Live: The Top Side Hustle Tax Strategies

I'm gonna play it. I'm doing it. Are we live? We are live. I'm just rocking out to some 80 scorpions people. Hey, maybe you participate in my webinars, my lives, my workshops. But this is for real. Don't go anywhere yet till I tell you the full topic. I'll turn off the Scorpions. Great band. So my name is Mark Kohler. I'm a CPA attorney, small business owner, real estate investor. I run my podcast, I an author and I'm chewing gum, which I shouldn't be doing. And I do this live podcast broadcast, whatever you want to call it. I'm here for you every Thursday on my Facebook, YouTube and entrepreneur Facebook. And today the topic is side hustle tax strategies. Now, even if you own a small business full time and that's what you do, I got some good tips. But especially for those of you that are just dipping your toe into small business because you drive for Uber, you're running for Grubhub, you're doing DoorDash, you're doing selling something on ebay or Etsy or all the above. If you're making some money on the side, that's a side hustle. That's a small business. And I want to break it down. I want to give you five principles to approach your business with and six tax strategies that'll save you thousands, I'm not kidding, thousands of dollars. Now I do live Q and A. This is it. What is today the 23rd? It's really is January 23rd at 4pm Mountain time. It's live. So type your question below your comment. Share this Tell people to get on this and listen. I would really appreciate it and hopefully I'm going to wow you and save you some money and help you better succeed in your American dream. I'm also going to give away my new 2020 calendar which are almost sold out. I don't know if I'm going to go through another print run because they're really expensive to do in bulk. If I don't do them in bulk, they're really expensive and so I usually give away a book. Last week's winner was April Lane in Houston, Texas. Congratulations April, you received your book. But I'm going to give away a calendar which is actually more expensive than one of my books and it's going to help you as a small business owner build your business in 2020. So you're going to love this. I'll talk more about. Alright, they're on my website like 25 bucks free shipping and that's half as much as Dave Ramsey's and mine's better. So even though I love Dave. Alright now, side hustles. Here's my five principles. And I wrote these down in front of me so I can make sure I remember and dive into them. Okay, number one. And then I'll do some Q and A. I'm all yours after this. So number one, a side hustle is a business, guys. You've got to know that if you're going to drive for Uber or sell something online or do a small service or whatever, and you're going to get the 1090, which you know may come even if you're a brand new realtor or whatever, if you're going to get a 1099, you have a side hustle and that is defined as a small business. So get in that mindset. You've got a day job and a small business and that's cool. This is the side hustle is a gateway drug to the American dream, baby. Because I want you to get excited about making money on the side. Funding a Roth retirement account, buying a rental property, saving money for the future, living a little less financially stressed. You know, it's all good. So that's number one. Number two, a 1099 could come and you're not even expecting it. So if you've got PayPal, sales, Etsy sales, maybe even ebay or all these different websites, they'll oftentimes ask for your Social Security number or your tax ID number. They may be sending you a 1099. Now I want to caution you about this. Some people are like, well, if I didn't get a 1099, I don't have to claim it. No, claim your business income. Don't play the game and I'll give you plenty of write offs. But you don't want to just say, oh, I didn't get a 1099, I don't have to claim it. No, that's not the IRS rule. If you earn money, you're supposed to claim it. The 1099 is just a way to catch you if you don't claim it. Now, a lot of times people will not send a 1099 even though you earn the money. So you may go, ooh, that, that person that paid me for doing their sprinkler system, they didn't 1099 me, so I don't have to claim it. No, they may have 1099, you and the IRS will catch you. So just be honest. You've got a small business claim the income now, number three, startup costs. This is an important point. Okay? Now hang with me here. Let's say, and many of you that have heard me before, I use this example all the time because you can use it around the kitchen table or at a dinner party if you're going to start a lemonade stand. I was one of those kids and I challenge you. Whenever you see a lemonade stand, stop over, buy everything they got, give them some cash, tell them they're living the dream, freak them out. I do it every time. It's great. I was a kid that had a lemonade stand. Now if you go buy your lemonade, the cups, the ice, the table, the sign. Are you in business? No. You're in startup mode. Now, do you still get a write off for all those lemonade expenses? Yes, but you cannot deduct them until you have $1 of income. So many of you, maybe in 2019 you were starting to have expenses and you were spending money to build a business. Cell phone, computer, laptop, iPad, I don't know. You were spending money marketing and building your business, but you didn't make any money. Don't put these expenses on your tax return. You will get audited if you have a big fat zero on income and then think you can write off ten grand in expenses. And you're going to see in TurboTax you're going to go, oh my, I'm getting this big refund. Yeah. And you're going to get a big audit if you take write offs with no income. So do we still get the write offs? Yes, but we have to push them into 2020. So keep track of those expenses. Your accountant should be asking them for you. Oh, you started a business this last year. Great. Give me all the expenses you had before you even made a dollar. Really? You can