The New Dining Write-Off and Q&A | Mark J Kohler LIVE |

Entrepreneur, Facebook, Mark Kohler, Facebook and YouTube. This is an opportunity for me to talk with all of you Main street business owners around the country and help give you tax, legal and business advice. I'm a CPA attorney, best selling author, surfer. Just trying to be an all around good guy. That's all I'm doing. Just here with you. I've got my rock star. It's a late afternoon, it's been a long week. Trying to hold it all together. So we're going to talk about one of the coolest, newest write offs that just came out in the new legislation passed by Congress and signed by Donald Trump with a lot of anticipation and fanfare. This is a pretty cool freaking write off. It's the dining expense. I'll explain more in a moment. I also want to be here to answer your questions on any small business, tax or legal matter. Now, it's snowing out here, so I went with the beanie today. Please don't let it be a reflection of my intellectual capacity. Maybe the warmer my head is, the smarter I am. I'm trying to shoot for that. We'll see. But I got the whiteboard up if we need it. And I've got my team over here. Whitney and Allison are gonna be throwing me questions. I've got my producer, Corey, who's amazing. Cory White, international videographer, HBO Oscar nominee. No, not really, but maybe someday. Okay, well, I like to keep it real and keep it fun. Now, let me explain this dining write off and then we'll just jump into Q and A. Maybe we'll do for half hour, 45 minutes. I do this every Thursday through my social media channels. Am I also on Instagram? Is that what I'm doing? My Instagram followers. Welcome. Glad you're here. First, as small business owners, one of our write offs that a lot of clients don't take advantage of is dining. Dining is a great write off. You go out and talk business with someone, you typically get to write down all the food, the tip, the bar tab, and then you cut it in half. At the end of the year, you got a write off because the IRS said you had to eat anyway. Then you go out and you're traveling. Maybe you're going to a town 30 miles away, 50 miles away. It just has to be outside of your normal commute. And you pull into Wendy's or Carl's Jr. And you get a sandwich write off. You write down 100%. And at the end of the year, the IRS cuts it in half. 50%. Maybe you have a Staff meeting. You have some food brought into the office. Well, it's. As of the tax cuts and Jobs act two years ago, it's all, it's now 50%. But under this new legislation, because under Covid, all of the restaurants and the entire food industry has been hammered. Grocery stores are doing great because everybody's stockpiling and eating at home. But restaurants have taken a beating. So Congress said, how can we help stimulate the economy and help the restaurant industry? Someone had a bright idea. Let's give business owners, you and me, 100% write off. Whenever we go out to eat or we do takeout or have catering or any sort of prepared food from a restaurant and bring it to our office. 100% write off for 2021 and 2022 for the next two years, we get 100% write off for dining. This is huge. This has never been there ever in my lifetime, in 50 years. Well, I know some of you think I look like I'm 30, but in 50 years, there's never been a killer write off like this for dining. 100% write off dining. The bar tab, the tip, it's all there you got. You have to have a conversation with someone talking about business, keep good records. Or if you're traveling for business by yourself, that's cool, you're going somewhere for a conference or going to meet a client, whatever. 100% write off. So big deal. It's pretty straightforward, pretty easy. Now, I'll say this. A lot of people are asking, well, what happens if I go to the grocery store and I get a deli sandwich? I went to a grocery store. It's not really a restaurant, it's the deli. Think you're okay? It's prepared food. I think we're going to find that. That will be the distinction. So if it's prepared for consumption at the office or with a client meeting, I can write it off. But if I just go to the grocery store and buy, I don't know, gosh, food and make it for the office, I don't think you're going to get 100% write off. We're trying to stimulate the restaurant industry. So all, all of you, if you haven't signed up for my newsletter is free. I've been doing it for over 12 years. I've got a great team, a law firm, an accounting firm, a trust company. We help clients around the country. Corey, is my whiteboard showing? Can I play on there? Let me just say if you want to go over to my website, ww.kkoslawyers.com or markjkohler.com you can go over there MarkJ. You can get over there and sign up for my newsletter for free And I have an ebook, the top 10 mistakes that small Business Owners make and it's free and I would love you to use it now. Corey, I am trying to see questions that are posted here. If you can make it any larger and scroll back up to the top, I'll do the best I can. Alison has already emailed me a few questions that came in before the broadcast. Let me open a couple of these up now. Matt Drake asked me a freaking long question. But Matt, it is a good question so I'm going to give you first dibs on our time here today. Love your videos. You've introduced me to a lot of great concepts. I'm a former Marine now police officer in Vegas and my wife and I started a small business online in our garage three years ago. We're netting about 20 grand a year as a 51, 49% owned sole proprietor. First of all Matt, you cannot be a sole proprietor and have it owned 5,149. That means you have a partnership and if you go, well we're spouses, we're married, doesn't matter one of you own it on the tax return if it's a sole proprietor or you're going to be filing a partnership tax return. So just FYI, he says I want to hire my 11 year old daughter for the first time as my hire. I have your books and watched your videos and I want to hire my kid in the business. Love it. So even if you're a partnership and it's owned by mom and dad, you can pay your kids under age 18 right out of the 1065 or on a sole proprietorship and what I've taught everybody and Matt, this is not going to change based on your question. If you have children under age 18 and you want to pay your kids for working in the business, make it another expense. Other expense I oftentimes put down outside labor. You are not required to issue a W2 or do the formal paycheck procedures. Now Matt, I'm going to tell you why in a moment and they have earned income, they can now go open an ira. You do not have to withhold FICA or Sudafuda Workers comp. None of that because they are your child under age 18 so there's no F word FICA, no Social Security and Medicare. So you're good to go. Now that's what I've been teaching for years. That's what CPAs around the country do. But what did Matt do? As a good former Marine and police officer? He went to the IRS website. He went to the den of iniquity himself to try to get an answer here. He did not trust me. So he said. The IRS website says, Mark, payment for services of a child are subject to income tax withholding regardless of age. Well, that's right. That's right. They are subject to withholding. But there's no withholding for FICA if they're your child under age 18. And there's no withholding for income tax because if their standard deduction, which is this year, $12,550. So if you pay your kid less than 12,550, Matt. There is no withholding because they have a standard deduction for earned income. So, Matt, what is the penalty for not issuing them a W2? It's a percentage of the required withholding. There is no required withholding because their standard deduction is 12,550. FICA. There's no withholding for FICA because they're your kids and they'll have plenty of time to pay into the Social Security system in their lifetime. You don't need to pay it while they're under age 18. So, Matt, this is where the IRS is tricky. They're covering their butt. The IRS is saying you've got to withhold and do a W2 of any child under age 18 if they're subject to it. So, Matt, you're good. Don't stress. Then he says to withhold income tax, wouldn't you have to do a W2? Yes. Now, let me tell everybody here. I have some clients up in Seattle, they paid their kid almost $40,000 in 2019 last year. 2019. We were part of some payroll for him because he was a licensed realtor at age 17. Loved it. He made more than 40 grand. Now, did he have to pay taxes? Yes. Did he have some withholding? Yes. Did we would do a W2? Yes. But there was no FICA withholding and we did not do a W2 out of their corporation. We did it out of a sole proprietorship. So, Matt, if you pay your kid high enough, you got to do this. But if you pay him low enough, there's no requirement. So that's okay. I'm going to leave it alone now. Finally, he said also recommended you call them outside labor but have a detailed job description under the IRS control test. Wouldn't this make him an employee and blah, blah Blah. Yes, but as an employee of your own children under age 18 and a sole proprietorship, there's no FICA. And if their earned income is under 12,550, there's no withholding. So, yes, it's controlled, but they're not required. You're not required to do W2. It's just this weird area. So, Matt, don't stress. You're good. We got you. If we do your tax return and you get audited and there's a penalty, we pay the bill. That's how we stand behind this. I've never had a client audited in 20 years for paying their kids properly. No FICA, no withholding, no penalties. Matt, you're good. All right, next question. Do you want to throw one to me or should I just look at my email here? I'm just taking my Advil here. Oh, my back's killing me. I was in the gym. I'm trying to look young and fit, and I lifted this 45 pound plate, guys, and I twisted. Oh, not a good move.

