Why Extending Your Tax Return Will Save You Thousands

Welcome to a live Main street conversation about saving, taxes, building wealth, asset protection, all the above. My name is Mark Kohler. I'm a CPA attorney, best selling author, podcaster, and I'm just out there trying to make it happen myself as a small business owner for years, real estate investor, and I'm here today to help give you some direction on this extension issue. You want to file an extension maybe for your business or for yourself personally, and it's tax time. Boom. So please pay attention for at least this first few minutes, I want to give you the rules. And then some of you are like, I'm out. And then I'm going to stay here and answer questions. And some of those questions are very insightful from all of you around the country. And all of a sudden you realize, oh my gosh, I should have asked that. We don't know, but we don't know. So let's hit the facts here before we even get to April 15th. From 50% of working Americans who have a side gig, a side hustle. 50%, over 40 million Americans now have a little side gig and they're getting a 1099. Many of you have a big side gig, a big side hustle, a small business. So here's the rule. If you have an LLC or an S corporation or an LLC taxed as an S corporation or an inc taxed as an S corp. And when I say llc, an LLC where there's at least two owners. Now that could be husband, wife, grandpa, granddaughter, son and daughter, whatever. Two members of an LLC or an S corp. And again, an LLC taxed as an S corp. Your deadline this year for filing Your taxes is March 15th. Now that's on a Friday. March 15th is on a Friday. And if you don't file your taxes for your S corp, which is an 1120s, or your two member LLC or more, which is a 1065, the penalties are $220 per owner per month, up to 12 months. So what do you do? You file an extension, there's no tax due. Filing an extension, super easy. Form 7004. This is right here in my calendar. I've got this cute little calendar, selling them right now on my website. Been doing it for five years. The Mark Kohler 2024 Trifecta Planner. And in here I've got tax deadlines and all sorts of strategies and resources and maps and checklists that are going to save you thousands. What's the calendar run? 25 bucks, 30 bucks? 30 bucks? You're going to save 100 times that get your info here. And I have all the deadlines throughout the year. And if you're a side gig, side hustler, small business owner, investor, you need this. And some of you are like, well, I do everything digitally, Mark. Haven't you heard of a Google calendar? Yeah, I got that too. But I love the paper. The paper helps me stay on track. So anyway, the deadline is March 15th for your 1120s or your 1065. Huge penalties if you don't file your extension. Now, once you file your extension, you have six months until September 15th to file your LLC or S Corp tax return, right? So that's phase one. Now phase two for all of you that have a plain old Single Member LLC, and there's 20 million of those in America. 20 million LLC. Single Member LLC. Your deadline is April 15th. When you file your 1040, you're going to file your Single Member LLC. It might own rental property, it might be for your Uber business. You might be selling crap online, who knows? Your Single Member LLC, all of that data for your Single Member LLC, or 10 of them is going to be on your 1040, which is due April 15, which this year is on a Monday. Now if you're like, oh, I'm not ready to file on April 15th, then you're going to file your extension form 4868. You can download these extension forms. Odd line. Now the penalties for not filing a personal extension are not good. There is a whole different rule when it comes into what the, the penalties would be. And it's really based on if you owe taxes. If you owe taxes and you don't file an extension on April 15, it's a derivative of how much you owe. Now I'm going to be talking more about this. You got to pay attention to when I hold my lives every week because over the next six to eight weeks I'm going to be talking about your extension for April 15. But that's not the, that's not the major focus today. What do you send in with your extension? Why would you do an extension? All of that we're going to talk about more. Please subscribe to my YouTube channel, my Facebook hit the bell icon, because when I go live, boom, you get tinged. And this is where you're going to get straight information, easy to digest, about your taxes and asset protection, building wealth in Main Street America. I'm your guy. I'm your guy. We got a Super awesome team. 100 plus employees helping clients around the country self direct their retirement accounts with our law firm, helping them set up the right entities and we're super affordable. And you're not going to just