What Your CPA Isn't Telling You! | Mark J Kohler LIVE |

Instagram folks, sorry for that craziness. We had to get the tripod closer to our main camera. Welcome, YouTubers. Welcome Facebookers, Instagrammers. I don't know if those are real words, but they are today. My name is Mark Kohler. I'm a small business tax attorney, CPA and attorney helping all of you hopefully today with some tips that are going to save you and make you thousands of dollars. Where's a copy of my book that I'm giving away? I'm going to give away book every 10 minutes. Now, my marketing folks here are going to alert me when 10 minutes is up and you're going to choose random winners. Now, do they have to do anything to be a winner? Do you have to share this or something? Share it. See, on Instagram, you can't share it until it's over.

Leave a comment that you shared it.

Yeah, leave a comment that I look really good today and you're in the drawing. So there you go. Okay, thanks, everybody. We're gonna have fun. I try to joke around. I want to answer your questions. Type your questions down below. Today's topic is what your CPA isn't telling you. Wouldn't that be nice if someone wrote a book titled what your CPA isn't telling you? Well, I did it and I put my money where my mouth is. And actually, a lot of CPAs and tax preparers and enrolled agents have started to follow me over the years and appreciate me kind of digging up little strategies and tips that can be helpful. So I want to say thank you to all of you tax and legal professionals that follow. I follow me. I follow several other experts around the country, too, and try to get the best info I can to you, the small business owner in America, one out of three Americans now have a side hustle. So we've got to know these little tips and strategies. Now I'm going to tell you the 10 things right now we're going to cover. So before you go anywhere, Here are the 10 things that I don't think CPA is telling you enough. And then we'll talk about each one for a little bit and then I'm a Q and A for the rest of the time. I'm all yours. Number one, they don't talk about small business enough. Okay, so I'll wreck. I'm going to expound on these 10 as soon as I get to that point. Number two, they don't talk about the S Corp strategy enough. This is what they aren't telling you. Number three, the backdoor Roth. Number four, the PPP and ERTC procedures. Number five, what an estate plan is and why you should be doing it. Number six, the Roth and 401k combo, because you can have both. And they don't talk about the mega backdoor Roth. We're going to hit that. Paying your family members. Number seven, paying family rental property. Why am I having 10? And the regular updates. That's number 10. Oh, I forgot one up here. Number nine, updates. We'll come to that. And number nine, self directing. Okay, to me, and I'm hoping many of you CPAs or tax professionals, legal professionals, financial advisors that are out there watching Today, these are 10 things that I don't think CPAs talk to their clients enough about. And so I'm hoping to wow you. I'm going to talk about each one of these now. Number one, small business. I'm going to hit these quick. I've got a bunch of questions here that have already been sent in and I'm all yours. I want to make you money today. I think you're going to love it. Number one, thanks. I got a woo in the studio. That's a big day. This is good. Okay, number one, I have so many people that are like, I don't. How do I save taxes? And I go, you need a small business. Give me something to work with. Well, my accountants never told me that I have a 1099 from Uber. They just plug it in. I go, they don't talk to you about small business from that. You sell crap on ebay. You sell stuff on PayPal. You have a little small janitorial business, a little landscaping business, or you've got a side hustle driving for Grubhub. That's a business. That is a business. So I bring up one of my favorite movies. Okay, this was a movie called the Accountant. Yes, that was me in the preliminary photo before Ben Affleck got the role. I love Ben. He was amazing. But I was close second. I was a close second. So this was kind of, you know the movie the Accountant. Oh, man, that's. That's my life right there. So I've been learning my Krav Maga. Take a punch, shoot a gun. You know, that's what us accountants do in our pastime. We're really, you know, secret agents. Okay. So anyway, in the movie the Accountant, if you've not seen it, it's on your to do list in the first scene. And the first scene, well, the first scene is when the FBI agents are outside. A stakeout of A pizza parlor. That's the first scene. The first scene with Ben Affleck is he's in his accounting office and this little farming couple comes in and they're paying way too much in taxes. And it's excruciating for Ben Affleck, the autistic accountant, to really talk about this. And he says, do you have a small business? And she goes, yes, I make