Open Forum: Your Questions Answered With Mark J Kohler CPA, Attorney

Hey, welcome everybody, to a little tax and legal open forum. And what that means is this time is yours. Now, I'm a CPA and an attorney, small business advisor around the country, best selling author, blah, blah, blah. But I'm here for you. For the next half hour, I want to answer any and all tax and legal questions I can. I'm going to do my best. If I have the answer, I'm going to give you to point in the right direction, give you the best resource I can. My name is Mark Kohler and thanks for being here. I'm on YouTube Live on my own YouTube channel, Facebook, as well as entrepreneur Facebook. Want to give a big shout out to Ryan Shea, the CEO and say thanks to entrepreneur and all the people over there that help support me and the tax and legal message because it's so important. I know many of you have small businesses and you're thinking tax and legal. I don't even want to talk about it. I'm going to make it fun, illegal, interesting. We're going to get on the whiteboard and hit it. Now if you have a question, I normally have a topic of the day, but today it's open forum. I'm all yours. And Rosalie and Mallory, my assistants here, they're amazing. They've already got their microphones ready to read off some of the questions you type up. And Rosalie already dug up 10 questions from my social media and YouTube this morning when they heard it was open forum. So I'm going to just burn through these as quick as I can and we're going to do it. I'm also going to give away three books today. So if you stay here with me throughout this broadcast, I will tell you how to win a book. Eight Steps Workbook on how to grow your business or start a new business. The Business owner's Guide to financial freedom. And what your CPA isn't telling you, a fictional and nonfiction story about tricking you into learning about tax strategies. You'll love it. I want to. I'll announce a little later our winners for last week's books. We do a drawing for these books and I'll announce those in a minute as well. Okay, so I'm going to jump into some questions. This is Memographics. That's their handle on Instagram. They said, I have a rental with equity. Should I wait to deed it to an LLC until I get approval for a heloc or just do it? I guess my question is, would a bank give you a HELOC if your rental is in an llc. Great question. Memographics. Here's the deal, everybody out there. The first golden rule is if you have a rental property with tenants, either it's a short term VRBO Airbnb rental that you're renting out, or long term rental, you want to get it into an LLC as soon as you can to protect your personal assets from a tenant lawsuit. That's the reason. Generally cheap and easy, a little maintenance every year, that LLC will prove very valuable. It's not just one sheet of paper, you got to have pieces and parts and all that stuff. Topic for another question, but Memographics brings up an important timing issue. If you're going to get a HELOC on that rental property, a home equity line of credit, or any sort of line of credit mortgage on that property, you're going to want to keep it in your own name until the mortgage is done. That's because bankers are from Pluto, men are from Mars, women are from Venus, and bankers, they're on a whole other freaking planet. Heaven forbid you have an llc. But Freddie Mac and Fannie Mae, they will literally know their brains will blow up if you have an llc. So the point is, do the heloc, do the lending, do the financing in your personal name and the minute it's done and they've sold the mortgage five times before you wake up the next day, then you deed it to an LLC. I have only had one client in 20 years. Have any problem with any bank upset that you deeded the property into an llc and then they're going to ask you to stop doing that and put the property back. But that's very, very rare. We have never had the due on sale with any client. They just ask you to put it back. And that's only been in a few handful of instances, in thousands of transfers. So memographics, wait till the HELOC done, then deed it to the llc. Alexi, Alexi asks, I have a question regarding board of advisors. Now many of you know I love having a board of advisors, a board of directors, and I'm going to start with my whiteboard here because we're going to build on this throughout the day. Remember, your operations are over here. Your, this is going to be your S corp generally and over here is going to be your llc. And that's where your rentals are going to be. Now this is just your basic one, two punch, very common. Then down here is your family trust and we already have some trust questions as well. So she says, Alex, he says, I've got a Board of directors, which could be up here bod, or you could have a board of advisors over here with your llc. And she says, hey, well, we transfer to another state on a regular basis. We rent a van and travel to visit with my family, spend the weekend and I meet with one of my board of advisors. Could be a mom, a brother, a sister or best friend. Is this a tax write off trip? Yes, it is. Now I don't want to get extravagant. You might spend two weeks in the Ozarks in your RV and you have one conversation with your board of advisor. I can't write off all two weeks. But it is common that you might get on a plane, fly to meet with someone on your board of directors or board of advisors and pay for the airfare and a hotel night, or maybe drive across the country or two states away or 30 minutes away and go meet with a board of directors or board of advisors that are on your team. Now, the bigger your business is, the easier it is to write this off. But on the on technically and on the face of it, it is a legitimate write off. I just don't want to get too aggressive with that. So Aleksey, male or female? I'm not sure. I would make sure that you keep track of those expenses. Talk with your accountant and I would love it to be a write off. I just don't know the full picture of your tax return. Marcia says, this is on Facebook. Last one was on YouTube. She says, how does offshore properties business mortgage affect your taxes in the usa? Oh, this is a good one, people. I love it when my clients buy rental properties or have businesses all over the country. But can I have one in Australia, in Europe, in Puerto Rico? Going to have a property down in Cabo or Mexico. How do I treat that? Here's the US rule, whether it's in Arizona or Nebraska or Cabo San Lucas, Sydney, Australia, you're going to treat that property on your tax return as if it was just owned in another state, even though it's in a different country. You're going to report your income, your expenses, and that's right, you're going to have to fly down there to check on it once in a while, which is cool. So the more income you make on this property or business, the more that's a write off on your tax return for checking on your international property versus your New Jersey property. It's all good. Again, your overall income and expenses need to be relative and reasonable based on your situation. Now what you're going to have though is you're also going to have foreign tax. If I have a property in Australia, I'm going to pay tax in Australia. Then I'm going to get a foreign tax credit on my US return. So it's kind of like if I have a property in New Jersey, I'm going to pay tax in New Jersey and then I'll get a credit here in Idaho even though I have a property in New Jersey. So just treat that foreign country just like you would another state in the United States. That's the general concept. Of course. We could talk about it for an hour. I'm going to go to our live questions and then I'll come back to these. Henry's got a question. Mallory, what do you got?

