Todd. You're a winner. Email dianearkjkohler.com get over your address. We're good to go. Let me hit another question, Bridget. Do you have to set up an LLC for rental properties? Yes, Bridget, you do. Okay, this is great. Whiteboard, everybody. Whiteboard. A lot of people say, mark, when do I set up an llc? Okay, there's two instances where I want to see many of you in an llc. First, you might need your revocable living trust. If you're just getting started, married or single, here's your 1040. Remember your trifecta. This is your foundation. Then if you buy a rental property and anything goes wrong on the rental, Bridget, you're getting sued. They're going to come after your home equity garnish, your wages, come after any asset you got. When you have a rental property, people, that's when you set up an llc. And we don't set it up in Frickin Nevada or Delaware or Wyoming. We set up the llc. Now, we have advanced strategies down the road, but you're going to set up an llc, the state where your rental is. So if Bridget's got a rental in Tennessee, we're going to set up a Tennessee LLC and we're going to transfer the rental into the llc. And you're going to go, well, Mark, I have a bank. And they're going to freak out. No, they're not. The due on sale clause is. I've had one time in 20 years, thousands and thousands of deed transfers to LLCs. And the bank was like, what's going on? Do you. Don't go into the bank. They've already sold your damn mortgage. You're going to set up an LLC after you close and then transfer the property into the llc, let the LLC be on the lease agreement and you're going to collect rent. You're going to take all the freaking write offs. You're going to love all these write offs and you're going to report on a schedule E. Bridget, call my office. Get an. We have an $800 LLC set up. You talk to a real lawyer, they're going to get you dialed in. If you want to pay a little bit more, we'll design a trifecta for you and a plan for the year. Maybe look at tax returns, all sorts of goodies. But give their office a call. Anybody you can go to kqslawyers.com don't use my law firm. If you don't like us, that's fine, but use someone. Don't go freaking try to knock this out on TurboTax or on LegalZoom and think you're gonna do it right. It's your first time, be careful. So, Bridget, you want an LLC for that. Now the second time I want an LLC is for you people that are starting a side hustle. If you're starting a side hustle, let's start as an LLC and then we can graduate to an S Corp when the time's right. Do you know how much we charge to convert to an S Corp? 200 bucks. 200 bucks? You can convert to an S Corp when the time's right. I've been on the phone with my daughter Sydney several times a day. Sydney, Shout out. She's my realtor down in Southern California, kicking butt. What do we do? We set up an LLC for her. As soon as she hits the income level we want, we're going to convert her over to an S corp. Her name doesn't change. Her ein doesn't change. It's all good. Okay, last question and I'm going to give away two more books and we're wrapped up. Does the IRS negotiate the amount you might owe? So people. That's in my article. It's down and in the description. What if I owe the IRS and can't pay? You can do what's called an offer and compromise. They are not easy. They want to see you dirt poor and they're going to make you stay dirt poor until they cut you a deal. KitKat people, pay the damn IRS and move on. It is not worth so it's you. And there are. I've had cases where clients get they owe the IRS 100 grand and they only owe 1,000 when you're done. But guess what? They're dirt poor. And they had to prove it for two years and live dirt poor before the IRS cut them a deal. It is not. It's crazy. Jared says marky Mark, new vehicle purchase. What tax implications does it elevate my chances? Okay, first of all, if you bought a new car, that is a great write off. Love it. We're going to decide between mileage or actual. It is not going to get you audited to put a vehicle in your business. Freaking do it. I want you to write the hell off of that thing. And Jared, take advantage of every penny you can. I've got an article in my blog. You can go to markjkohler time markjkohler.com and in the blog just type in auto. Just type auto in the blog search. I've got a great auto with seven ways to write off your auto. Get over there, check it out. You're going to love it. Alex says I need to set up an S corp this year. What is the last day I have to do it by? Okay, Alex, if you don't have an LLC already when you set up the S Corp, it's only good for the rest of the year from the day you set it up. So if you set it up September 1st, you only get to use it. September, October, November, December, you only got four months of benefit. So if you're making money, Alex, you got to get that thing set Up. Call the office immediately. Get your S Corp going. You can't set it up in December and go, oh, it's good for the whole year. Nope. Ira says, oh, you set it up December 1st. You get to use it for the month of December, and then you're screwed for the last 11 months. So, Alex, get on it. Okay. I thank you, Janie, for making that post. People, there's a fictitious Mark Kohler that is not really there. It is not me, and they are scam artists. Do not listen to anybody that's got any 0.00, whatever the hell a bitcoin. It is a scam. It is a bot. Stay away. My kids win. Certified tax preparer. Here, Let me know. Mark. My kids win. I'm coming out with the sweetest tax certification program of tax strategies. You're gonna love it. It's affordable. It's gonna make sense. I'm gonna have a referral network that you can participate in to get clients. You're gonna love it. Okay, everybody, I'm giving away the last two books, and we're wrapping it up. Financial freedom. Who's my winner?

Marley Toredo.

Marley Tortoise.

Torado.

Torado. Marley Toredo. Make sure you email Diane with 2ns markj.kohler.com and what your CPA isn't telling you. The gateway drug.

Earl Thomas.

Earl Thomas. Thank you, Diane. Okay, Earl, you're a winner as well. In life and of a book. Everybody, The IRS is getting bigger. The IRS has doubled their budget. They are going to be auditing more people. Get your crap together. Save taxes. It's okay to write things off. It's okay to be on top of it. There are loopholes that are legit and are not going to lose. And an audit. But you got to be the captain of your ship. You got to be your own damn quarterback, people. I'm not going anywhere. I have a podcast every week. I'm going live every week. I got YouTube videos. I've got articles out there. I love the American Dream. I want to see you succeed. Don't give up. Keep learning. The dream is real. And this tax and legal. Making money and saving money. Same damn thing. See you next week.