write that off? Yes. Now, startup costs are a little more complicated to explain. We could go into it if you want, but track everything. Number four, all of these. This is the fourth principle. I'm going quick. The fourth principle is on your 1040. This is your 1040 tax return that all of you got to do. I got to do it too. If you have a side hustle, it goes on what's called a schedule C, as in Charlie, that's your small business. You're going to report your income even if you didn't get a 1099. And then you're going to report all those sweet write offs and whether you have income zero or loss. So you could have a plus for income, zero for break even, or a Loss, we're going to write that offer, claim it on your 1040. Now if your W2 is up here and you had a day job and there was withholding and you have a loss in your small business, which I'm okay with the first couple years, you can have a loss in your side hustle, it's okay. But you cannot have a loss in the third year or an ongoing. Or the IRS says hey, you really suck at this or this is a write off strategy, you know, so what's going on? So they want to know. So you've got to be legit and make sure by the third year your business is profitable even for a dollar. But we're going to take this loss, take it against your W2 and now we're talking refund. That's right, you're getting a refund here because you've got a write off from your small business. That's principle number four. Number five, don't be afraid to take any write offs. You're entitled to. And I'm going to go through my top six right here shortly and I've got questions coming in already, so hang tight people. But I'm just going to list my top six write offs. So that's where these go, people. Right here are the write offs. And I'm going to give you my top six. There's probably 50. I mean there's no list at the IRS that says here's your list of write offs. It's any expense incurred, the production of income. For example, if I've got a client that's a personal trainer and they go to a gym every day and they make money giving yoga lessons or weightlifting training, they can deduct their gym membership. That's okay. Now is there a list somewhere at the IRS that says you can deduct your gym membership? No, there's no list anywhere of all the expenses. But if you have to pay for the gym membership to make money at the gym, then you can write it off. But for the rest of us, we don't get to. Don't think it's going to be a write off in your HSA either. Whole other topic. But that's the point. You want to think of any expense that you're incurring to make money in your side hustle. And don't quit your day job too early. Build that side hustle, let it mature, let it grow, and when it starts making a ton of money, you can quit the day job if you so choose. Alright, now here's my top six Expenses and then Rosalie, Nick, I'm coming your way. You ready? We got lots of comments. Okay, my six and I'm just going to list them off here. Number one, I want to talk about cell phone and electronics. We can talk about that a little bit more. I'm just going to list them and then I'm going to let you guys bring up whatever you want. I'm going to go after travel. If you travel anywhere to make money in your business, I'm going to go after auto. Auto is different than travel. Auto is either going to be mileage actual and I give little presentations, have a chapter in my book. It's all good stuff. Okay, the next one we can talk about our supplies and equipment, just anything you might be incurring in your business. And then number five, I'm going to get dining in the mix. A lot of clients underutilize dining. I want to write that off because you're going to go out to eat and talk with clients and customers who all the time. And then number six on my list is what did I miss here? Oh, home office. And I love the home office. Home office deduction is legit. Don't let some accountant freak you out and go, oh, you're going to get audited if you do Home office. No you're not. That's an old wives tale from 20 years ago. The home office has been around. It's alive and well. As long as you don't abuse it, you're good. Now there's more. You might have a restaurant and cost of goods sold is food you might be buying. When I put supplies and equipment, you might be buying tools and bowls and silverware or whatever for your restaurant. I mean this supplies equipment, office stuff, furniture. All that stuff is kind of a grab bag. And if you're going to Costco to get stuff, I want to write it off. If you're going to the Apple store, best buy for electronics, I want to write it off. This could be a camera, this could be a drone. This could be a cell phone, a computer, it could be an iPad, a projector, I don't know, what do you need in your business? This could be software. So we're going to try to maximize all these write offs and wipe out your income. Even if I just wipe it out to zero. Now you're making bank. And some of my best videos out there on YouTube are Uber drivers and side hustles and all that kind of stuff. I'm here for you. I got a weekly newsletter where I'm giving Tips on all this stuff. I got like 70 different YouTube videos. I've got all sorts of resources that you can study up and just get the basics. Especially if you're going to just knock out your return on TurboTax, which is fine, but some of you've got an accountant. This is scared of their own shadow and they're not talking about this. You got to be the captain of your ship and freaking take these write offs. You deserve it. We deserve. Treat yourself. Treat yourself. Alright. Okay. Now we're going to just do some Q and A and I can get more into these as you guys want. I'm all yours for maybe another 25 minutes or so. And I'm just going to drink my rock star here and just enjoy the moment being here with you. Now I want to know where their first name and where they're from. So do your best. I want to know your first name and where you're from. This is an international live freaking broadcast. All right, what do we got? Rosalie?