All right, there were a couple questions regarding the one you just talked about.

Okay, they said, I'm going to repeat this, everybody.

How old do they have to be before you start paying them? And then E. Blackburn said, can Mark explain how things work after they turn 18?

Okay, so we've got two questions. First, how old does a child have to be to start getting paid out of the business? Now, Matt started to pay. He wants to start paying his kid, his daughter, at age 11. Great. I'll come back to that. And the second question was, what happens when my kids turn 18? How do I deal with it? Now, let's. Is the whiteboard up, Cory? Okay, now I'm going to try to read this board up here. And Corey, I'll have you scan back up to the top here in a moment. Oh, so those the first questions. Okay, now, everybody here, if you've read my books, you can get my book, the Tax and legal playbook, second edition on Amazon or my website for under 20 bucks. I've got a whole chapter on paying your family members. These questions, I answer there in writing and I stand behind it. So if you want to read that, now, here's what I call the trifecta. If any of you have a sole proprietorship like Matt Drake said he had, if I'm going to pay my kids, I'm just going to call it outside labor. And if they're under age 18, I'm just going to. And they're under 12,550 there's no W2. No withholding, no FICA. All right. You feeling it, Matt? There you go. Now, if I'm going to pay kids 18 and over, I'm going to give them a 1099 because they're going to be on my board of directors, board of advisors. Now, if they act like and look like and work like an employee like everyone else, then I'm going to do a W2. You're darn right. I don't want to get in trouble. Under the control test. If they're using my stuff and they act like an employee and they're 18 or over, I'm going to do a W2. But if I can get away with it, I want to call them a subcontractor. My kids at college when they were acting As a subcontractor, I 1099 them. My amazing daughter Allison, who's now working in my office like all the rest of the employees. She. She gets a W too. I play by the rules. Now, when can I start paying these kids under age 18? I put kids on payroll when they're about 6 years old. I know that sounds crazy, but the kids that are 6 years old can start vacuuming the office, shredding paper, emptying the trash, stuffing envelopes, going to the rental property and wiping down counters and sweeping and mopping and mowing lawns. Now, maybe a 6 year old shouldn't be behind a mower, but anyway, they can be pulling weeds. So I get kids on payroll as soon as I can afford to do it. Now, I may only pay a six year old $1,000, but it's $1,000 that could go into a Roth IRA. So I get kids. I've had clients that have come to me and said, my kid's five years old and he goes out to the job site with me and he picks up nails around the construction yard and picks up garbage and he helps me every day on my job site. And I was like, pay them what you want. It's up to you. This is your tax return. I'm just preparing it. I'm going to warn you. And if I think it's a little aggressive, we're not going to sign it. We're going to reign you in. But guys, let's not leave money on the table, okay? I'm going to. Oh, and again, why I did this diagram. For those of you that have an S Corp, you pay an outside management fee to a sole prop. And that's where I pay. The kids are under age 18. I diagram this in my workbook. I've got videos on YouTube and I have a tax and legal library@markjkohler.com it's three or four hundred bucks. And I've got 60 videos. You can watch Lifetime Access. And I have a whole video on paying family. You would love it. Okay, I'm going to go through some of these questions. Adrian says, great news. I'm getting some thumbs up. Some kind words from Rick. Thank you so much. Oh, what was at the top? Corey, go back up. This was from Stephanie. I thought with travel food, it was always 100%. I didn't know that there was 50%, but when you were traveling, it was 100%. No, Stephanie. Now, everybody listen. This is important, okay? We're going to do old rule. And this is for your tax return. When you file it for 2020, then for 2021, we'll do new rule, okay? Last year when I traveled for business, I went to a conference. I met with a customer, a client. I went and checked on my rental property. Whatever the case may have been, the travel was 100% write off when I was traveling for business. That's airfare, hotel, Uber, taxi, tolls, subway, whatever. That's 100%. But, Stephanie, when I went out for lunch, the food, even though I was traveling for business, was still 50%. That's the rule. There's no. That's. There's no if, ands, or buts. That's legit. Under the new rule, Travel is still 100% for business. And when I'm out getting food, while I'm traveling for business, now that food is 100%. So, Stephanie, we're in the money for 2021 and 2022. Ruben says keep good records. Totally agree. Robin says, by the way, I cannot see far away with these glasses. I've got the wrong one. Sorry, everybody. Robin says keep good records. Yes, I agree. Over the Road Truckers. Hundred percent. Matthew, there's different rules for over the Road Truckers. I'm sorry. And I'm just not going to go into it today. It's tricky. I'm going to write that down for a good article, though. Over the Road Truckers, Dining and Travel. And over the Road Truckers. You might be lucky on 100%. I actually haven't looked at it closely. Okay. Dre says. Hey, Mark. Cooked shrimp. I like it. Keep going. Shared with my accountant. Thank you. Has to be carry out or dine in. 100%. Carry out or dine in. Working lunch. Woo. The three martini lunch. Love it. Janet Coronalyte Love the write offs. I'm with you. Great news, Jay. Save the receipt and always use my business card. Fair enough. Write it down. Who doesn't like write offs? I'm with you. Have a question from Robux. I just sold through owner financing a piece of land. Yay. What do I need to do as far as taxes for me or the buyer? Okay, any of you that sell a piece of property, real property, seller financing, that's called an installment loan. So you're going to receive money over time. It's reported on a form called an installment sale. You want to talk to your accountant, make sure that they understand what you bought it for, what you sold it for. It's going to typically go on a schedule D, as in David, that's a capital gain either short term or long term. I don't know how long you held the land, but the installment sale allows you to collect the gain over time. So you might get capital gain treatment where you pay the capital gain over time and interest over time as you receive the installment loan. So talk to your accountant. That's how it works. Installment sales are a great deal. All right, Corey. Whoa, whoa, slow down. Okay, I've got. What's the code for the dining write off? Well, if you want to know the code, it's in the new bill that was just signed by Donald Trump and passed by Congress in the last two weeks. It's called the COVID relief bill. There's all sorts of names for different portions of it. It's 5,500 pages. So Van Oteri will travel Brown. Just go download the new bill. It's in there. Jude says hello, Mark and team. Thanks, Jud. Tampa, Florida. I have four employees I want to add medical benefits to myself. And the employees for my medical coverage are both the employer employee cost for insurance tax deductible or only the employer portion of it. That's from Khalid, Khalid Khaled. Whatever you pay for as an employer, for your health insurance premiums and whatever portion you pay for the employees, that's 100% write off. 100%. Any insurance, health insurance premiums for yourself and whatever you pay for for your employees. Now, I'm going to pick on Whitney here in the room. If I cover Whitney's health insurance, I get a write off. But if I don't cover her husband's or boyfriend's or her mom's, I don't get a write off for that. Whitney may