click it out on a website hoping you get it right. We're going to there for you. Okay, so here's the deal. Filing an extension. This is your last piece. And then I'm going to do open forum Q and A here. Here's the big deal. Filing an extension reduces your chances of an audit. Oh, my gosh. I had a call with a client this week who was freaking out that they had to file an extension. I'm like, you reduce the IRS looking at you. Okay, let's say you're in line. And the IRS is so excited to audit people at the beginning of the year. And as you file your return, they start going, ooh, we're going to audit him. Ooh, we're going to audit her. Ooh, we're going to audit her. Boom. They're waiting for tax returns to get filed so their computer system can go bing, bing, bing, we're going to audit this one. They don't even get my tax return until October. They've already assigned their audits for the year. It's a matter of numbers on which extent which tax returns are audited. And they assign that workload based on the IRS tax computer system identifying high risk returns when they come in. Well, if my return isn't even in, it reduces the chances of an audit. This isn't all the big. You can look at this anywhere on the web. You, your chances of an audit go down when you file an extension. You're not going to get audited for the IRS for filing an extension. And you're like, oh my gosh. Well, my accountant's always filed by April 15th and oh my gosh, I'm going to file an extension. Hellfire damnation. I'm going. You know that is not the case. Take a chill pill. I don't know, what do you call a chill pill? Prozac? I don't know what it was. I don't want to get in trouble here. Some illicit drug. Go binge on something. You're fine. Do not stress filing an extension is a good thing. Over 60% of our clients in our accounting firm over the years have filed an extension. It gives you time to prepare your documents. It gives you time to dig up all those kick ass write offs that I'm going to be talking about here over the next six weeks. Please get engaged in the process. Do not drop your crap off at a strip mall hoping to get your taxes done and then pissed off. When you owe, get engaged in the process. It's not that hard. People. Doing your tax return is fun. Did I just say that out loud? I know, I'm a geek. Doing your tax return is exciting. I love it. I love it when family members come, come home from the store and they're like look at how much I saved. In fact it was funny. I was at a store this last week buying a gift for my granddaughter for her birthday and it was half off. And I was like, oh my gosh, this is half off. I'm losing money if I don't buy this. Girl math. And so when you're doing your tax return, you're actually saving money. When you get involved and learn all the kick ass strategies. Girl math. And so please have fun knowing how to save money. It's not show the receipt. Look at how much I saved. It was criminal if I didn't buy this. I love to see a tax return with savings. It's not that hard. Let's write off auto, dining, travel, home office, electronics, everything at Best Buy everything at Apple Store. I'm getting the new Google Glass. What do you call the new Apple glasses? Apple Vision Pro. That's a tax write off. I'm using that in my business. That's not for fun. I'm going to be more efficient in my business with my Apple Vision Pros and Apple watch right up. This isn't my Apple watch. I love analog watches. I hate my Apple watch because I get so dependent on it. It's freaking. I'm like damn all those cool watches I can't wear anymore. But anyway, my Apple watch is 100% write off because it's a business tool for texting, calendaring and business. So anyway, so many cool write offs out there. Get excited about it, get engaged in the process. Don't just think your accountant or your sister in law is going to do it right on TurboTax. Get involved. It does not have to be expensive or a pain in the ass or a heartache. And extend if you want time to get your tax returns done right. Extend. Now I have a tax pro network. I'm going to be talking about a lot more here in the next few weeks. Of over 500 accountants around the country that are trained personally under me every week and they're taking clients. So stay tuned, stay engaged. Get on my newsletter. You can sign up for my newsletter@markjkohler.com no cost, once a week, one freaking email. It'll make change your life. Lots of kick ass write offs. Get over There. All right, so we're going to go to some questions. I'm now all yours. File an extension or you'll pay penalties for not filing your return. File an extension, less chance of an audit. File an extension, dig up paperwork that you need. Easy, easy, schmeasy. Where's the my easy button? Easy. Okay, there we go. All right, Jack, what's our first question?

