Year-End Tax Strategies The IRS Haven’t Heard Of w/ Carter Cofield

IRS allows you to rent out your primary residence to your business for up to 14 days a year. The business gets a tax deduction. You don't have to recognize the personal income. I can get all the way up to $1,000 a day. That's $14,000 tax deduction and $14,000 tax free for me.

Stock market's up, crypto's up, interest rates are going down. Holy crap. Inflation will follow. It's a domino effect. This is a time to move forward, Invest in your future, invest in your business.

Looking at your payroll at the end of the year is a strategy that every business owner can take advantage of to, to minimize the taxes. There's no point of paying extra FICA if we don't need to.

Welcome to another episode of the Main Street Business Podcast. My name is Mark Kohler and I have the honor and pleasure to introduce my special guest today. Carter Cofield, owner of Melanin Money, a CPA working out of Dallas, Texas. A major influencer in the tax and legal industry. An absolute force in, in our Main Street Tax Pro program. Serves on our board of advisors. He's impacted so many business owners over the years and across the country. It's an honor to be Carter's friend and also co professional in this crazy industry. Carter, thanks for being here today.

So happy to be here. Had a great weekend together and we're gonna keep it going.

That's right. And for those that don't know, I'm sure, unless you've seen some social media posts, Carter and I were at a board of directors retreat in Charleston, South Carolina and just had a good time socializing and, and eight plus hours in a boardroom, just powwowing on ways to make the industry better. Yeah, it's been good. It's been good. Well, Carter, thanks for finding the time to be here on the podcast today. And the plan was we were just going to riff. We're gonna, you know, for those, that's, you know, rock and roll term. For those that don't know, you know, we're gonna riff on tax and legal strategies, especially year end tax tax tips. So we're just going to go for it.

I'm ready when you are, Mark. Let's, let's rip. Let's rip it.

Let's rip it. All right. So, you know, since I've been kind of playing the bass here for a minute or whatever instrument one might say, I'm going to turn it over to you to take it for a moment. I mean, we could try to prioritize Our favorite or the most important or strategic, but we just got to go for it. But I'm going to let you come out of the gate one of your favorite year end tax topics or tips. What do you got?

Yeah, so I will share a new one that I kind of learned a few months ago. It's called the December loophole, or we're coining it the December loophole. December loophole. So as you know, we want to get equipment, AKA vehicles for our business so that we can take advantage of bonus depreciation, which is only 60% this year, go down to 40% unless they make changes. The problem with that is it's really hard to print prove a hundred percent business use on one vehicle for the whole year. But if you purchase the vehicle in December, you only have to prove business use for 30 days, not 365. So it is, it makes it a lot easier for our clients that when I purchase a vehicle for them to purchase it in December, we could keep the vehicle log for the last 30 or 15, 20 days of the month and we can legitimately show that we use this vehicle 100% business use for the year, aka for the last 15, 30 days of the month, which allows us to take the full 100% of the 60% bonus depreciation that we can

take this year and we can stack 179 on it and straight line and really try to get. And if you have profit in your business that's going to give us additional depreciation on top of bonus, what do you say to business owners the next year when their usage may go down? Do they have to make an adjustment and recapture depreciation or adjust basis or.

Well, the goal is to use it 100% going forward, but it's just so much easier to have that proof at the end of the year for the first year because majority of the depreciation, we're trying to capture most of it and in the first year and, and then next year, you know, the depreciation basis goes down. But we got the majority of that appreciation when we got the vehicle, which will help our tax bill immediately.

Okay, I like it. And I, I put this in the category too of any equipment that a taxpayer small business owner might need that they foresee in January or February, pull the trigger in December. Let's accelerate it. Computers, equipment, manufacturing, trucks, vehicles, tools, supplies, anything like that that I shouldn't say. Supplies, tools and equipment and like maybe some real estate rehab. So all sorts of goodies.

Yeah, I mean if you're Going to need the, the supplies or things in January or February. If you buy it now, you get to immediately reap the reward of tax savings versus having to wait another 12 of 14 months. So one thing that we really encourage our clients to do is look at your business. What are you gonna need to pay for in January or February? Let's just put it on a credit card in December and we can pay it off as the money comes into the business in January, February. But we really want to lock in the deduction now so we can save on our tax bill that's going to be due in three months.