say, I'm going to withhold it out of my paycheck and pay for them. That's her deal. I didn't pay for it, she did. So I only get the write off for the health insurance premiums I pay for Whitney and myself 100%. Okay, Saludu. I have. If you have two businesses that are S Corps, one professional company, lawyer, doctor, accounting firm and one regular business. Okay, if you have that, what's the question then? Oh, it's down two more. Do I have to take a W2 from both of them? One S Corp has substantial quarter two wages. Saludu. This is a great question. If you own Both S Corps 100%, yes. You would have to take a W2 out of both of them. If they're both generating profit and you're taking draws. What I prefer everybody out there. What I do in my life. Salutu. I have 1s corp. I do. I only have 1s corp in my life. Mark J. Cole Polar Inc. It's out there. I'm marketing it. It's there now. If you want to know where my rental properties are, good luck. I'll use LLCs with indiscriminate names to own my rentals. See, so I'm using privacy. So this is my asset side of my business and I'm going to use LLC's over here for my rentals. But my Mark J. Kohler Inc. Saludo. I might have owned another S corp. I might have owned part of a law firm, llc. I might have owned part of an accounting firm. So you can have a professional S corp that owns a non professional S corp. But I only have to take one W2. That's what I do. So saludo. Get a consult with any of my tax lawyers in my firm. Just pay for an hour, get a review of what you've got structured. We might be able to save you some money because I don't want you to do two tax returns and two W2s. If I can get away with it, I want to do 1w2 coronalight. What a fun little handle there. Says I am looking into buying real estate residential. I'm in California. Should make an LLC before I buy to put the property in or do I just buy it under my name, Corona? Neither. No to both questions. Here's what I would do. Coronalight. First crack one open, get a line, put it in the top, sit back and listen to this. Okay, here's what you do. Corona. I don't know where you're going to buy your rentals. You live in California. Buying rentals in California can be a little precarious. Especially if you're in the Bay Area or Orange county or San Diego. You got to throw down a lot of cash to get something. Cash flow. Lot of times the ROI or the internal rate of return isn't there. A lot of my California clients buy rentals in the Midwest or other states where they can get better cash flow. When I lived in California, I bought rentals in Idaho and Utah. It was a better deal for me. But I didn't set up the LLC first because I didn't know where I was going to buy my rentals. Go out and make your offers now. When you get ready to close, the bank's going to probably have you close in your name. Then you're going to deed the property over to the llc. Now, people, do not worry about the due on sale clause. Do not worry about the bank coming down and knocking down your door. Oh my gosh, I'm sick of that. We have transferred thousands and thousands of deeds to an LLC after the client closes in their name due to Fannie Mae and Freddie Mac rules. Close in your name, be honest on your loan application, close on your loan, and then after closing, deed the property from your name into the llc. Totally. Okay. Most of these mortgages have a provision that says if you transfer the title into a trust or an LLC that you own 100%, there's no due on sale clause. Don't worry about it. So the answer is set up the LLC in the state where your rentals are going to be, but go ahead and get through closing in your own name. Then we'll set up the LLC and deed the property over at our office. We set up LLC's in all 50 states for $800. You get an hour with one of my tax attorneys and after closing you go to Brady. And Brady is in charge of our deed transfer department. And Brady will transfer the deed from your name into your LLC. This is what we've been doing for 20 years. Folks will take care of you. Get to my website, kkos lawyers if you need some help, but this is not an infomercial. I'm just telling you what our prices are. You get out and shop around. But be careful of someone trying to set up your entity in freaking Nevada or Delaware and someone saying you got to set it up in California first. They're going to rip you off. Be careful. Saludu From Dallas. Your questions kind of get split up between multiple messages. Saludo. I'm sorry about that. Chris says from Indiana. Can an S Corp own an LLC and pay the LLC taxes through the S Corp. Yes, but Kris, LLCs don't have taxes. It's a pass through entity. Now there might be franchise taxes in the state of California or Texas or Tennessee. I get that. But most states, and certainly under the federal government, you're going to have an LLC that doesn't pay taxes. Let me show this right here. Kris, you're going to like this. I'm not going to lie to you. My life's an open book. We have offices in Arizona, Idaho, California and Utah. My S corp is registered to do business in all those states. My S corp owns part of an llc. Kris. Great. If Kris, you call me up and say, Mark, I've been opening up a restaurant down the street, all right? Am I going to buy into his restaurant? No. My S corp is. Does my LLC pay taxes? No. LLCs do not save taxes. LLCs do not pay taxes. They file a 1065 tax return. And if Kris and I go into business together, I'll probably take 60% and Kris gets 40%. Is that okay? Kris? I'm just joking. All right, but if I take 50%, we're 50. 50. Damn it. Alright, so Kris, my 50% is going to go into my S corp and salutu. This is where I take my W2. So my S Corp owns 50% of an LLC and Kris S Corp owns the other 50%. That's how I do it. Very straightforward, very common. So Kris, you're good. Alright, do you have a question for me, Ali, or should I go onto your email? Okay everybody, you hang tight. Corey, Is this the YouTube feed or the Facebook feed? Okay, so Corey's giving me the feed up here. I'm going to jump over here to this email. This is from Juan. This looks like a sales pitch for something else than a question for the show. Am I right? Okay, I'm going to go over here. Matt, question. Okay, here's a question. Can a W2 person forced to work from home due to the COVID claim expenses at all? No. If you're working at home with a W2, that's an unreimbursed employee expense. They no longer exist on a tax return. So I hate to say Ramey or Rami. No write off. I'm sorry, expenses like Internet, home, office? Nope. But Rami did said thanks stud. Well, I appreciate the little shout out. I. I try to be a stud muffin, but no. Okay, let's see. This is G. Says I have a $45,000 vehicle deduction for 2020. Good time to chunk 45 grand from traditional to Roth for no tax holding, it all equal. Everybody hear me out. So G says I'm writing off my vehicle for 45 grand. Now, I don't know the details of the actual deduction here. Is that validation? What Type of vehicle? 45 grand. Sounds like an SUV or a truck. Bonus depreciation looks like a great write off. So G's saying, I've got this extra $45,000 write off. I'm going to convert 45 grand from my traditional IRA to a Roth IRA in the same year. So I've got to claim $45,000 of income because I did a Roth conversion. I call that chunking. I love it. Get over to YouTube people and write Mark Kohler, Roth IRA. I got four or five freaking awesome videos over there, you'd love it. And G is saying if I convert from traditional to Roth, I've got an income of 45,000. But over here in my business, I've got a vehicle deduction of 45 grand. Will this deduction in a sense offset the income over here? Yes, but I don't know what else is going through your business, G, but theoretically it's all going to wash out on your 1040. So you've got a $45,000 write off here and you've got $45,000 of gain here and they would offset on your 1040 in effect. But I don't know all the details of your situation. Okay, what was the other question Ali

