Tax Lawyer Reacts to Breaking News and What to Do On Your Tax Return

Foreign. Welcome everybody to this week's breaking news on the tax policy of 2025. Where are we at? I want to be here to answer questions for you, give you an update on how this tax legislation is going to go through. And it may feel like chaos, maybe it is a little bit. But there are things you can do now. And today's message along with some updates are what should you do right now to get your 2024 tax return filed? Get a refund if you deserve one, how to save some taxes on last year and how to do some better planning this year? I would love to answer any of your questions today. No matter what platform you're listening or watching me on, Please write your question down below. Do you have the right structure? Can I write off my home office? Can I pay my kids money and take a write off? Can I write off my rv? There's going to be more questions than I can answer, but we will do our best and I want to try to answer those now. We do need to get an update right of what's going on right now with this legislation. And I want to give you some important news and then let's get to practical tips. Here's the biggest news. I want to share some major points. The IRS is not going away. We are not getting rid of taxes as we know it now. We hope there's going to be legislation passed and there will and there will be tax savings for every bracket, not just the rich, not just the poor. It's going to be across the board as we saw with the Tax Cuts and Jobs act that we're trying to extend. But the IRS just reported last week that tax filings people have filed their taxes already in February are down by 5% compared to the same time last year. That equates to millions of people have not filed their tax returns now.

Why?