I don't think I know his first name or where he's from. But he goes by Impact Complex.

Impact Complex. Thanks for sharing your first name in your city. He didn't know or she didn't know. Okay. Impact Complex says can you claim student

loan interest on your side hustle?

No. Can you claim student loan interest as a write off? Yes. That was not cut back by the Tax Cuts and Jobs act. But you cannot claim it against a business income. So it'll be on your 1040. So here's your 1040. We're going to write off that interest on your student loan somewhere and it's going to be based on your income. You can phase out. It's a nightmare. Pay off those student loans as fast as you can. Just get rid of them. Don't think the write off for the interest is great. It's not. It sucks. So get rid of them. But the interest is deductible over here. Interest on a student loan is not deductible in your business. But still track it. It's okay. All right, who we got here? Nick?

Lubna, J. Chano. Sorry if I'm butchering. That is the passive loss deductible upon selling the rental property.

Okay, so Labra Libra.

Love now.

Love now. That's cool, right? Love that. All right, now she brings up or he brings up rental property. Sorry, we may be mispronouncing your name. Please forgive us. Okay, so you may have a W2 day job. You or your significant other, you may even have A side hustle over here. Well, you may even be incorporated or have an llc, I don't know. But on this side of the equation, lover has got some rental property. Now, if you've got rental property, rentals generally create a passive loss because you're deducting mortgage interest, depreciation, travel, dining, home, office, auto, all this great stuff. So even though you may be cash flowing the rental against the mortgage and the HOA fees and all that, you could be putting cash in your pocket. I'm still taking plenty of write offs. So on paper, you're losing money. Is that interesting? This is why rich people buy rentals, because you build wealth and equity and cash flow. Tax deferred or tax free, literally. So that's why rental properties are freaking awesome. Why do you think Warren Buffet, Warren Buffett bought a billion dollars worth of real estate after the crash? Because he was in there buying, knowing it's a screaming deal. So love right here could have a loss. Now, the loss is either deductible against your ordinary income or it goes into a bucket. And it's based on your income. If you make more than $150,000 a year, you can only deduct up to $25,000 of these losses. And then they go in this bucket. And a lot of people go, oh, Mark, my accountant said, don't write off the trip to grandma's house where your rental is because you make too much money. No, no, you'll get a write off, track the expense. This goes into your bucket. And whenever you sell a rental property, I can dump it out. Any one of your rentals, I can dump it out against any of the rentals. Did you hear that? But if I have the right level of income and not too many losses, I can take that write off every year up to a certain point. So this is in my book, in the tax and legal playbook. Do I have a copy of it here? I do. Okay, so thanks, Rosalie, for being prepared here. So my tax and legal playbook, there's a chapter on investing in rental property and understanding the difference between passive and active losses and real estate proposals. You'd love it. I've got videos on YouTube, on this articles on my website. So just to educate yourself a little bit on it, I have clients that know more than most CPAs on this topic. So don't get pushed around. There's a lot of great CPAs out there that take the time to learn this. There's a lot that don't. So. Okay, next topic.

Jeffrey from Collingswood New Jersey. What can I write off if I'm starting an Airbnb business?