one that says. S Corp or llc?

Someone says S Corp or LLC everybody where in the long run I want to use an S Corp for ordinary income. So that's if I'm getting a 1099. I'm doing sales, I'm doing marketing, I have a restaurant, I'm an accountant, an engineer, a landscaper, a plumber. I sell crap on ebay, I'm an affiliate, I sell stuff on Etsy, Craigslist. When you have ordinary income, you're going to pay self employment tax on everything. If you're an llc, it's not going to save you taxes. So you've got to be careful of self employment tax. I've got a video on YouTube called When to convert my LLC to S Corp. I do a rant, I think it's like got 50,000 views. Get over there and watch it. It's about a 30, 40 minute video. You'd love it. But I'm going to convert the LLC to S Corp and I'm okay. But if I just have a plain old sole prop or an llc self employment tax is going to kick my can. So I want to get over to an S Corp. Now, if you have rental properties, I'm never going to use an S Corp for rentals. So I want to use LLCs for rentals, and I want to use S Corps for operations. That's the general rule. But I can start out as an LLC and convert to an S corp when the time's right. So that sound okay? All right. Someone says, this is RLS strategy, or RL Strategy says, may you please explain using someone's credit to purchase a rental, both lending and equity. Oh, everybody, I love this. Okay, now, Faith, I'm coming back to your question. Gary, I'm coming to you. Marlene, Richard, I'm coming to you. Okay, so let's say I'm Corey. Corey is my producer, director and lighting guy, gaffer. He does it all. Look at my cool background that Corey did for me. Doesn't this look cool? Six panel screen, real wood. The guy's handy. So Corey calls me up and says, mark, I want to do a rental property. I go, okay, got any cash? Cory says, nope, I don't have any cash, but I got good credit. Okay. And he goes, I'm pretty handy, too. Look at what I did with your studio here. I go, okay, what do you got in mind? He goes, well, there's a cute little rental down the street for 150 grand. Cash flows about 500 bucks a month. He goes, you got any cash, Mark? I go, okay, maybe I can take out a little money here out of the business. And I'm going to take 20 grand out of my S Corp as a draw. And Corey says, let's form an LLC and let's go buy this little rental for 150 grand. Okay, I'm interested. Right. So what's the down payment on this thing? Well, if I do 10% down, 10% down, that would be 15 grand. So let's say we find a lender. Maybe we're going to go for an FHA loan under Corey's credit, under Corey's name. So Corey goes out and applies for the loan, and we close with $15,000 down and $135,000 mortgage. And then right after closing, we deed it into our LLC. And in this deal, I put down the 20 grand, 15 for the down payment and 5 maybe for some minor repairs. And Corey's going to do all the work. He's going to put down his credit. Since I love Corey, let's say we go 50, 50. So Corey owns 50% with his work and credit. And I own 50% with my $20,000. Now, the bank is not going to be thrilled if they find out Corey deeded it to an LLC that he only owns 50%. So we might disguise it with the land trust or be a little careful with with that. Am I doing anything illegal? No. But the bank, if they found out, they might want to call the loan due. But if we're making our mortgage payment, trust me, they're not going to care. And they've already sold your loan nine times over to some junk bond or some mutual fund in Chicago or New York. So we're making our mortgage payment, we transfer the title to an LLC, and now Corey and I own this 50% each. Very, very common. A lot of people will use a land trust to hold title and the beneficial interest is the llc. Then the bank doesn't see as much movement on the deal. But that's what a lot of people do with the subject to land trust strategy. No one's trying to do anything illegal. We're going to pay the mortgage payment. We want to always pay it on time. And I'm going to do a deal where Corey and I own this. 50. 50. Am I going to own this with my S Corp? No. I'm going to own my 50% share in my trust, and Corey's going to own his 50% in his trust. See, my S Corp does business. My LLC owns the rental and I own it. 5050 with Cory. So RL strategy. It's very common. We do them at our office all day long. Okay. Alex from Miami signed up for a solo 401k with you guys and is getting ready to buy a property with their 401k. I know I can't use it for personal use. True. But I happen to find a property that I wouldn't mind making my retirement home someday. Can I move into it after I hit the retirement age? Yes. Now, let me tell you, technically. What's their first name? Corey? Alex. Alex. So listen to this. We've got our left side, right side. Maybe Alex has a sole proprietor. Maybe Alex has an S corp. I do not care. We're not worried about that side over here. Maybe Alex has an LLC with a rental over in Miami. And Alex funded a 401K and the 401K created a Florida LLC. He's going to go buy a rental. Love it. We help clients do that all day long. Go over to YouTube and type Kohler 401k rental. I got sweet videos there. People we can set up a 401k for you for around 500 bucks or a thousand bucks if you go with the full service. You get an hour with one of my tax attorneys designing it for you. Email WhitneyQs lawyers and she'll hook you up. All right, now Alex is out there with an LLC with a rental. Now, can Alex go work on that rental? Nope. Can Alex go and stay in that rental? Nope, because he doesn't own it. His 401k owns it. Now, if Alex has an LLC over here with his trust and he wants to go stay in that rental, can he do it? Yep. Can he go work on the rental? Yep. Because he owns it, it's not a prohibited transaction. But when his IRA or 401k owns the LLC, he can't go stay in there. He can't go work on it. But he said, when I turn 60, I want to turn it into my retirement vacation home, and I want to go live in it when he does that. Alex. I guess it could be Alex. A girl. Alex is an andronomous name. So when Alex moves into this rental now, makes it his or her home, isn't that a distribution out of his 401k? Yes. Now, if it's a Roth 401k, the day you move into it as a rental and deed it to yourself, bink. No tax because It's a Roth 401K. But if it's a traditional 401K, the day you move into it at Alex and the day you deed it to yourself. So you're going to deed it to yourself now you own it, not your 401k, that's a distribution. And based on the value of the home, you would have a taxable distribution from your 401k. But you're 60 years old, so there's no penalty. You pay some tax based on the value. But that's cool, Alex. We see people do it all the time. Now. Everybody listen. The way to do it is, what if during the next five to 10 years, Alex did a little conversion and he converted this to Roth just a little bit every year, and at the end of 10 years, it's a Roth 401k when he moves into it or Alex moves into it, him or her into his home tax free because it's a Roth and all along he or she was chunking it into a Roth for five or 10 years, no tax, when he moves in. Pretty cool. I love it. Okay, Gary says Albuquerque, can I hire my nephew versus kid? Yes. But when you Hire your nephew no matter what age, you're going to have to do a W2 or a 1099. Read my chapter. And hiring kids or family members. It's actually hiring family members. Marlene says is there a 50 mile radius to deal with on this new dining write off for 2021 and 2022? First, Marlene, it's for new dining expenses in 2021 and 2022, not last year. Next, there's no mile radius. What the Supreme Court of the United States has said when a business owner goes out of their normal commute to travel for business, they can write off dining, don't even have to talk business because they're outside of a normal commute and they couldn't pack a lunch. So Marlene, if you live in LA and you're going to Long beach and you never go to Long beach, that may not be 50 miles away, but traffic sucks and it might feel like 50 miles you're traveling for business. You can go to In n Out Burger or in Long beach and write it off. You might live in Kansas City, Kansas side and you never go to the Missouri side. But you have to go over there to meet a client outside of a normal commute, travel, write off, dining write off. Richard says if you're a 1099 worker and haven't filed 2020 taxes, can you re establish your LLC and refund all your 2020 income through the reopened corporation? Okay, now Richard used a lot of words there that I don't know if I would agree with or make sense of. Richard, if you're a 1099 worker in 2020 and you didn't have an LLC in 2020, you're going to just report it through a sole prop. That's number one. So anybody out there, let's say you started driving Uber Grubhub DoorDash or Richard's an engineer and he got a 1099 working from home, sole proprietor schedule C. Now let's ask Richard if Richard went out and set up an LLC or re established it. That's not a corporation, it's an llc, limited liability company. So be careful throwing out the corporation word Richard. Now if Richard goes out and reestablishes his llc, can he backdate it? Usually not. The state of wherever Richard lives is not going to say you can't backdate your llc. It was defunct. You can't go set one up retroactively. So probably not going to be able to re establish the LLC for your 1099. But let me ask everybody, here's the quiz okay, now Corey, I want you to find out who says yes first in the chat. I mean, says the right answer in the chat. If Richard ran his 1099 through an LLC, let's say he could go do that, would it save taxes? Would an LLC