Your Tax Planning for Next Year Starts NOW

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Hey, welcome everybody, to an important meeting about after tax day. Some of you might still be a little burned a little, still recoiling a little frustrated. You got stung with your tax bill that you had to pay a few days ago, or maybe you wanted a bigger refund. Tax day for me. We're recording this two days after April 15th, and a lot of people are now coming up to going, mark, what do I do so I don't have the same problem next year? Like I want to plan moving forward? Tell me what to do. So that's the topic today. I'm going to explain what tax brackets there are and how you can better plan to set aside the right money, getting a refund, a bigger refund, and what you could do to save taxes or pay no tax at all next year. So let's break it down. I think you're going to love this. My name is Mark Kohler. I'm a CPA attorney. I've been a small business owner since I was 12 years old when I opened up my first lemonade stand. I own rental property. I fix and flip properties. I love crypto. I'm all in. I just love the American dream. So this is live. I want any of you that are catching this live on either YouTube, Facebook, LinkedIn, TikTok, Instagram, I want you to throw in your questions down below and I want to bring together this topic for you and answer as many questions as I can. So we're going to have a good time today. Now, on this note, and I want to get here to the right slides. We can talk about this in a moment. What can I do now? I've got five tips for you. Five things that you could do now for 2025 that I know are going to save you freaking in taxes and help you make more money. Both. It's amazing. So, number one, space out a little cliche, but pay attention. We've got to start paying attention to this. So this little burn that you felt, you know, and from a couple days ago or earlier this year when you filed your taxes and you're like, damn, I paid more than I wanted to or I didn't get a refund, that sucks. And it's kind of a mystery. I know for a lot of people, they kind of just plug in their stuff and they're like, oh, you don't know what your tax rate is. You don't know why the hell I made X dollars and it got taxed and other stuff did it. I know it can be confusing. It's like this magic box, whatever comes out. Yeah. So I don't want that to be the case anymore. I want to give you some basic principles today that will help you feel more confident for this year in 2025. But the first one is paying attention. And the fact you're here with watching this video tells me you care. You want to learn, you want to be aware of how tax strategies work. What in the heck is Congress and Donald Trump trying to do? Is it going to help me? I don't have tips, I don't have Social Security. I work overtime, but no one's paying me for that. So how am I going to save taxes? Well, that's what I explain here every week on my live broadcast and on my YouTube channel and post on social media. I want you to pay attention to the topic, pay attention to what you're paying for and that, that can make all the difference in the world. All right, now, number two, I would like you to understand what is deductible. A lot of people are like, well, Mark, I'll pay attention, but what the hell am I paying attention to? If, if you have any sort of business income, small business income, or little side hustle or side gig, what you spend your money on is very, very important. So I want to throw this, this out. This is extremely critical. You cannot. And this is here. I want to erase this before we go to the whiteboard here. Okay. All right, so let's head over to the whiteboard. You are only going to save taxes if you have a small business or you have rental property, some sort of real estate thing going on. These are the two best ways to save taxes. Bottom line. So why do I say it this way? If you just have a day job with a W2. And God bless you, thank you for your hard work, whatever it is. You went to school, you have a special trade, you're leveling up, you're getting promoted, you're moving on, you're doing what you love. Great. You get a W2. You can't write off your cell phone against that. You cannot take write offs against your day job. You have to have this little small business on the side or a little rental property on the side where we can build more wealth and we can take things that are now deductible. We're making your life tax deductible. Now, we're going to come back to this in step five here in a moment. But the point is, I want you to keep track of anything we might be able to deduct against that Small business income. That side hustle of yours. 50 million of Americans now have a little side hustle. I was talking to the team here in my studio today, and every one of them has a side hustle. Every one of them and all. There's four people here. Let's see, 1, 2, 3, 4. Yes, four people. It's a little dark on the other side of the lights here. Four people on my team here today. Every one of them has a W2, and every one of them has a side hustle. Well, our goal is to pay a lot less tax on the side hustle than we pay on the W2. And when you net it together, the effective tax rate you pay is going to be much lower. I'm going to explain this when we get to rates in a minute, but let me just say, when you have a side hustle, you make more money and pay less tax. It's the gateway drug to the American dream, people. So what is deductible? Any expense. This IS Code, Section 62 of the IRS Code. Any expense related to the production of income. So if you've got a little side hustle, any expense you incur trying to make money is a write off. Auto, dining, cell phone, laptop computer, anything at Best Buy or Apple Store, for sure. The cell service, travel, you're going to a conference, airfare, Airbnb, valet, taxi, Uber, all of that can be a tax deduction. And whenever you have a side hustle and you eat with with