And I know there's always the counter argument out there that some people are like, well, now what do I do next year? Now I'm going to have more taxable income next year because I accelerated all my write offs for January and February and December. Well, not all of them, but some of them. And you know what? It's the time value money. Okay. So you pay a little more extra tax at the end of next year. I'd rather defer that. And there's an actual time value savings even if you don't do the same thing next year. Yeah.

And again, I think the money is as a business owner, as an investor, the business, the money is better in your hands, even if for extra 12 months, than in IRS's hands.

Yep.

So I encourage people at least, at least you can you do something smart with the money in the meantime.

Love it. Okay, I'm going hard and fast. I'm gonna say holding your board meeting. I love it. I know it may sound easy or simple. Some of you that are followers of mine and Carter, you already hear us talk about this all the time. But we got to remind you, if you're going somewhere for Thanksgiving or Christmas, it's a great time to have your family board meeting. You don't need to be a billionaire to have a home, a family office. So let's talk about your plans for 2025. If you have an LLC or a corporation, you're going to have a board of advisor meeting or a board of directors meeting. If you're like, well, I don't even have that in my corporate books or whatever. Well, then you better freaking have your meeting. Anyway, we, we at Main Street Business Services, we can give you a checklist of questions to go through. Very, very affordable. And let's make sure there's a link down in the description below for the, for the board meeting service. It's 200 bucks and we help thousands of clients do it every year, but it allows you to write off your travel, your dining, your Uber, Airbnb, any hotel, anything you're going to be doing with family. Maybe during the holidays, have your board meeting if you're. You got your board meeting scheduled. Where you having it, Carter? I want to know.

Yes, we are H. We are having our board meeting in Kissimmee, Florida.

Oh, cool.

Yeah, and I like to plan my board meetings around Thanksgiving since I hire most of my family in my business anyway. So why not turn the Thanksgiving trip into a tax deductible expense by inviting my family to our board meeting. Oh, I love it for Thanksgiving.

Well, for Thanksgiving this year, we're not traveling. But I'll tell you right now, a lot of the food is going on the corporate card and there'll be a meeting after this. You know, my mom, back in the day, I'd be like, mom, what are we doing for Thanksgiving? And I take the corporate card down to Costco because she hated to cook. So it was always like pre made stuff. But then we're having our more official board meeting. Well, for another company of ours, we got multiple companies. So, guys, you can be doing this for several different businesses. But we'll be doing our Christmas board meeting in Park City, Deer Valley, and we'll be flying in a few kids for some recreational holiday activities and a board meeting. All right. Okay. What else you got? What? Throw down another one. What's one of your favorites?

So one of my favorite things to do, which I know will have an immediate result for a lot of our clients, is looking at their entity structure in the last quarter of the year. Right. We have some LLC owners that had more profit than they expected. They look up and they're at $100,000 net profit with a few months left of the year. So what we want to do with those clients is we want to do a late selection to convert their LLC to an escort, back date that election to the first of the year, kick out some payroll before the end of the year, and if we could help them save massively on self employment taxes.

I like it. I'm going to write down a selection and on any entities or business operations clients have for 2024, we want to do a retroactive S election to 1124. And I'm going to add to this same item, if I may. Can I add an amendment to the Senator of Texas to your bill here?

Yes, you can.

I would add for any of you that already have an S corp, let's nail your payroll. Let's look at how much you've taken in payroll. Too many business owners take far too much in payroll. Let's tone it down. Let's bring it down and not take as much payroll. The reports aren't really due till January, but you need to make sure you're on top of. You don't want to be calling your payroll people in mid January trying to figure this out. So let's do it before year end. And I like what you said as part of that too, Carter, is you're kind of doing an audit. Like, what's my income expected? What should I be taking in payroll? Should I do an S election? Everything. S corp. I myself realized I was taking too much in payroll this year. And when I was doing my my tax return in October and said, holy crap, I got to tone down my payroll amount. So it's common for everybody to reevaluate this.