Do you have any tax tips for an ebay business? Scenario is reselling items from garage sales and consignments for non business.

Okay, I like this. An ebay business and any tax tips? And you know what, this is another question that I kind of go to Methandria or Methandra on Instagram said I own some rental properties, but I don't feel like it's quite a business. I don't spend as much time managing them. I've spent money for real estate, education. Can I write this off? Very similar to Henry's question saying, I got an ebay business. What do I do? Guys, any side hustle like that is a freaking business. If you've got a rental property down the street or two states away or you've got a little ebay business or something you're doing on Amazon as an affiliate, that is a business, my friends. I want you to track the income and I want you to track every gosh darn expense that relates to it. So if you're Henry and I've got an online business, I'm writing off Internet. I'm writing off my computer, my laptop, my iPad, all my electronics, I'm writing off maybe my, even my cell ph home office. I want you to keep track of everything, Henry, and take that to your accountant and rub your hands together. Take advantage of every freaking expense you can. And I mean start following some of my YouTube vids. I've got 70 plus YouTube videos on travel and dining and all sorts of good stuff. And same here for methandrier. Gosh, I've got some unique names here today. Forgive me. Absolutely same story. If you don't feel like it's a business because you don't do it like do a lot, then you better start doing a lot. I want you to write off Every expense you can related to your real estate empire. Think of it that way, guys. It's really a state of mind. It's, it's. You've got to take advantage of the American dream. Do you know over 50 million Americans now have a side hustle, Some sort of side business where they're making money to supplement their day job. That's a business, Gosh darn it. And your accountant better be excited about it. You better start keeping track of your expenses. And we might structure it in a certain way. And all of you that have a side hustle, you might just be a sole proprietorship driving for Uber. That is a side business. I want you to claim the income, write off all the expenses you can. As you start to make more money, people, you're going to graduate to an S Corp or an LLC taxed as an S corp. This is your side hustle, people. Now, if you have a rental business, same thing. That is a rental business. You should be tracking the expenses. Okay, we got a couple other questions online and I'll come back here to Tyler in a moment off YouTube. What do we got?

Asked. Are there any good tax reasons not to pay off a rental property quickly?

Ooh, Beth says, are there any good tax reasons not to pay off a rental property quickly? Well, from a very narrow answer for tax reasons, you're going to lose the mortgage deduction, the mortgage interest deduction. If you pay off a rental. You just got rid of the mortgage interest deduction. Beth. What I tell everybody, and I think I might make some of you mad here listening, and others are, you're going to totally high five me. I like to use leverage. I don't want to pay off a rental property that's sitting there with 200 grand just sitting in it. That's not a good rate of return. Because I could take out 100 on a HELOC and go buy another rental property. Now I'm getting the power of leverage OPM, using other people's money. Now, if Beth is 75 years old and she's got five rental properties and she wants to pay them off and just sit back and collect rent and visit her grandkids and great grandkids, Beth. I like that. But for many of us that are 60 years and younger, I want us using leverage. I want us buying multiple rentals. And I'm not saying leverage to the hill, find balance in that. But people don't pay off all your rental properties and just sit back. You're not a land, you're not an investor. You're a rent collector. Investors get a better rate of return. Nicole. I mean, Mallory, go ahead. We have Nicole.

Nicole, yes. She just bought a triplex and she's going to live in one of the units. Which depreciation interest should she deduct from which unit?