Maybe one people are thinking, oh, they're going to pass some tax legislation and I'm going to save taxes for last year, so I'm going to wait and file. No, that is not going to happen. Never have they passed tax legislation, a reconciliation bill like this that goes and gets you write offs for last year. So if you're waiting to file your tax return because you think you're going to get a write off for last year in some form or fashion, not going to happen. Maybe number two, you're thinking, oh, I'm going to take my time and file my taxes later because your chances of an audit go down when you extend. I've been saying this for years Trying to tell people, quit rushing to file your tax return because you actually, when you file an extension, reduce your chances of an audit. People as first in, first out. Whoever files their tax return first, they get online to get an audit first. I file my tax returns in September every year. 60% of my clients extend. Now you still got to send in money if you owe, but you file an extension and take your time. Get intentional. Watch a few podcasts of mine, watch a few YouTube videos of mine. I want to save you taxes for last year. But if you just rush and file your tax return, you might leave money on the table. Now with all that said, if you are due a refund, if you're always do a refund and your tax return, simple. Holy crap. Go file your freaking tax return. Nothing. The Senate is going to do nothing. The House, the Supreme Court, the Trump administration, they're not going to do anything that's going to affect your taxes for last year. So get your tax return freaking filed. If there's a question you have about it, bring it up here. I'll give you some resources. We'll see if we can answer that question. But don't delay. If you're due a refund, millions of dollars are left on the table every year of people that don't even file and they're due a refund. Let's not be one of those people. Now there was some interesting news this last week. We were finding out that the IRS leaked millions of tax returns, data on taxpayers. Well, we'll see what that's all about. Still to uncover there, we also understand, was it hundreds of thousands or hundreds of thousands? Sorry, did I say millions? It's millions or billions or trillions lately. So I went there, I think it was around 400,000 about that. So hopefully your tax return wasn't leaked. Who knows? Now the big situation that occurred this week is the House and Senate made progress. Now let me just give you a quick roadmap of what's going to happen and this will be brief and then we'll get into some kick ass strategies here. Some of you may have watched Bill on the Hill, an old Schoolhouse Rock video that's just classic right now I'm sharing it on Twitter today because we see how a bill goes through the House and Senate. Now here's the deal. Donald Trump is not going to pass tax legislation. Donald Trump does not make tax legislation. He's the leader in the White House that goes to the House and Senate and says, hey, guess what, I got elected. Here's what Everybody wants, can I help you get this across the finish line? What can I do to help you? And he lets the Grand Old Party, the Republicans, figure this out in the House and Senate, and then he's waiting there with his big black pen, waiting to sign it. That's how it works. So, in fact, I even created a little diagram. Let's go through this step by step. So what happens here is the White House, the President gives advice or direction. In fact, what they're hoping a good President does is provide leadership. And the President says, okay, House GOP leadership. Here's what I want you to do. I want you to give us 1.5, 1 trillion, 3.5 trillion, whatever in tax breaks. Pass my old tax bill. I'd love that. So last week, the committee in the House passed a blueprint and then took it to the House floor on Tuesday night, everybody was freaking out. It was late night. And they passed this budget resolution. This was a budget resolution that passed on Tuesday night just two days ago. Now, what happens next is the Senate has to do the same thing. Well, the Budget Committee passed their blueprint and then it's been stalled. They're thinking, well, let's do this in two bills. Let's do two budget resolutions and let's break it down. This one big bill the House is doing is a little too big for us. La la la la la. Well, the Senate has not voted yet on their blueprint. So once they do their budget resolution and the House's budget resolution is going to go into what's called conference committee. And members of the House and members of the Senate are going to get together and try to figure out what the details are of this budget resolution. They're also going to say, well, we need savings. We're going to go back to the Energy Committee or we're going to go back to the House Ways and Means or House Ways and Means or some other committee over here or this committee here. Now you poli sci majors are freaking out going, Mark, you're oversimplifying this. You're missing. I know. That's okay. I'm just trying to keep this simple for the average person that doesn't want to know all the details. But the committees are going to help find any savings they can to pay for this reconciliation bill that's going to ultimately be passed. And it will be passed. There will be a bill passed and in it, it has to break even in 10 years. So any savings that we get in tax savings has to be paid for without us going in more debt within 10 years. And the goal here is, what the Trump administration is saying is, hey, we're going to find all this savings with Doge, and I'm going to go find some tariff money. And guess what? If anybody wants to be a citizen and gives us a lot of money, give them the gold card. They want to give us money, I'll put that towards taxes, too. So what Trump's trying to do is find as much money as he can to help out Congress and the Senate and say, hey, I found this extra money, you don't have to cut as much. Let's get these tax bill, this tax provisions passed. Well, once they make this reconcile so there's zero cost on our debt at the end of the day, then the House can vote on it, the Senate can vote on it, and then the President signs it. So over the next two to three months, this mess is what we're seeing go on. So that is the process. And here's my biggest message today. Don't stress we're all going to save taxes with this bill. We really are rich and poor, young or old, middle income, high income, low income. There's something for everybody in it. There was something for everybody in the last one. Anytime you hear news say it's only for the rich, or we're going to cut this or we're going to cut that, you're going to hear rhetoric from the Republicans, you're going to hear rhetoric from the Democrats. Well, what rhetoric means is blah, blah, blah. Everybody's trying to position themselves to look great. But I just want you to relax and have confidence that we're already seeing the economy grow, inflation is headed in the right direction, we're seeing savings, we're seeing a tax bill coming. You may have not voted for Trump, but he's the quarterback on the field right now, and I'm Team America. So even if you don't like the quarterback sometimes, let's root for our team and let's get our tax returns filed for last year, let's start planning for this year. And I don't care if you're Republican or Democrat, this is not about me being MAGA or Dem or anything. It's about the American dream and it's about Main Street America. And if a Democratic president or Congress passes a Great bill, I'm 100% behind it. If they pass a bad one, I'm not behind it. Same thing with the Republicans. But there's so much anxiety right now. So I'm going to keep giving you reports. It's kind of fun to see how this is going to come together. And I'm going to give you practical tips everywhere I can. And the first tip I want to say is extend your tax return. If you owe the irs, send them what you think you owe and let's rub our hands together and find some write offs for last year. So the time is all yours. Now I would love to give you some tips and strategy. I'll go to the whiteboard if I need to. Please let me help you. I'd love to be of service and I can pull on the knowledge of reading thousands of tax bills in the past and laws and tax law because I just want to live that American dream too. So Danan, my studio producer, do we have anything good?

Well, we have a question here that I think a lot of people have and you've already touched on it a bit. But do we need to file tax returns this year? Will Trump forgive past taxes due that people filed for past years?