Okay, first off, we need some more questions, so make sure you're putting your questions in there. Mark is a CPA and an attorney. This guy bills thousands of dollars.

I never said that.

For free right now.

Thousands of dollars per hour. I'm saving you. Come on, throw in a question.

Okay, Nicole asks, do you have to use business expenses and the year they occurred? Renting my house furnished, but bought the furniture four years ago. Wondering if I can write it off now. I was living in it previously.

Yes. Okay. Yes. You're like, what do you mean? Okay, first of all, there's two things going on here. First, name again. Nicole. All right, Nicole, this is tricky. Okay, so let's. We're going to talk about two different rules here. If you've got an operational business, you know, I've got a lemonade stand. I'm selling lemonade. The year in which I incur those expenses to build my lemonade stand and have income, I have to write those expenses off that year. Now, I'm not going to go down the startup cost route. That's a whole other conversation. But if you have an operational business and you have a lot of expenses and you're like, ooh, I'll just use them next year. Doesn't work. You're a cash basis taxpayer. You take the write offs in the year in which you incur them in your operational business, okay? That's the rule. It's no big deal. And if you're in a loss, you get to take that loss and kick it against other income or kick it to the next year, that's cool. But you got to take the write off in the year you incur the expense. Now, Nicole's got a different situation going on. She lived in a home, bought furniture, yada yada, and then last year she turned it into a furnished rental because maybe she midtermed it, maybe she Airbnb it, vrbod it, whatever. So she had a home with furniture and all sorts of goodies that she put in that home and then turned it into a rental property, but she paid for that stuff three years ago. Can she get a write off in 2023 for stuff she bought in 2020 now that she's converted her home to a rental and the answer is yes. So what she's going to do is her accountant, by the way, do not try to knock this out the first year on TurboTax. Holy crap. This is a little complicated when you convert your home to a rental. So we're going to take all those assets in your home and boom, put them on the books as depreciable assets for your rental property. We're going to put the home on the books. We're going to. The land is not depreciable, but it's going to go on the books. So the land, the building, the blinds, the couches, the, the sprinkler system, the fence, fans, lighting, dishes, whatever the hell, anything that's in your house that you are contributing to the business as a rental property is now a write off. We're going to depreciate those. You might do a cost segregation and write them off quicker. That's a whole other topic. Usually doesn't work for those that have the W2 wage earner job because cost segs are not helpful unless you're a real estate professional and have material participation. So they're right off. Nicole, talk to your accountant. You're going to love it. You're going to get it. Next question. Jack.

Okay, nobody says I've extended the last two years and I have had to pay interest and penalties also if I don't, if I if any contributions that I have to do. Don't you think I. Sorry, am I missing anything here?

There might be a part two. I'll let you formulate your thoughts. Okay, the first issue is with nobody. He says or she says. Mark, I filed extensions the last two years and what the hell, I paid penalties and interest. The extension is an extension to file your return, not an extension to pay. If you owe taxes on April 15th, you, you gotta send in a check. But you don't have to dig up all. So you may estimate, go, I think I owe five grand. So you send in your five grand with your extension, then we go to work and we dig up all those kick ass write offs for last year that you might not be thinking about because you're in a rush. You don't want to be in a rush. And so you're trying to just get your tax returned on because heaven forbid I got to file by April 15th. No, no, no, no, no. File the extension and send in what you think you owe. Then we go dig up all those frickin awesome Write offs and come to find out you only owe three grand. Sweet. Now you get a refund for two grand. But if you don't send in a check on April 15th of what you think you owe, and even if we get it down to three grand, you're going to pay penalties and interest on the three grand because you should have freaking sent it in on April 15. So the extension for your personal return is, is based on you also sending in some money, and you want to send in just enough to cover what you think you're going to owe. And then we're going to try and get you a refund. Now, business extensions on March 15, you don't send in money. There's no money going in with your 1120s or your 1065. But on your personal return, Mr. Or Mrs. Nobody, send in the money of what you think you owe. You can estimate it, send it in with your extension. Then you have time to prepare your return and really sharpen the pencil.