Okay, this is good. Nicole says she's got a three Plex, so she's buying a little three plex over here. One, two, three. And she's going to live in one piece of it that's going to be her home. Then she's going to rent out the other two sides. You're going to question one of the questions I get. I had it just this morning, and I met with one of the attorneys in my office. They said, should I put this in an llc? See if an LLC is trying to protect your personal assets from your rental properties. Well, guess what? You're going to want to think twice about an LLC unless you have a bunch of other assets. And so that's just an asset protection comment. But for taxes, you're going to depreciate two thirds of the rental property. You're going to track that depreciation on two thirds of the deal and one third, it's going to be your home. So just split it as if you had two other rental properties down the street in your home, even though it's all in one. Three Plex. Okay, now I'm going to hit a couple others. Now, Jeff, this was a. I don't know if Jeff was trying to be funny or a snide comment. I love it, Jeff, because I know who you are. He says, how does your firm handle a client's IRS audit? Well, Jeff, the first thing that should happen is when you call my office, my staff should respond red alert. And try to help you out and talk with you about it and find out what's going on. Sometimes clients call my office and they don't get the same services. If I answered the phone, be patient, send me an email and go, Mark, you got to do a little more training with your people. So there's number one, Jeff. So don't anybody get upset. We're a firm. Not everybody's going to answer the phone cheery every moment. So be patient. But if our clients get into an audit and it's our fault, we'll pay for the penalties, we'll pay for any interest, and we're going to solve the problem at no charge to you. But if we did your return right, and your number just came up, and maybe your prior accountant did it wrong, and we did it right, and now you get audited. That's not our fault. We're going to help you out and we need to rush to your side. So if anybody uses our accounting firm, I want to know about it. If you're getting audited. It's very rare, to be honest. We have a lot of people coming to us that are getting audited in other places. But sometimes people's number just comes up and we're going to be there for you. So I'm going to stay in touch with Jeff and other people that go through that situation. Jeff, thanks. Okay, I'm going to hit one other question here. I like this one. And then I'm going to come over to our other questions online. This is from the DIY couple on YouTube. They said, My husband and I have income from YouTube consulting and other businesses we own and operate together. Cool. Many people have multiple businesses going into one company entity. See, remember you have multiple businesses and one entity. Very common. And they said it's our full time job. We plan to set up a Solo 401k for him, but I'd like to set up a SEP IRA for me too. I'm confused as to my options and which one is best. Oh my gosh. This is an answer for all of you that you've got to hear. If you are a husband, wife, married couple, whatever, partners, whatever the situation is in your domestic life and you've got an entity and you're running multiple businesses together, we are using the Solo 401K. Amazing. Stay away from the SEP. In fact, I want to tell you, the DIY couple just type Kohler SEP strategy and you're going to see a video that says I screwed up and did a sep. How do I solve the problem? Compare the SEP to the 401k. I've got several videos out there on this topic. The SEP is an old school strategy. It's only used in a narrow situation. You're going to find that both of you joining that solo 401k which a married couple can, including the kids, is going to rock your world. You're going to love it. So look into that. Calls for a consultation. We have a499 setup. 401k or a 999? 401k setup. That includes an hour with an attorney planning your world. So give my office a call if any of you need that. I'll give you our phone number here in a minute. Okay, I'm going to do two more questions then we're going to RAFFLE off these books or at least tell you about it. And I've got some more questions here and I'm loving this. Jeremy even asks how do I start a non profit? We're going to hit it. Alright, what do we got?

Rosalie Leonel. He asked what is the best structure for a holdings company? Can a holding company be an llc?