Okay, so Jeffrey is in New Jersey. Thanks for telling us where you're at, Jeffrey. He's got rental property. Now, this is an important IRS rule. You can have a long term rental, like, you know, a tenant that's paying month to month rent for a year lease, and you could have a VRBO or an Airbnb. The IRS treats them the same for tax purposes. You may say, well, Mark, that's a short term rental. Well, you want it to be a long term rental, that's okay. The IRS says unless you act like a hotel and provide daily turndown services, which most Airbnb's VRBOs don't do, you're going to be able to keep it on this side of the equation. So everybody listening? Jeffrey, the first issue is where do you put your rentals? And even if they're an Airbnb or vrbo, I put them in an LLC over here. And you may put your long term rentals in a different LLC. You may have another LLC, so you can have multiple LLCs. I don't set up an LLC for every rental. We're going to look at your risk tolerance and amount of equity and all that. So did you hear what I'm saying here, everybody? Jeffrey's got a business, he's got an Airbnb vrbo. It's going to be a passive activity and it's also a business. Isn't that cool? Now, Jeffrey dove right into what can I write off? Whatever the freak you need to to run your business. Do you ever travel over there in your car? I'm writing off auto. Oh, did you go out to lunch and talk to your brother or sister or mom or dad or best friend or realtor about your rental? That's a write off. Dining. Did you have a home office where you paid some bills? Write off. Do you have a computer? Write off. Do you have a cell phone so your tenants can get a hold of you? Write off. Are you going to go travel to your Airbnb? That's by your grandma's house in Minnesota, right? Write off. I mean, just start. Are you going to buy some tools to go fix your rental? Write off. You're going to buy a new lawnmower for your rental. Write off. So that's what I'm going to do. Geoffrey, talk to your accountant. Go. What the freak. I need to be writing off all this crap. You're on the right track, bud. Read my chapter on rental properties. You'd love it too. Nick.

Yeah. Jason asks, is it better to have an S Corp with multiple DBAs, separate S Corp for different businesses. I have retail store design firm in a service install company.

Wow. First name, Jason.

Jason.

Okay, Jason, let's break this down for everybody. The first thing Jason said is he's got multiple businesses. Let's just go with that. And they're operational. Did you hear him say that? He said he had retail businesses. So if we do our short term, long term. This is Mark Kohler 101. Jason, if you got a phone call with one of my tax attorneys for just an hour, they're going to build a diagram for you. It could be the best money spent just for an hour. We're not going to nickel and dime you for thousands. Okay? So you're going to put your short term operations here, your long term here. So like Jeffrey in New Jersey, he's got rentals, but you, you've got a retail business. And then he says, should I have a S corp for every business? Hell no. Easy answer. I want you to have one S corp. And that's where we're going to do your payroll. We're going to do a pass through income, which called a K1. You might have kids, you might have older children, you might be married. I might fund a 401k. I'm going to write off all your expenses. I have one S corp in my life and I own five or six businesses. That's the way to go, Jeffrey. Now, Jeffrey says, well, I've got different locations. All right, so you got some concern, you got multiple business locations and employees and yada yada. One of his options is I'm just going to run all these locations as DBAs and run all the income into my one entity. Now that's the cheap and easy way to go. I'm not saying it's bad, but he is co mingling all these operations into one entity. There's some efficiency there. He's got payroll for all these employees out of one spot. But he says, well, this area over here has got a lot of concerns and I don't want a problem in this location to bleed into my other ones. So Jeffrey's got lots of options. And this is where in a consult with your attorney or our office, we're going to say, should he have one LLC or three or four LLCs. But notice how I said LLC, not S Corps, the one S Corp is going to own the LLCs. So now this S Corp owns 100% of this LLC and I can create protection and isolate this retail location that's in a slum area from the other high quality retail locations. So if there's a lawsuit here, I can protect it from the others. Now, there's some tricks here and some issues, Geoffrey, because we've got to talk about separate payroll expenses, checkbooks, merchant accounts and payroll. There's a lot of. But do I have clients to go this route and set up multiple locations in 1S Corp? Absolutely. You just got to look at a cost benefit analysis of how elaborate you want to get. Get a consultation. If your accountant or attorney hasn't ran you through this option, you got the wrong advisor. You should be talking about this on a regular basis. Get with one of my tax attorneys just for an hour and see where it goes. Rosalie?