Okay. MF asks if you have a single member LLC that makes little to no money or even loses money. The side hustle, my main W2 job makes the money. How much danger does that increase in audit?

Wow, MF. Okay, so let me restate this. MF has a day job, W2, and a side hustle with an LLC. And the side hustle makes money or breaks even or loses money. Is there audit risk? No. Unless you keep losing money. In that business, there's a rule called the Hobby Loss rule that you've got to show profit at least three out of five years. So you can lose money for a couple years, you can use money for a couple years. That's cool. And the IRS was like, eh, MF's figuring it out. They might suck at business, but we're gonna let them lose money a couple years. But by the third year, you better show at least a dollar of profit. Or the IRS is like, eh, not only they suck at business, they're trying to screw the IRS over. Then they get mad and they say, no one's going to jail. They're just going to send you a nasty letter and go, is this a hobby? Are you really trying to make money? Because you kind of suck at it and you have to go, no, I really just suck at business. That's literally the letter you're sending. This isn't a hobby. I'm trying. I'm idiot. I'm losing money. And so the IRS was like, all right, we'll let you off this year, but you better show some profit next year or we're going to suspend those losses until you do make money. Because we don't want you just losing money every year to save on taxes. You got to really show us some profit. So anyway, MF having a side hustle. Having an LLC that makes money one year and loses money one year and makes money one year and lose it. That's cool. Now we might look at other strategies. An S corporation. What type of business is this? Does it really need an llc? Sod hustles do not always need an llc. Someone may have told you to get an llc. And everybody, I want you to almost repeat this after me. LLCS do not save taxes. Okay Everybody, rude awakening. LLCs, that's limited liability. Companies do not save taxes. S corporations can save you some tax. There's other strategies. Watch out for the C Corp, especially in Nevada or Wyoming or some idiot trying to sell you that. Be careful. If you're continuing to make more and more money. We want to be worried about the write offs and converting to an s Corporation. But LLCs are there for asset protection and partnerships. That's what they're there for. Learn more about it get to my website markjcohler.com Sign up for my newsletter. I've got a workshop twice a year you can attend in person or virtually. I've got so much material that can help you save taxes. I've got books on Amazon. No one's got more books, more downloads, more podcasts, more YouTube videos than me. No one else. I'm here for you. I'm the goat. You want to learn about tax strategies and writing crap off? Follow me. I will help you. I will save you. Main Street America. I gotcha. All right, next Jack, real quick.

MF followed it up with It's a property management company on a high end properties in a ski town.

Sounds great. MF by the way, I may have been on a gondola with you last week because I met a property manager managing some high end properties. Was that you? I want to hear about that. But cool. You're managing property and typically you're going to be licensed as a realtor or working under a realtor or broker to manage other people's properties. That's great. It's a side hustle. Schedule C. That's great. Do it. Yeah, it's not people, it's not high risk or audit risk to be an entrepreneur. It's the American way. Get out there and make fricking money. Take advantage of it. Republican, Democrat, don't care. Main Street America is for all of us. Let's not get in this fight over Republican, Democrat crap. Let's go out and make some money. Let's be an entrepreneur. I got a lot of Democrats that love making money and a lot of Republicans that like making money. Okay? It's cool. It's American way. Do it. Don't worry about an audit. Unless you're trying to screw someone over. The irs, then we got issues. Do it right.

Okay. TS says, if my accountant files an extension and taxes aren't done yet, how do I know how much to pay without penalties?