Okay, Lionel or Lionel? Lionel. Okay, Lionel. Okay. I'm a Lionel Richie fan, so just know that my partner Matt Sorenson went to a Lionel Richie concert on a dare with some friends that said you're going to have fun, come. Said it's the best concert he'd ever been to. He's like, dude, I knew every song and Lionel Richie freaking owned the concert. He was like a great performer. So hold back on your Lionel Richie, you know, jabs there. Okay. He said, a holding company, is it best to be an LLC or how? Well guys, a holding company is kind of a broad term. I'm going to use it this way. This is how Mark Kohler does it. A holding company to me is an LLC that's usually got COPE protection, which is a huge topic in my books. Right here. I'm going to share with you and it's a great asset protection strategy. And a COPE LLC is for my clients that are usually worth a million dollars or more. They're going to set up a COPE holding company and this LLC is going to own all their other LLCs which might be rental property, triplexes, commercial property, raw land money. So you're going to use this holding company to hold all your other assets and it's going to give you two layers of asset protection and it's going to make my tax return reporting more efficient. I also use the word in my terminology. I call it a parent company for operations. I don't call it a holding. Holding means you're holding assets. To me this is a parent company which in my world is an S corporation and I freaking love it. An S corp is going to own all my other LLC that I have partners with or just different operations. I set one up these today for a client in New Jersey. We have their S Corp and we set up a separate holding company, a separate LLC for owned by his parent S Corp. And this is all operations rentals over here, operations over here. I'm going to say it now because I just saw a little ping here. If any of you need a consultation with one of our attorneys, pay for a half hour or an hour, we're going to try to save you 10 times. We want to look at your tax return, your overall plan, put it in a diagram. You may spend three to five hundred bucks and we'll throw in an entity for a few hundred dollars more if that's what you need. We kind of have an hour with any entity, so if you want to give us a call. I'm just going to say it now because I'm getting a little note here. 435586, 9366 and that's for the law firm. And we can transfer you over to the accounting firm if you need help with the tax side. 435-586-9366. Now there was another question someone asked about this. They said Tyler asked, how difficult is it to convert from a C Corp to an S corporation? So let's say, sorry about that people. Let's say you've got a C Corp and someone set it up in kind of old school fashion. I usually don't like a C Corp for small business owners. You can convert to an s corp with one form. We charge 125 bucks. Really simple. But sometimes if you have carry forward losses or appreciated assets or equity in the C Corp, it can cause a tax consequence to convert to an S Corp. So it's simple and easy and it's cheap. But the question is, when you do it, is it the right time for you? Talk to your accountants. One of our accountants can do an analysis for a couple hundred bucks, run you through it, tell you what the options are and how many more taxes you would save. And you generally will. Mallory.

DH asks, would you put, can you put a home in a trust that's not paid off yet? And if so, which type of trust would you recommend? I also would like to know when is it appropriate to put your retirement in the trust?

Okay, so DH asks, when is it a good idea to put your business or property in a trust and then your retirement? Okay, I call this the trifecta. Because what I want down here is a revocable living trust. Revocable living trust, it's easy to change, easy to amend. No extra tax return does not save you taxes, but it avoids probate and it keeps all your assets from getting wasted by idiot beneficiaries. Kids, ex husbands, ex wives, whatever. I want to make sure I've got a revocable living trust at the foundation. 99% of America's the own small businesses or real estate are using the trust and it goes with a will. You're going to have a will and a trust and a whole estate planning Package. We're doing a special this month. I didn't plan on bringing it up, but I'll tell you about it here in a minute. The trust should own your LLCs. The trust should own your S corp or, or your operational businesses. The trust should own your personal home, your life insurance. The beneficiary should be your trust. And your investment accounts and retirement accounts, IRAs, 401ks, any sort of investment account. I want all of those. The beneficiary to be the trust. Now some of you financial advisors are freaking outgoing. Well, there's special tax elections with an IRA and a 401k and all this stuff. Get it. The IRS passed a rule. Well, the IRS Congress did called see through trust provisions where you can have a trust as a beneficiary, but the surviving spouse or the kids can still make the tax elections they need to. It doesn't create an automatic withdrawal or tax consequence. A good tax planner, we put this in all of our trusts. Allow all of your assets to be owned by the trust. So you get the trifecta. The trust, your operations and your holdings. It all goes into the trust this year, every year for seven years. We do a special on trusts. 999 for married couples, 600 bucks for single individuals. We do the entire estate plan with Will trust, the whole nine yards. And you get an hour with a real tax attorney to design it for you. So again, call that phone number if you want it or go to our website. I'm sure Mallory and Rosalie will put it down there below. Okay, now here's the winners of our books from last week. Dylan, my photographer, my videographer, my amazing Dylan is saying, move it along, Mark. We got lots of questions. I'm going to hurry, man. Okay. I'm going to give away these books. Here's who the winners were last week. Financial freedom was Andrew Topoloski. Congratulations, Andrew. And the tax and legal book was Valencia Alleen. Valencia Alleen. And then the 8 Steps Workbook, $99 on Amazon and it's kicking butt. It's getting great reviews. I'll tell you about it is Brian Roman. So I'm going to give these away today. Anybody that shares this video on your social network, Rosalie puts you into a hat and draws it out in the morning. I autograph it and mail it to you for free. 8 Steps Workbook is 60 plus little videos with QR codes that you can start watching immediately if you bought this on Amazon tomorrow. Today on my website, you can start watching videos, look at diagrams, get a business plan A marketing plan and a strategic plan, downloadable and word, all available for you to build your business plan and grow your business or start a new one. Podcasts, webinars, little places to fill out your plan. You'd love it. Get it over on Amazon. And I'm giving one away today. Well, Rosalie will give it away in the morning. What your CPA isn't telling you, published by Entrepreneur. Yours truly is the author and the Business Owner's Guide to Financial Freedom. We're going to give away both of these books. They're kicking butt out there on Amazon and Barnes and Noble and everywhere. Thanks so much, everybody. I'll give those away. Man, I'm talking fast. Hope you guys are enjoying this. Where are we at on 20 minutes? We're 20. We're good for 10 more minutes. You guys good? Hopefully you got your bowl of popcorn and a diet code. Or a rock star. I have to drink water. My rock star. I only get one rock star a day and I already drank it. Okay, what do we got?

