How to Write-off your Cellphone in your business PROPERLY | Mark J Kohler LIVE |

You are live, sir.

Alright, welcome everybody. Don't go anywhere until I tell you what this little webinar broadcast live presentation is all about. My name is Mark Kohler. I'm a CPA attorney helping small business owners around the country. And I'm going to save you money today. Not selling anything. I'm going to give some books away, I'm going to answer questions live. I'm going to here on entrepreneur Facebook, Mark Kohler Facebook and YouTube Live helping you out to save money in your taxes and business structuring 4.4 million Americans last year opened an LLC or a small corporation. S corporation. That's a big deal. One of your number one write offs is writing off your cell phone. And there's an IRS ruling that allows you to write off 100% of your cell phone based on a couple rules. Very easy to meet. You're gonna love this. So I got my whiteboard, I got my pen, I got some books to give away. We're live. Are we good? My team, right. I've also got Darren Charrington, one of our attorneys from our law firm on the live chat as well. He's gonna try to answer quick questions, give you links on YouTube, give you blog links. Please bring your tax and legal questions. Which entity is best for you? How do I file my taxes? Which write off can I take? Can I pay my kids? How do I set up a Roth IRA cryptocurrency? All the. I'm yours for the next 58 minutes. One hour. So we're gonna see what happens. Okay, now let's just get the cell phone rule out on the table and then I'll put it in a structure. For many of you, you're a sole proprietorship. I'm gonna put sp. Sole proprietorship. Some of you may have set up an llc, which is fine, you're still going to get taxed. And a sole prop. As a sole prop, you're going to be putting your tax return on a schedule or your tax information on a schedule C, as in Charlie. Schedule C is on your 1040. You could still knock out your tax return yourself if you want, but you could do it with the schedule you're going to just do it on, maybe even TurboTax or Tax Slayer. And some of you may have already set up what's called an S corporation. S corp, not an S corp that you'd get in Vegas. That'd be very bad. S Corp, it's in small business. All right? Now you're the owner of one of these operations and this Is your side hustle, side gig, whatever, your small business. So if you're owning rental property, you're going to be over here with an llc, having rental property. Now, the cell phone can be written off here under your rental property or under your sole prop. Under your llc, under your S corp. Now listen, if you're getting a 1099 from Uber Grubhub, what are all the food places? I mean, I don't even know anymore. What am I? What do I use? I can't even remember. What do I use? Postmates. That's what you're using. I gotta give someone a plug here. I don't know what I'm using. I can't remember. Anyway, if any of you are getting a 1099 from selling crap on ebay, mowing someone's lawn, consulting services, Uber, whatever, that means you're at least a sole proprietor. Now, that's a 1099. You don't get a W2. You get what's called a 1099. And this 1099 is going to go into your schedule C. You're able to write off your cell phone here. Now, we could talk about auto travel, all the goodies, but we're just going to focus on cell phone for a moment. Now, if you have an llc, we're going to write off in the same place. If you have an S corp, we're going to write off your cell phone. If you have an LLC for a rental property, I want to write off cell phone. I'm going to give you the rules, but this is what it looks like. This is your structure down here is going to be your trust, your 1040. Your Schedule C is going to be this little doohickey right here and get rid of that 1040. So that schedule C is this little return that's going to come down onto your 1040. And then this is your LLC for rentals. And you might have a trust that owns your home. You got life insurance over here? LI Ooh, some brought me a cold, rock star. This is a cold. I had some in the fridge. Can I get one out of the fridge? I got to throw down the cold stuff. All right, so Sole Prop LLC or S Corp, I want to write off your cell phone here. If you have just rental property in a day job, I'm going to write off your cell phone over on your rental property side in this area, maybe going, Mark, what the frick's going on in here? This is where we're doing your Roth IRAs, your 401ks, your HSA ESA, all these tax free structures. Right now I got a crypto mine in my Roth ira. I got. I can look at my money right now on my phone making cryptocurrency during my broadcast here. I want to keep saying podcast, we've got a podcast every week too, but nice hash right here. What's my crypto up today? So this month I've made $524 on my crypto mine. Okay, so cell phone, cell phone, cell phone. Now here's the rule. You can write off 100% of your cell phone cost as long as you can show you have a personal phone line for personal use. It could be a landline, it could be a line attached to your Dish Network, your cable company, whatever. If you're married or living with someone, they may have a personal phone that you share. And then your phone becomes the business line 100% write off. That means I can also write off the phone itself, the case that goes around it. I want to write off Bluetooth, I want to write off your Apple Watch. All of that related to your cell phone because they're Bluetooth devices. That smartwatch, we're going to write that off as 100% business because you need that phone for your business. This was a case and revenue ruling and listed property rule. For all of you that are accountants out there or enrolled agents or tax preparers. You want to look at cell phones as listed property. That's where this backdoored in. So but you got to be able to show you got a home phone line for personal use. And again, if you're married, boom. Now here's where this even gets better. It gets better. I'm throwing in some shamwow tiles. No, I'm just joking. Okay, here's where it gets better. In any business organization want you to have a board of advisors. B of a board of advisors. That's not bank of America. Board of advisors with an LLC or a sole proprietor or you're going to have a board of directors if you're a corporation, even if you have just a simple LLC over here, Board of advisors. Now you may say, well, when I've set up my entity on LegalZoom or whatever, I didn't get that. It's because you're setting up your entities online. We have a very affordable service here at our law firm setting up entities in every state in the country. We're swamped, we're busy. We're helping clients. They love it. When we set up an llc, we create a board of advisors. Guess what? My kids, I have some teen, one teenager left. My other three or four. College. I say three or four. You're like, don't you know how many you have? One of them, two of them are married. I'm getting in trouble today. Okay? So I have my kids, cell phones that I pay for that are in the business, either working for the business or. Or a subcontractors or on my board of directors or board of advisors. So I want to write off my spouse's phone, my phone, my kid's phone if they're legitimately working in the business and still have my Winona Ryder, Stranger things yellow phone hanging on the wall that allows for this write off. There you go. Pen drop. It's that easy. Make sure your business is paying for it. If you're like, mark, I don't have enough money in my business to pay for it. Put the money in there and let it pay for it. I want you to make sure that you are. Ooh, nice and cold. Writing off your cell phone. This is for my sponsorship with Rockstar. Tastes so good. This is a write off today in the studio. Okay. All right, Questions? I'm now all yours. Whitney. What do we got?