Yes, I have, Juan from North Carolina. Do I have to report my rental properties in 2019 if I only had one month income, but I had more expenses from fixing up little things?

Yes. Bottom line, bottom line, Juan, if you bought, if any of you bought a rental in 2019, and it's a good thing, Juan, this is a good thing. I want you to report that freaking income if you even had rent for one month. And I want you to write off as many expenses as we can. Now, there's an important point here, Juan, and this is good for everybody. When I have a client with a rental, I own rental property. Do you know, today at lunch, and my staff knows this, I was over at my rental property across town. I've got a duplex across town. I've got installers right now as we speak, installing carpet and flooring in the upstairs and I've got a painter downstairs. It's an up and down duplex. And I was over there getting dirty, walking around saying, okay, we need to do this and that. I love real estate and I've got five or six rentals myself. I want to have 20 or 30, but I'm still young. I'm going to do it. That's why I drink rock stars. It gives you longevity. It's good stuff. I just added a year to my life. Just this one can, it's legit. Okay. But I'm a real estate investor too. Now here's the thing, and I'm going to use my example. I just put. Juan, listen, I just put carpet in my rental. Can I expense that all in one shot or did I extend the life of the rental by attaching it to my rental? So you're going to have to decide between repairs and improvements. And then there's Actually, a third category, which is just general operational expenses. So let's give an example of each one. An improvement would be carpet, and I would have to depreciate it. Now, some of you are talking cost segregation and you want to blow this up. I'm not going to go there today. It's too complex for all the other viewers, so chill out. But I'm going to write my carpet off over three, five or seven years based on the depreciation schedule. Repairs might be going in and painting. Painting I can expense immediately. Okay. And then operations would be my cell phone, because I need to have my cell phone on. So one, you're going to add up improvements and lay it out for your account. You're going to add up repairs, and you're going to add up all your operations. You're going to have all these expenses and maybe rent for one month. That's a freaking awesome write off. And that's going to go on a schedule E. So schedule C goes on operational businesses. Schedule E is for rentals. And that's. That's. You want to sit down with your accountant and say, hey, I was listening to Mark Kohler and he gave me six different things that I could write off or more. And so you want to be going through this with your accountant going, let's sharpen the freaking pencil. Let's take some write offs this first year. Absolutely. One, get on it, Joyce. Where's Joyce from?

Joyce is from Maryland. She says, I know another accountant who is able to write off a yacht for her realtor client, plan on buying an RV to travel for work, teaching on the road. Can I write it off, Joyce?

Man. Okay. I like it. Okay. I've got a client or two or three with boats or yachts. The yachts and boats were a lot easier to write off before the new tax Cuts and Jobs act because I would write them off generally under entertainment. A lot of people don't use a boat for transportation. They use it to entertain. So now you, Joyce and I. But I bet you would agree, Joyce, if we were on a phone call that you said, yeah, I knew a friend that rode off their yacht. I bet it was over two years ago because that's the old law and we would do that more legitimately. Now I can only write off boats if it's like taking you somewhere. Now if I'm a realtor, fact, I had some clients out in Minifee that it's in California, out in the desert. Some of you may be watching. And there's a kind of A lake community. And the realtors will drive around and show properties on the lake. And if they bought a boat specifically to show properties, not to entertain, but to show and sell properties, I could write off that boat or a good portion of it, if not all of it. And I'm going to look at the time of use and what they're doing with it. But not for entertainment. It's got to be for transportation. Okay, now this is good. Joyce says I'm going to have an rv. Now let's use our example here. I've got client. I speak at RV conferences around the country. I love it. I love my work. Campers Steve and Coop out in Arkansas. Little shout out if you don't, if you own an RV and you don't know work amper, it's work A M P E R like wer camper work. Get it? Play on work. Anyway. Okay, so RVs are a great write off. They're a lot easier to write off than a freaking yacht. So where do I use RVs? Two places. One, you might have this beautiful big RV. This is going to look more like a bus. But anyway, I've got my RV and I'm cruising down the road and I'm driving around the country to work on my rentals. Okay, that's cool. That's fair. So I can write off the RV if it's a work truck and if think about a contractor that plants a mobile home on a work site and they work out of it during the construction of a project, well, your RV becomes your work vehicle to travel around and work on your rentals. Now if you're going to live in this too and go full time rv, I'm going to have a harder time. Whole other topic. I got videos on my website and my tax and legal library for RV owners. The other option, and I have some clients that do this, they'll use the RV to go to trade shows and travel around the country to pick up supplies, do equipment, go to trade shows, go to county fairs and sell wherever it is. More for an operational business. And if they've got a home somewhere over here that they live in and this is not again, 100% living quarters but it's for the business. I'll write off a good chunk of this too. So Joyce, you're on the right track. Make sure accountants talking like I'm talking we or get someone new that can help you do this. Okay, Rosalie, what do we got?