necklaces. Do you like them? He's like, no. And then he goes through and he saves him money. That's the movie the Accountant. I love it. Number one, your accountant should be talking about your side hustle. Number two, the S Corp strategy. If you have a small business and you're a sole proprietor, you are paying 15.3% on all your profit. This is the F word called fica. What? The fica. And so if you're a sole prop or an llc, you are getting hosed. I do not want that. This FICA is a killer. So every dentist, doctor, plumber, electrician, accountant, realtor, developer, restaurant owner, landscaper, and I'm going to do one more. Engineer. There's 10 people right there. Dentists, doctors, we're all S Corps. We want you to be an S corp. Take a W2 salary, reasonable comp. Everything else is a K1. No corporate tax, no self employment tax, and no Obamacare. Whoo. This is huge. Plus, you get what's called the 199A deduction. So good. So if you're a small business owner and make more than 30 or 40 grand a year, your accountant should be bringing this up. I meet people all the time that meet with an accountant, and they've had an accountant for years. They never brought up the S Corp. I'm like, oh, my gosh. And I know you accountants out there. You're like, well, Mark, you're being too aggressive with reasonable comp. Really? I go to every reasonable comp CE in the country. I write articles on this. I interview fba, FBI, I interview IRS agents about reasonable comp. I have never had a client in 20 years audited for taking too little comp. Yeah, but markets are risky. It blows my mind. Accountants are afraid too much of their own shadow. Be more aggressive people. There's a reasonable comp that'll save you money. Boom. That's number two. Okay. Is this okay, Ali? I'm good. I'm going to hit these real quick. Number three, Backdoor Roth. Okay? There's a party going on, and it's called the Roth party. And anybody that wants to save big money for the future. And Dave Ramsey loves the Roth. I love the Roth. The Roth party is freaking rocking. Tax free growth, tax free withdrawals, the rest of your life. Peter Thiel started PayPal with his Roth IRA as an investor worth millions. Tax free, tax free people. You should be funding a Roth. But my account says I make too much money or I can't do a roth and a 401k because I have a 401 at work. No, you can still do a Roth even if you have a 401k at work. Well, I'm 90 years old. You can still do a Roth. Well, I'm six year old and I shred paper for my parents. Small business. Yes, you can have a Roth. You can all have a Roth. Mark, I make 500 grand a year. I make too much. No, you can have a Roth. It's called the Back door Roth. So here's the front door. And right now, in my amazing calendar, which you can still buy on my website for this year, the handy dandy Mark Kohler 2021 calendar, there's a front page here with all your little tax dated you're going to want at your fingertips if I make more Roth IRA contribution phase out. Oh, 208,000 if I'm married, 140,000 if I'm single. I can't do a Roth. No, no, no. It just means you can't go in the front door. So what you do is a traditional IRA contribution, which is not tax deductible because you made too much money, and then you convert it to a Roth the next day and you can, you're allowed to convert money at any income. Income level. So it's called the backdoor Roth. Go YouTube. Kohler backdoor Roth. Done. Okay, that's the Backdoor Roth. Too many accountants don't teach that. Okay, number four. What did we say? My number four. I'm going to go back to my list. PPP and ertc. I am writing articles every three weeks on this Biden. And the new administration wants to come out with another $2.9 trillion package for small business owners. You have got to think about getting the new PPP. Is there a problem, Cory? Huh? It's been 10 minutes. I gotta give away a book. Yeah. Okay, who's the winner? Anastasia Lafassa. Anastasia Lafassa. Lafata. Anastasia Lafata, you are the winner of a what Your CPA isn't telling you. The gateway drug to tax planning. Once you read this, you'll never go back. You're going to love it. Good Kids, bad kids, death, divorce. I even worked in a sex scene. So it can be a movie someday. Yeah, it's a little subtle. All right, now, if you're a winner, you've got to email Corey@markjkohler.com Corey@markjcohler.com so I will not. I will refer to that a minute and every time we give a winner. So 10 minutes in our first winner. What your CPA isn't telling you it's been out. It's almost five stars on Amazon. Some people don't like it because it's a story. So I get four stars. They're like, this is too much of a story. That's the point. Because normal people don't want to read a tax book, you geek. So I've got other books that are more geeky. This is to help the average business owner catch the vision. All right. Okay. We are called normal people. All right, so now what I was talking about is the PPP and ertc. You have until the end