I don't hate the player, just hate the game. If you don't like the game but you know, sometimes you hate the player on the or. I'm delivering some news here. Donald Trump, the White House has no authority to forgive old tax debt. Doesn't that would have to be something passed through that House and Senate. There is no talk of this. There is no provision in the bill. There is no one I've heard of in the House or Senate that says, hey, anybody that still owes the irs, we're going to let you off. Frankly, I'm sorry, I'd be a little upset by that. I had to pay my taxes. I've been on payment plans. I've had to owe the IRS a lot before and had problems paying it. It's okay. I paid it. I love America. Maybe I felt I paid too much. But I hate to say any of you out there that are holding out thinking you're going to get out of tax debt, it is not going to happen. Number two, you still need to file a freaking tax return. For last year, the penalty for not filing a tax return is 10 times more than not paying the tax you owe and the penalty for that. The IRS doesn't want to be left in the dark. It's like going on a date with someone and saying, hey, I'll give you a call and then you ghost them. That's how you get your car keyed. The IRS was like, hey, we went on this date, it was called 2023 tax return and now you ghosted me. What's going on. So they're going to assume the worst. They're going to think you're cheating on them. You're going to think you got another hookup going on. And they're like, what the hell? So they're going to come after you. The IRS does not like to be left in the dark. They do not like to be ghosted. And there is no provision right now anywhere on the even in the works that says the IRS is going to be abolished. Anybody on the news that's saying, oh, we're going to, we're going to get rid of the irs. We're not going to, we're going to get rid of taxes. Really? What are you smoking? We may like to that to happen. It ain't going to happen. We've got, you know, we're paying a trillion dollars a year in interest on our debt. What the hell, we got to get a balanced budget, get out of debt. Then we can start talking about lowering taxes even more. It's a mess right now. So much anyway. Okay, so I'm sorry to break the news to you. File your taxes. Stay on top of it. File an extension. It's okay. I file an extension every year. I, I don't think I've ever filed my taxes before April 15, ever. Not in my adult life, that's for sure. Okay, Dana, next question.

All right, right here we have. Do we know what no taxes on overtime is going to look like? Is it no taxes after 40 hours, no tax on the 50% pay bump?

Great question. This is where the mud, the sausage being made in committees and in these House and Senate bills. Because a lot of people are thinking, how can I abuse this already? You know, I may only work so many hours, but the rest is overtime. Or I'm going to get somehow push more of my income to overtime. Oh, I'm going to pay myself a salary because I worked super hard this week in my S corporation and I'm going to pay myself overtime and it's not taxed. There's going to be all sorts of provisions to prevent abuse on this. So that's point number one. So if you're thinking, how can I game this in my own corporation to pay myself overtime? It's not going to happen. There's going to be a provision preventing any forgiveness of tax or no tax provision on overtime. It's not going to apply when you pay yourself in your corporation. Not going to happen. Number two, is it going to be at certain income levels, you know, if you make X dollars or more and you get overtime. You're probably still going to pay taxes. What Trump has said from the beginning, I want to help middle income America, not the rich with this. The rich don't work overtime. Right. They've got money making money for them. It's the middle income America that's working their butts off in more than 40 hours a week because of high inflation and costs. And that's what Trump's trying to help. So now, love him or hate him, I'm not trying to, you know, hit the bandwagon for Trump here. He said he's going to do it. He's followed through with a lot of stuff that he said he's going to do. So we don't know the details, but what we're, what I'm predicting is that it's going to be over 40 hours of work. And the amount you earn over that 40 hours, the time and a half would not be taxed up to a certain dollar amount if you're under a certain income threshold. So if you make less than 250 grand a year, x amount of your overtime would not be taxed. And I think there's going to be some boundaries, but it's going to go through and it's already part of the House and Senate blueprints. And now they're going to figure out the details. So, Danan, next question.

Okay, over on Instagram, we actually have a couple comments. One comment says the government needs to get rid of boi. And I'd love to hear your thoughts on that. But before we do, somebody else responded to that saying, BOI is on hold. You don't need to do it yet.