someone and talk a little bit of business, that meal is a write off. Now, so I want you to track those things and deduct them against that side hustle income. So, number one, we're going to pay attention. Number two, we're going to realize that any expense that helps me make money out of my day job, except for my day job, anything I expend, I can freaking write that off. All right, now, number three, we've got to track it this year. I want you to track this better. There was someone in my studio here that said, mark, that's the one thing I realized. I got to freaking track it. And the first way down and dirty is get an Excel spreadsheet, a little Google sheet that you can write down any expense that you might incur. Now, it's a little ugly and time consuming that way, but at least you're tracking it. That's the. One of the best ways to just start writing it down in Excel. And what you might do is one day a month, you're going to go to your bank statement, you're going to go to your Venmo, your Apple Pay, and you go to your credit card and you're going to look at it go, oh, that was business. Oh, that was business. And you're going to write it over in here to this Excel spreadsheet. That's the beginning of bookkeeping. It doesn't have to be rocket science, but you're paying attention and you're looking for what's deductible and you're writing it down. That's it. Now. Now if, as you get more efficient, we're going to upgrade to QuickBooks Online. You'll have an app, you'll have a separate business account for your llc. And you're going to put all your money that you earn in that LLC from your business. And anytime you have an expense, you let the business pay for it. And anytime you want to take money out, you can do that, just transfer it right out. I have online banking at Wells Fargo. I move it from my business to my personal every other frickin day. And that's all good. Now I'm on number three, and I want to say this before I go to my next two. We're going to get on the whiteboard here. You're going to love this. I want you to ask any question on this down below in the description or post it, whatever DM it. I don't know which social platform you're on, but throw down your question. There's no dumb question. I want to help you in this process of trying to save taxes moving forward this year. Now number four, we want to plan for how much you think you're going to owe in taxes so that when you come to next April, you don't have a tax bill or you may get a refund from your day job because you've already paid in all the taxes you need for your business. So we've got to start estimating what we think we owe and when we can estimate what we think we're going to owe, then we can prepare and not get caught off guard next year. And this is when people get behind with the irs, is when they don't set aside what they think they're going to owe. Now once you know your what rate to withhold from yourself because as a business owner, no one's withholding, you got to do it yourself. If you know what rate you're in, then you can say, oh, whenever I make money and I take it out of my business, I'm going to take that percentage and put it over here. In an account that I don't touch. I would recommend you open a bank account in another bank. So if I do Wells Fargo, I want my tax savings account over at Chase. So it's a pain in the butt for me to go get money out of there. I'm going to leave it alone. I'm not going to touch it because I know it's for taxes. Now, next April, I don't owe and there's money left in my Chase account. All right, now I can go put that in a savings or investment account. I could go buy More xrp. Oh, did I say that? Is that my inside voice? Okay. Anyway, we're going to save our money for the future and be building it. But I have that tax savings account. So that brings me to tax tables. And I want to kind of show you guys what a tax table looks like and what you might be doing to really save on taxes. So here's my. Well, I'll leave my calendar alone here for a minute. I'll show that to you in a second. But what we do is we. Let's look at, you're making either $0 here or 200 grand. So let's say the average American here is going to be. This is middle to low income America. This is where 80 to 90% of Americans live between 0 and 200 grand. Now, here's what's interesting. This is called a progressive tax rate. If you've never heard this before, you're going to love this. Everybody, I'm going to keep it super simple that we have a progressive tax rate system. And what that means is on your money, you pay a lower tax rate. If you make less money, the more money you make, the higher your tax rate is. And number two, as you make money, you only pay that rate up until that dollar amount. So with right now in 2025, this is a single bracket. I'm a single taxpayer. I'm going to pay 10% on my first 12 grand. I'm going to pay 12% on the next 40 grand. See, I'm going to pay this 10% in this window and then from 12 to 50, I'm going to pay 12%. Then from 50 to 100, I'm going to pay 22%. And then anything over 200 up to the next bracket, I'm going to pay 24%. These are tax brackets. And the more money you make, the higher the rate is in that bracket. Now what your marginal rate is, if anybody says what is your marginal rate, that is the tax bracket of your Next dollar, it's your next dollar's rate. So in this example, if I am going to make $105,000, I'm going to pay $5,000 at 24%. That's it. I don't pay 24% on the entire 105,000. I only pay it on my next $5,000. I pay 24%. That's my marginal rate, what I'm going to pay on my next dollar, earned. Now, your effective tax rate is what your total taxes are divided by your total income. So let's, in this example, say you made 100 grand. I made $100,000. Mark. I was right here. Well, you're going to pay 10% on the first 12 grand, which is 1200, 12% on the next 40 grand, which is 48, and 22% on the next 50. So I am going to pay $17,000 in taxes. Well, my