No, I'm just waving.

Okay, thank you. I appreciate that. Okay. My personal assistant's, like, waving at me like, there's a problem. I'm leaving. I'm like, okay, have fun. See you in the morning. Hey, I want to say thanks to all those people out there. Renee. Renee says don't drink these. Look at B vitamins, electrolytes, taurine. Good stuff. No carbonation, 10 calories, no sugar. These are amazing, Renee. Come on. And 160 grams of caffeine. Love. All right. Okay. Lori wants info on crypto. Let me just say I have a YouTube video on crypto where I show you how I built my mind. So I have a mining crypto situation. Structure. I could show you how that's structured. But I'm going to just say, any of you that want to. Oh, my gosh, Crypto is a whole. Ooh. Okay. Next Wednesday, right, Corey? Next Wednesday, the 21st. I'm doing an entire hour free on entrepreneur.com. will you put that in the chat below on YouTube and Facebook? The link, if you go to entrepreneur.com. the webinar for next week is crypto mining. And I'm going to say cryptocurrency Tax Strategies. How to save money or pay no tax at all on cryptocurrency. It's next Wednesday afternoon. I'll put in the link below. You can register for free. In the meantime, just go to YouTube and type Kohler Cryptocurrency or Kohler Bitcoin and you'll see all my videos on it. You're going to love it.

I do have a question that I Keep getting on YouTube on your personal page.

Okay, I'm fielding a question. If you hear this, folks, what is it?

So it's from a Rachel, if I remember correctly. But she wants to. She keeps asking, if me and my husband make too much money, can we still get the Roth ira? I heard somewhere that we aren't allowed. We aren't allowed to get it if we.

Okay, the question is the backdoor Roth. This is from a Rachel and her husband. She goes, we make too much money. We can't get a Roth ira. So we're told. By the way, Corey, in the next five minutes, I want to give away a book. I need a name. Okay? So, people, I don't care if you make $1 or a billion dollars. You can all have a Roth IRA. It's called the backdoor Roth. Now, the IRS today's April 15th, but we have till May 17th to fund our Roth for last year. People, this is what I'm doing inside. My Roth is my cryptocurrency. So I pay zero taxes. That's why I want you to have a Roth. Peter Thiel started PayPal with this Roth IRA as an investor. Over $100 million Roth IRA. Now, well, you might like Mark. You can only put six grand in a Roth. You can only put six grand in per year, seven grand if you're over age 50. But you can grow it to any level, any year. There's no limit on the growth. So here's how you do it. The Roth ira. We love the Roth ira. The Roth IRA is a big party, everybody. If you don't know what a Roth IRA is, don't feel stupid. You take after tax money. So after you pay your taxes, you can put six grand in a year and you have until May. So this is 2020 here. You have until May 17 and you can put in your six grand for last year up until May 17. Then you can put another six grand in for 20, 21. Now, you don't get a tax write off when you put it in, but you never pay tax what it invests. And when you pull it out in the future, there's no tax. You can pull out your contributions anytime, tax free, penalty free, anytime. You can pull out your contributions, but the growth stays in there till you're 59 and a half. And you young people, don't stress about it. I meet people all the time that are broke, in their 40s, 50s, 60s, and they're freaking out. Build that Roth now watch a Dave Ramsey video on the compound interest principle. Love it. So the Roth ira, you can put this in. But Rachel says, well, Mark, we make more than 100 or 200 grand. It's really about 180 grand. If you're married. What is it I got in my. Anyway, if you make too much money and you can't do the Roth, the. On the face of it, you can go in the back door to the Roth. And we love going in the back door to the Roth over. Is that the side door or the back door? Anyway, what we want to do here on the back door is we do a non deductible IRA contribution. Then on day two. So day one, I do a non deductible ira, and then on day two, convert to Roth. There's no income limit and no rules on how much you can convert. I could convert a million dollars tomorrow. So this is called this. If you want to check it out, go to YouTube and just type Kohler Backdoor Roth. Watch the video on that. You can learn how to do it. If you want to set up a crypto Roth right now, you could be trading crypto tomorrow. Go to directed ira.com directed ira.com and you can set up a crypto Roth right now, tax free. You're gonna love it. Okay. Wow, so many questions. Do you have one, Darren, for me? Are you answering questions, Darren? Are you typing and answering questions? That's what you're supposed to be doing. Okay. Okay, you're on it. Okay. Did you find the webinar link?

Oh, yeah.