for Richard save him taxes? Corey, who is the first correct answer? Anybody in chat. Anybody on Instagram. What is the correct answer for Richard? I'm going to give away a book. I'm going to give away my tax and legal playbook. Mom's Money Habits said no. That is right. Mom's Money Habits. You just want a free tax and legal playbook by Marc J. Kohler. Would an LLC save Richard any money? No. Mom's Many Habits. You rock. And Joyce Rob's also got at the exact same time. Oh, Joyce Robbs exact same time on the time clock. Joyce Rob and Mom's Money Habits. You both get a book. Ali, will you make sure they get a book? You have to email Allison A L L I S o n@markjcohler.com Allisonarkjkohler.com Mom's money habits and Joey Joy Throb. Joyce Rob. You guys both want a book? Email Allison Mom's Money Habits and Joyce Rob. Okay, now here's the answer. Richard. An LLC does not save taxes. I say that every time I speak on stage or on a podcast or on a live webinar like this. LLC are for asset protection. Now here's the question Richard might be asking. If I was able to go back and re establish the LLC and convert it into an S Corp retroactively and I ran my 1099 through there, could I maybe save some taxes? Yes. Okay, everybody, did you feel that? That's a deep answer. If I could take Richard and get him into an S Corp retroactively through an LLC conversion that he had already set up. For any of you out there that had an LLC in 2020 with a 1099 and it was in effect for the whole year, I might be able to convert it into an S Corp retroactively, kick out a W2 in the next three weeks and save you taxes. But the LLC does not save taxes. The S election would save you taxes with the W2K1 split. Richard, read my chapter in the Tax and Legal Playbook on S corporations. Go to my YouTube channel, go to my website and get my tax and legal library. I promise you it will save you thousands of dollars. Very affordable. And every year I shoot new videos and I will explain that. So everybody, good stuff. Joyce and Moms, whatever good Answers. Okay. Agent Orange. No, Agent Onega. Agent. Agent. I can't even read. Hey, Mark. I work day job, 50 day, 60 grand. And I have a side hustle making 12 to 15. What max, loan can I write off and live in Bronx, New York? Oh, what max can I write off? Is that what he's saying? Yeah. Okay. And it's Agent or Agent? Agent Omega. Agent Omega. Okay. Agent Omega is in Bronx, New York. Love it. I used to live on 108th street on Broadway. So, Agent, I was just a hop, skip and a jump from you. Love New York. Love the five boroughs. Do you know one in three Americans now have a side hustle? So Agent Omega is like many of you on this podcast. Now, let's look at this short term, long term. So Agent Omega has a sole proprietorship. And he said, or she said, I'm making 12, 15 grand in my side hustle. And I also have a day job. Perfect. Also, does Agent Omega have an IRA or a Roth? And also does Omega have a rental property maybe over in New Jersey? Let's just think about that, right? Isn't this cool, Agent Omega, there's four sections I went from my trifecta and I just blew it up. Here's my trust down here. And here are my before tax or no tax accounts. An IRA or a Roth over here. My rental properties, also owned by my trust. So I've got my assets, after tax over here. And I've got my before tax assets over here, my retirement accounts. Then I've got my day job, W2. And Agent Omega has the side hustle, people. I love this. Look at this. Four sources of income. That's awesome. I'm such a geek. I know. Can you believe your CPA is freaking out over here? This is what I love to see from clients. Agent Omega, I love it. Do you know some people go, mark, it's too risky to have a small business. I say it's too risky not to. Can you imagine a global pandemic where you might lose your job? I know that sounds crazy. Probably will never happen in our lifetimes. Wouldn't it be nice to have a side hustle on this side that I could rely on if I need to? Oh, now, Maggie, I'm coming to your questions, Mark. Hang tight. So, everybody, Agent Omega, I want you writing off everything you can. I want you writing off home, office, dining, computers, electronics, cell phones, auto, travel, computers, marketing, legal, accounting. I'm going to be able to bury that 15 grand like nothing. That 15 grand is going to be freaking tax free. Baby. Because agent Omega is going to have 15 grand worth of write offs. Kids, spouse, oh my gosh, tons of write offs. Then the W2 day job, then the retirement accounts, then the rental property. Agent Omega, you keep reading my books. I got my eight steps to start and grow your business. It's on Amazon. 99 bucks, 60 videos. A business plan, marketing plan. You'll love it. Can you go up, Corey, to the baggie? Maggie says, what about an s Corp? No, W2 for children. Maggie, go back and watch the part here. The S Corp pays a management fee to a sole proprietor. Then I pay the kids. Never, ever, ever give a W2 to kids under age 18. Read my chapter on paying family members. It's a great book. You can get it on audible and on Kindle tonight. Mark says, does the meal have to be purchased by. Okay, I got it. Mark says, does the meal. To get the 100% dining write off, does the meal have to be purchased by the business account to be able to be deducted as an expense? Technically, no. Let's say is my wallet out in the car. Okay, but let's say I had my wallet here. I would like to use my business debit card for the dining expense. But let's say I forgot it at home and I had my personal debit card and I went out and talked business with Corey after the program today, do I still get to write it off? Yes. Is it more of a pain in the butt because I have to book it because I wrote it for it with my personal account? Yes, but I still get to write it off. Mark. But it would be most efficient if I use a credit card or debit card from my business to write off the dining. That's what we want to do. If you purchase the meal with a personal funds, does it become a personal deduction? No, you would book it as a business expense. Now for you accountants out there, you do journal entry. You would debit the expense and credit a capital contribution. So I'm going to. I'm going to write it off, but I'm going to use a credit as a contribution to the business. Now you can do a reimbursement. You could give yourself the money and reimburse yourself, and now it's a write off. But it's just a journal entry and QuickBooks, so. And I hope I got my debit and credits right. Don't be mad at me. Your accountants out there. Do you have another question? Ali, Whitney, you got one. Okay, I'm going to stay on our feed here. Oh, you're looking at the feed too. Steven says Mark Steven in Utah just bought two homes for rentals. Love it. I think my wife qualifies for the 750 hours to be a real estate professional. She works for a realtor. Oh no. He just blew it up. He says she works for a realtor. I'm looking to set up an llc. Or should it be an S Corp? Okay, everybody. Now what Steven is talking about is the real estate professional classification. I have a whole chapter on it in my book. I love it. And in the book, what your CPA isn't telling you, I talk about the real estate professional strategy and the husband and wife using that. Now, whether you're a same sex couple, married strategy still works. So it's not discriminatory to just male and females if you're married. That real estate professional thing works. Now what Steven is trying to do is I presume is Steven is over here with a W2 and they have an LLC. You would never set up an S Corp for the two rentals. Steven, just do a Utah LLC and use my office to do it. Don't try to go on LegalZoom and hack it out and screw it up. I have a whole service of just fixing LLCs since people don't check the right box. LegalZoom does a great job, but if you don't choose the right boxes, you're not going to get the right thing. So use my paralegals or one of my lawyers, set up your LLC in Utah and transfer the two rentals to the llc. Now he says my wife might qualify as a real estate professional. Okay, now I love it. It's a two part test. There's an hour requirement and an occupation requirement. Stephen, you're forgetting the two tests. Test one is hours, test two is occupation. If your wife is a W2 working for a realtor, that does not qualify an occupation in real estate. You have to own the business 10% or more to be a W2 real estate professional. Now if your wife is a 1099 working for a realtor in the real estate industry as a realtor, maybe now she's getting to 1099. We're done. We're in business, baby. But your wife is a W2. He says the wife is a 1099. Okay. And I presume then your wife is a realtor 1099. Because think about this. If your wife is a marketing consultant 1099, is she really in the real estate industry or she a marketing consultant 1099. So Steven, you got to make sure we got that right. But let's assume that Steven's wife is a real estate professional. All the losses from the rental are 100% deductible against Steven's W2. So, Steven, it sounds like you're on to something. I like it. Really? Drill down on the rule. Talk to your accountant. You got some feedback. So he just said, she is. She's a photographer for real estate. Oh, not good. I'm sorry, Steven. Steven said his wife is a photographer. 1099 for a realtor. That means she's in the photography industry, not the real estate industry. I'm sorry. The IRS is pretty clear. Realtor managing rentals, fixing up rentals. Contractor, broker working in real estate on the real estate. Plumber doing real estate is a plumber, not a real estate professional. Sorry, Steven. Keep working on it. Yes. Question.