Yeah, because I think a lot of people put their payroll on like automatic to make it easy. But the business fluctuates up and down. So looking at your payroll at the end of the year is the strategy that every business owner can take advantage of to minimize the taxes. There's no point of paying extra FICA if we don't need to.

Damn straight. All right, I'm going to throw mine out healthcare. And this is a grab bag. There's multiple things here. So maybe you can riff with me here on your take on healthcare, but I'll at least throw out the hsa. Some may go, well, that's not a year end strategy. You have until April to make your deposit for your 2024 HSA if you have the high deductible plan. But I don't know if I should call this the December loophole. I'm going to call it the December loophole too. For health care is if you have your health insurance in place for the next year before December 1st and it's effective December 1st, before December 1st, it's effective. Then you can take the entire HSA contribution deduction for 2024 as long as your insurance is in effect before December 1st. So people, as of the recording of this, you should have at least 10 days, 7 days, 10 days left to go to healthcare.gov or wherever the exchanges in your state. And if you're an entrepreneur, even if you have employees, you can do your own health care and make sure it's effective before December 1st and take the HSA contribution. Even if you don't put the money in until April. You got to have your insurance in There. Now, what else would you say, health care wise or. Or add to the hsa? If you comment, if you want.

Yeah. I mean, I just love having the HSA set up as quickly as possible. Because even if it's set up and you don't fund it. Correct, Mark?

Yes.

If you fund it later down the road and want to reimburse yourself, you can reimburse yourself once that account is open, right?

Yeah.

Yeah.

For any expense. Yeah.

So I think it's getting open. Yeah. As quickly as possible.

And you could open the account for $10 and then fund it later and then reimburse yourself for some year end medical. So you can just put it in, just churn it. This is how you launder money, people. I'll add to this the hra, the health reimbursement arrangement. If you're a small business owner, you can have both the HSA and the HRA, but you've got to have your HRA agreement in place before year end for 2024, and you've got to do the reimbursement before the end of the year. So you would go, okay, what's my medical for all of 2024, adopt the HRA agreement and actually reimburse yourself. It's not a use it or lose it plan. It's not the HSA. It's called the HRA 105. I've written about this forever. Carter's got content out on this. You've got to have the HRA in place. If you're married versus single, you're going to have a different strategy as well. But come January 1st, it's gone. If you don't do it before, you're in. This is not one you can make up. So the hra.

Perfect. Can I add on here?

Yeah, totally.

Okay, new strategy. Not. Not healthcare.

Okay. All right, throw it down. What's our next one?

Okay. I love having our clients take advantage of the Augusta Rule in the last quarter of the year.

You can do this with the board meeting too, huh?

Yeah, you can stack them all. So I'm gonna just.

Okay, stop.

And go straight through it. All right, so Augusta rule, the IRS allows you to rent out your primary residence to your business for up to 14 days a year. The business gets a tax deduction. You don't have to recognize the personal income. That's the base of the strategy. Now, I love stack a strategy stacking, as you mentioned. So I will host one of our board of advisor meetings in my home to take advantage of the Augusta Rule as one of my 14 days.

Oh, I love it.

And what's really interesting about doing it towards the end of the year is there's a lot of holidays. So I don't know about you, Mark, but where I'm at, depending on who's playing basketball at the stadium, because I live about two blocks away from American 9 Stadium, depending on who's coming to town for a concert, depending on what's happening for holidays, the base rate tends to increase because there's a lot of events happening at the end of the year. So what I used to be able to get of like seven, six hundred dollars a day to, to, to charge my business for rent, I can get all the way up to $1,000 a day for rent leveraging the Augusta rule. That's $14,000 tax deduction and $14,000 tax free for me.

I love it. And the re. And that's an important note for everybody to understand is notice how Carter recognized the fair market value of the daily rental. Because you can do the Augusta Rule, but you can't jack up or the amount just to benefit yourself. It's got to be fair market value. So go on to a one day rental on Airbnb on a busy weekend and find out what's going on around your area based on this type of home compared to yours. And that's a good starting point. I mean, really just kind of look around. So I love it. So, okay, next one. Man, we are killing it. We got, you got five or ten more minutes and we're going to see how many more we can squeeze in. I, we both huge fans, both Carter and I got to talk about it. And that is putting your kids on payroll.