I have Christopher from Wisconsin. I am starting a pressure washing Window Cleaning llc. Can I Use my Roth IRA or HSA account to start an equipment leasing company.

Well, those are two different things. Freaking Christopher. Okay, so Christopher, I love where he's going with this. He is going to. Now let's assume Christopher's got a day job or a part time job. He's waiting tables at night to pay the bills and he's starting his pressure washing business. Okay, so let's put this over here. Pressure washing business, that's his side hustle. And by the way, when I was going through college, I had a window cleaning, janitorial carpet cleaning business. Christopher did it for seven years, got my hands dirty. And that's how I got through college. Was a small business, had 20 something employees when I sold it. Go to law school. Okay, so you're going to do windows and pressure washing. And frankly, you're going to start out as a schedule C sole proprietorship. And we may create an LLC right away. Wisconsin is pretty darn affordable. So if you call us, we're going to walk you through your structure, set up an LLC for you. We charge 800 bucks for any state for an hour with the tax attorney and get the entity you need. And you're like, well, I can do for half that on legalzoom. Yeah, but you don't get the advice and our experience of a thousand calls before you to help you succeed. So find a good professional that knows what they're doing and help you do this. So, Kris, we might make you an LLC. Ultimately, if you're making more than 40 grand a year, I'm going to get you into an S corporation or make an S election. So you've got this process here as you build the window washing pressure washing business. And for anybody else listening, this is how side hustle start. This is your sh. Side hustle. Get it going. Get a separate bank account, start tracking your expenses. Make it successful. If you're making enough money, you can get rid of the W2. Now Christopher throws us a curveball. He says, well, now I also want to take my IRA and my health savings account and do business with those too. Can you do that? Yes and no. There's some rules and I love it. I help clients do business with their IRAs every day. We've got clients with over millions of dollars in their Roth and traditional and IRAs and 401ks doing business on Main Street. Wall street doesn't want to tell you this. They want to turn your money in Wall Street. So Christopher, to keep it short, says, I want to set up an entity and that's how you do it. Christopher, you'd set up an entity owned, let's say 50% by your IRA and 50% by your HSA. In fact, let's be a little more realistic with most of my clients, I'd say you're going to put 15 grand in from your IRA and 5 grand in from your HSA fair. Now you have 20 grand in this new LLC. Now can Kris run his window washing business and go out and clean windows with his IRA HSA business? No, you cannot hire yourself, provide sweat equity in this business. But can he have a business here? Sure, he could hire someone to run it and do all sorts of things. This businesses, these businesses have to be treated separately. So he says he's going to go buy equipment and rent it. So this is equipment, equipment, equipment and he's going to go rent it. He can do that all day long. The only concern I'm going to have, Kris, is I want you to look at sales tax. It's going to be an issue, but because you have to collect sales tax when you rent personal property, most I have clients in Hollywood that buy studio equipment, gaffing and lighting and cameras and then they rent it to different studios when they go out on location. Most producers that do a movie, they don't own all the equipment. Now some of the bigger houses, like, boy, I was on the Netflix lot this last fall. Unbelievable. You see how many movies are kicking out. Crazy. I was on their lot. They've got building after building and stage after stage and they own a lot of their own equipment. But most small movie makers have to go rent the equipment. So I have clients that buy studio quality equipment in their IRAs and rent it to movie makers and they do that. But you've got to be careful again with sales tax and some of the rules of renting personal property. Make sure you talk to a tax lawyer that knows what we're doing, set up this LLC for you and consult you through it. So a little more expensive than a standard LLC, around 1500 bucks start to finish. But if you get audited, we pay the bill, we know what we're doing and we'll keep you out of hot water.