We had a question from Candace related to that. She asked, is a pool builder considered a real estate professional?

The question was, is a pool contractor considered a real estate professional? I'm probably going to say no, because the electrician, the plumber, the painter, and the pool contractor are not real estate professionals. The general contractor is. And the realtor or broker that lists it is. Now, if you're an owner builder, an owner rehabber, real estate professional, you don't have to be a licensed contractor, but you have to be the one working on the real estate, not the pool. Now, you might find an accountant out there that says a pool contractor is a real estate professional. I think you're pushing the envelope. Sorry about that. Okay. Oh, question.

Mom's Money Habits.

Money Habits wants to know if you

can sign her book. Her first name is Rosa.

Oh, Rosa. Mama. Mommy. Money Habits Is Rosa okay? Rosa. All right, this book already has a date signature with me in here, so I am gonna. Ali, will you remind me to sign Rosa's book tomorrow? Okay, next question. By the way, are we okay on time? Are you guys okay? I'm just. I'm having a good time. I hope you guys love this and no one's asking about ppp. I'm surprised. That was what I thought I'd be talking about more. We have a PPP question. Okay. David, Faith, Sheldon, Andreas, I'm coming to you. Hang tight. Okay, what's the question on ppp?

Invest and Young asked. Second Covid relief Fill application qualifications.

Okay. All right. This is what I thought I'd be talking about today. What's their handle?

Invest in Young.