Victor asked, is it legal or spark as a parent to start a Roth IRA for your kid instead of a 52 night plan in case she doesn't go to college?

Oh, my gosh. Victor. I love it. And Victor says, should my kids have a Roth IRA even if they don't go to college? Or should I do a 529? Guys, I am not a fan of the 529 account. Now, I know some of you already have them going. Let them ride. Just keep letting them grow. But don't put any more money in it. I love to set up Roth IRAs for the kids. And you can pay them out of your business. Pay the kids down here, and they can go and open up a Roth IRA this year up to $7,000. I mean, this is a big six or seven. Yes. No. 6,000. 55 and over. 7,000. Oh, boy. Freudian slip. Sorry. 50 and over, too. I'm just blowing it today. But kids can open a Roth IRA. The Roth IRAs can be partners in your next LLC. So all my kids have Roth IRAs. I love it. It's a great tax strategy. And if they don't go to college, they built their retirement account. They can pull out contributions tax free for college. I love it.

Okay, Valerie, Nicole asks, if I claim a loss on paper against my rentals, does that deduct from my W2 income?

Okay. Boy, Nicole, hard question.

All right.

I take it all of you heard that. Wonderfully. So Nicole says, I've got rentals and I don't have a small business. I have a W2. Alright, cool. Remember, short term, long term rentals. Over here, W2 over here. Down here, right below your Trust is your 1040. And so Nicole says, I've got losses from my rentals. And will that offset the pluses for my W2? The answer is yes, usually. Here's the rule. When you go to do your rental property, you're going to be one of three types of investors. Passive. That's number one, active or a real estate professional. I'm going to put re pro now. I've got little videos on this as well, chapters in my book. It's a secret strategy in this story that'll change your life. It's a story. I should read you the first paragraph. Okay. Since Nicole has a day job, I doubt she's going to qualify as a real estate professional. I don't want any of my clients to be passive. So of these three options, what I love the most is active. And Nicole or any of you, if you're making decisions regarding your real estate, even if you have a property manager, you qualify as active. All of our clients are at least active. That allows you to write off up to $25,000 of losses against your W2 unless you make more than 150 grand. If your AGI is greater than 150 grand, you lose the write off. Or do you? No, you don't lose it. It goes into a bucket and you get to carry forward those losses for the rest of your life. They never go away. And whenever you go to sell a rental property, you can use those losses against the sale of any other property. This is a big deal. So Nicole, keep track of those expenses. It's a business. If you don't get the write off because you make too much money or you can write off up to 25 grand against your W2 and I'm talking refund or you keep track of the losses until someday when you sell another rental. So it's good. All right. I'm going to take another email question that came in before. This is a good one. This is from C and T. C and T says, hey Mark, I got a W2 full time job. I make pretty good money per hour. My wife makes pretty good money per hour. We both have day jobs but my wife's company told her that we're going to file a 1099 instead of a W2. Now that's a little precarious because if you look like an employee, act like an employee, or treated like an employee, they really can't 1099 you, but I'm just going to assume that C and T here says my wife acts like a subcontractor and they can 1099 her legitimately. Okay, let's assume that's the case. What's better, he asks. Is a 1099 better or is a W2 better? He said. I said, no, no, no. We want a W2 because we won't get as much of a return next year if we do a 1099. Now, the husband in this situation, I don't know if he is the C or the T, but I hate to tell you you're wrong. You're going to have to sleep on the couch tonight. The reality is that a W2 withholds a ton of money because you work for someone else. And you might get a refund, but that doesn't mean you save taxes. That just means they withheld a ton of money and you gave the IRS a loan all year freaking long. That's not good tax planning. But if your wife got a 1099 now I could write off home, office, dining, auto mileage, computers, electronics, Internet, cell phone. Then she's going to pay less in taxes. And you're right, she's going to have to withhold from herself. She's going to have to put money in the bank to make sure she can pay her taxes in the spring. And you may not get a biggest refund because you didn't give an IRS the loan, but you're going to pay less taxes because the 1099 freaking rocks if you qualify for that. So don't worry about the refund, worry about your net tax you're paying. And the 1099 kicks butt. So. Okay, Mars. Mario, where are we going? Mario or Joshi? Okay, sorry, Mario.

Can a professional meet with a client at a remote location from an office such as Cancun, Mexico, and deduct the expenses from that meeting with the digital professional?