Okay, so the webinar link is in the chat down below. Any of you that want to know, cryptocurrency tax strategies next week? All right. Is this at the top, Corey? Am I just going to go down the top? All right, people, any of these. Okay, Todd Smith says if you transfer your home to an LLC to be a rental, can you keep the utilities in your name? Yes. I don't think it's fatal. And what I mean by fatal, people, is we want an LLC for asset protection. So if we go back to our trifecta, you're going to be wanting to run your operations over here or your day job, but over here is where you're going to have your rental. So, Todd, you might have your personal home and you're going to transfer it to your LLC people do not worry about the due on sale clause. I've never had a mortgage company go after one of my clients. They don't care. Your mortgage has been sold nine times over. Just make the payment. So you're going to transfer the property to your llc? So, Todd, I want the property title in the name of the llc. I. I want the LLC to be on the lease agreement. I want the LLC to pay the mortgage. I want the LLC to receive the rent. I'd like to move the utilities over to the LLC. But if you do eight out of 10 things, the LLC is still going to protect you. So, people, when you want protection with an llc, you got to treat it like a company. It's not you. Todd's over here. Todd does not own the property anymore. Todd transferred the property to the LLC. Now the LLC is the 100% owner and Todd owns the LLC. Now we get protection and that's what we want. So, Todd, move the utilities. You still get the write off. But I try to get them in the LLC name. Nick says, I'm in Manhattan, New York. If I make 50k in W2 and 10 to 15k in a side hustle, no rental property, how much can I write off? And can I only write loss for 2 years or so? 3. I need to make some more. I need to make more income than expenses. Do I have to? Okay, everybody. Nick, big shout out. I lived on 180th and Broadway in New York for a couple years. Love New York. That's up in Spanish Harlem. You're right. It's kind of good and bad areas up there. But I was a missionary and I just love New York. Fell in love with the people working in soup kitchens and just hanging out and spreading the good word. It was a good time. Okay, everybody. You're like Nick and you have a side hustle. Listen to Nick's question. He goes, how much can I write off? I got a W2 for 50 grand. Don't care. He says, I made 10 or 15 grand. How much can you write off? Well, there's no limit whatever is directly related to that business. So let's say he's got his little sole proprietor and Nick, I'm going to come to the two and three year rule, but let's say you're bringing in 10 to 15 grand. Just like Nick said. You're driving Uber, you're selling crap online. Great. You're bringing in 10 to 15 grand. I want to write off cell phone, home office, auto dining, electronics, marketing, computers, bank fees, legal Accounting. See what I'm doing, everybody? I'm writing all this stuff. If it relates to my business, we're going to try to relate as much as we can. Right? You go out to dinner with your wife and talk about the business. I'm going to write that dining off once in a while. I'm not going to write off bringing home pizza, but I'm going to try to write off as much as I can. So what happens if we write off 20 grand in the first year? Oh, we got a $5,000 loss. Is that okay? Sure. That's okay. You can have a loss the first year. In fact, the IRS turns a blind eye generally. As long as you don't get greedy for the first two years. You have to show a profit by the third year. Or you can write off the losses up to the income and then carry the rest forward. Let me explain that. Let's say. Let's look at the next three years. Let's say that Nick has a loss. This is 2021. Well, let's do 2020, because he had last year. Then we got 2021 and 2022. Okay, so let's say Nick had a loss for five grand last year. I'm going to write that off against his W2. We're going to get maybe some refund there. I'm sure we would. Next year he does the same thing. He makes 20 grand. Let's say he has a $10,000 loss after all of his write offs. We're writing off everything. Boom, boom, boom, boom, boom, boom. Legit. Legit. We have a $10,000 loss. That's okay. I'm going to write that off against this W2. I'm good. But on the third year, I want to either show profit or a break even because I want to avoid the hobby loss rules. Now, don't freak out by this, people. No one's going to jail, but you don't want to get audited. It costs money and it's stressful and it's a pain in the butt. So I'm going to show a zero. Now, let's say on paper Nick brought in 18 grand, but he had 25,000 in expenses. Well, he really had a loss of seven grand, but I don't want to show a loss of seven grand again. So I'm just going to take the seven grand and put it in a bucket called a carry forward loss and just do a zero net profit. That's why the IRS is happy. Nick made another 18 grand tax free. Boom. So Nick, I Think you're off to the races. Okay. Am I asking? You're just cranking away Darren and typing questions. Okay. Do I want to answer something else? You want to tell me what?

One I need to give a name

out a winner of my book. What your CPA isn't telling you. Do you know I've got an amazing screenwriter. I've got to be careful disclosing too much because I've got a non disclosure agreement. But this is in the works for a made for TV movie. Is that crazy? Yep. I'm going to be Ben Affleck in Accountant Number two. I got. I'm working on shooting guns and krav and I'm just joking. But anyway, this is a great book. It's a story that it gets you hooked on tax savings. So I'm going to give away four books today. Going to give away these four books and I'll sign it. Who's the first book too? What? Romulo. How do you spell that?

R O, M U L O. R

U, R O, M U, L, O. Keep living the dream. All right, Romulo. Sorry I'm butchering your name. Forgive me. I'm glad you're here. Okay, that's for Romulo. Okay, next question. What do you want? Okay.

He actually asks if. If I get reimbursed a portion of my cell phone from W2 company, can I still do this?

Okay. Romulo says if I'm writing off my cell phone. Oh. But I have a day job and let's say my cell phone is $200 a month and my day job pays 100 bucks of it. So I'm only out 100. You can't write something off that you didn't pay for. So if your W2 day job covers 100 of it, 100 that you're going to pay for out of your business. Is that okay? Yes. Now the only question Romulo is I'm going to ask. Well, where's your home phone? Oh, well, my wife has a cell phone and we use that for our personal use. Oh. Or I've got. I'm single but I got a phone on the wall and I have a number through my DirecTV. Okay, cool. I'm going to write off the other hundred that your business pays for. Because see everybody, the trick here is one of the master plans here for all of you is I want you to have a day job and a side hustle. See if I can write off your expenses over here. The W2 gives you the benefits and the side hustle pays all the extra bills and we're making money, we're building the dream, then if I can take some of this profit and contribute to a Roth or buy a rental property, better yet, that's how we're building wealth. That's how my wealthy clients do it. Okay, next question. Who do you want?

Jay Pevy. He asks, if phone is listed as property, don't you have to figure a business use percentage?

Okay. If I'm going to write off.

What if the phone is listed as property, don't you have to figure a business use percentage?

Okay, and this is. What's his first name?

His name is Jay.