of March to apply for the ppp. If you're a small business owner and your business was going on in 2019, have you applied? Do you know how to apply? Do you have any articles on this? Is your accountant talking to you about it? If they're not, I've got articles on our newsletter and on my website@anentrepreneur.com. get over there. Look into your PPP. Okay. Why should you have an estate plan? Is that next estate plan? Okay? The trifecta I've been teaching for years. You need to have your revocable living trust as the foundation of everything down. Here's your 1040 tax return. Your trust owns your home. Your Trust owns your LLC that owns your rental. Your IRAs and 401ks go down to your trust. If you or your spouse both die, you and your spouse both pass away. Your S corp is owned by your trust. Your trust saves legal fees. It can save estate taxes, state estate taxes. There's federal and state estate taxes. And it can save your family from fighting. And you can leave money where you want it. Guys, you're working so hard for the American dream. Make sure you put your money in a safe spot for your next generation. Leave a legacy. Accountants don't talk about it. Alright, next is the Mega BackDoor 401K. Now this is pretty darn cool. I've got a new article. I'm working on this. So let's say here's your trifecta. And let's say you have a regular Roth IRA and you could have a 401k at work, or you could have a solo 401k that you contribute to out of your own S corp. Okay, so this is your day job to a 401k. This is your own S corp to a solo. Okay, so you've got these two 401ks. How much can you put in this year? 19, 5. Now, at your day job, they may match 3 to 4%. Right. If you're doing your own solo 401k, you could match 25%. But how much can you really put in to an IR 401K this year? This year in 2021, I think it's 58,000. It is 57,000 in 2020. 58,000 in 2021. So I could put in $58,000. Well, if you're like, Mark, I put in my 19, 5, maybe I paid myself 40,000 in salary. I did 25% match. That means I'm only up to 29,500. And if your company is not matching 25%, so you're even less. But if I'm at 29. 5 and I want to get to 58,000, you're like, got to take a huge salary to get a match to get me in the door to 57. 58. Wrong. You can do what's called an after tax contribution to your 401k. Darin, this is the coolest thing I've got Darren, one of my lawyers here, tax lawyers, answering questions on the chat, trying to help out here. This is a new strategy that Darren learned when he joined our firm as well, which is exciting. The Solo 401K. You can do what's called an after tax contribution. So you don't get a write off. You don't get a write off to put the money in there. And I don't have to take out a bigger salary to put the money in there. I just do an after tax contribution. So if my salary was 40 and I've got to make up the difference to get to 58,000, I just take part of the profit of my S corp, put it in there, and we're looking at 39. 49. We're looking at about 27 grand. 28 grand? No, 39. 49. Oh, about 28. Yeah. 27, 28,000. You put that in the 401k and then convert it to Roth the next day. Now you have, oh, my gosh, you could have over 30 to $40,000 in a Roth in one year at any income level. It's Called the Mega Backdoor Roth. Okay, another strategy. Some of you are like, mark, move on to a cool one. Okay, the next one is paying your family members. Whether you're young, old, rich or poor in your small business. Are you paying your kids out of your business? And you may say, mark, I'm not rich enough to fund an IRA or a 401k in the thousands. I just got a couple kids and I'm trying to pay that are in high school. Great. Quit paying taxes and giving your kid money. Put them on the payroll and give them a 1099. Or if they're under age 18. No 1099 or W2, you just call it outside labor. Now in my books, I have a whole section on how to pay your kids. I've got a YouTube video on how to pay kids under age 18. Another video on how to pay kids 18 or over. Please check them out. You will love them. So good. So good. All right, now on our list, I'm just going to wrap this up and then my Q and A is all for you. We have three more rentals, self directing and regular updates. Rentals in your trifecta, Too many of my clients go to their accountant and the CPA is not bringing up how great rentals are. Rental properties are one of the most tax deferred, cash flow, tax free cash flow, best investments. When I meet with clients, people ask me all the time. They're like, I'm at a dinner party, I'm at a family reunion and they go, mark, what are your rich clients doing? And I go, 95% of my clients that are doing well are buying rental property. Is that crazy? They're buying rentals. They don't have to buy expensive ones. They may use credit. They're just buying a little rental every year. And they're building wealth. That's what successful clients do. Is your CPA telling you that? Maybe not. Are we ready to give away another book?