Oh, digital professional. So Mario says, I'm going to go to Cabo and sit by the pool and then call my professional advisor that's in New York. And I get a write off. No, I'm sorry. Making a phone call from a beautiful resort at Sandals Resort. Oh, in the Bahamas. Wouldn't that be nice? You're out on one of those little huts out on the water with the little walkway. That's my dream vacation, Right? And then you make a phone call on your Skype video from your little hut. Not a write off, but let's say your New York advisor flies down to the Bahamas and meets you in the buffet before you go out to the pool. Is that a write off? Yes, it is. Because you're having a business meeting at a remote location at least four hours a day or at least one day critical meeting if you're there multiple days. I need to see four hours of conferences or meetings every day. I can write off your airfare down a travel day, back the airfare, back the whole nine yards, but you have to meet them there in person. Sorry, the Skype call will not cut it. Joshi. Joshy. Okay.

Is there a minimum age for kids when we could start a Roth IRA for them?

Okay, so Joshi says, mark and I like this. Let's go to the board. I love to write things out. So Joshi says he has kids. Joshi could be a boy or girl. Again, some of these names I just don't know. I'm sorry, Joshi. So let's say Joshi has kids. And so here are these little kids down here, and he wants them, or she wants them to start a Roth ira, which I love. Well, in order to start a Roth ira, they need to have earned income. So these three kids want to start a Roth. Now, maybe your kid, you know, is an actor in Hollywood for the Disney channel at age 2. That's cool. They got earned income. They can open up a Roth. But in your little business, because you're a landscaper and you're going to have the kids run around and hold a weed eater or put lawn, you know, grass clippings and garbage cans, or help file paperwork in the office or run the paper shredder. I normally don't put kids on payroll till they're at least six years old where they can have a nominal job. And maybe you pay them 100 bucks a month for shredding paper, emptying the garbage, sweeping the, you know, the shop, or helping vacuum the office on a Saturday. I worked for my dad cleaning the office when I was six or seven years old. I could pay my kids $100 a month, $1,200 a year, and they could put it right into a Roth, which I love. But they've got to be old enough to have a legitimate job. So I say usually six or seven years old. I do have some clients that pay their kids a modeling fee because they're on images and pictures in the business on the website on the wall. Think of a pediatric dentist that might have some pictures of his children in a commercial at the movie theater on the wall. But, guys, most of your kids are not going to be model Quality. I've seen some of my kids. I'm not going to sign their return. It's not pretty. Yeah. You know what I'm saying? Yeah. That was rude. I'm sorry. That's a. That's a drop here. Okay. All right. More questions. Are we good? Are we. I'm having fun. I hope you guys are having fun. This isn't this crazy. You're listening to Tax and Legal Strategies, and I'll tell you why. Because saving money is just as good as making money. And the business owners sometimes take a while to learn that. You buy a rental property and all you're worried is about cash flow. Why don't we worry about the tax savings that comes with it? That's just as valuable as the cash flow. Boom. I just got chills. I'm crazy. I love this. Okay, what do we got, Mallory?

Dan from Maryland here. My wife and I plan to each have our own LLC and a solo 401k. Am I allowed to fund my wife's IRA or 401k if her business does not have income to contribute?

Okay, Dan, you are all jacked up. Do not go on LegalZoom and do not do this. You got to call us. My tax attorneys would rock your world and it would save you 10 times what you're going to pay on some freaking website. He said he's going to have two LLC's. No, I do not do that. Now, you may think that's bad, but Dan, hear me out. Everybody listening. I'm going to set up one llc, and we might tax it as an S Corp, too, because we want to save on FICA and get the QBI pull through deduction. I mean, there's lots there. But when I have a husband and wife, I let them both own the business. Now, I only have to do one setup. They both have a dba. So you can run two different businesses in the same company. You each could have your own checkbook, your own debit card, your own set of books. But then we merge them into one company at the end of the year. Dan, I just got chills saying that because just saying that hopefully saved you thousands of dollars of setting up 2 LLC that you don't need. Now, in some instances, I might set up two LLCs. I've got a doctor and a Realtor, a pharmacist and an engineer. And for professional licensing, they have to have separate LLCs. But nine times out of 10, I'm doing one company, two DBAs, two URLs. Then we do one solo 401k. And that solo 401k can be carved into two pieces for both of you. Husband, wife, they could be Roth 401ks, they could be traditional 401ks, but it's all one 401k, all one company. You're getting the efficiency and the cost effectiveness of one 401k and one entity. Guys, we have a set service for this. This could be under 1500 bucks, and you get both and up to two hours with a tax attorney helping you do this. I'm so glad you're watching. And this is not an infomercial, but shop around. And if you set up an online 401k for 400 bucks and don't know what you did, that's why we have an $800, $900, 401k where you get a time with an attorney and we set up the right entity and then we're here every year to review it with you. So shop around. Doesn't mean you have to use us. But be careful doing too much DIY online because we end up having to fix it later and it costs you more. Okay, next question.