Jay says, if my cell phone is listed property, don't I have to have a business use percentage? Okay. There was a court case on this. Several IRS notices and private letter rulings where the accountants of the world, if you go to some continuing education on this topic, even the most conservative. Well, sometimes it shocks me how conservative CPAs can be, but the general consensus is as long as you have. And this was the case where someone went to court and said, I wouldn't have a cell phone if it wasn't for my business. And I got a personal line over here. And the IRS acquiesced, which means they give up. Fine. We're going to quit trying to audit this. It's a waste of our time. And this case was the determining factor because the court said, let him write off his cell phone 100% because he has a personal line over here. So I'm going to claim 100% business use because you wouldn't have the cell phone unless it was for your business. Right. So your cell phone is for business, your personal lines for personal. And I'm going to take your desktop computer, your laptop, your drone, cameras, speakers, headphones, all sorts of things, and write them off on a business use percentage, usually 100%. If I can say I wouldn't buy it if it wasn't for my business, but I'm just. I would not worry about this. This is a very common strategy. We've been using it for years. And I've never had a client audited for this. And. And you're not going to abuse it anyway. Okay, next question. Do I get a pick? Yeah, go for it. Okay. Who? Jacques. Jacques. Jacques. I can't say that. Okay. If I roll over my old 401 to a Roth, can I pay the taxes fees out of the account or will I have to pay that separately? You would have to pay the taxes separately. Okay, now let me explain for everybody else. We Just did our podcast today on this. Now if you want to get to some kick butt podcasts, I have two of them. Main Street Business podcast and we have the Directed IRA podcast. They're all on Stitcher, Spotify, YouTube, iTunes 1 and 2. Today's topic was this very question. If I take an old 401K. So I've got this old, this old 401K and it's all traditional. So let's say you put money in and then the company did a match. Company match. And let's say you have 50 grand in this old 401k, you don't work there anymore. So what you can do is called a rollover. And you're going to do this rollover and you're going to transfer it to an ira. And when you do this rollover, there's no tax. No tax. Now, Jacques, that's right, there's no tax here because you have to roll it to a regular IRA first. Then you're going to do a conversion and you're going to convert this to a Roth ira. And when you convert it, you have to pay tax based on the bracket you're in, whatever tax bracket you're in. No penalties, just tax. And so on this 50 grand that I roll over here, and then I roll it over here, if I'm in a 20% tax bracket, I would pay 10 grand in taxes. Well, you have to pay the 10 grand in taxes out of your personal money. Now some of you may go, why in the freak would I do this? It's because you want it. I call it a Roth freeze. It sounds really good, like at Dairy Queen. But no, this is a Roth freeze. We're going to freeze the value because as it grows, you'll never pay tax again. Never, ever, ever pay tax again. So I want to pay the tax now. Rip off the freaking band aid and be done with it. So Jacque, you're going to do three steps to IRA to Roth. Now, in our podcast today, we actually did four or five steps of who you call what forms you fill out each and a lot of that. So get over to the directed IRA podcast, Corey. That should be up in the morning, right? Yes. All right. Anyway, there you go.

Well, directed IRA podcast will be Monday.

Oh, it's not till Monday.

Yeah, that's when we post those.

Okay, Monday. You'll get it on Monday. Okay. Vic, can I write off a brand new cell phone? Frickin. Every year the job drains the battery significantly. Yes, yes you can. Now some of you may say well, are you doing bonus depreciation? Don't I have to recapture it? Depending on what I sell it for, A lot of these cell phones aren't worth anything by the end of the year. I know. Also a lot of clients and what we use. Darren, help me out. It's. There's a term used for this where you only depreciate things that are over five hundred or a thousand. So you have a term for that where if it's under a certain amount, you're just going to write it off. It's not a depreciable item. And accountants out there, you know the term. It's just escaping me. But here's the point this, guys. Okay, gals, everybody. The more money you make, the easier it is to write crap off. If you're like Nick in New York and you're making 10 to 15 grand, I'm not going to write off 10,000 in cell phone. Right. I don't want to get. I don't want to be that. That looks a little too much. But if nick starts making 100 grand and I have 10,000 in cell phone or electronics and they're legit, is that going to be a red flag? No. The IRS isn't going to chase that down. And I don't want you to be unethical anyway. But if you're recycling and doing a new cell phone every year and donating your old one or getting rid of it, it's in the garbage. Don't worry about it. Seriously. Okay, what do we. Someone says, how do I get a book? Okay, for any of you that want to buy my books, I've got a bundle on my website that's freaking awesome. We've got some audio and PDF Kindle versions, also the print versions. Cory, give me a name from one of our other platforms. But if you go over to markjkohler.com I've got all my books. You can also get them on Amazon. But if you don't save. Oh, my gosh, one of my books, my goal is to save you five or ten grand in taxes. 20 bucks. Seriously. And I try to make them fun to read. So get over to markjcohler.com if you want to buy something. All right, Name. Who's the winner? JP jpv wrapped in the flag with his little baby there. J. Don't give up. Even when your baby becomes a teenager, even when you have teenagers, because you're going to want to give up. You guys know what I'm saying? For those of you that have teenagers I even wrote that here. Don't give up even when you have teenagers. Smiley face. Mark Kohler. Okay, we'll give away another book in here. Now you're answering questions, right? You're typing like a madman. Okay, cool. Darren, my attorney over here. If you want to make an appointment, you can meet with Darren. We've got seven other attorneys he meets with clients around the country.

This Jordan Reed one is about the when we answered the hobby loss section.