Invest in the Young asks, how do I qualify for round two? A PPP? Whoa, man. We're into this 50 minutes and you guys finally asked that. This is free money, people. I love round two of PPP 5500 page legislation. It's knocked me out for a week. Whitney and Allison are pissed right now because I'm not doing anything. They're asking me to because every night I crash trying to read the bill. All right, anybody? Here's the deal. Congress just passed second relief for PPP. If you had a small business in 2020 or 2019 and you are making a profit paying yourself as a sole proprietor or llc, or you have employees or you're an S corp, you all can apply for this. Now, let me tell you, if you qualify, I'm going to put this on the board. Ppp, Sorry, ppp. Second round money. All right, you can be a sole proprietor, you can be an LLC sole prop. You can be an LLC partnership or you can be an S corp. All of you can apply for the ppp. That's step one. Now, do you qualify if you did not take any money on round one? So if no money in round one, you didn't do it, you didn't do the ppp. All you have to do is claim, I have uncertainty. I need the ppp, I'd like to apply. You can do it. There's no test. If you did not take money on round one, a ppp, you can just say, I have uncertainty and I need to apply. So the threshold is very easy. Now, if you had profit and you paid yourself out of a sole prop or llc, you're going to use that figure in the calculation. If you had an S corp and you gave yourself a W2 and you had other people with a W2 or just yourself, you're going to use that number in the calculation. Okay? So again, if you did not take money in round one of PPP and you have any of these situations where you're making money or pay in payroll, it's going to be easy. You should qualify, no problem. You just got to do the math. Now, step three. If some of you did take money in ppp, round one, here's how you qualify. You have to have less than 300 employees. They're trying to make the smaller businesses qualify. You cannot take more. It has to be less than 2 million application. So if you could qualify for 2 million or more, you got to cap it at 2 million. Sorry. And you can show. Now, this is deep. Everybody listen. Faith, you said you need help. Listen, if you have a small business, if you had less, if you had a 25% reduction in sales. So you had 25% less sales. That's what I was trying to say. So you had a 25% reduction in any one quarter in 2020 compared to 2019. So that means Covid impacted you. Your business went down by 25% any given quarter last year. 2020. You can get the PPP now, let me explain how that works. 25% reduction in sales. Okay, you ready? Now you guys tell me if this doesn't make sense. So what you do is you take 2019 and 2020. Everybody listen, write this down. This diagram right here is very helpful. You're going to look at your four quarters, get out a piece of paper and write quarter one. That's Q1, Q2, Q3, Q4, and then 1, 2, 3, 4. In 2020. All right, what you want to do is look at your worst quarter in 2019. Okay? So you'd look at your worst quarter. I'm sorry. Sorry. Back up, back up, back, Back up. You want to look at your worst quarter in 2020. So let's say worst quarter is second quarter, because a lot of you in April, May, and June. So that's April, May, and June. This is January, February, March, April, May, June, July, August, September, October, November, December. Okay? So let's say in second quarter, it was your worst quarter of 2020. That's really when the state started shutting down businesses and everybody was freaking out. Right? That's your worst quarter. You compare it to the same quarter in 2019. So let's say that your sales every quarter were 100 grand, 100 grand, 100 grand, 100 Grand. Usually 100 grand, 100 grand. Oh, but in second quarter, my sales were only 75 grand. So what you do is you look at your sales number, your gross sales dollars, and you compare it to the same quarter in 2019. So if I had 75 grand in sales in second quarter 2020, and in 2019, I had 100 grand in sales. See all these other quarters? I'm just saying you average 100 grand in sales. That's about 33 grand a month, right? 100 grand in sales. Look at 75 of 100 grand. That's a 25% reduction in sales. You qualify. Done. You just have to look at your worst quarter in 2020 compared to the same quarter in 2019. And if there's a 25% reduction in sales, you can get PPP round two. And then you start the math, and there's an equation for it. I don't know if I want to go There I can. What I'm quickly going to do is just say you take 12 months, 12 consecutive months of payroll or profit. If you're a small business owner, just one hundred percent you profit. If it's just solo you, it cannot exceed one hundred grand. If it's just solo you, but you take twelve months of payroll or one hundred grand, you divide it by twelve months, that's your average monthly profit, under one hundred grand. If you're solo or your average monthly payroll, you divide it by 12 months and then you multiply it by 2.5. If you're a regular business, you multiply it by 3.5. If you're a restaurant, that equals your PPP. So let me make this everybody. I know that sounded crazy. Focus, focus. Don't multitask. Listen to this. I'll make it easy. If you're a solo entrepreneur, Sol Prop S Corp. Llc, you're just a solo entrepreneur. The most you can take is 100 grand for 2020 or any 12 months. In 19 and 2020, you look at 12 months floating 100 grand divided by 12 is 8333 times 2.5, it's 20 grand. That's the most you're going to get. But it's free money. You don't have to give it back. You just use it on payroll or profit. You get 20 grand free money, tax free. That's the most you're going to get for PPP. If you're solo owner about you can't go above 100 grand divided by 12 times 2.5. Okay, that was technical. I know. Was it? Okay, now I'm going to be doing tomorrow. Everybody listen. Tomorrow at 1 o', clock, mountain. Let me write this down for those of you that want to learn more about this PPP Covid relief. My amazing partner Matt Sorenson is doing 1pm Mountain, 3pm Eastern. We're doing a webinar for an hour or more tomorrow, which is Friday. What's tomorrow? The 9th. Is it? Tomorrow's the 9th. 8th. Friday the 8th. That's tomorrow at 1pm Mountain, 3pm Eastern. You can go register. Can you put the link down below? Do you have the link? Okay, Ali, can you give Cory the link? Or you can go to entrepreneur.com entrepreneur.com. it's on my Facebook page and you can register. It's free. It's a free webinar tomorrow and we're going to go over PPP Covid Relief and we're going to cover it. Matt Sorenson and my partner tomorrow for a whole hour. So I'm not going to answer any more questions on PPP today. Just come to the webinar tomorrow. Entrepreneur is going to record it and you can watch it later. But go to entrepreneur.com two or three more questions. I'm having too much fun. Corey. Corey says two more questions. I'm going to finish this picture page right here. David says Port St. Lucia, Florida. Here. I probably pronounced that wrong. David, forgive me. My wife and I are owner, operators, truck drivers. We qualify for the DOT's per diem deduction of 80%. $66 per day per driver will be. Will we be able to deduct 100%? 100% of that for 21 and 22. If you eat at a restaurant? I'd say yes, David. I would say yes. I think you get 100%. Now. We're just learning this bill. So David, don't be mad if I'm wrong. I do a little bit more research. But if that is your dining per diem deduction and you're getting the 80% of the 68 per day as a full time trucker operator, I think you get the 100%. Now see, the theory is, David, is you're supposed to use it for dining at restaurants. The scary part here is you could use that dining per diem to go to the grocery store and buy a loaf of bread and peanut butter and jelly. Right. You know that you could go to a truck stop and just buy groceries and still get the same write off, Right. The hundred percent is if you dine at restaurants. And since you're claiming the per diem, I guess you just have to say on my honor, it was always a restaurant. But David, I think you're going to get it. I do do a little more. You know, we're going to see more of this come out and research Faith. I hope I helped you. She said I need help. Sheldon, where do I go to access the piece for the small businesses? The what? The P R E C S. I don't know what that means. Sheldon, will you write that again down below and will you look for it? Cory, Andrea says hi. Mark Andrea from Miami. Lots of Miami folks to hear today. Where's my hat? I went to Puerto Rico for Christmas. Plantains and beans and rice for four days. Loved it. Now, I know some of you Miami folks lean on Dr. Cuba or Puerto Rico, but I went to Puerto Rico for Christmas. It was awesome. And I've got my Puerto Rico hat. I left it at home. I'm learning Spanish. Andy. So Andreas So hang with me. So Andrea says from Miami, I have paid my house 100%. I came across an idea of selling it to an S corp of my own to be able to rent it to myself and be able to depreciate all the goodies and reduce my taxable income. Okay, Andreas, everybody, this is so important and I know, Andreas, you're looking for write offs. I get it. It's probably Andre and I'm just saying it wrong. I apologize. People first, you never put a rental in an S corp. Never a good idea. I just will stand by that all day long. Number two, think about this. You sell your house that you've paid off to a company you own or contribute it and then rent it to your business. Well, now you've got rental income and you're going to depreciate it and. But you're doing this just to get a write off in your business. Now when you go to sell it, you don't get the sale of home exemption and. You claimed income that you get a write off over here. So it's like X's and O's. You're just moving money from one pocket to another and you're like well Mark, I get the depreciation. This is an agreement between yourself. The IRS doesn't like this. It's a related party transaction. Just don't like it people. I just don't. Rent your own home to yourself in your business and then where's your personal residence? Where do you live? The IRS is not going to let you rent your whole house to your business because you got to live somewhere. So Andre, I would just not chase it down. I don't like it. I try to be as aggressive as I can. Hopefully your people are like hey Mark, these are great ideas but. But I draw the line at places I just don't like. Renting your own home to yourself and where's your really home? And you got the sale of home exemption. That's gone now. I just wouldn't even go there. There's other write offs I'd like better, Andrea, so forgive me about it. That's my opinion. Can I do any more? I just want to do another question or two. Can I please. Oh, did by the way, did Sheldon tell us what he meant? Sheldon left. Okay. What was the other question you liked, Corey? I had this one. Can I fund my LLC with cryptocurrency bought under my name? Yeah. So the question was can I fund my LLC with cryptocurrency that I bought in my own name? Now, I don't know what you're using your LLC for. Is your LLC for a rental or is your LLC to run your business? Because I could use an LLC for either one. And you're going to take crypto. Maybe bitcoin. That's gone crazy lately. Even my daughter bought crypto. She's freaking smart. I didn't buy any. Damn it. I hate it. But she's going to buy me dinner with her. Profit from cryptocurrency, 100% write off. Okay, all right, Crypto. So you've got bitcoin and you're going to contribute bitcoin to your LLC to fund your business or to buy a rental. Okay? Oh, it's for a rental. Okay. Should I bring my coat? My co host on the show. Okay, this is my co host for the show. Okay. This is Winnie. She is our office dog. Do you know you increase productivity in your office by 20% when you have an office dog? It increases your morale. And everybody loves our office dog. This is Winnie. Okay, now everybody, what was her first name on the question? Oscar. Oscar said, I've got bitcoin and I want to buy a rental. Well, when you sell bitcoin and you make profit, you do now have to pay tax on that. So when you convert the bitcoin to dollars and you go buy a rental, you're going to pay tax on your gain. The IRS has been very clear about that. Now, I've heard of people that have bought homes with bitcoin. Is that a taxable transaction? You've converted the bitcoin to real property? Probably. But the bitcoin can be contributed to the llc. And now you go buy a rental. I'm good with that, Oscar. I like it. Okay, one last question. Choose a good one. I'm having so much fun. I hope you guys are having a good day. Oh, can I pay my gym trainer as a CEO expense for my llc? I sell items online for e commerce. Randy, you look great. At least from the neck up. You must be working out. But Randy, I'm sorry, people. You cannot write off your gym membership or your personal trainer. It's just not a write off under a medical expense or. The IRS has shot that down. Sharon. Gosh, ask some big questions. Sharon, I'm going to have to pass on your question. It's a big one. But you want to fund your kids, Ira, with six grand of income, you're on the right track. But that's a significant question, Sharon. I'd recommend a half hour appointment with one of my Tax lawyers. You'll love it. It'll kick your butt and it'll answer all your questions. One on Instagram.