Tim asked you. Hi, mark. I am 1099. What's the best way to find loans for flipping houses without shoving a lot on taxes?

Oh, my gosh. Okay, now say that again. I was multitasking. Tim flips homes.

Yes.

He's a 1099. He asked what is the best way to find loans for flipping houses without shoving a lot on taxes to find loans.

Okay. Tim is a fixer flipper. I'm going to think of Chip on Fixer Upper. You know, if you love Chip and Joanna on Fixer Upper down in Waco, Texas. I love Chip. Chip, if you're watching, I'm still trying to get you on my podcast. I think you're just a complete stud. We'd love to have you on the show. Now, Tim here is also a fix and flipper. So what Tim needs to have if he's fixing and flipping properties, do we do an llc? No, he's not holding rentals. He's fixing and flipping. So we're going to have an S corporation. If he's making more than 40 grand a year. So he's an S corp or an LLC taxed as an S corp. And he's off to the races. Now, when he goes to buy properties, he might be buying them in his own name to get the bank loan. And then soon as he closes, he's going to deed it over to the S Corp. Do the Rehab and then put it up for sale. The 1099 goes into his S Corp. Now, a lot of my fix and flippers, they're partnering with others. They're borrowing money from people's IRAs and 401ks. They're doing hard money loans. A lot of times they might be doing seller financing loans from the buyer that owns. Sorry, from the seller. And they're having a partner on a jv. There's so many ways to find money for this. You could partner with others, seller financing, borrow from retirement accounts, use hard money until you get enough capital where you're doing the whole deal start to finish in your own money. And I've got clients that that level doing one rehab a month, making 100 to 200 grand every three months. So there's lots of options here. But you want to do this in an S corp and maybe consult with us once in a while and we could help you out. Boy, we're still getting questions. Aren't you guys tired of this? I'm having fun. Maybe a couple more minutes. Oh, Rosalie's calling the time of death. She says last question is Eric. I might look here on our email. DH already emailed and did. I've got El Toro and DJ Snyder and Jeremy. I've got three more questions after this. Okay, Eric.

Eric asks, I have a digital marketing business set up in an S Corp. I'm starting back up in the real estate wholesaling. I have a dormant LLC from previous. I need to spend $2,000 asap. Should I open up the bank account first?

Okay, Eric, you're killing me, bud. Now listen to what Eric's doing. He said he has an S corp and he's been doing wholesaling in the past. And he's got also an online marketing business. Sounds like one S Corp to me. Eric. I'm not kidding. You may say. Well, Mark, you're an attorney, you've got teams of paralegals. You're a national expert on this. You must have bunch of S corps. No, I have one S Corp. Seriously, I'm not kidding, people. I just got chills saying that because it's so true. Eric, use your one S Corp. Run your wholesaling through it. Run your online marketing through it. Run your hair and nails you do on the weekend, which we know you do. You just don't tell anybody. Just do this on the side. Do your dba, do your URL, do your side business. Run it all through the same freaking S Corp. Let this pay the bills. Now you're going to use QuickBooks, and you're going to run books for all these different operations and you're going to do good accounting and you're going to do your minutes and you're not going to have one sheet of paper from LegalZoom. You're going to call my office, we're going to get your books organized. And why in the hell do you have a dormant llc? Either use it or get rid of it. Where am I going to use that llc? I'm going to use it over here to hold your rentals because you're going to not wholesale everything. You're going to pick up a rental once in a while. Or I'm going to use this LLC for a business with a partner. But seriously, guys, just be careful doing too much of this online by yourself. Spend a few hundred bucks here and there and get some advice and don't get taken advantage of. And call me if you ever have that problem at my office. I want to take care of you, but. Yeah, Eric, just consolidate, baby. Don't overdo it. Okay? Now, El Toro said, mark, would I be making a big mistake to open two Roth accounts? A Solo Roth 401K and a Roth IRA? That's what I've got. I got both. Do it. Someone mentioned I should keep one pre tax and other post tax strategies with tax advantages later on before retirement. Oh, now we got. We're jacked up here, El Toro. This is good. Everybody, listen, listen. He said a Roth 401K and a Roth IRA. And then someone mentioned I should do keep one pre tax and the other post tax. No, no, no, no, no. Here's what's going on, people. And I have a lot of my wealthy, successful clients doing this. They're going to have a Roth IRA, they're going to have a Roth 401. Then they may even have a traditional IRA and a traditional 401K. You can have all four. But remember, these might have their own LLC to buy rentals, but you're also going to have your own LLC owned by your trust. See, think of it this way. I have clients with different buckets. This is their pre tax bucket or their post tax bucket. And you can have a little of both. I'm okay with that, El Toro. But if I had to bet, and the best way to go with my money is I'm going to go Roth in the long term every time. I don't want to have any post pre tax money that I'm going to have to pay taxes on later. But I'm Going to have LLC is in my own name too. So I'm going to have rentals in my own name and rentals in my Roth IRAs. If you have some traditional pre tax retirement accounts, that's cool, but I'm going to try to convert them to a Roth later. That's me. That's just where I'm at. Okay, D.J. says I filed. I only have two questions left. I filed for a single member LLC for my lawn, lawn care, single landscaping business a couple weeks ago. Should I convert to an S Corp right away, after approval and then get my ein? My intentions were to keep the business finance away from my personal finances. I will still be the owner of the business in an S Corp. Okay, now, dj, you know, it sounds like you may have done this online and now you're trying to save a few bucks. And I get that. And I want to tell everybody if you. Again, I'm not trying to be a salesman here, but when we do an entity for a client, we charge 800 bucks and you get an hour of advice so you don't have to figure it out later. Then you get off and running. DJ may have done this for a couple hundred bucks, but he's got. He's missing the pieces and parts and he doesn't even know what questions to ask. This is one of 10 questions I might ask. So get some advice and maybe dj, give us a call. But let me answer this. He has a single member LLC and he says, when should I turn it into an S corp? Right away. Well, you're going to get an ein, right? He said, should I get the EIN after my S corp?