The court's blocking. Oh, my gosh. Oh, my gosh. Okay, everybody, I want to make sure that you're all very, very aware of this. So first, and by the way, any hate mail or comments? Daynan, I love that you're bringing up all the, the juicy stuff. I'm very open to hearing how you guys feel. I want to make sure that I'm not trying to skirt by anything. Okay. And you can go to the FinCEN website right now and see this. The BOI report is on. It is due. There was a February 18th decision and the US District Court, Eastern District of Texas, yada, yada, yada. They gave everybody 30 days to comply. We're talking about March 18th. It was off. It was on. It was off. It was on. Right now, everybody, news alert. The BOI is back on. It's a Business Owner Information report. If you have an LLC or a corporation. 99% of small business owners that have set up an entity since 2019. You have got to file this or the penalty. It's not much. It's only $592 a day starting on March 18th if you don't file. Now, our little law firm, we've helped tens of thousands of clients. We are filing these every 15 minutes for our clients all over the country. You can go to mainstreetbusinessservices.com our kkoslawyers.com is down in the chat. Just get over. We charge 200 bucks and we also do your minutes so you can have a board meeting and make sure you're good with the state. Get it done. You can do it yourself. You can go to the FinCEN website. I've got YouTube videos on this and everything. But everybody, the boi is on. Now. One of those questions was what do I think about it? I'm trying to have faith here. The reason why the Senate and the House, Republicans and Democrats passed this law three years ago and said buckle up, this is coming. No one paid attention. Now it's here and everybody's freaking out. Maybe you should have paid attention three years ago. They said we were gearing up our law firm three years ago for this. Staffing procedures, forms. There's over 40 million Americans that have to do this in the next freaking three weeks. We've already got employees geared up for some overtime to handle this. Now the whole goal of this why all those elected officials of yours and mine pass this law is because human traffickers, drug dealers, scam artists, money launderers use LLCs to hide behind every freaking day and disappear. Family members of mine have been ripped off with Shell Co. LLCs. I've been ripped off in my lifetime with people hiding behind the LLC that disappears. No one knows who owns it. Well, the BOI report is a process of self reporting. All of us law abiding citizens letting the government know. This is the Treasury Department, sister to the irs. This is not public record to anyone else. No one can google this and get it. It's like your tax return unless someone shares it. One of the 400,000 that were shared and you're going to inside the Irish. You're going to be fine with privacy and asset protection. But the reason we're doing this is to catch the bad guys. This is how Al Capone went to jail. They didn't get him for murder, they got him for tax evasion. They're going to go after bad people with the BOI report two years in jail and 591 a day. 592 a day. Sorry. So I'm having faith that it's going to pay off and we're going to get bad people in jail. Maybe I'm altruistic. I don't know. I'm a glass half full guy. All right, Dana, next question.

Okay, we have a little bit of. We have a little bit of controversy. Controversy.

We have controversy. I love controversy.

So first of all, we have. Look at the cpi, the Consumer Price Index. People are worried about the future, and rightfully so.

Okay. And they're worried that tariffs are going to increase consumer prices. Is that what it is? Well, this is a. This is a good one. I'm going to just take the fifth on this. This is an economist wheelhouse issue. The Consumer Price Index is a tax lawyer. Here's how I deal with it. And I mean, I've got a doctorate degree, a master's degree, I've written books. And I know. Here's the thing. Can I control the cpi? Can you. Can even Donald Trump really control the cpi? I mean, he's going to implement some policies, but it's like trying to control interest rates. Good luck. Right. Would you want to try to be in the White House and figure out how to control the cpi? Here's what I worry about. My freaking checkbook. I try to worry about what's in my bank account. I try to worry about what I'm doing to make money in my business next month. Do I have multiple sources of income? Am I trying to scale up on the Web with some other ways to make money? Am I trying to cut costs? Am I trying to stay out of debt? Am I funding my Roth ira? All I can do is control my economy. Yeah, the price of eggs are up. Yeah, it sucks. By the way, I'm buying chickens next year. I'm super excited about this. I'll report on my chicken purchase soon. But anyway, we've got to just worry about our own world. And I know it can be scary out there seeing inflation and insurance interest rates and CPI and all that, but I would just encourage you all. This was the message I was talking with my team right before we went live, and the message the team wanted me to share, and this is, I truly believe and feel this is we've got to just take a breath, worry about our small business, worry about our investments, worry about getting out of debt, file our tax return for last year. Be smart, file an extension, talk about money with our family members, talk about financial Literacy. And you know what? If we could all do a little of that, the world would be a better place. Wait, is that a. I think that's a song. I don't know. I'm gonna start singing if we're not careful. Next question.

All right, up next, we have a double question here. Will the ein tax get a deduction and will the sin tax get a deduction?

I don't know. So what even that means?

Easy, easy. The ein tax.

I'm not aware of an ein tax or Fintex syntax. I. So you want to rephrase that? I know there are so many acronyms out there in so many sin.

Like the word SIN text.

Okay, I don't know. Go ahead, give me another question, Dan. All right. Okay.

You said to give you hard questions.

Yeah, yeah, well, once it makes you know, that you even understand, too. Yes.