Great question. Okay, everybody, when you're ready to do your extension on April 15, and I've got articles on this, we're going to. You're going to be getting more of these on your newsletter as you're signed up for my newsletter and future podcasts and lives the next eight weeks. Okay, did you hear the question mark? I'm filing my extension on April 15, but I don't know how much to send in. All right, what do we do? Well, the first thing is, I look at your last year's return. Did you owe? Did you end up owing last year? Did you end up sending in money last year? Ultimately, look at that. If you're like, no, I didn't owe last year. And then my second question is, is this. Was 2023 kind of the same as 2022? I mean, did you make any more money or was it kind of the same? If you go, eh, it was kind of the same. You and I didn't owe. Then don't send in anything. I mean, you're kind of where you were at for 2023. Based on 2022. If you're like, oh, yeah, man, last year when I filed taxes for 2022, I ended up owing about 4 grand. Okay, so in 2023, did you make about the same amount of money? Yeah. Then send in three grand. Just base it off that. Now, if you're like, well, Mark, I started a new business. I made more money I owed for 2022, and I made an extra 50 grand. Oh, okay. I think the safe harbor is about 20%. That's what I tell a lot of my clients. Take your increase in income in 2023 compared to 2022, plus what you may have owed in 2022. So we got to start there. What did you owe for 2022 when you filed last year at this time? There's your. There's your baseline. Then look at any increase in income, multiply it by 20%, send it in with Your extension. That's a good safe harbor. Then we're going to get to work and sharpen the pencil. Hopefully you owe less when at the end of the day. And here's a big warning. Do not forget the state, the state of California, state of New York, state of Illinois, any. There's only nine states that don't tax you. The other 41 of us, we got to deal with this. Make sure you're doing your state extension and sending your state money. I ended up owing. Oh boy. It was Idaho two years ago because we have an office in Idaho and I didn't send in enough with my Idaho extension. Holy crap, they were worse than the irs. And they don't f around the irs. You could work out payment plans, call them up. The IRS is actually a lot easier to work with than a lot of the states. And so Idaho freaking bent me over and I was like, geez. And so you got to make sure you're sending in your money with the state too. And again, just look at what you did in 22. Did you have an increase in income? Send in an estimate. The worst state out there is California now about 13.9%. All the rest of the states are going to be between 2.5 and about 10. So send in another 5 or 8% to the state just to hold them off. Send in your extension and then get to work on doing a kick ass return. That's what you want to be doing.

So Michelle asks, can you file an S corp for the year before? Who files the form 2553?

All right, now if some of you are trying to do an s election for 2023, you're a little late now. You could still do it, Michelle. Do not do it on your own. It's a form 2553. You want to work with your accountant. Now I've got my TaxPro network is still in its infancy on my website, but get over to MarkJ Kohler.com click on the TaxPro Network, find one of those accountants because they're all certified by and talk to him about a retroactive s election to 11 23. It's not going to be super easy because you should have been doing payroll last year. So now we got to kind of wrangle in a little bit of payroll allocation for last year when you didn't do it. It's beyond the scope of this call. Get with your accountant and talk about a retroactive s election for 2023. If your accountant freaks out and says you can't do it you got the wrong accountant. Because you can. There's workarounds. It may not be necessary either. You got to run the numbers. But if you work with one of my certified tax advisors, they know the angles, they know how to analyze it with you. They'll help you out. But when you have an accountant, that's just a stick up their butt. Oh, you can't do that. And they're scared of their own shadow. Move on. Tell your brother in law I'm out and move on.

Okay. Shaylyn asks, do business losses carry forward?

Yes. Well, they can. First of all, if you have business losses on your 1040, they're blended. You're making a smoothie. So you're going to try to make a smoothie on your 1040. You're going to take business losses, rental losses, stock losses, crypto losses, crypto gains, stock gains, W2, and you create a smoothie. You know, you're like, you're trying to get the best result. Now, not all those fruits can go into that smoothie. There's sometimes restrictions on losses that have to be carried forward in other ways. Capital loss, carry forwards, passive loss, carry forwards. They might blend over here on a side smoothie, and then they get to be in the big smoothie on the 1040. By the way, I'm getting hungry. Now. With that said, you're going to take those losses from a business, and I'm going to say this, everybody, operational business that you're involved in, those losses are the best. Those are like Amex points. You can use them everywhere. So you want to take those losses from your operational business and you can net them against your W2. Then if you have a negative after that. So that would be a negative AGI, you carry that forward to the next year. Absolutely. Most of my clients chew that up against their W2. But if any of you have business losses, it will carry forward. But that's after we make the smoothie. I'm going to Jamba Juice here in a minute. All right, go ahead. Okay.