income was 100 grand. Oh. So that means my effective rate of tax. What did I effectively pay in taxes? My effective rate is 17%. It. And you go, mark, the bracket doesn't even have a 17%. That's because your effective rate is what you really paid. At the end of the day, what did I really pay in taxes? It's that taxes you paid divided by your total income. That's your effective rate. So effective rate, marginal rate in a progressive tax system with tax brackets, that's how it works. Isn't that exciting? So fun. All right, now, the last thing I want to share here is for those number five is as you track things, I want to show you how you make your life tax free. So let's say in this example, you've got cell phone service. So you're. In fact, I'm going to move this up a little cleaner. Okay, so you have cell service for your cell phone of 100amonth. That's kind of what the team here said is average times 12 months is going to equal $1200. All right? Okay. Now I also go dining, and the team here in the studio said, yeah, eating out every month with others, I spend about 500amonth. So 500amonth times 12 is $6,000. Okay. Now I can only write off 50% of that, so I get to write off $3,000. All right, now, camera. Someone said they bought a camera for $300. That's pretty. But it was a GoPro and they're going to use it in their business. Okay, $200. I mean, sorry, $300. And then a laptop. Laptops can vary dramatically. But I buy a laptop for $1500. And oh, and we had another studio member here that bought a new phone today. They bought a new iPhone. And after their upgrade and all that goodies, they, they spent $1,000. Okay, and then auto everybody in here, the consensus was we're going to do about 500 miles. 500 miles a month times 12 months is 6,000 miles. Well, this year you can write off 67 cents per mile. So that's essentially an auto deduction of 4,000. Okay, now here's how this works, people. If you have a small business, and I can say, by the way, there's a law that if you, as long as you have another line for a phone for your personal use, your cell phone is 100% deductible. So I've got my cell phone at 1200, I've got 3000 in dining that I was meeting with others talking about my business. I get to write off $300 for my GoPro that I'm using in my studio for my online marketing. I bought a laptop exclusively for my business because I've got another computer I use for my personal life. And I bought a new phone for my business, which is a write off again, as long as I have another phone line or phone somewhere. And then I've got 4,000 in auto driving around town about 500 miles a month. That, my friends, is $11,000. $11,000. So here's the cool part. If I go out and earn in my side hustle $11,000, I get all those write offs. I pay zero tax. You are tax free on the first $11,000 in this example. And so as you pay attention and track your expenses and you keep track of all the things you use for business, all of that, that total amount for the year, including auto and dining and travel and computers and airfare and blah, anything you use for business that's directly deductible against your side hustle. So in fact, Jack, go back up to this picture. So let's say I'm back to this example of an effective rate of 17,000. Well, if I made an extra $11,000 in my side hustle in that example, but I didn't pay any tax on it because I wrote off everything related to that side hustle. Now my effective rate went down to 15% because I'm still paying 17,000 in tax, but on really $111,000 of income. So your effective rate goes down when you make more money in your side hustle and write off expenses against it. So when you See ads out there. Oh, live tax free. And oh my gosh, let me show you my video of living tax free. And you can live tax free. What they're doing is taking write offs against their side hustle income. You may even be buying rental property and taking depreciation, accelerating it and wiping out your income. There are years and times you pay zero tax, but there's other years where you're like, I couldn't drum enough write offs. And then you still pay tax, but still at a lower rate than the average person because I'm going to have these expenses anyway, but now I'm going to write them off against my business. Now I'm going to take some questions here. I want to hear what you guys might have to ask on this. But the last example of this is Warren Buffett. It was a big to do about five, 10 years ago, I can't remember was in the news that Warren Buffett's effective tax rate was lower than his secretary's. He made like, like what was it, like $800 million in a year, Some crazy number. And by the time he took all of his write offs for all of the businesses he owned and la la la, did his math, his effective rate was around 18%. But his secretary that had a W2 was paying like 23 or 24%. So a secretary that made 200 grand or 100 grand or whatever it was was paying more tax rate. He paid way more in tax, but he had an effective lower rate because of strategy and people. That's the secret to tax planning war. Buffett didn't do anything wrong. He took all the write offs that was producing jobs, making money in our economy. That's a good thing. We want him out building businesses and he gets take write offs for that and he had a lower effective rate. But when I have a W2 and work for someone else and I have no side hustle, I'm not trying to buy rental property and develop an area or have a business. Then you're going to pay. There's no write offs for that. And that's how it works. So my five steps are pay attention, start knowing what's deductible, tracking it. Then know what your bracket is, know what your tax rate's going to be so you can save money for it properly. And number five, try to live tax free as much as possible by writing off those things that you've been tracking against your side hustle or your rental property pen drop. There you go. All right, so questions, do we have anything? Jack Here.