All right. Somebody here about the by said, I just filed my by and FinCEN before the end of 2024. When do I have to do the 2025 one?

Okay, we're going to go BOI for a minute. The Business Owner Information Report is required for every company. Once you file it, you're done. Unless your address changes or the ownership or management changes in your llc. So let's say you started an LLC two years ago. I'll give you an exception or two here in a minute. Some of you are saying, well, I don't even use my llc. I'll come to that exception in a minute. If you set up an LLC two years ago, three years ago, you have three weeks to file this. Or it's $592 a day now. It doesn't take long. It's 20 minutes, you can, 30 minutes. You can go fill it out yourself, call my office, we'll take care of you, whatever. But you don't. If you filed it last, you're done. If you filed it last year, you have to just file it once. But if your personal address changes, if the management of the company changes, the ownership changes, you have 30 days to update FinCEN or face penalties. That's it. You don't file it every year, just have to file it once. So everybody out there, if you have an LLC or a corporation, an S corp that you've created, you have to file this form by March 19 or face serious penalties and possible jail time. They're going after bad people. We're all self reporting so they can track down the bad people. That's why if you hate it, that's why now you say, well, I haven't even used the llc. Really? It's totally inactive. No bank account that's required. No transactions. Well, I own real estate, but I haven't done anything with it. Doesn't count. It owns no assets, no transactions, no bank account, nothing. And I set it up before 2019. Okay, you don't have to file. It may be a sign that you should dissolve the dumb thing anyway. If you set it up before 2019 and you haven't used it at all in five years, let's dissolve it. Hopefully you're not paying state filing fees. Dissolve it. But you are not required to do a BOI report on a inactive entity that you set up before 2019. If you have more than 25 employees and $5 million in revenue, you're exempt. They already know who you are. Other than that, the exemptions are for big banks, insurance companies. Big companies. Guys, we've all got to file this. Get it done. It's back. All right. I might have to sing an Eminem song. And it's back. Okay, go ahead. Next.

All right, we have a fun one here. There's a woman here who says that she's trying to show her husband how changing their manufacturing business from an LLC to an S corp is better. The husband argues that it needs to stay an LLC for liability protection.