Okay, Jordan has a follow up question on the hobby loss. Jordan Reed says, what if my business takes for a couple years, takes a loss, I shut it down and open another business that takes a loss. Does my two years start over or does the IRS get more picky? Jordan, that is a good trick. If it's a different line of business starts over. But if it's really just a sham where you like start a new tax ID number but it's really the same business. If you got audited, you have problems. But no, it starts over. I have a lot of clients are like, hey, after two years, Jordan, everybody out there, if you're not making money within a couple freaking years, the IRS is going, what's up? Do you really suck at this or you just doing it for a tax benefit? So Jordan, I want you to move on to a new freaking business. Anyway, if you're losing money after two years, want you to make a lot of money. Everybody. Okay, Doug says, my wife has a business taking off. Taking, taking my off. Single Person LLC. If she gets to a 40k by end of year, should we convert to S Corp before the end of the year? Okay, Doug, this is a really good question. Everybody. If back up to the very top where I started. If you have a side hustle or side gig and you're a sole proprietor, I know this looks ugly, but if you're a sole proprietor or llc, you're just going to melt that as long as you can write offs and this and that. But when you start netting, and I'm going to put this in red when you start netting, 40,000 or more. Okay, that's 40,000 or more net. Now see, Doug, you said my wife's 40k by end of year. I don't know if that's gross or net. I want after expenses. If you net 40 grand, Bink. We're going to convert to an S corp. We charge 150 bucks easy schmeezy and we're going to want to convert. Really? Technically, you could do it in the first week or two of January, but don't Wait till the last minute. Let's get the conversion done in December of 2021. We backdate the S election all the way to the first of the year, and then we issue your payroll. If any of you are like, when to do an S Corp, just type YouTube Kohler, when to do S Corp. I've got thousands of views on some great videos that break it down. When to move to S Corp, when to convert to S Corp, just go YouTube it. Okay, Darren, you got something? You just typing away? Yeah.

So Gene from Facebook asks, my wife resigned last year and left her 401k. What should she do?

Oh, my gosh, Gene, I wish knew how much you had. Jean says his wife left her company last year during the COVID mess. And so in 2020, she left the job. And when you leave a job, your old 401k is now yours to do as you please. There's no tax to roll it out to an ira. Now, the first thing I would do, Gene, is I'd find out if any of its Roth. Because think of a 401k like honeycomb. You could have Roth in here and you could have traditional in here. You've got your match there. You know the company's match, your contribution. But you want to find out is any of this Roth? So you would roll out the Roth portion to Roth IRA and the other portion to regular ira. So you're going to do. You'd probably have two accounts. Okay. Now the world is your oyster. Do you know I'm buying 10 cows? I might go look at cows tonight in my nice sweater here. I was gonna say it is cashmere. It was a gift. I'm so excited. It's so soft when you have cashmere. You know what I'm saying? All right, anyway, totally inappropriate, but I'm going to go look at cows. I own crypto mining rig in my Roth. I own a rental property in my hsa. I can buy cows in my ira, Gene. Buy what? You know, if your brother's opening a restaurant down the street and you know it's going to go big, like your Roth or your wife's IRA or ira. Invest in the restaurant. I don't care. You can do almost any business now. You can't get work for the business if your IRA owns a majority of it. There's some prohibited transaction rules. And I'm going to say his name again. Darren Charrington. Darren Charrington. He's got. I should have him come smile here on camera. He's on the other side just answering questions. Right and left. But if you need an appointment, he's one of our attorneys, legit attorney. You can book a half hour, an hour and get set up. But I would invest in what you want. Real estate, crypto gold, small business, cows, online business, blah blah, blah. Whatever you want to invest in. Ooh, which reminds me. Next week on the 23rd and 4th, April 23rd and 24th, Matt and I are doing a two day online Zoom live broadcast from right here at this desk. It's 199 bucks. I thought we were charging more. I found out I'm like, What the hell? Two days next week, 23rd and 24th. It's our sixth annual IRA Self Directed IRA Summit. And there's people in the room that have $50 million Roth IRAs. There's other people with five grand. And you're learning how to self direct your retirement. Gene. Bring your wife. You could pay for one person. Sit around the computer and watch this thing next week. Darren or Corey, can you put the link for the summit in the chats in these two things? Okay. Leslie says my side hustle became my main hustle. Is it better to W2 myself or remain 1099? Leslie. Okay, I'm going to ask Corey here. Corey, my amazing producer, Leslie. She's pretty there, right? Okay. Cory's single. I'm trying to hook him up. Okay? So I'm just saying, Leslie, you might. I don't know if you're taking. Leslie says, I'm going to let Corey answer this question. Leslie says I'm a side hustle. So what does that mean? Corey, sole proprietor. Okay. And she's getting a 1099. And she says, Should I W2 myself? Well, the only way you can W2 yourself is in an S corp. It does not work in an LLC. Everybody listen. LLCs do not save taxes, period. You have to elect to be an S corp or just set up an inc to begin with. And that's where you take a W2 and you pay no self employment tax out of the bottom over here. Leslie's paying SE tax on every dollar of net. So Leslie's question is, Corey, should I stay as sole proprietor or should I convert to an S corp? What would you ask her? What's the big decision? What would tell her she's got to be an S corp? Did Darren help you? Good job, Corey. He said, leslie, are you netting more than $40,000? That's it. I don't care if you're in California paying the stupid $800 minimum tax. If you're netting or you think you're going to net by the end of the year after expenses more than 40k, you better be a freaking S Corp. Guys, every dentist, doctor, plumber, electrician, landscaper, realtor, broker, attorney, cpa. We're all S Corps. And we're all S Corps. That's the number one small business strategy. And if your accountant says it doesn't make sense for you and you make more than 40 grand, you've got the wrong freaking accountant. And I'll go toe to toe, head to head. I teach this class to CPAs around the country and your CPA is either scared of their shadow or they don't know the law. In 20 years, we have never, ever, ever had a client audited for taking too little of salary. Ever. Ever. Knock on wood. Okay, I'm giving away a book. Corey, who's winner?

We want Gerald Nelson. Gerald Nelson.