Okay, people, this is the studio producer here. Mark Kohler is the number one tax attorney in America. He's a thousand dollars an hour. So this is your chance to get free advice from the number one attorney in America. Be sure to put your comments below. Okay, let's get started. The first question here is from Juan. He says, I got an extension because of the fires. I don't know if I owe. Should I ask my accountant and save the money now if I owe?

Okay, this is a great question, Juan. First, my. I am so sorry about any financial loss you may have had during the fires. If any of you are in a federally disaster declared area, there may have been fires down your street. But if the government did not designate it a federal disaster area, then you got to file taxes like everybody else. But Juan here, and heaven forbid, I hope you didn't lose your home again. Our hearts go out to you. If that was the case, he gets to file his taxes later in the year because he was in a fire area and he filed an extension. Okay, that's good, people. You know, filing an extension is a smart move. You reduce your chances of an audit. Now Juan can sharpen the pencil and really get smart on last year's taxes. So one, that's a good thing I extended. I haven't filed my taxes before April 15th in 30 years. The first one to get go through the cattle chute is the first one to get slaughtered. That's not me. The IRS assigns their audits based on who comes through the door first. I'm the last one to come through and I'll shut the door. That's how it works for me now. So Juan says I've extended first. That's a good thing. Don't stress you're going to reduce your chances of an audit. They haven't even seen your tax return yet. How can they audit you? But he says I might owe, I might not. I do not know. I don't know what to do. Well, we've got to start by estimating what you think you might owe. Because if you do owe taxes, we want to send in a deposit. Even you can do that after April 15th. Send in a deposit for what you think you owed last year. Every month that you have owe taxes and you don't file, it's a half a percent in penalty per month, which isn't a lot. At the end of the year, that's a 6% penalty. Who cares? It's like a credit card. But we don't want to pay it if we don't have to. So if you think you owe for last year, let's try to figure that out and send in some money even before you file your return. Again, we want to file your return wisely. So I've got an article, it's right there on my website@marchacoler.com titled how to determine if I owe and how much to send in with my extension. I think that's the title of the article. How much to send in with my extension. Maybe someone that's watching here could cut and paste that in in the chat for you. But there's different ways to go at it. And so, Juan, the biggest and easiest way is I'm going to say, hey, did you owe taxes when you filed your 2023 tax return? And if he says, yeah, I owed about $1,000, okay, did 2024 look about the same as 2023? Yeah, I made about the same. So no extra income, no extra huge write offs? No, mark, I made about the same. Okay, let's assume you owe 1000 then. So the easiest way to do is just ballpark it, look at 2023, compare it to 2024. If you said, oh, I made a lot more in 2024, then I'm going to go to the tax brackets. I'm going to go look at all those little brackets and go, oh, yeah, I probably owe because I'm in a bigger bracket and. And I'm going to have to send that money in. So in my calendar and all of you can get my calendar on my website, I think it's 35 bucks. Or I've got all the tax brackets, deadlines, the months laid out for all of you for your LLCs, when to file them and everything, when to renew them. But you're going to look at your brackets and go, yeah, I made more money in 2024. And then try to figure out what that could look like and send it in. So one, get a bead on that. Don't put your head in the sand. At least estimate what you think you might owe and send in the money if you can. You can still wait to file your return, but send the money in just so you're safe. And if you do your return and get a refund, great, you'll get that money back. So just work on it that way. Next question mark.