I'll talk about it.

Boom. And I, and I say payroll loosely. I'll add my two cents. And I know, Carter, you can add something to this. There's so much to, you know, unpack here. But when you pay your kids, you've got to first start are they under age 18 or over age 18. You've got to look at what are they doing. It's got to be legit. And you're going to follow a different method if they're under age 18 before they're over age 18. And again, there's so much you can say on this too. But the last point I'd make is you've got to actually do it. You can't say you did it. You got to actually move the money around before December 31st. What else would you add to the strategy?

Make sure your kids are doing actual Work and document the work that they're doing. Because our clients ask all the time, what's the minimum age? And again, we tell them between the ages of 6 and 17. But we also tell them if they're on the lower part of that, you probably can't pay them the whole $14,000. Right. So it's making sure that the work matches the age and that the compensation matches the work that you're requiring them to do.

I like it. And also, Carter just said that if some of you are like, what's this $14,000 thing? That's the approximate standard deduction. So if your kid goes out and works for someone else, they don't pay tax, federal tax, on up to 14. But in 25 states, they don't recognize the federal standard, they might have a lower standard deduction. That's one point. And don't think that you can just pay them up to 14 or that's what you get to do. Some kids, they may earn 30 or 40,000. You can pay them more than 14. It's just the first 14 is their standard deduction. And it doesn't mean you get to pay them 14 either. May mean you can only get to pay them 6 because that's what they earned. So just. But that's a sweet spot. Love the standard deduction.

I got a few more.

Yeah, what do you got? I'm loving this.

Yeah, I'm having a great time. Mark, we know. We do this all the time.

This is nothing new. Nothing new.

Nothing new. So this is interesting. I want your opinion on this. So as we know. Well, if your audience doesn't know, there is a deduction called the QBI deduction.

Okay.

The qualified business income deduction, which is a 20% deduction of your AGI that you get just for being a business owner that was 20 is a lot of money. If you're making a hundred ousand, that's a $20,000 deduction. Nothing. Nothing to balk at. The problem with the QBI deduction is the limit that they put on top of it. Basically, if you earn over a certain amount of money and you have a certain type of business, which Mark, me and you have, you can no longer take the. The deduction because you're earning too much. So what we try to do is we try to maximize the client's deduction so that we get their income below the limit so they can still take advantage of the QBI deduction. Does that make sense?

Yeah, I like it. It's so tricky because in order to get that net income and you said AGI. My understanding is it's based on your net income in the business. And the tricky part there is if I take more payroll then I might be paying more FICA and then I don't want to do that so I go back and take less payroll but then it drives up my net income and I get phased out of qbi. And so it is true there is a sweet spot and you in fiddling with it is absolutely critical.

And Mark, I don't mean taking payroll is the only way we get the income of the business down, but it will help us make a decision. So for example, if they were on the fence about buying a car this year but they didn't really know if they wanted to, we're going to say, okay, this is going to push us over the line because it's going to put us back in a QBI deduction range.

I like it. I, you know, it's if the hard part I have is that if I can take a write off I'm going to take it anyway.

If it gives me qbi. Yeah, yeah, yeah.

If it can give me qbi. Better yet, at the same token, let's say you're on the bubble. And I like your point though because if you say, well, I need the vehicle but I don't, I'm kind of on the bubble, well, you come forward and do the math and say, hey, if you do buy the vehicle, not only you're going to save tax, we're going to increase your QBI by X. All sudden that car looks a lot more attractive or truck or whatever it is. So I think it's good to add it to the equation when the client is looking for the financial incentive to invest back in their business. And I think this does bring up the fact we got a, we're looking at a pretty cool year coming up. Everybody's so confident about the economy. This is a time to move forward, invest in your future, invest in your business. Stock market's up, crypto's up, interest rates are going down. Holy crap. Inflation will follow. It's a domino effect. And we're going to see some amazing things. So I think your point is very well taken. I like it.