In three minutes?

In three minutes. Okay. All right. And next, buy rentals. Then it was self directing. So let's say in your trifecta you've got a solo 401k or a Roth. Your Roth IRA and solo 401k can buy crypto, it can buy bitcoin, it can buy gold, it can invest in real estate, it can buy cows, it can buy raw land, it can buy a meth lab, it can buy a rental property that's a meth lab. You wouldn't be doing meth. You might just rent it to a Jesse or. And let them make their chemicals. But the beauty is you can invest in whatever you want inside your retirement account. And that's called self directing. Accountants aren't talking about it. If you want to learn more about it, go to directed ira.com we do a podcast every week teaching you how to take control of your retirement account. Boom. All right, and then where's that? Or does that leave us? Number 10, what your CPA isn't telling you. Here's the biggest takeaway, guys. You're the captain of your ship in your personal life and your personal tax return. Do you have a side gig? Do you have a little side hustle? Is your accountant giving you regular weekly updates? Do they have a newsletter? They have a YouTube channel? Are they doing up posts on their social media? If your accountant isn't force feeding you tax strategies, you've got the wrong account. And if what your CPA isn't telling you may be the very problem that your CPA is telling you. Nothing. And some people say, well, Mark, a tax return is what it is. And you're taught that I'm going to pay the least amount for a tax return. But the reality is, the more time you spend with me or my team members, the more money we save you. If you pay 400 bucks an hour, I want to save you 10 times that. I never want you to get off a phone call with any of my advisors in a paid consultation where we don't save you 1, 2, 3, 4 times. Whatever you paid us, you should. The person you should want to pay is your accountant because they should be saving you. So, last example, you could hire three different people to remodel your kitchen. You're going to get three different jobs, three different prices, and you get what you pay for. And that's the same thing with accountants and tax returns. You get what you pay for. If you want to be cheap and go down to the strip mall and go grocery shopping and pick up your tax return, you're going to get a crappy tax return. It's just up to you. All right now, it's Q and A time. Woo. Oh, giveaway. Book time. Who's our winner?

Laura Kowalaska.

Laura Kowaliska. Laura Kowaliska. I probably butchered that. I apologize. Laura, get over to Corey. Email coreyarkjkohler.com C O R E yarkjcohler.com Tell him your name and your contact information and we will send you a book. I. I will sign it and get it out to you. Ali, make sure I sign all the books. Okay, now it's Q and A and I'm all yours. I've got Darren here on the chat. He is one of our tax lawyers. He had an hour to spare. He came over. He'll be answering in the chat as well. Darin, I'm going to come to you with questions since you know what you're answering and what you're not. And I'm going to answer a couple on Instagram. Is that all right? Rami? This was a good one from Ronnie H. She said a friend received a 1099. Rami, I don't know if it's male or female. Sorry. So Rami said a friend received a 1099K. What's a 1099K? Well, a 1099K comes from transactions from merchant accounts. And so PayPal or Venmo, stuff like that. Apple Pay. It was from a GoFundMe. Oh, for his wife that had cancer. Is that taxable? Now, the first answer is. And then he says, or Rami says, and how would you report it? Thanks, stud. Thank you. Little shout out for that. I appreciate it. A friend received a 1099K. GoFundMe wife had cancer. Is it taxable? 1099Ks can be taxable, but in this situation, it was a GoFundMe to help his wife with cancer. There was no business transaction, so that was a gift. Now, this year, the gift exemption is $15,000. So if anybody gave them more than $15,000, they would have to file a gift tax return. Not the recipient, but the person that gave the money. But in a GoFundMe, typically people are given 100 bucks, 500 bucks, 200 bucks, whatever, $10. So all of that was gifts, non taxable. Now, I would keep good records. If the IRS comes knocking and says, you got a 1099k for 50 grand, what the hell happened? You're going to say it was a GoFundMe, wife had cancer, we're okay. So there's nowhere to report it. You don't have to report it. Keep good records. A 1099K for a GoFundMe would have been a gift in this situation. Okay, Darren, you got a good question? Yeah.