You are going to love this one. The humble trader says, should I report short term rental under schedule E or C? I'm a single W2 employee and my accountant is very reluctant to file schedule C for Me because he thinks it'll increase the audit rate.

Schedule C. Schedule C. All right, Humble Trader, you are at the right spot. I've written articles, spoke around the country on this. Short term rentals are my jam. I own three short term rentals. And by the way, we are holding a conference. All of you, you have got to come. I guarantee you will save taxes five times of what you pay to come. And my conferences are not expensive like a lot of the crappy conferences out there. In June, in just six weeks, we're going to be in Anaheim, right down the street from Disneyland. I think our general ticket is like seven or 800 bucks. It's three days with other accountants, lawyers, small business owners, tax and legal360.com these questions you're asking. Now, you can come to the conference and you'll save again, five, ten times whatever you pay to come. You can hang out Sunday and go to Disneyland. I'll be there, too. But this is a great conference for all of you that want to save money. Get over to tax legal360.com now everybody listen. Humble Trader has a 1040 tax return. Okay? So let's go to the 1040. On your 1040 tax return, you're going to have different schedules. If you have a trader and you trade stocks or you trade crypto, you are going to file what's called a Schedule D and you're going to report that on your 1040. If you have a small business like selling a product or a service, you're going to file a Schedule C. If you have a rental property, and that could be long term or short term, you're going to file Schedule E. Now, I do what's called a trifecta where we want to put your operational income on the left. So this could be your day job, W2, your little side hustle LLC. And it all comes down here to your 1040. That's great. But when you have passive income, this is long term income, it's not short term income. It's going to go over here and you might think of a rental property and it's going to come down onto your 1040. This might be a schedule C, this might be a Schedule E. Does that make sense, everybody? It's not rocket science. You know more than freaking 50% of America just by understanding this diagram. Now, Humble trader says, mark, I have an STR and a day job. No side hustle because it's short term rental. You think because it's short term, it should be over here on a schedule C. Wrong. All short term rentals still go on a schedule E. That's how it works. Humble Trader. Trust me, I am absolutely 110% correct. And so your accountant should already be encouraging you to put it on a schedule E. If your accountant has questions, they're saying some weird things or they're, you know, off, then I want to encourage any of you that are a tax professional, you may send this Humble Trader to your accountant. And I say this with all love to my enrolled agents and CPAs. I'm a CPA. I love my accounting followers. We have what's called the Main Street Tax Pro program where we will bring you tax advisors, clients from all over the country. Humble Trader may want to upgrade and work with one of these tax pros you can get on our network@markjkohler.com look for the under services, the Tax Pro network. We have over 500 accountants on there right now taking clients that have been trained by me on 900 quiz questions, 70 plus topics. It's amazing. And one of those topics are short term rentals. So Humble Trader, Schedule E as an echo, stay away from the C. Get your accountant over to our training program. Tell them I'll bring them more clients too and they'll upgrade their practice and you'll get good accounting advice. Don't do this on a schedule C.

Okay, Mark, we got a lot of good questions.

I'll go faster.

So we got to go pick up the pace here. Okay, this one you're going to love as well. James says if I have an LLC owned by my solo 401k, wife's rough, child's Coverdell and child Roth that owns a rental. When my children go to college, can my solo buy out their share of the LLC or is that a self deal?

Okay, everybody in our trifecta Revocable Living Trust. We've got ops over here, we got assets over here and this guy is freaking next level. And I love you. He's got a 401k and then he has a Roth for his kid. It's a kid Roth. Love it. And then he has a Coverdell which is like a college savings account. Like a Roth, but it's called a Coverdell. It's like a Coverdell ira. He's got three owners of an LLC that owns a rental property. Love it. And this kid is going to go to college because this Coverdell is for the benefit of college education for this kid. And this kid's going to go to college and he wants his 401 to buy out The Coverdell so that the money can come down here to the kid. Cause the Coverdell's locked into this rental property. I'm sorry, the answer is no. You cannot do that. That is a prohibited transaction. What you could do is, number one, sell the rental, take the profits, split them up according to the percentages and let your son or daughter with the Coverdale rent run off into the sunset. Then recontribute the money into a new LLC and do it again. That may be a pain. Option two, refi this property if it has a debt against it. If it doesn't, do a cash out non recourse loan so you can borrow money and send that money Back to the 401, the Roth and the Coverdell. Coverdell kid goes off to college. You take that money in this Roth and go buy some crypto. Take this money in the 401k, go buy an ETF so you can take that money and reinvest it and make sure you get a higher rate of return than the interest rate on your cash out refi. But in no way can this 401k sell out the Coverdell. Last strategy number three, have a third party. Someone else buy out your son or daughter's Coverdell and be your new partner. Someone else's 401k could buy it out, but not you. Next question.