Yeah. Just trying to throw you something new that you, that we haven't talked about before, you know.

Yeah, yeah. I'm going to call that QBI sweet spot and seeing where a client's out on it. Okay, next one. I like Roth chunking. We've got to if we're going to do any Roth conversions, we got to do it before December 31st. And so if I want to do a backdoor Roth, if I make too much money and I can't go in the front door to make a Roth contribution, I've got to do an individual contribution, get no write off at all. But then I can convert it to Roth on the next day. But I've got to convert anything else I have to Roth. And with that comes the strategy of moving some of my traditional money into a standard 401k, which, spoiler alert, I might come to that on my list. But anyway, I just like doing that Roth conversion. And so if I can meet with a client and go, do you have any traditional IRA money? Let's bounce it into a solo 401k. Or let's convert it to Roth and where's your tax bracket there? Because I don't want to convert too much and throw you into a higher bracket. So I call that Roth chunking. I'm going to chunk at it and take as much as I can to Roth.

I love it. We don't do that enough. So I'm adding that to my list. Now can we talk about retirement plans that you kind of brought us there?

Okay. Yeah, yeah. The Roth is a nice entry point to that. What do you got there?

I just love, love, love the solo 401k for my clients that are allowed to use it. It's one of my favorite retirement plans because it is so easy, the way it's structured, especially if you have an escort, it's really easy to fund. Maybe not max out, but it's. It really, it's really, it's really, really easy to get 30 to $40,000 in there at an average, at an average payroll. And it's just one of the best retirement plans that I think is out there. And I know that for clients that are smart enough and are confident enough to manage their own investments, they should go to directed ira, but those are the ones who don't. You can still set up your own solo 401k, have a good amount of flexibility on what you invest in. And there are some institutions that allow you to have a loan provision with your solo 401k, because the biggest kickback that we get is this money's going to be locked away for 30 years. Like that is potentially true. But if you set up a loan provision with your Solo 401k, you can borrow against that. The value of that, of the portfolio, $50,000 or 50%, whichever is less. And if you need the money for your business, you can use it. But I just don't want clients not to invest today because they don't think they'll be able to test the money for 20, 30 years.

Yeah. And I love that strategy and I want to say a couple things. The first one is for some of you are like, I hate that pushback. Well, I'm not going to be able to touch it for 30 more years. That's why I'm doing this. That's exactly, that's exactly right. Do you know, do you know how many people and I know, Carter, it's a. Gets emotional for me. How many people we've met with that are in their 50s or 60s and they're scared to death and they wish someone would have told them when they were in their 30s, do your 401k and they ignored them. They thought they were going to live forever and now they're 50 or 60 and they're scared. And so if you look at the statistics on how many people don't have enough set aside and they're scared. I'm just sick and tired of the. Well, I need access to it. No, you don't. I don't want you to have access to it. If you need access to it, let's increase your disposable income and let's work on your, your cost of living. Because if you're trying to drive fast cars and chase fast women and live in a big house, you got other problems. We let's take care of our future first and then let's live a nicer lifestyle. So drives me crazy. But getting that solo in place is critical because the rules for solos next year are different than if you get it set up before you're in. So you want to pull that trigger.

Yes. And correct me if I'm wrong, Mark, if they set it up before the end of the year, can they still contribute to it next year or do they have to contribute to before the end of the year?

Yes. What did they can still get a solo 401k as long as you set it up before year end, you can put the money in all the way up until your filing deadline next year. If you're an s Corp, that's September 15th. And but now under the build back better plan that was passed under Biden that you can set up a 401k next year. But the problem is you don't get the deferral piece, you only get the company matching piece. So it acts like a sep, which is better than Nothing. So that was a good thing, that. That about that law, but it doesn't get you all the way to the finish line. So if you're thinking that you might want to do it, let's get the solo done now. And you can still throw the money in next year on the deferral part and the company match. So it. It's sound. I know that sound may sound a little complicated, so talk to your tax advisor about that if you can, because again, some of you are like, well, I don't have the money before you're in. Fine, let's just prime the pumps. You can put the money in next year. Okay. I've only got maybe one or two more. I mean, we're. We're scraping the bottom of the barrel. And you know what's fun?