Oh, my gosh. I love this. Oh, my gosh. This is. We're going to the whiteboard now. See, this is. Guys, this is saving freaking taxes. If you're still here, let's get to saving taxes. So hopefully her husband's here with her. Can you. She respond and go, her husband's here. I'd love to hear. Okay, here's the. This is a strategy. And, you know, I, you know, sir, would you rather be happy or. Right, you know, you know, let's go with happy on this one, because I hate to tell you, you're probably wrong. So wife says, here's our trifecta. And you've got an operational business. In fact, they're doing. See, we're going to put our assets over here. This is where we put our rental properties. And we might have an LLC over here. Yada yada. Boy, that's ugly. Let's clean that up. Okay. All right, let's clean that up just a little bit. So we have rental properties over here in an LLC. Maybe our IRAs over here or 401K. Okay, we're not going to worry about that. She says, we have manufacturing, and it's going into an llc. And the wife's like, no, no, no, we need to convert it to an S corp and we're going to save taxes. Husband says, oh, no, no, no, no. We need asset protection because if anything goes wrong, we don't want to get sued. Well, I hate to tell you, sir, I am so sorry. And I've written books on this. You can go to Amazon and type in March J. Cole and get my book. And I stand behind it. I give you the cases of my books. The S corp gives you the same asset protection. If this is an inc, it gives you the same asset protection as an llc. Some argue better. There's a school of thought out there that it's better because they've been around longer, whatever, but you get the same protection from a lawsuit. Number two, if we take this LLC and convert it to an S corp, you're still an llc. You're still an llc, nothing changed. You get the same asset protection. I'll just say, oh, your LLC is in the state of Michigan, okay? It still is. The ein doesn't change or anything. Now here's why your wife is saying this is the way to go. Okay, so let's assume, and I'll do this quick, let's assume you're bringing in, if you're doing manufacturing, you're probably making a little bit of money. You know this is a big deal. So let's bring in 500 grand. 500 grand, same as the apple. We're going to put 500 grand in your LLC, 500 grand in your S corp, and then let's say you have 300 grand in write offs. You got to pay employees. You've got equipment, machinery, supplies, materials, cost of goods sold. Just work with me and you're gonna make 200 grand. Okay? That's your profit. So see everybody, 500 in, 300 out, you net 200 grand. Okay? Now here's the tax for this couple in the LLC. 15.3% right off the top. Now it's actually up to the first 180 grand and then it's one point or then it's 2.38, whatever. I've got a table right here in my bag down here. But you're going to be looking at about, I'd say $27,000 would be my guess in self employment tax. That's what you'd be paying. Then you're going to pay state and federal probably 5 to 10% here and then at this level 10 to 20% there. It's gonna get ugly. So that's your LLC. What your wife is saying is, hey, Honey, honey, look at this. Let's go to an S corp and what we're gonna do is take a salary. Oop, I wanna undo that. We're gonna take a salary here. And the salary, in fact I'll do this in red, is going to be 75 grand. Now you accounts out there may be freaking out. Let me just say this real quick. In 25 years, I've never had the IRS audit any of my clients in the law firm or accounting firm with thousands of tax returns filed on reasonable comp. I teach continuing education on reasonable comp. I write articles on reasonable comp. I write books on reasonable comp. I have interviewed IRS agents in the service center of Chicago on S corporation's unreasonable comp. So when you start freaking out that I'm doing a third allocation to payroll to do 2/3 and K1s, chill out. I would argue you're far, far, far too conservative. And if you think, oh, the IRS is coming after, when I've been hearing that dumb argument for 15 years, sorry. Accountants get on board with a little aggressive stance on S corporations, it's okay. And what's the worst case scenario? I get a nasty letter and have to pay a little more F and I'm not going to have any liabilities. A tax preparer with a reasonable approach. Okay. And you don't need software. Don't go buy software to do this. Sorry, I had to digress everybody, because as soon As I suggest W2 of 75 grand, some accountant is freaking out. Okay? So that means. Now this is important, husband. Listen, you're going to make the same 200 grand, but we're going to take 75 and a W2 and then we're going to take 125 in what's called a K1 or pass through. So you have a 75 here, 25 here, you make the same 200 grand. You don't have to get. You don't you take the same draws. We're just going to put you on payroll on a 941 after the fact. Super easy. You're still going to pay the same federal and state taxes on the 200. Well, why in the hell do you do this? Because, and I'll go to the color blue here, you're paying 15.3% on the entire 200 grand. Here you're only paying the 15.3% on the 75. So I just saved 15.3% on, on $125,000. That's almost going to be at least 18 grand. So your wife wants to save you $18,000 in this example. People, dentists, doctors, engineers, lawyers, accountants, tax lawyers, me, realtors, brokers, loan officers, online marketers, influencers, manufacturers, restaurant owners. We're all S corporations. If you make more than 50 grand a year, your net, you're probably a candidate for this. So, my dear couple and the wife that brought this up and is showing this to her husband on YouTube, My dear sir, I bet you I know another factor. You've got your buddy you go golfing with as a CPA saying, oh, watch out, you got it. You can't do a reasonable comp thing like that and S Corps are going to get you audited. I want to say a word that BS stands for, but I'm not going to say it. Kids might be present. Your accountant is wrong. And you get also get the same asset protection. Now, the other day I took some heat on Twitter because someone was like, oh my gosh, Mark, you make it sound so affordable and simple. When you convert to an S corp, there are a few costs. Let's look at the costs of doing this. First, you've got to convert to an S Corp. Oh, my God. Yeah, I know. It's super expensive. We charge $200. I know, I know. Call it highway robbery. $200 to make the conversion once. Okay, now you've got to do an S corp tax return. Now keep in mind, you're not going to do an LLC schedule C tax return. So you've got a cost gone, but you have a cost now of an S corp tax return. An S corp tax return is an 1120s. It's going to cost more than a schedule C. Now, with a manufacturing business, schedule C, you're probably paying 1,000 bucks for that tax return. And when you do 1,120s, you're probably going to pay a couple thousand for that. Now, if someone tells me that you're paying 4, 5, 6, $10,000 for an 1120s tax return, I have filed thousands of S corp tax returns, and the only time it's costing that much is if they have so many transactions it takes that much work to do it. Well, guess what? It's going to be costing you that much for the LLC tax return. The S corp tax return is not much more than what you're already paying for a tax return. Number three, you've got to do payroll. If you're a solo entrepreneur, your payroll is going to probably be around, I'd say 1,000 bucks a year for payroll costs, 200 bucks a quarter. 250 bucks a quarter W2 at the end of the year. So the moral of the story is I'm going to save $18,000, but it might cost me an extra two, maybe 2,500. Okay, so let's do the math. Help me out, everybody. This is hard. This is hard. Harder than fifth grade math. Spend $2,500 and convert. Save 18,000. Which one is better? Okay, let me get this straight. Okay, this is hard, this is hard. Spend 2,500, save 18. In this example, I'm gonna go with. I'm gonna go with doing it. I think it makes sense. It's hard math. It's close call, but I think it works. If that difference is all kidding aside, a couple thousand, sign me up. It doesn't have to be a difference of 16 or 15 grand. We help clients do this every day all over America. And we have never, ever had a client audited for taking too low of a salary because we're careful. All right, I'm gonna do one last easy question. You got anything, Dana? You like?