Okay, so Amy Hung, Amy Hung says, is the max still the same if there is already after tax contribution from a W2 employer?

She says, is the max after tax contribution? Okay, so she said, is there an after tax contribution I can make in my 401k even if my employer made up all the difference? Okay, let's do some math here because. And her name's Amy.

Yes.

Okay, Amy. Now everybody, I'm going to do hard questions and easy questions. I'm here for you. How much can Amy put in her 401k for last year? Okay, let's say that $57,000. Okay, that's the max. Now how much of that can be a deferral from her? Now it could be 19,500 if she's under age 50 or if you're over age 50. You go to your handy dandy calendar and you look at this and go, oh, this is pretty cool. I can put a catch up provision of $6,500 more if I'm 50 or older. So she would be able to put in $26,000 if she was 50 or older. Okay, now what's the difference? Let's assume Amy is put in the 19:5. So 57,000 minus 19:5. Okay, so that's 37,500. Now Amy says her employer put all of that in for her. Now I'll say, Amy, that's pretty darn rare. I don't know if I've ever seen that. That's a huge contribution. You must be a vice president at Microsoft or something because here's the thing, most 401k plans may put in 5% of your salary and to make up 37 grand, your salary would have to be around 800,000. I don't know, maybe it was a profit sharing plan, something like that. But if your employer already put in $37,500 and you put in 195 for a total of 57,000, you're done. You can't put any after tax contributions in, but you can go to home and do a Roth ira. So you can still do a backdoor or a front door Roth IRA plus the 57,000. I'm cool with that. But everybody out there, this 37,500 is typically something you're going to put in after the employer match. So let's say the employer puts in seven grand. 500. 7,500. Which sounds a little more realistic then the 30,000 you could put in and convert to a Roth on day two. Yep, you can do it all day long. People like, this is how the rich get richer. Yes. This is how they do it. Okay, next question from Instagram. All right, where do I start to set up my mobile auto repair business in Hawaii? An llc. Mark. David Foster. Mark, I love it and my heart goes out to all of you in Hawaii. Some of you think maybe I'm being funny. I'm not. Hawaii was beat up with the Airbnb law passed two years ago. Lot of people that are renting out their homes got shut down by the state. Extra income was taken off the table for them. It's brutal. And then Covid hit Hawaii harder than almost any state in the country. Tough. The unemployment rate is off the chart. Tourism went through the floor. It's been terrible. So my heart goes out to Mark David and anybody else in Hawaii that's watching right now. God bless you. We just hope everybody gets traveling to Hawaii soon, which they're going to be happy to do. All right. Spend lots of money when they come. So Mark David in Hawaii is going to set up a mobile auto repair business. I love that. I've heard of mobile detailing, mobile oil changes, but mobile auto repair, that's pretty cool. I haven't heard of that. So Mark David's going to show up, put your car on blocks in your front yard and work on it. You might fit right in in Arkansas, but I don't know in Hawaii, maybe in Waimanalo or somewhere like that. You can get away with that. Okay. Anyway, so he's going to go put someone's car up on blocks and work on it. Mark, you're going to start with an llc. It's operational. And then you're going to convert to an S corp when you're making more money. We have a paralegal setup for 450 bucks. Done. You could also try to go online and do it. But remember, you got to get all the pieces and parts. It's not just filing one piece of paper. You got to get operating agreement minutes, a corporate book, tax ID number, membership certificates, get everything involved. If you go to LegalZoom, you're still going to spend around 450 bucks because you're going to check all the boxes you're supposed to. So if you need help, give us a call. If you want an hour with an attorney, we charge 800 bucks. So you can go to the state. You could go to an online service. You could go to us. Just make sure you get all the pieces and parts. But I'd start with an LLC. And when you start to make 30 to $40,000 or more net, so you're bringing home three grand a month, you're going to convert to an S corp right away. All right. You got one, Darren?