Gerald Nelson. Gerald and Denise. Or is it Gerald? Gerald Nelson. Have an awesome. Okay, Darren gets to choose the next winner because I have a feeling he's on a different platform. Oh, you're looking at all of them. Okay, well, I'll stick with Gerald and you get a pick. Gerald, have an awesome 2021. If you'd like a book, get over to markjkohler.com I'm so happy today. I'm having a great day. I hope all of you are having fun. I try to keep this tax stuff light and fun. Okay, who's next? Nathan says, can I write off a percentage of the purchase of my cell phone and laptops? Hell yeah, Nathan. That's the whole point of this presentation. I want you to write off 100% of your laptop, 100% of your cell phone. But you better have a landline for personal. And a crappy 1982 desktop Apple IIe Atari for your personal use. That was a joke. Have a personal computer for personal use. Have a personal phone for personal use. Then I'm writing off a hundred. I write off 100% of my iPad because I need it for business, but I got a desktop at home. That's not a write off. See what I'm saying? Right off the laptop. Have a crappy desktop at home for personal. If the IRS comes in through the windows pointing a gun at you can go, there's my personal computer. Back off. All right. Laura says, I saw you are having a seminar in Hawaii in November. Is that still happening? Laura? Rain, shine or snow or freaking Covid? I'm coming to Hawaii this year for my normal workshop. It's going to be the week before Thanksgiving, I believe, on a Saturday. And folks, I really don't like going to Hawaii. Who does, right? It's miserable. But I do it for you. Because if you want to write off coming to Hawaii, come to my annual workshop in Hawaii. I do a luau, some surfing the night before. Laura, you know, I'm just joking around. I love my Hawaii clients. They send me gifts all the time. They're just so giving the aloha spirit. I love them. So get to Hawaii. Who's. My next question. Is the backdoor Roth only for earned income, or does it apply to Schedule E earnings? No, it has to be earned income. But I've got a backdoor 401k strategy that's the same as the backdoor Roth. You want to hear this, jk? You're going to freaking love it. Everybody. No one has a video like this on the web. No one. There's no one else that has the backdoor 401k. And I don't know if I call it the double Backdoor Roth. Okay, let's say all you have is rentals. And that's what JK has. JK is saying all I have is rentals. Now, this is good. Darren. All he has is. Or she. JK has a Schedule E. Is that passive or earned income? Darren? Passive. See? He's so amazing. He's answering someone's question. He just rattled that off. It's passive. Can you fund a Roth IRA with passive income? No. Can you fund a 401k? No, you cannot. Well, damn it. JK is like, what do I do? I set up a little LLC over here to pay a management fee to manage your own properties. Now, I never do this for asset protection. It's overkill. Don't set up a C corp in Frickin Nevada or Wyoming or Delaware. Whoever's selling you a C corp in another state, fire him. It's a scam. I'm not kidding. And I stand behind that. I'll go toe to toe. But manage your own properties in an llc. Would I ever do that? No. It doesn't make sense for asset protection or taxes, because I've got passive income. And when I pay myself a 1099, I just created ordinary income. Like Leslie was saying, I got ordinary income, but look it, if I pay myself 10 grand, then I take earned income of 10 grand. I could put that into a 401k or I could even put it into a Roth. Now, I've generated earned income. Frankly, JK, what I would do is a backdoor 401k because I can wipe out the entire 10k from income tax. But if you want a Roth, you're going to have to pay tax on it. So I just do the Roth. All right, next question. You got something Darren, I can see it in your eye. No. Okay, I'm going up here. Robert Redderman. Robert says I'm buying a truck through the company. Should I depreciate it the first year or spread it out over years? Corey, you know what's coming? Auto question. Robert says, buying a truck through my company, should I write this truck off the first year? Ooh, that's a really ugly truck. Okay Robert, it depends on your income. Because if I can write off this whole thing in the first year and reduce your income to zero or something, why not? I want to depreciate it. And I know some of you are going. Well Mark, you've got depreciation recapture. So what? You've got an interest free loan from the IRS. Listen, would you rather give take an IRS deduction for 20 grand? 30 grand? Let's say Robert buys a $40,000 truck. He could write off the whole thing in the first year, not pay any taxes on $40,000. Then someday when he sells the truck, he's going to recapture the depreciation he took up to the fair market value of when he sells it. Well, that's an interest free loan. He'll pay the tax back then, but he got the use of that money. Take a depreciation deduction whenever you can, Robert, if possible. It's going to depend on your income and what your business is about. Now what Cory put down into the chat everybody is a link to my article on auto deductions. I give seven criteria or seven rules of thumb of how you should write off your car truck whether you're leasing or whether you're buying whatever with loan or not. And I just want to show you what I purchased. Yes, this is my Tesla truck. I got mine early. Yeah, it's just a model 61, 64th, you know, ratio. It's not the real deal printed on a 3D printer. But this is my Tesla truck that I am going to be getting in the next two years. I got the one with the long distance engine I prepaid. I'm in line. I am so excited. Okay, Nick says can I. Nick's asking another question. Is that fair? I better hit someone that's not Nick. Read my chapter on paying kids. Go to YouTube and type Kohler pay kids. You'll freaking love it. Who Should I hit that? I haven't. Connor or lw? You want lw? Lw? Husband and wife both have their own business as single member LLCs. Can we both take a home office deduction? Yes, everybody can have a home office deduction. But I can't write off the same office twice. So if the office deduction for one of you is 400 bucks and then the other spouse says, well, I'm going to write off a home office too, then you Both write off 200 bucks, you can't double dip. But I don't know why you have two LLCs. You better have a darn good reason for two single member LLCs. You may say, well Mark, don't you have a bunch of S Corps? No, I have one S Corp in my life and if I can help it, depending on licensing, let's say whoever here is a doctor and the other one's a lawyer, you're going to have to have two different LLCs for Department of Professional Licensing. But if I can, I want 1S