I was just gonna say that she did say that he was not there, but she is recording it.

Okay, good, good.

And she also pointed out, and anybody on Instagram who's watching this, this is live streamed on YouTube as well, where you can always go back and watch it. Whereas Instagram, it's. It's a little bit cropped. So if you wanna show your husband that clip from YouTube, that would probably be a little bit easier. Alrighty. Let's see. I was very invested in that, so quite as much. But let's see.

I know my studio producer here is an entrepreneur himself. He and his wife, and he does freelancing, and he's on that border between an LLC and an S corporation. This is very common every Realtor, broker, dentist, again, restaurant owner, food truck owner. This is such a common strategy and a transition many millions of business owners make every year. So one last question.

Okay, we have one here. It's hopefully an easy one. It says, I understand that tax mechanisms are different in C Corp rather than S Corp elections, but is there any more safety in a C Corp in separating owners from the business?

No. Sorry, did I say it too fast? Should I look like I was at. I was thinking about it.

You have to pretend to think for a minute.

I got to think. Okay. Is a C Corp going to give you more protection in this situation? For owners in a business? If I'm a C Corp versus an S corp, is this where I play? Like I'm thinking? Okay. Oh, you know what? I'll pull out my crystal ball here. No, people. C corporations are so bad for the small business owner 99% of the time. In fact, I'd say 999% of the time. C corporations do not save taxes for small business owners, and they don't give you additional asset protection at all. In fact, when you form a corporation, let's say you go form a corporation in the state of California, Texas, Florida, New York. I just covered about a third of our country in four states. You go form a corporation, okay? I got my protection, I got partners. I'm so excited. I got my corporate veil, I got my corporate book, I got my minutes, my bylaws. Whoo. You've got asset protection. God bless you. Well, I'm a C Corp, okay? The state doesn't care. Oh, I'm an S corporation. The Secretary of State doesn't even know. They don't care. It's an IRS designation. A C Corp or an S Corp is what the IRS cares about. The Secretary of State of New York, Florida, California, or Texas does not care if you're a C or an S Corp. Now, the Franchise Tax Board of California wants to tax you differently, but your asset protection is the freaking same. And guess what? That goes for an LLC as well. So choosing that right entity is so important. If you are not sure if you need to get your boi done, if you want to get a plan where you bring the whole thing together, I've got a team of tax lawyers. We meet with clients every day on Zoom. We're affordable. We love small Business America. We don't want to burn a bridge with you. We want to build a relationship. We want to save you 10 times in tax. Whatever it costs to get a plan with us, it could be a couple grand. You get a new entity, you get an estate plan. It could be 2000 or 3000. What do you need? Call. Just talk to one of our new client administrators for free. And just say, hey, I need a tax review. I need an asset protection review. I need a plan, and I want to make sure it pays off. Give us a call. Contact information is down below. But I am not going anywhere. I will be here next week live, two times. We're going to do a news update on Thursday. We're going to talk about a cool strategy on. No, on Thursday is our news update. On Tuesday. I'm going to cover a cool strategy. But, people, please don't give up. Calm down. File your taxes, get your reports done. Worry about your own consumer price index. Worry about your own debt load. Worry about your own inflation. I can't control what's going on in Washington, nor do I want to going to worry about Mark Kohler World and my own checkbook and my own costs and savings. Thanks everybody for being here. Please give me a like a thumbs up hit the bell icon. Subscribe Share it with your friends or family members. I want to help you live your American dream and give you a straight, honest answer whenever I go live. Thank you so much.