I have one from Supergirl Investor. She asked, should I, should my virtual assistant overseas Sign a 1099?

Sheldon, I liked your question about your kids. I'm going to come to that too. But can I pay my virtual assistant? Do I have to give my Virtual Assistant A 1099?

Yeah. Who's overseas?

Who's overseas? No, if you're paying someone overseas to help you in your business, you don't have to issue them a 1099. You can because you're fine. You don't have to. You're getting a write off. Now you want to justify it. You want to keep receipts and be able to document that this personal assistant actually did work for you and your business. But you're good. What do you think, Winnie? Is that? Raise your hand if you agree. Okay. Winnie agrees. So Winnie. Yes. This is yes. This is no. Okay. Sheldon says, how do you document paying your kids through your business? Just keep good records. Now you've got to have your kids have their own bank account and so when you pay them, you actually have to show that you paid them. Keep a written record of how you pay them and. And there you go. Stephanie says suggestion. I would love for you to create a class for various level accountants. Stephanie, thanks for saying that. I'm actually trying to create a certification of Mark Kohler strategies and you accountants can get CE by taking these classes and taking a test. So Stephanie, I'm working on it. Stay in touch. Brian says you're awesome, Mark, thanks for the great information. Thank you, Brian. Winnie says thank you too. Thank you, Brian. And I guess we're. Oh, one last question. This is tico. My 17 year old daughter helped with my real estate business all year. In 2020 I paid for her to cheer $100 a month with a different non biz credit card. Can I write off the $1,200 I paid as a payment to her in 2020? Okay, now TECO, you're in a gray area. Now here's why. Can TECO pay a 17 year old for helping in the business? Yes. Okay, but you didn't pay her. You paid her cheer coach $100. You didn't directly pay your daughter, so I don't like that. But if your 17 year old really did work in the business, she really did earn $1200. I would probably write it off. But I'm going to forewarn you that you need to be able to show what she did. And I would like in the future that you pay her directly and let her pay the cheer coach. And by the way, a 17 year old, you should be freaking paying more than $1,200. So Tico, let's max that out in this year. Are you okay with that, Winnie? Yes. Okay, so we're good to go. Winnie says goodbye. Winnie says bye. And I'm sorry, I'm just joking around too much. But I love you guys. I love Main street business. I'm not giving up on you. Please get to some of my books on Amazon. There is no other tax lawyer in America that's written more books than me, has more podcast listens and more YouTube views. I'm trying to be your guy. Got a great team behind me. The law firm, the accounting firm, our trust company to help you set up your Roth IRAs and 401ks. Just get to markjkohler.com I love entrepreneur Ryan Shea, his team, Dan Arnab. I love you guys. Andrea, thanks for setting me up. Everybody at Entrepreneur, we appreciate you keep doing a wonderful website and articles every day and you guys keep living the dream. Join the webinar tomorrow on the PPP Covid relief and next Thursday I'll be right back here answering your questions on small business. Keep living the dream. Bye. See you later. Is that okay? Winnie. Sa.