We are.

Is it all the ones you normally read in Forbes magazine? We're not even talking about. Those are stupid. You know, like, oh, harvest your losses, and I'm not going to throw that crap down. Also, we have a new one this year, and that is the BOI Report. A lot of people have not filed their business owner information yet under FinCEN. There's been a lot of chatter about it. Some of you that are listening right now, you're like, oh, yeah, I got to deal with that. What is that again? So if you have an LLC or a corporation, you have to file with the federal government online. We provide that service with our company minutes that we talked about early on in the beginning of this. But the BOI Report is critical, and it's a bipartisan legislation, Republicans and Democrats, to catch human traffickers and money launderers and drug dealers and all the bad people out there that are hiding behind LLCs and ripping people off. We're now finding out who owns them, really. So that's called the BOI report. It's required before December 31st. The penalties are $500 a day, up to two years in jail. This is not good now. It's not prison. I hear jail's a lot better than prison. I mean, I've just heard that. So, anyway, get your BOI Report done. Absolutely critical.

Absolutely. Absolutely. I guess I don't know if this is a strategy, but I think it's worth the people hearing. So I'm sure your people listening understand that if you're a business owner, you should have a separate account for taxes, and you should be saving money throughout the year in that tax account for a future tax bill. But one thing we have to remind our clients is that we can Use some of the money in this tax account to implement a tax strategy and not just save it all for taxes. So for example, we had a client that had about $140,000 in their tax havens account, which is great. And at the end of the year they were looking for a purchase to a property, a property to purchase because we wanted to turn into a short term rental and be able to use accelerated depreciation. They were like, but I don't know if I can come up with the money for the down payment. I'm like, we can use some of the money in your tax savings is literally for either paying taxes or saving on taxes. So we were able to use a portion of that money to as a down payment for the property. Got the 100 hours, got the saving is the less. Ran the call sick. And he was like, wow, I didn't think for a second to use the money that I was saving for taxes to implement a tax saving strategy.

I like it. Very good. And it actually brings me to one that I think is often overlooked. And I know here in November some of you are going, hold it, Mark. I can't even buy a short term rental in the last month of the year and, and put in my hours and all that. But the point is still well taken that there's that tax savings account that might get me across the finish line with them with some strategy or another. And so I'm going to piggyback yours with the self rental. See the self rental. If any of you out there own a small business and you're paying rent to someone else, why don't you put an offer out on a property or business, condo or warehouse. It could be just a warehouse, it could be a commercial building that you need to store some equipment in or who knows what. So if you buy a self rental building before your end, you don't have to put in 100 hours, you don't have to be a real estate professional and you could use some of that tax savings account for the down payment to close on that quickly. And as long as you put it in service, which means you go step your foot in there before December 31, bam. I can cost seg that and take a write off 100% on that depreciation against my other income. That's called the Dash 4 self rental. And I love that that tax savings account could open up that and unlock it.

Yeah. Mark, I just want to thank you and my clients. Thank you because you taught me this self rental strategy at the beginning of this year. And I would say we've implemented it with a lot of clients in our firm and we're probably looking at north of a million dollars saved in taxes because of the strategy. Because if you think about it like in this day and age, a lot of business owners need podcasts or some type of media outlet to grow their business. So we are purchasing a property to turn into a entire content studio and then we're able to grow the business with media because content is better than ads in my opinion. And we're growing the business and saving on taxes at the same time.