Terpex asks, I have an apartment in my wife's name and mine and my wife's name. It has been rented for the last eight years. Is there a way to change it into an llc? Would that be beneficial?

Okay, now we have an asset protection question. And this is great. Should we go to the whiteboard for fun? Let's go to the whiteboard, people. This is next level. Okay, so what I design for clients is called the trifecta, hence my trifecta planner. Helping you make money and save Money. With the trifecta, I design a client's life in this way. The baseline is your revocable living trust and it flows into your 1040. Okay, and we talked about April 15th is your tax return deadline unless you do an extension. We just covered that. We're going to split your life in half and we're going to have a two legged stool here or three legged stool. We got your revocable living trust that's going to own your LLC and your rental properties. Over here you're going to have your side Hustle LLC or your S corporation, which could be also an LLC or an income, and that's going to be owned by your trust. See operations, assets, estate. See, we're bringing this all together. This is your trifecta. And when you work with our office, we build a trifecta for you. We make it super pretty color bubbles and we make a plan for the year, very affordable. You meet with any of my tax lawyers@kqslawyers.com and get over there. KKOS lawyers.com you can do a discovery call for free and just say, hey, how much do you guys cost? And I want to get this done. You're going to be under 1500 bucks to just like get a call with a lawyer and get a plan. Your trifecta done. All right, around 1500. Now in this trifecta, our caller right now is saying, hey, right now we have this apartment that we own. Now if you're doing an arbitrage strategy where you're renting the apartment and subletting it as a whole other conversation, because you really don't own the apartment, so no LLC is really going to help you. You're just going to get good insurance, sublet the apartment, make some cash flow. That's called rental arbitrage. Great strategy. But in this equation, I'm going to assume you own this condo slash apartment and you're renting it out. So what we want to do is you currently own it, you and your wife, and we want to transfer that property to the llc. So we're going to set up an LLC that now you own 100% by your trust, which you need to get done too. And then we're going to transfer that ownership over here to the LLC. And then we have 100% ownership by the LLC of your little rental. This gives you significant asset protection. Someone rents your property, has a big party, someone gets drunk, whatever falls off the balcony, falls down the stairs, blah, blah, blah. And I could give you a lot worse examples Right. I don't even want to. Bad things can happen in a rental property. And if you own that rental property personally, guess who they're going to sue? They're going to sue you. And they may not win. Oh, but you're going to love paying all those attorney fees. Ah, so fun. So you want to transfer this to the llc Now, I know some of you are out there. Oh, Mark, you're such an idiot. You got the due on sale clause. There's a bank over here. You can't just transfer that property over to an LLC. The bank's going to, you know, hit that button. DEFCON 3. You're. No, no, no. In 20 plus years, I have never had a bank come after the due on sale clause because a client transfers their rental property to their llc. The bank doesn't notice, the bank doesn't care. Hell, they already sold your mortgage to some private equity company firm, whatever. They've already sold your mortgage five times over, right? You get those little notices. Oh, this new, you know, servicer is now handling your mortgage because we sold your mortgage. Again, they do not care. And there's always. I've got to be careful. Always. 99% of the time in a mortgage, there's an exemption to transfer a property to something like a trust or an LLC that you already own. The underlying ownership is not changing. So everybody out there, this was a great question. If you own rental property in your own name, set up an llc, transfer it. The bank doesn't care. Let the LLC become the landlord. The LLC is on the lease. The LLC has the insurance. And if there's a lawsuit, bing, they can't get through the LLC asset protection one on one. Get with one of our lawyers, set it up. Right. Don't try and jack this up on LegalZoom. We have a whole service called Fix mindlegalzoomenity.com. now, Legal Zoom is great if you know what the hell you're doing. If you're new to this, have the lawyer involved and a real lawyer that actually has a relationship with you. And you get it all for one fixed price. And it makes sense. Give us a call. All right, next question. Jack.