Dude, that was sweet. Good for you, James.

Good job, James.

Okay, Gwen says my tax person is. Sorry, my tax person isn't good. He filed an extension. I really need someone who can help me that knows all these tricks specific to my situation.

Well, first of all, him filing a a extension was good. Extensions are good. Okay, everybody, don't think that's a bad thing. The blessing here is that you don't like your accountant now. And so you're like, I've got time. I need to find a new one. Go to my tax Pro network. I don't even make any money off of them engaging with you. You get to negotiate with them. So go to www.markjkohler.com. i'm sure it'll be down there in the description on the platform you're watching. And this network is amazing. And also, I'm going to say this to any of you, if you're looking for a new accountant, if you're like, I got to find a good accountant, come to my conference. They're everywhere. You forget, this is. This is better than match.com. i'm like a love maker. I'm trying to get business owners to like, hang out with tax Advisors, sexy. And you'll be at the bar going hey, what kind of accountant are you? Do you know this strategy? You know your short term rentals? Yeah, I know some of my short term rentals. Let's get together. And then they're going to be preparing your tax return. Now when I say get together, you're going to have this incredible tax advisor business relationship with an accountant that knows what the hell you're doing. How cool would that be? So come to tax and legal360. I got countless coming out of my ears there. All right, next question.

Okay. Shabir asks, if you have profits on your S corporation but don't distribute to shareholders, what's the best way to pay taxes?

Well, shareholders, that's kind of interesting. Most of my clients that have an S corp and I'm talking 90% of them, it's a husband and wife or a hundred percent one owner. I do not like S corporations with lots of partners. That is not a good thing. So I'm going to tell you the first thing is if you've got money in an S corp with multiple shareholders that, that are not husband and wife, you've got to get a consult with my law firm, kkoslawyers.com and talk about reorganizing this. It's costing you money. It really is because it's dysfunctional. Now with that said, I'm going to assume when you say shareholders you may be talking about you and or your spouse. So if we have an S corporation and that's great, and there's 100, you brought in 150 grand and commissions. Let's say you're a realtor, you got 150 in commissions, you spent 50 grand on expenses and you, let's say you even did a payroll of 25 grand on a W2. So if we add up our expenses, 75 grand and 150 grand of income, that means you have, as we do the math here, 75,000 of net income. And the question is, well Mark, I never took the money out. I got 75 of net income on paper, but I never took the money out. It's sitting up here in the bank account. What we call this is phantom income because it's going to show up on your 1040. You're going to have to pay tax on this 75 grand even though you didn't take the money out. So there's no strategy to get it out. That's going to save you tax. You're already going to pay tax on the net income and I don't want you to be a corporation. So this is all good. It's just I want to see you take a distribution. Holy crap. You just do it tomorrow. Take out what you want, leave in there what you need for operations, and then take the rest as a distribution. There's no tax hit to do that. The money's just sitting in there. Get rid of it. What I do in general is with my s corporation is if I'm making money, Jack, you want to take that. If I'm in my s corporation, I drain it. I just leave in my S corp what I need for operations and I take the rest out. It doesn't change my tax bill whether I got a write offer or not, whether I take it out or not. There's separate issues. So take it out. Run and run with it. Next question.

Okay, Mr. Buzzman asks, my single member LLC was more successful than I planned on. Had a large tax bill. Is there any good plan to Postpone taxes if 401k is maxed? Create a new LLC for a new business that can be a vendor.

Is there any good strategy? And then he said for a retirement

account, I think he's trying to do maybe a solo 401k.