Corp in your life. 1S Corp. And then I run all my businesses through 1S Corp. I've got an LLC here, an LLC here, a URL here. I sell books here, I do hair and nails on the weekend, I do drywall, whatever. You know, it all goes into one S Corp. Husband and wife. That's what I want. And I know some of you professional licensed folks are, well you can't do that with the state. You know, I'm a realtor and my broker won't pay a 1099 to my S Corp in my state. I got ways to get around it. Totally legit. Not audit problem? No audit problems. Audit proofed, you're good to go. I've been teaching this to realtors for 20 frickin years. Get a consult with one of my tax lawyers and we'll save you thousands. And some people go, well, Mark, I'm going to pay your tax lawyer 400 bucks for an hour if I don't save you 4 grand on the call. We messed up. You pay to get good advice. Quit finding the cheapest tax preparer. Pay someone twice as much and save 10 times that. That's the trick. Alright, who am I going to? Ken. I like Ken's picture there. He looks good. Look at that beard. I wish I could grow a beard like that, Ken. I just grow like Joe Dirt. I'm just kind of white trash when it comes to that. Ken says starting investing in crypto and am doing okay. Should I start an LLC to grow my Investments in. Okay, Ken, do LLC save taxes? No, Cory just said it. No, you do not. You do not save taxes with an llc. Is that romantic enough to. Ken, you don't need an LLC to save freaking taxes. Now, let's say you got a million dollars. I once had a hockey player come to me and said he retired from the NHL. He was like, set me up, dude. And he lived in New York. He had been playing hockey down in Texas for the Rangers. No. Is it New York Rangers? Texas what? I don't know. Anyway, I'm not a big hockey fan. Did I get it right now? New York Rangers. What's the hockey team in Texas? Do they have one? Dallas Stars. Dallas Stars. Gosh, you're good, Cory. Okay. Anyway, this guy was playing hockey down in Texas, says, Mark, I got a million dollars. I want to protect it. So we set up an LLC for protection. Fast cars, fast women. He was going to get sued. We wanted to have that income, that money in a protected structure. But it was not to save taxes. Now, Ken, your bigger issue is I don't want you to pay taxes. What the IRS came out with on a notice is when you buy bitcoin, everybody. Okay, let's just do this real quick. Let's do a little bitcoin. So you got bitcoin. Let's do bc. When you buy bitcoin and let's say you bought it for 20 grand. Oh, well, 20 grand a bitcoin, maybe you invest. Yeah, let's say you invested 20 grand of Bitcoin and it's now worth 50 grand. You have a $30,000 gain. Now you pay no tax Right now, no tax until one of three things. One, you convert to cash. If you convert to cash, then you pay tax on that. That's your first one. Number two, if you exchange for another type of currency. So exchange or trade for, let's say Doge or ethereum. So if you trade, exchange, you pay tax. And then the last one is if you use the money now, Visa came out and said they're now got a partnership with Bitcoin with where you can use a Visa card tied to your bitcoin account and pay for services, products, whatever you want to buy with a Visa bitcoin card. Can you believe that? Tesla also said you can now buy the Model X with bitcoin. So if you buy something, you pay tax. Do not think you can hide your cryptocurrency offshore. Oh, Mark. My platform, my exchange, my custodian, they don't report to the IRS. They don't give me a 1099. You think that's going to last? Do you really want to get audited with a million dollars of Bitcoin? No. The taxes and penalties will chew up all your money. So freaking get on board. You're going to pay taxes on it? It's legit. The IRS has already come out and they're coming hard. So you're going to pay tax if you use the money and buy something. So, Ken, what I would say is, know how it works. An LLC is not going to save you any tax. But here's what I would throw out. Get that money into a Roth IRA now. Sell today, transfer the money into a Roth IRA or Roth 401k, RIRA or 401k. No tax ever on trading that money if you're in a Roth IRA or Roth 401K. Now, if you want to keep a little money for yourself to go buy a new house, fine. But I want you using a Roth to do all your trading. And I don't care how young you are, you're going to want that money. Does your truck need to be in the business name to depreciate it for LLC or S Corp? Nope. Taylor, the IRS says it doesn't matter who owns your truck or car as long as you're using it for business. And, guys, if you wrap your car with lettering or whatever advertising it doesn't make it 100% write off. It depends on what you use the vehicle for. Look at the article that Corey put in there for auto. Okay, Cory, I'm giving away another book. All right. All right. Jordan Reed. That's who it was. Jordan Reed. Jordan Reed is getting a book. Oh, and I've got a bookmark in here that's pretty cool. All right, Jordan. J O R D A N or en J O R D, E, N. Okay. If it's a N, it's Corey's fault. Oh, this is in pen. Son of a gun. I'm going to put a little arrow. Blame Corey. Blame Corey. All right, you can send him hate mail. All right, Jordan, what should I say? I got to give you the best advice of your life. Buy low, sell high. I know, it's pretty creative. Oh, yeah. A side hustle is the gateway drug to entrepreneurship. Yep. This is your brain on drugs right there. Okay. All right. Gerald Nelson says, what net asset level should I be before implementing your trust strategy? Oh, Gerald, this is good. Everybody. Gerald says, okay, now this is the trifecta that I've been teaching for 20 years. Trust. This is A revocable living trust. Okay. This is the foundation. Your personal bank account is down here. And this is your 1040 tax return. Revocable living trust. There's no tax return every year. You set it up once. I've only amended my Trust once in 20 years. It was after a crappy family reunion. My wife said, they ain't raising our kids. But once you set up your trust, you can amend it every five or ten years. 