Okay, so H had a rental property and the tenants ruined it and they had to put about $20,000 to repair it. Is that a big red flag for an IRS audit?

No, and regrettably, I've had it happen too. I own rental property. You have a VRBO Airbnb that you could get some problems with. You could have a long term renter that trashes the place. You could have a commercial rental. I had a commercial rental. I'm not kidding you. Where a tornado hit my rental property and ripped the roof off. You know, you say, well, I had a tenant with a problem. I had a tornado with a problem. Some of you might call a tenant a tornado. But literally, I remember the day when the tenant called me and goes, mark, did you hear about that tornado in our town? I'm like, yeah, I thought it was pretty isolated. Yeah, I'm looking at the blue sky now, and I'm standing in my office. He literally said that. I was like, holy crap. So my next call was to my insurance agent. Had to fight that out. But anyway, you're gonna have bad tenants, you're gonna have acts of God, you're gonna have water damage, you're gonna have all this crap, and you're gonna pay 20 grand to 200 grand to 1.5 million to put a new roof on a commercial building. That's not an IRS audit. It makes sense. And if the IRS wants to send a letter and go, what the hell happened? I'm like, you want to see the tornado damage? You know, guys, do not be afraid of the irs. When you have a valid write off, it's cool. And when you have a good accountant that's preparing your return and doing it right, you're gonna be fine. Yeah, you might get a nasty gram once in a while, and you send the letter in IRS and go piss off. It was, you know, whatever. By the way, the other day, I had a phone call. I talked to the irs. I had a phone call. I think I told Jack about this. I had a phone call with an IRS agent, and she was awesome. Now, I know you can get some pissy IRS agents. They hate their life working at the irs. But I get on the call with her, I'm like, hey, I got this client. They got a little mess here. Can you help me out with it? She was like, yeah, send over the power of attorney. She goes, I'm rocking some 70s music in the background. You cool with that? I'm like, damn, yeah, I'm good. By the way, her dog ran by. The IRS agents are now working more remote. This works for the IRS. They have $80 billion to hire more agents. So she was working from home. She was like, yeah, I'm jamming to some 70s music. Let's get this figured out. She's like, oh, yeah, no problem, Jay. I'm put you on hold. Let's get it done. Took care of the whole problem. She Was totally wonderful. I'm like, hey, can I put you on my Christmas card list? Well, I didn't go that far, but she was wonderful. Anyway, just. It's not the end of the world to get on a call with the IRS people. Chill out. I'd rather. I'd rather deal with the IRS than to dmv. Oh, yeah, I'm going to go redo my cell phone plan at Verizon. I'd rather call the irs. Can I just say that, you know, I'm going to go buy a used car. I'm going to go to the irs. There's worse out there, people. Check.

Okay, last question here.

By the way. If I get that lawsuit from Verizon, I. That wasn't. I was just saying, you know, sometimes the Verizon guys can. I could be in there for three hours trying to get a new cell phone plan. Holy. All right, go ahead.

It's harder to get a new cell phone close on a mortgage. I mean, seriously. Yeah. Okay, so Telly asks, was in tax debt because wife who's a doctor was an llc. Now she is an S corp, and I'm a real estate professional. Can real estate losses and cost segregation help prior tax debt?

Woo. Okay, so let's get the facts. This is a good one, man. You guys throwing me some hard balls now. So we got a husband, wife. One's a doctor, one's a real estate professional. And the real estate. The doctor's now an S corp, and the real estate professional, I would presume is an S corp, too. That would probably be the way to go. So let's go to our. Let's go to the whiteboard. Now, you may say, well, Mark, it's structured a little different. That's fine. I'm just telling you normally what we would have in a husband, wife scenario, because a realtor and a doctor cannot be in the same S corp. We got the division of licensing. Doppel Division of professional licensing. In all the states, they're not going to let a doctor own a realtor business or realtor own a doctor business. So we're going to see two S corps. Now, Those could be LLCs taxed as S Corps. They could be a PC taxed as an S corp. That's cool. All right, so this one's a doc and this one's a realtor. All right, so then, Jack, they're asking, we've got losses from somewhere. Guess where they're going to come from. Jack, where would you guess their losses are coming from?