All right, next I have Tony from Denver, Colorado. Tony, my wife and I drive Uber and order other gigs full time. How do we set up an S corp for this?

Okay, Tony and his wife are driving Uber and he said we're going to go with their full time Uber drivers. They could be making 50 to 100 grand, right? People, if they're out There hitting it hard, what I normally do. If I had Tony on a phone call right now, I'd say you're in the right spot. But I'm going to start him with an llc. And Colorado is very affordable for an llc. And I'm going to start this llc. And I'll tell you why, Tony, we're going to start this llc. You're going to make sure you're signed up with Uber, and Even if they 1099 you, you're going to deposit all your checks in your llc. This is going to be your business. And you've got you here and your wife here, and you two are driving Uber. Both of your revenues are going to go into the same entity. You also might be selling crap on ebay, maybe window washing on the side, cleaning homes in the evenings. I mean, you could have multiple sources of income going into one llc. Now, why did I not go straight to the S Corp? Tony, everybody listening? I want you to become an S Corp. When you're netting around three to 4,000amonth, that's when the S Corp starts saving you grundles. But if you're making less net, making less than 3,000amonth, I might just keep you in the LLC realm. And we got to talk about it. This is an ongoing conversation. I have a couple meetings with a year with my clients to make sure we dial them in when you call me. I want to save you 20 times in taxes. Some people are like, I don't want to pay $300 or $400 to talk to a tax lawyer. Your office, Mark. Okay, go pay $4,000 more in tax. Well, I can figure this out on Google. Good luck. I know what I do, and I do it well, and I train my team to do it well so that you can go out and do what you know well. Don't try to hack this out on Turbo and LegalZoom. Okay, back to my point. Once they're making 4,000amonth, so say they're bringing in 60 grand and we're riding off 20 grand and they net 40. I'm going to make an S election. But Tony with a lot is Tony right? With a lot of my Uber drivers. The first year, we're going to be writing off this car quite a bit. I'm probably going to go mileage because you're going to put on a lot of mileage. I probably won't go actual. Make sure you read my blog article on auto deductions, but I need to kind of peg this number and I'm not going to know it till the end of the year. So the reason why I want you to be an LLC is because I can backdate you into an S corp if I need it. So if you start out as a sole prop now and go, oh, I'll just be a sole prop, I'll call you in November. Hey, mark, I made 60 grand. Can I be an S corp? Yeah, in November. But if you're an LLC now, I can back date it. And that's what we're going to try to do. All right, we got Kasha. Cato. Cato. Is that Cato?

I think it's Katya.

Katya, I think it's Nick's handwriting. Kia. It's not. It's not you. You're good. Okay.

She says hi there. From London, United Kingdom.

Woo. We got a see, isn't this cool? London calling in g', day, mate. Okay, you know that's a joke from Dumb and Dumber. Okay, sorry, Austria. And he thought she said Australia. Okay, watch Dumb and Dumber, you'll get the joke. Kia. Okay, go ahead.

She asks, are these texts strategies relevant in the uk?

They are. And you know what, this is an important point. Katya, thanks so much for calling. What time is it in London? It's like freaking two in the morning. What are you doing? Okay, thank you for watching. Alright, I have a lot of clients that buy rental property in other countries. I have a lot of clients in the UK buying rental properties in the us. You're going to get the same write offs, depreciation. Now there might be different schedules, but travel and dining and home office and all these principles apply in 99% of the countries around the world. So Kadi, you want to keep track of these expenses. And just like I went through my principles, you want to treat it like a business. You want to track your income, your expenses, be honest, track everything. And if your accountant, whatever you call them, you know, in the uk, sometimes, you know, if your tax preparer is not thinking outside the box, trade them in, get a new one, you know, that's a cool thing. And so I want all my clients around the world to be buying real estate and having a small business and keeping stability with the day job until they can quit it and maybe go full time business. I have clients that keep a wonderful day job their whole career and they had a side business the whole time and they had rental properties. What do you think they're going to do? You think they're struggling as much in retirement? They're not. So Connie, great Question. Thank you so much for listening and watching in the UK and yeah, keep track of your expenses. There may be variations on some of the rules, but the standard rule of keep track of your income, keep track your expenses, make money, and make sure you're aggressive on your write offs. You go for it. I love it. Okay, last question. Rosalie's call in time of death.