I. I'm on a personal note and I think it could have been this story that initiated our conversation last year. If you were referring to when you and I collaborated on this, I bought a 3000. I built a 3000 square foot metal building with a YouTube studio in the back and then I put all of my construction, for lack of a better word for my real estate stuff, my real estate rehabs and rentals because I had two or three rentals. So any tools, supplies, trailer, la la la la la. There might be some Christmas supplies in there. But anyway, I put that all in the warehouse plus built my studio in the back and it was an 80% commercial building that I was able to deduct as a non real estate professional. So I did it myself. I try to do the strategies I preach. So yeah, okay, I've got one last one. I'm going to throw out my last Hail Mary. And if you can throw anything out too, you got paying your spouse. A lot of people think about paying the kids, but I should put my spouse on payroll now. Don't you think people putting your spouse on payroll is smart for Social Security planning or health care? They could be on your health care insurance and you can write off 100% of your health insurance. They are going to get Social Security under the spousal benefit. Do not put them on payroll to just stack money at the Social Security Administration. Not worth it. But back to that solo 401k. If you're going to do a solo and you're going to throw some money down, you've got to put your spouse on payroll so they can play. So it's pay to play. Let's get your spouse on payroll. And there's a sweet spot there too. I may put your spouse on payroll for 20 to 25 grand. They defer the whole thing. Their W2.0, you just got a write off, they drop it in the Solo 401k, go buy some crypto. Who knows how the next year plays out and now you just got a tax write off to buy Crypto. Bam.

I love it. Now Mark, question on this strategy. Is there ever a time where you would pay the spouse as the 1099 contractor?

No.

Because all the money's come to the same household, right?

Yeah, I would never pay the spouse as a 1099 because they're going to pay self employment tax on that. So now I guess you could say, Carter, if you're going to. Okay, first let's put on the table. In my opinion there's only two reasons to pay your spouse. One, to put money in their 401k or that help the reimbursement arrangement that I talked about earlier. Well, you really are kind of. If you're going to just do the HRA, you're really 1099 in your spouse to fund the family management company to do the HRA and zero it out. So there's no self employment tax in that equation and you would 1099 your spouse under the family management company to do the hra. So I guess I gotta say yeah for that instance. But if you're doing a solo 401k that means you're on freaking payroll. So it's nothing to add your spouse to a W2 and just freaking do it at the same time. So I don't think you, I don't think you're ahead of the curve to do it on a time.

I was just asking for the listeners. No, some listen to my set that I was like, let me just ask Mark while I have him live.

Oh dude, I love it. All right, well I, I think I've. We. How many did we come up with? I'm going to add these up. This is freaking awesome. I've got 1, 2, 3, 4, 5. And that's with healthcare with several in there. 6, 7, 8, 9, 10, 11, 12, 13 strategies freaking deployed, baby.

13, 13 great year end strategies that you can implement and save a lot of money on taxes.

Yeah. Carter, thanks for all you do for so many people and I love talking with you. You got me thinking on a couple here. I wouldn't have thought about. I like that tax savings account. I probably would have not put the Augusta rule in there. And the keyword I like there is stacking. Stacking strategies. That's freaking cool. It's awesome.

Strategy stacking. Yes.

Yeah. Well, I'm going to throw one more out I forgot is the. Because we. I hate finish on 13. Some people are superstitious. I'm going to go 14 is. I just thought of it. Is. Ooh, we might get to 15 is.

I can make it 16.

You got one. You got one. I'm going to say 14 is matching your four. Getting the matching out at work. Any of you that are participating in a work 401k and they offer a matching, you got to put in the money to get the match. People. That's 100% return. So if you forget to do it or you don't call HR department before year end, you're leaving money on the table. So find out if your company doesn't match what that match amount is and make sure it's been deferred from your paycheck throughout the year or put in that money. And I was going to say the other employment strategy is if they have a flexible spending account with the user, to lose it, you got to turn in your receipts, go to the dentist, go get some new eyeglasses, something, because the company's paying for it tax free. You got to find out what your FSA is all about.

Exactly. Use it or lose it. Yep.

So I'm going to put matching out and use it or lose it. FSA those. That puts us at 15. You got one more?

Yeah. Because I believe that the secret to living is giving.

Oh, damn you. Now you make me feel guilty. Charitable contribution.

Charitable contribution. And there are three I'll highlight really quickly. So at the highest level, there is the private family foundation, but you can set up an entire foundation that you only find and you use for character. Charitable projects that you want to fund, you have to be the sole owner. It's a lot that goes into setting that up. Secondary is a daf, Donor advice fund. So I actually set up my first DAB last year because I knew I had money set aside for charity, but I didn't know what charity I wanted to give it to. But I was able to put the money in my dad and invest it and I still can select the charity I want to give it to later.