Passive real estate loss oh, there we go.

Woo, Jack, you're so smart. So this is my studio producer here today. So Jack has said, oh, this doctor and this realtor are buying rental properties with their profit. What a novel idea. Why don't we buy passive income properties with our income? Hmm, sounds like a good idea. Right? So they got over here maybe a couple LLCs, maybe three of them, and they got some rentals. And if you have a real estate pro, so here I don't know if it's husband or wife is a real estate professional. There are special rules under code section469AF6 that I can take these losses from these rental properties and write them off against the doctor's income, the realtor's income in how do I get big losses? I'm talking the big D, and I don't mean Dallas depreciation. So they're going to go out there and harvest a bunch of depreciation from these rentals, create some losses. Now here's the golden question. This caller is now saying, well, we've got some old IRS debt. Can I use these losses to wipe that out? You could, hypothetically, but all of these losses are going to first have to be used against your current income. And after you chew up all of that current income, if you still have a carry forward loss after all that, you can carry it back three years, then forward 15. Now we're talking about some serious depreciation, not very common. So in, you know, if the stars aligned and you were Matt Damon on Mars growing potatoes, this could work. But typically you're going to chew up that depreciation. You got a doctor here, that doctor's probably making some woo hoo. And so this realtor's always, you know, probably kicking some ass. And so you got all this rental losses. I don't see it generating enough to deal with the old IRS debt. Stay on the payment plan, get out of debt, make money, get out of debt with the irs. I've been on a payment plan with the irs. I've had so many clients that get on a payment plan with the irs. It's not the end of the world. And then you go out and make more money the American way. All right, now here's my pep talk, everybody. The American dream is real. It's there for everybody. Republican, Democrat, we're in it. We're in an election year. Everybody's starting to get pissed off. You know what, can we just chill out a little bit? Why don't we worry about legislation that helps us build our businesses, buy Real estate. Create passive income. It's tough out there. I know some of you are paying for groceries with credit cards. It's hard. Create some additional sources of revenue. Look at a small business opportunity. Look at a side hustle, look at a side gig. Create some extra income. Set up a debt snowball. Love, Dave Ramsey. Love Dave. Get a debt snowball. You email me and put in the subject line debt snowball. I'll send you one. I do it all the time. You want to know how to analyze real estate? Put in the subject line real estate spreadsheet. I'll send you another email. Sign up for the newsletter. Hit the bell icon, people. You've got to educate yourself in these times of stress, these times of need. It's not time to hunker down in front of Netflix with a bowl of ice cream, you know, saying, woe is me. It's time to listen to some kick ass podcasts, looking at some ways to make some extra income. Pretty soon life will turn around real quick. The universe will help you if you try to help yourself. So I'll be here for you. I'll be here every week. Not going anywhere. Got an incredible team. Get over to kqslawyers.com get a consult with one of the lawyers to build your plan. I've got my network of CPAs and enrolled agents around the country. Get over to markjcohler.com click on the TaxPro network. We'll help you out and be here next week. Next week on Thursday or Friday. You don't know when it's gonna be. That's why you got to hit the freaking bell icon. I'm going to be here next week with a live broadcast answering your questions, helping you build your wealth and your American dream. See you then.

Okay, Mark, before I close this out, we have 20 plus unanswered questions right now. What, do you do this every week?

I do this every week. And those 20 questions we're going to, we'll hit them. Maybe we can try to print them out somehow. But come back next week. I'll be here on Thursday or Friday and we have a podcast. Our podcast is the Main Street Business podcast where we do an open Q and a every three weeks. Save your submit your question there@mainstreetbusinesspodcast.com you can submit your questions and thank you everybody. Thanks for being here and I'll be back. Stay tuned. You don't have to answer all your questions right now. Do some homework, get on my podcast. I've got over 450 podcasts on every topic under the sun of small business, and you can use.