Yeah, from Facebook. This is from the Massachusetts Flipper. I have an online store. It's set up as an S corp. I'm starting a junk removal Company. Can I set up an LLC and use the S Corp to funnel the money through?

Yes. So we have Massachusetts Flipper said they have an online business and they have an S corp. Now, if they're called Massachusetts Flipper, unless they are part Dolphin, I have a feeling they're flipping real estate. Little Chip and Joanna down in Waco, Texas, type thing. So they're doing probably a couple things in the S Corp. Flipping properties and. What was the other business?

Junk removal?

No, the one before that.

Oh, online store.

Online store. Okay. So they have an online store and they're flipping property. Can you do that in one S Corp? Yes. I love it. Do you know, in my life, I. I have one S Corp. You may be like, Mark, you're a lawyer, an accountant. You can have as many S corps as you want. I only want one. So I have my 1s corp, and she says I'm going to a male or female. Sorry, Massachusetts Flipper says they're going to start doing junk removal and they were going to set up an LLC for it. Now, you don't have to set up an LLC for that. You could set up a DBA and run the income through your S Corp. But let's assume Massachusetts Flipper has a partner. So I want their S corp to be the part owner of this llc. And you're right, all the income should funnel through your S corp, where you do 1W2 and 1K1. In my life, I have 1S Corp, Mark J. Kohler Inc. Literally, it's out there. See, my corporation is a brand, and I want you to know where it's at. I'm not hiding from anyone. It owns a laptop or a phone, sue me. There's nothing. There's nothing in the corp. But if you want to know where my real estate is, good luck. You're not going to find it. I've got LLCs, I've got camouflage. I've got all sorts of strategies to protect my real estate over here with privacy and anonymous names and all sorts of good things for Massachusetts Flipper. What I do is whenever I set up a new partnership for ordinary income, my S corp's the owner, my S corp's the owner, my S corp's the owner. So you can run DBAs, URLs, different LLCs. All of this can flow through one S Corp. Do your salary, do your K1, you're good to go. Okay, should we do 60 seconds or less? Like two or three of those? Okay. My marketing director, Allison Boyce, says I have to do 60 seconds. Gone in 60 seconds. Oh, we're gonna give away a book. We have another book winner. Do you have a male book winner or you're just giving it to all the ladies because you're being chauvinistic? Okay, Miguel Ocho. Miguel Ochoa. Ochoa. Miguel Ocha sounds so romantic. Ocha. Miguel Ocha. Okay. Sounds like Antonio Banderas, which I've been mistaken for at times when I'm really, really tan. Okay, Miguel wins a book. But your CPA isn't telling you. Miguel, you can get over to Corey. Email Mark coreyarkjkohler.com Give him your info. He'll mail you out a book. Congratulations. You're a winner. You're a winner in life and a winner of a book. All right. Gone in 60 seconds says I have to answer these questions in 60 seconds. Are we ready with the timer, Corey? Whoo. Ready.

And go.