Okay, so you're so. Okay, so he said, I've got this business in my single member llc. It made more money than I thought, and I'm going to pay more tax on this than I thought. And he's saying. And then he throws out. Is there a retirement plan strategy, frankly? Right. Okay. Well, first I'm hoping you haven't filed for 2024. If you haven't filed for last year and you're on extension, you can still set up a Solo 401K. I may even do a retro s election. It depends on how much profit you have here. I would do a retro s election to 1124, pick up officer comp on a schedule C and then kick out a Solo 401K and you can at least do the profit sharing portion of 25%. Now, for any of you that are an accountant and just freaking lost your whatever because you're upset that I said retro s, pick up. This is A1. This is your only year strategy with a retro s election that works. Never in 25 years have I had a problem with this. I've had prior IRS agents on my podcast. I talk about reasonable comp every day of the week and on Sunday. So if you're an accountant, don't stress about this. Join our group. And we do above board awesome tax strategies for you that just sent this message. If this is for 2024, get a consult with one of my lawyers at KQS. Lawyers. You might be leaving thousands of dollars for 2024 on the table. If this is for 2025, we have got to talk about an s election. I want you to think about a solo 401k. I want to talk about the health savings account and health care strategies. We need to talk about reasonable comp. Oh, my gosh. Are your kids on payroll? There's so much to talk about. And if your accountant's not talking like this, get over to my network and talk to one of our accountants. Do an onboarding, meet with one of our lawyers. If you're making that much money, spend 1000 on some awesome tax planning. For crying out loud, get over to the tax law firm. I promise you, if we do a tax consult, we'll come up with something. We really will. Next, Richard.

Okay, last question here. Andy asks, unfortunately, I owe taxes. Will an offer and compromise with the IRS cause me future problems with irs?

No. So everybody, what Andy's saying at first, I'm sorry, Andy. He owes more taxes than he can pay right now. And so he's thinking about an offer and compromise now. What? An offer and compromise? Everybody, you got to hear this. This is a great question to finish on. An offer and Compromise says, hey, IRS, I owe you $100,000. I'll offer you $50,000 if we can compromise and you'll just let me only owe 50 grand. Can we come to an agreement here? I'll give you the 50 if you can let me not owe 100. By the way, people, this process is at least 12 to 18 months. The IRS is going to put Andy through the ringer, and he's got to show that he cannot pay that 100 grand for at least the next five years. He better be, like, on his deathbed. Business gone. Dog got ran over, truck got keyed. I mean, any country song you can think of about him being on the skids, it better be true. He's got to prove that to the irs. The IRS is not going to give you an offer and compromise unless you can play like the sky is falling Now. His question was, well, is this going to cause problems with the IRS in the future? No, it won't. It's just going to be miserable, and I doubt you get the offered compromise, Andy. What I would recommend instead is an installment agreement. An installment agreement under 50 grand has to be automatically approved by the IRS, no questions asked. Over five years. They put you on a payment plan and then you get current with your current years. I've been on an installment agreement in my professional career. It was only 20 years ago I got caught after the 2008 crash that I owed some more taxes than I could pay. I didn't claim bankruptcy. I didn't ask for an offer in compromise. I was never going to get it. But I got on an installment plan. And so many of you just get on an installment plan. The penalties and interest are terrible if you don't, if you do nothing at all. So we've got incredible IRS resolution. Members of our program at Main Street Tax Pro. I'm just going to, if you can remember this name, Farah Sala. Farah Sala. She is amazing. She's on my board of advisors. We for our company at Main Street Tax Pro, do a consult with her. She'll give you your, give you your real options. And my heart goes out to you. It's no fun owing the irs, but you got to deal with it. I'm glad you're talking about it here. Okay, everybody, thanks for being here for the live. Get over to the tax and legal360.com website. Come join us in Anaheim. Find the perfect accountant. If you're an accountant, you're going to level up. It's got 25, five hours of continuing education credits, enrolled agents, CPAs, lawyers, life insurance agents. This is legit. Three tracks, business building, basic and advanced. And we've got parties for networking. It is going to be off the hook. So get over and check that out. I also have Tax Pro talks over the next five weeks. We've got a virtual real estate tax summit coming up in three to four weeks and you can find all of that@markjkohler.com we are here to help educate you to make more money in 2025, keep more money in 2025 and build wealth for the rest of your life. Thanks, everyone. See you next week.