Ooh, I like that.

So I'm able to get a tax deduction today. Let the money grow, and then I can select my. My beneficiary later.

Can you.

Here's a. Yeah, go ahead, Mark.

Can you self direct a daft?

You would find out the answer.

I'm gonna call Matt Sorenson as soon

as we hang out with him.

Yeah, I like that. So donor advised fund and then you were going to add to it.

Yeah. And the last layer of donating to charities. And I read this in a really good book so when you donate to charities, normally you have to. You only can take the deduction if it's on top of your standard deduction or if you itemize.

Yeah, if you itemize.

Absolutely right. If you itemize. Now, I want your opinion on this. So when we do charitable events. So for example, this weekend we're going to a Walmart and gonna give out $10,000 and gift cards and different things like that for the. For Walmart and underdeveloped company. Now, we're gonna bring our content team with us and we already worked out with the owner of the Walmart to get, you know, get a big check and everything and do the content. And when we do this, this tends to bring a lot of attention to our business and we end up getting a lot of clients. I mean, not doing it to get clients, but we didn't do it to get a lot of clients and awareness for our business. So is there a world that we can write this off as promotional expense versus charitable expense because it's bringing attention to our business?

Well, this is a really good point.

I didn't mean to bring us into weeds, but.

No, no, no. I think this is one we should explore on a separate podcast because there are a lot of nuances to the technical rule I put out. There is you only get the charitable deduction if you're giving the money to a 501C3 or through Walmart's gifting arm. So you're giving it to the Walmart 501C3, their sister company, and they're turning around and spitting it out to who they think is most deserving. If I just go to out front of the Walmart and give out gift cards, that's not a charitable deduction, even if it was just being nice. Now there is a gift deduction in business. From a marketing standpoint, there are limits on that. So if you're doing a marketing event, giving things away, keeping it under the gift amount, and it's to promote your business, but also to promote charity, there might be an angle in there. You see where I'm going with that. I'm trying to figure out how to pull that off.

Yeah. Again, read it in a really good tax book. And it piqued my interest. We haven't implemented it, but we're going to do this charitable event anyway. But it was like, is there a world where this is just all a marketing expense? I don't know.

Yeah, you know, it's hard to. Because some people might find it very unethical to say well, I'm going to go give money away to people and look good, and it's good marketing for us. So I'm going to write it off as marketing. And I'm not saying that it's not marketing. I'm not saying it's not great to help the people out there. And so I like it. I think there's a. There's an. There's a strategy in there somewhere.

In there somewhere.

Yeah, yeah, let's talk out.

Maybe they explain it well, but that was. Yes, but those are the ways you can give the charity before the end of the year, change someone's life and get a tax deduction.

I like it. And I'm going to just add to the charitable. For those that don't know, you don't need a receipt to give away anything to Goodwill or Salvation Army. If it's up to $500, I don't need a receipt. But if anything over 500, as long as I have a receipt, I can take that deduction. So if you're going to be doing a little house cleaning in the next six weeks, people, anything in the garage, anything you want to take down to Goodwill, it's fair market value or whatever you paid for it and whichever's less. So if you bought something for, let's say a treadmill that's just sitting in the garage, you spent 2,000 bucks on this crazy treadmill. But you could sell it on Facebook Marketplace for a, you get $1,000 write off. Just get a receipt. You got it. So keep all those receipts and you can stack on it $500 of non receiptable donations. So that's it. But again, that's if you're itemizing people. If you're not itemizing. Tricky, tricky. Well, we did 15. I'm going to put the flexible spending account back into the healthcare section, which gives us a clean 15. We'll finish with charity. There we go, man. Carter, thanks again for joining me. Great broadcast episode and God bless you. Thanks for all you're doing for America.

Thank you so much for helping the people and more so helping me. I would not be the CPA I am today if it wasn't for you. You know that. But I will not never stop giving you your flowers.

Oh, thank you, Carter. I appre. I wouldn't be who I am today without you. It's a team. Takes a village to raise Mark Kohler. So I appreciate. All right, happy holidays, everyone. We'll see you on another episode. Thanks.