Go. This is from Buy no Holdguru. Can I use depreciation from a rental in a state A to off center rental income from state B? And the answer is yes. You're going to use two different options. First, you can be a real estate professional election, and you could have two different LLCs with a rental in each one in state A or state B. You could have one LLC register both state A and B and both rentals in the same LLC, and it's all going to flow down into your 1040. So as these rentals generate income and loss, loss and income doesn't matter. It all nets on what's called a schedule E. So it's going to net on the schedule E that's going to go onto your 1040. 5, 4, 3, 2, 1. There you go. There's your answer, people. Rental property rocks. Boom. All right, This is a real easy one. So, okay, I'm ready for the next 60 seconders. This was from Dr. Jonathan, regular listener. Nice to see you, Jonathan. He says, can my dad convert his taxable mutual fund into a Roth? He's retired with Social Security income. And the answer is absolutely yes. Now, we love Roth conversions. You actually have till the end of the year to do this. Now let's talk deadlines. You have until April 15th to contribute to your Roth for last year. But if you want to convert to Roth money, you need to do that by the end of the year, December 31st. So let's say dad has a Roth, and then over here he has a regular account, and it just has some mutual funds in it. So he's going to turn those to cash by selling the mutual funds. If there's any gain, he's going to have to pay it. Then he's going to convert it to Roth and move the money over to the Roth. That's a Roth conversion. Live the dream. Boom. Did it. Okay, here's a little question. I'm not going to do this on the 60 seconds. Melody, Mayor Matty says, do you practice as an attorney? Yes, I do. I'm a tax attorney. I don't go to court and do divorces. I don't do bankruptcy. I don't fight in civil court like John Travolta or Matt Damon. I am a lover, not a fighter. Win, win, win, IRS lose. I'm in the boardroom, not the courtroom. So we have six, seven attorneys in our office, plus my partner. We help clients around the country set up entities, do estate plans, contracts, agreements, maintain your entity asset protection. We are a law firm, legit. Give us a call. Love to be helped. Thanks, melody. Okay, another 60 second question. This is Fonzie chauffeur driven. I'm a big Happy Days fan, so that's good. Okay, give me the go Cory and go. Fonzie says, can my S corp open up a brokerage account and invest r in the market? Invest in the market, I think is what he's saying. Now let's look at our diagram right here. If I have my S corp here and I'm doing business and that's what S corps are for. So I'm doing business, I'm making money, I'm spending expenses that are deductible and I'm got my net income, I'm doing my W2, I'm doing my K1. And then Fonzie says, well, I've got some extra money in here. I'm just going to go open a brokerage account and start investing. You can do that, but I don't like that. I want a wall of asset protection and I want to take this money that you're netting and not do a brokerage. Let's take this net income and come over here and invest it where I can asset protect it. I don't want it in the same business where you might get sued. I want to take this money and put it in a broth, put it in a 401k, put it in an LLC and go invest it. But I want to protect it. So if you did a consult with one of my tax lawyers, we're going to talk about asset protection. I want your S corp to just have the bare minimum and then peel out the money and go over here. There you go. Fonzie, in 60 seconds or less, what to do with your brokerage account. Okay, let's do one last 60 second question then. Darin, I'm coming your way for YouTube and Facebook. Okay, this is Cory. Give me the green light.

Ready and go.

Okay, this is DMX Tech. He is an RV inspector. I have an llc, a nomadic RV and technician. Do I claim income in every state I work or just my home state? Very difficult question. DMX is going to have an LLC that will ultimately go into an S corp. His LLC is going to be set up in probably the state where he or she earns most of their income. So let's say it's Arkansas and so Arkansas is ar. I keep doing ak, which is Alaska. So LLC is Arkansas and he's going to register there and make money there. If he goes over into Texas and makes income, if it's de minimis and small, I may not claim it in Texas. If he goes over to Georgia, makes 1,000 bucks, maybe not. But once you start making more money in these other states, you need to file non resident state tax returns in those states. Get a consult. Be careful. All right, we're gonna just start doing some regular questions before we give away another book. I've got Israela Menta and Victoria, Chris Allen, Peanut Dog. Let Truth Prevail, Queen of Cups. We'll see what we can get through. Darren, what do you got?

Okay, from Facebook, Mark woods asks, as an employee of a business, can my wife write off scrubs and office supplies above what's supplied by her employer?

What's the first name?

Mark.