No.

So you've got it all mixed up, bud. When you set up the LLC, get the EIN, start operating. If you're going to make more than 40 grand this year profit, I'm going to retroactively convert it back into an S Corp. You get your EIN before you make the S Corp decision. That's the way it works. It's okay. The S election comes later, we charge 125 bucks. So get making money. Get your LLC out there, market the hell out of it. Make some bunch of money. But I love it. Then if you start making money, call your mom and then call us. We'll get your S corp done and get you in the right structure so you can start doing payroll and all that good stuff. Keep learning. I didn't mean to be insulting to anyone. Keep watching my broadcast, the YouTube, my daily social posts. I've got a little workshop and I'll Say it now. I've got a self directed IRA 401k workshop on June 9th or June 8th. June 8th. It's just a couple weeks away. Can you believe it's almost June? Couple weeks away. It's a live broadcast and live in Chicago. I'm also doing it in Honolulu. I know I did it for you. So you can get a tax write off to come to Hawaii on August 10th. So check those out. I had to look over here because Rosalie is making sure I don't miss the dates. But come out and get to my website, markjkohler.com and you can sign up for any of these workshops. And I've got five around the country in the fall that I do business building. So that's markjkohler.com and just get over there in it and check out those workshops. And finally, Jeremy says, how do I start a nonprofit? Well, there's a new nonprofit application that's out that we're using that if you're going to be a small potato nonprofit, we can even do it for about a third, two thirds or about a half of the cost we normally would. So there's full nonprofits that are we charge around three grand and then a simplified nonprofit around 1500 bucks. This is a great way to go for any of you that want to set up a nonprofit. We set up a corporation. It's a nonprofit corporation in the state where you live. Then we register it with the IRS and then we give you the tools to go register it with the state or we'll help you do it. It depends on what you're going to do. Are you going to do black tie affairs, golf tournaments, raffles and all sorts of things to raise money? And then what are you going to do with the money? You're going to put shoes on kids in the Navajo Nation down in Arizona or down in Peru, you know, deliver tents to kids in a refugee camp? I don't know. So you want to. I want to meet with you. We're going to spend two to three legal hours getting you through the nonprofit, depending on how extensive. We'll give you a quote right up front and. But they're easy to do and they can take a few weeks or a few months and we set them up all the time. So anyway, a couple other things. Share the video. Rosalie's going to do a drawing in the morning. Follow me on the social media, the newsletter. If you get over to markjkohler.com I've got a free ebook, 30 pages on the top 10 strategies for small business owners. Sign up for the newsletter and if you need a phone call with an attorney, give us a buzz. And what do I want to say? Yeah, keep living the dream. Don't give up. It's hard. It's hard. I was at the office last night till 10 o'. Clock. I was at the office till 1 o' clock on Monday night and I didn't go to bed till 11:30 on Tuesday night. I've had three nights in a row working late because it's hard as a small business owner. Now it's Memorial Day weekend so I'm going to play a little bit but that's the freedom I get to with being a small business owner. Don't give up on it people. Doesn't mean you have to quit your day job but get a small business on the side. Start paying off your debt, building a retirement and doing what you love. Thanks everyone.