All right, I have Pinel from Atlanta, Georgia.

Okay.

After claiming depreciation, I have lost on my 1065. Can I still take simplified home office deduction? This is for my rental LLC that is treated as a partnership.

Okay, what's the first part of the question? She said. Say it again.

She said, after claiming depreciation, I have lost on my 1065.

Okay, now I understand. She's okay. So Pina, we're gonna say she's down in Atlanta, Georgia, by. I'm a fan of Walking Dead until the third season. It got a little too bloody for me. But filmed in Georgia, if you didn't know that. Lots of filming going on in Georgia. Right. Pina, she says. Now I'm gonna assume Pina is a female. Sorry, I'm just gonna go with that. Sorry. If it's a boy, I apologize. Pina says that she took depreciation on her rental property. So over here she has a rental. And she said she did it on a 1065. Now that's a partnership tax return. So I have a feeling that Pina has a partner. It could be a husband or wife. But the point is, you don't do a 1065 unless you have a partnership. So that's point number one. And she said we did depreciation, so I'm assuming that she has depreciation on the rental. She said there's a loss. Okay, makes sense so far. That's what she's talking about. And then she says, you know what? I got a home office and I want to write it off. Now, my partner doesn't want to write it off because they got their own home office. They're going to do their own thing. And that's cool. What this is called is an unreimbursed partnership expense. And your accountant is going to put it on page two of the schedule E. Let me repeat that. This is an unreimbursed partnership expense because she had a partnership and she didn't get reimbursed and she has a home office and she wants to write it off. Damn right, PETA, I'm good with you. So unreimbursed partnership expense. And you're going to take it on page two of the K1 of Schedule E. Now the reason why I say this is because she's going to get a K1 from the part, she's going to get a K1 from the partnership. So let's say she owns 10% or 70% or whatever it is, her share of the loss is going to come through. Then she can double dip and take even more write offs and you go, pina, do it. So I want home office, I want cell phone. I want any crap out there that you didn't write off up here. I could keep going. I love this stuff. Now I'm going to do a drawing. Now the drawing is done by Rosalie. She takes hate mail@rosaliekoslawyers.com and if you send her presents and chocolates, you could win. So I'm just going to throw that out, right? Am I? Good. So Rosalie at my office, you can call her anytime if you want to talk. And I'm going to say that real quick. If any of you are like, oh my gosh, this guy speaks English, I can understand this. Set up a consult with one of my tax lawyers. Our accountants are freaking busy right now. We're prepping returns. So you're not going to get a consult with a CPA right now. We're going to extend your return and then talk after April 15. But my tax lawyers can do a meeting with you right now and make a plan for the year. If you want to call, I'm just going to throw this out. 888-801-0010. And if you want to go straight to the website, go to KKOS lawyers and there's a little contact us button and you can say, I'd like a consultation and they'll call you right away. Rosalie may be the one to call you now. If you share this video broadcast today, she's going to choose a winner from all of you that share this. And you're going to win. My calendar. Now you can buy this calendar again. I think I only have 30 or 40 left. They are going quick. I've got a little. You can hold your phone off over all these QR codes. Every month I have a different message. Got a plan of attack and a little comment or two. I've got tax deadlines, state filing deadlines and I've got pages to write your strategic plan, your ten year plan. I've got extra pages in the back. I've got all the tax numbers up front. I love this. So this is the type of planner I carry around every year and I designed it for me because I love it and people have already grabbed it and said, oh my gosh, this is just what I needed. So check it out. Your 2020 strap plan. I want you to put it in here. Rosalie will give this away. If you get to my website, they're $24.95. Also, my business owners workshop that was seven plus hours long is only $99 on my website. The full recording, you can watch it at your leisure and if you buy it right now. But while there's calendars left, you get a free calendar. So if you want to get over to mrkjkuller.com that's the my personal website and I just wanted to say that too. Now again, this is not trying to be too salesy, but a lot of people ask Mark, how can I get more info? All my books are on Amazon and if you get to markjcohler.com you can get the calendars or some other items there. Please share this and I'll be here next Thursday. And I don't know what we're talking about, but I'm going to get it out there. Then we're going to do Q and A. And thank you so much for listening from around the country, around the world. And I'll see you next week. Keep living the dream. Don't give up.