Mark from. Do we know from where? Duluth, Minnesota. He says his wife works for a doctor. It sounds like. So we have a W2 from not their own business, a W2 working for someone else. And I have bad news. He said she writes off. She wants to write off scrubs, uniforms, clothing that's supposed to be used at the business, maybe some medical supplies. You cannot write that off. It's called an unreimbursed employee expense. It used to be on a schedule A under the Tax Cuts and Jobs Act. They increased your standard deduction and got rid of that as an itemized deduction. Unless Joe Biden changes the plan, this is going to not be deductible for at least a couple more years. We'll keep you posted this year if the tax law changes on that. This is for policemen that buy guns, firemen that buy supplies and tools, people that do construction and buy their own steel toed boots. You used to be able to write that off because it was needed for work. Now you cannot. You get the standard deduction, which has been increased. Okay, we're going to go over to Peanut Dog. How best to use donor advised funds. Oh, my gosh, I can't believe I read this. Okay, how to best use donor advised funds. For example, what time of year for doing Roth conversions? Is it better to sell an equity or just transfer the equity and whole after the initial tax break? Can we also chunk donations annually to get a tax write off? Peanut the dog, Let me just say you blended two different issues that are complicated for me. You've talked about donor advised funds, which is a charitable contribution, unless you're doing something different. And then you say, for doing Roth IRA conversions, is it better to sell an equity or just transfer the equity to the Roth? Think what Peanut's trying to do is say I'm going to donate money to charity at the same time I do a Roth conversion and I want the donation to help offset my taxable income on my Roth conversion. Peanut Dog, I hope that's what you're asking. I apologize. It's a very complicated question, the way you phrased it. Don't be upset at me. I apologize. So is that doable? Yes. Are you going to get an exact dollar for dollar benefit of doing a donation to offset your Roth conversion? Maybe. It's very difficult to make that work for everybody. It depends on your itemizing. You're using the standard deduction. What's your total AGI? How much you're giving to charity? How much is the Roth conversion? There's a lot of variables. Can it be done and. Yes. And what time of year would you do it? Near the end of the year. I'm going to have a better idea of what your taxable income looks like. How much do you want to convert to Roth? How much are you going to give to charity? And we're going to try to do some mock tax returns and try to offset those. That's what I think you're asking. I hope that's correct. Okay, the business, this is Israel Amenta. The business is the llc, and the business has the S election. I realize this is a mess. I have an LLC partnership. Best way to restructure. Should I use a C Corp? Hell no. Okay, so Israel Menta says, here's the trifecta. It's not an LLC over here. We're talking operations. And so instead of having an LLC that's owned by the two partners, S Corp, which we talked About a little earlier, he says, I have an LLC that has an S election and it's owned by the two partners. I talk about this in my book, don't like it. This is very dysfunctional. We don't want this. And Israel knows that. Israel a Armenta does not want this structure. And I get it. So he says how? Or he says, how do I fix this? So the what the best thing to do first of all is do this at the end of the year. We're already almost into March, so to try to do a reorganization in the middle of the year, even the first quarter of the year, could be a pain in the butt. So typically what I do is you have two options. One, you can set up the new llc, give this S Corp to one of the partners and set up a new LLC and then just 1099 the other partner. We could talk about that as an option. Darren and I talk about clients doing this reorg in the middle of the year and kind of doing some 1099s and kind of fiddling with it. The best is come near the end of the year in November or December, you call us and say, okay, I'm ready. We're going to take the LLC, that's an S corp and we're going to give it to one of the partners. So now they're the S corp. Then we're going to set up a new LLC that starts 1122 and get set up a new S corp for the other partner. That's probably the best way to do it at the end of the year. And you're going to make a lot of money this year and you got to get it done. Talk to Darren, set up an appointment and say, darren, we got to make this work now. What are my options? But it's fairly technical. Time to give a book away. Yes. And we got to end. Okay, who is our winner?

Marco Sapan.

Marco Sepan is a winner of the what your CPA isn't telling you book. I hope you guys enjoyed this. Marco, please email coreykjcohler.com your information. He'll hook you up with a book. That was a whirlwind, everybody. Thanks for your patience. It's. I'm passionate about this. I love it. There's a lot your CPA may not be telling you. Continue to study. Please sign up for my newsletter. The information is down below. Pick up my videos, the books on occasion. I know it'll save you thousands and thousands of dollars. Set up a consult when you can. Our attorneys are out probably a week and a half. If you want your tax return done with through us, we're going to be extending. There's a lot going on this year with COVID and we're busy and tax day is six weeks away, so don't worry about extending. If you extend your tax return, you actually reduce your chances of an audit. What's more important is finding an accountant that understands you. So keep living the dream, and I'll see you next Thursday live on YouTube and Facebook at 4 o' clock mountain time. Make sure you email Corey. I just cut the word. If I don't get an email from you, you're not getting your.