20 years doesn't matter. No annual fee, no filing with the state, no tax return. The trust owns your businesses. It's the beneficiary of your IRAs or 401ks. It owns your home life insurance, LLCs. Da da da yada. Gerald asks Mark. Okay, that's cool. Looks good. How much does my net worth before I do? Doesn't matter what your net worth is. I've got three triggers. Do you own real estate? If you do, you're going to go through probate when you die. And your family, it's going to cost them 10 times the cost of a trust. Take them half a year or more. If you have a trust, no probate number two, you've got kids and you want to leave the money properly to them so you don't jack up their lives or they're married to some bozo. A trust allows you to control the money. You can control their future. It's called dead hand control. You can screw around with their life. Life insurance goes into the trust. You're going, well, Mark, I'm only worth 200 grand. Got life insurance, policy goes in the trust. So if you've got kids, you've got real estate. You want to avoid probate, control the money. And number three, you're married for a second time, third time, whatever, his, hers and our kids and all this, you're just waiting for a freaking lawsuit. Now maybe you want to die and leave everybody a mess. Die without a trust. Guys, we set them up for 1,500 bucks any state in the country. This is a trust document that I personally modified for 20 years, making it the best trust I can find out there. I see people that went paid five grand for an estate plan and they're like, mark, yours is better. Sometimes someone else might give you more hand holding. But the trust documents we have, and your will and powers of attorney and pull the plug and living will and gut. Trust for guns, trust for, for animals. It's all included. 1500 bucks. Get it done. Gerald, I don't care what you're worth. Are you going to have probate when you die, do you have a unique situation being married, kids and hers and theirs and whatever. And do you want to leave the money in an organized fashion to your family? Keep it private? There's so many good reasons. It's not about money, guys. I'll set up a Trust for a 22 year old that just got married or single. You got five rentals and you're 25 years old. Let's get a trust period. Alright, Couple more questions. Crypto. Do you have to pay tax on interest earned? Yes, Interest earned is taxable. Sole proprietor here. If I file as an escort, can I choose between a W2 or a 1099 employee? Okay, Daniel, this is good, everybody. And Daniel may have missed a little bit of the earlier stuff. You've got to go to YouTube, all of you. If you're wondering on this S corp thing, search when to convert to an S corp. My video should be in the top three. If not, type the word Kohler so you can understand it and it'll be in English. Next, if you're on the bubble and you're making 30 or $40,000 net, just set up a consult with one of our attorneys. Darren, come over here and say hi to everybody. Darren is a really nice guy. He got a new haircut today. He looks really good. I've kind of got the Bradley Cooper look. I'm trying to grow out my hair and look good. Look at this haircut. This guy looks. Yeah, he looks like you've been in the military or something. He's looking good. He's a real attorney, real walking attorney. You can book an hour with him. Thanks, bud. Okay, there he is. We got seven attorneys at the office. Thanks, Darren. Okay, just book an hour. The hour is included in setting up your entity if you go that route. But Daniel, Daniel says, Mark, listen to this question. Sole proprietor here. If I file as an S corp, can I choose between a W2 or a 1099 employee? Now, Daniel could be saying one of two things. He's working up here for someone and they're paying him a W2. And he's maybe thinking, oh, if I set up an S Corp, they can 1099 me. I like the theory, Daniel, but the risk is on them if they screw that up. So it's going to be up to them. You setting up an S corp might help. I don't know. Before you spend the money, go talk to your client and ask them, hey, if I set up an S Corp, will you 1099 me instead? I would love it. It'd save you money. But they're getting. It's going to be risky for them if they get caught and they shouldn't have. The next thing is people want. Like Leslie, you were listening earlier. If you set up an S Corp now, you're a W2, the 1099. You don't 1099 yourself. You're going to get a K1, you're going to take a draw. You're going to do a W2. Your 1099s come in here. I get hundreds of 1099s. All my 1099s go in up here. And then I spit out one W2 to me. Watch my video on S Corps. Okay, I'm going to do one more question. Is that all right? Cory, two minutes left. Okay, Bobby has asked this question. I'm going to do it. He says, please go over flipping cars using your IRA or something. You said I ain't been able to sleep. Lol, Bobby. I love it. We're going to cover this in the summit next week. You should come to the summit. 199 bucks. It's recorded and you can watch it over and over again. Okay, people, if you have a Roth ira, I would prefer a Roth. Daniel. No, no, no, it wasn't Daniel. What's his name? I'm embarrassed. Bobby, Bobby, Bobby. There was a Daniel a minute ago. Okay, Roth. I did. I messed up his name last week. Oh, my gosh, Bobby, you're gonna kill me. Okay. Forgive me, bud. There's a lot going on in here. Okay? Okay, Roth, if you want to flip cars instead of flipping houses, I'm flipping a truck right now. I got an F150E I bought for six grand up in Canada. Going to probably have to put five grand into it. The engine sucks. But I will sell for 13 or 14. I'll still make four grand on it. Okay, Roth Ira creates an LLC. The LLC buys the truck. You're not allowed to work on this yourself. Now, you might vacuum it, run it through the car wash, but I would prefer you to use a third party mechanic or third party detail service. Then you go out and sell it. All the profit goes into your llc, tax free. Now, some of you may say, well, aren't you going to pay Ubit? It depends on how many cars you're flipping. I would really like to only see you do three or four a year. If you say, well, Mark, I want to do more than that. Set up a different Roth. Do another llc. Maybe bring in your mom's Roth. Your brother's Roth. Your wife's Roth. Bobby, you can have an LLC with multiple parties and go out and flip some more cars. So you can do this in multiple LLCs. But I only want to see three to four transactions per LLC or you're going to pay UBIT. Read up on UBIT. It's brutal. Okay everybody, I love you. I love the American Dream. I'll be here every Thursday at 4 o' clock next week boys. Lots going on. Next Wednesday at Entrepreneur we're doing a full hour free on cryptocurrency tax strategies. Check it out at entrepreneur.com number two Thursday at 4 o' clock mountain. Same time, same place. I'm going to have Matt Sorenson, my partner here with me in from Phoenix and we're going to do a self directed IRA live broadcast Q and A for an hour. We're just here with you. We're expensive per hour but we're free for you for an hour. Bring your questions Please Share this link Sign up for my free newsletter, my blog and and the summit is next week. All day Friday and Saturday and the link's down below. Get to my website markjkohler.com, you can sign up for the summit there. Thanks everybody. Don't give up. Keep that side hustle going. Live the dream baby. Here we go.