CPA Serving McKinney, Frisco, Plano, Prosper, Celina, Allen Talks New 2018 Tax Laws And Strategies

[Music] listening to talk radio 1190 I'm John wolf and I have a special guest with us today on the ask the experts radio show John Harmon CPA how are you this morning John I'm doing well thank you John and tell us what makes your tax business special where do you really stand out above the others well I think one of the first things we're a smaller firm there's four CPAs in the firm we can provide the personal service to a client you know you're just not a number to us you know we take every client and work with them personally we we look at their situation and we also provide a holistic approach to our accounting there's a lot of times you have questions about your taxes but John so you have questions about your financial aspects you might have a question about take money out of a 401k should I invest in this type of business what stocks should I invest in which we avoid we don't recommend any stocks but there's a lot of personalized questions that you need somebody to turn to at certain times in in a year there's questions you have outside of April the 15th and we're always there to pick up the phone and answer questions for you that's great now I should minutes because people dive in out of the car all the time and especially when it comes to listening to radio the phone number for your office for six nine seven four two zero two eight three four six nine seven four two zero two eight three and your website McKinney tax calm want to make sure we got that in there you were voted best accountant in McKinney 2017 you've got eight years with that stature and running and you've had other awards you're on Angie's List Super Saver Award winner and let me ask how are we gonna be affected how are your clients affected by the new tax laws that just got passed yeah there's there's been a lot of discussion about the new tax law there's a lot of myths going around we've had questions about well I'm going to follow my tax return this year on a postcard and that's it's not just not true the forms are going to be out next year and in also this year they're going to be very similar forms they're not going to be cut down there's a 1040ez s been around for years you can use those forms and they'll still be available while the people will rushed out and want to pay property taxes you know want to prepay it too before the first of a year there's a lot of news and people's said well we can save taxes pre paying these taxes and I call the collin county appraisal district on a thursday right after christmas and that's asking about you know should people be pre paying taxes i'm wondering what they're doing what they're telling people in she's and ask have you been saving a lot of calls about this just yes the first couple of days we received a lot of calls said what are you not receiving them now just know we're receiving calls how do i get my money back because people have paid in they've listened to the news they paid in their money to the county and then i realize it doesn't do any good and so they're now they're requesting their money back and in fact what they're doing is actually make a deposit on the next year's real estate taxes they're not actually paying a real estate taxes because there's no bill yet they're just making a deposit and a deposits not a deduction so if they make them feel good when that time comes to write a check but they're not accomplishing anything other than giving money away sooner than they needed to not collecting interest on it not able to invest it well there's a lot of times you don't want to listen to the everything is on the news by the tax law changes and you need to really dig into the law itself there's a good example as the senate bill was coming out in the first part of December and in the bill from the house was coming out very different bills they went in and they number total about five six hundred pages and then went to committee and then when it came out committee it was a thousand and forty seven pages so everything he was hearing prior to the committee report or the type voting on him what's different from what actually the bill was and people were always asking well how the new tax law changed well you don't know till it's actually law and there was some big changes coming out okay what what major write-offs if any can you name that got taken away oh there's a lot of the exemptions were taken away that was a big one that you hear on the news about the standard deduction going up to twenty four thousand for a person filing joint but if you had four children for four kids and then your husband you had six assumptions assumptions were 1950 1950 each so your is coming out to of eleven thousand seven hundred in deductions that that you're missing they yes they raise the standard deduction you know ten twelve thousand dollars but you've lost the exemptions of almost the same amount so it's a wash but all you hear in the news is all the standard deduction almost doubled its up to twenty four thousand well yeah you know that took something away to get you there now sales people talk about the elevator speech if he met someone basically in an elevator yet twenty thirty Seconds with them mm-hmm how would you sell yourself in this situation if you if you had twenty thirty Seconds to just give someone a generic but solid piece of advice for their finances all right well first of all my office is in a one-story building so I don't have an elevator but if I out and try to break it down into a short speech you know mostly with your individual there's not really much changes you know they might change the bracket and the other bracket from 39 to 37 there's there's no way to get around this you know you prepare your taxes and what the end result is is the end result they're doing away a lot with the standard for replacing the itemized deduction with a standard deduction you know make some small changes and for the average person with w2 income there's not really much they can do to save money that make sure they're giving to charity make sure they're giving a good write off when they donate to Goodwill or to the disabled veterans make sure you're putting a good value on the items you donate you know if you donate a sack of clothing is that sex worth more than $10 and lot of times people said well it's not worth much a little clothing old clothing you know when you put a sack full of clothing yeah and there's big garbage bags you can put two three hundred dollars worth of clothing in there pretty easily you know if a shirt is worth $15 at the Goodwill store 10 shirts does it $150 value so make sure you take all these small deductions but the big the big tax law change has to do with corporations and you hear about the 20% of flow-through if you're a receiving a k1 or your owner of a business you can get a deduction equal to 20% of your income from that business that sounds great I'm a LLC myself I'm an S corporation that's how set up I won't be able to take that 20% because I'm a service organization and I'm over the limit of making 300 $15,000 a year the taxable income I'm over outlay meant something that allowed the 20 20 percent deduction you know so you keep reading about and hearing about all these tax benefits once you get into law they're not there for a lot of people doctors contractors small business owners a lot of them won't be able to take this 20% deduction however there are ways to get around this there are some loopholes in the new tax law one of them you have to work outside of an S corporation or out or you use LLC's you can do a multi structure of having your business instead of being one entity having two or three entities and the you have part of the money going to a corporation or corporations tax at 21% your tax at 37% you're going to save 16 percent in your taxes if your tax liability is $100,000 you're saving 16 percent that's sixteen thousand dollars so there's ways to restructure it and if you go too many people are in the tax profession they don't understand how to restructure this you need a firm that is forward-looking that understands the tax law is more there to help you save money and not just to fill out a form we're not form filler alders we want to look at your total situation figure out what's best for you we can actually set up different types of entities that will help you disperse your tax liability among different entities and actually over lower your overall tax liability okay I want to mention again I'm speaking with John Harmon CPA phone number for his business for six nine seven four two zero two eight three four six nine seven four two zero two eighty-three or on the web at McKinney tax Cobb you mentioned about LLC's and S corporations if someone's just starting up a business always hear America's made of the small businessman we all have great ideas some people go for it and what would you advise someone who's just starting out as far as trying to protect himself with an LLC what LLC one of the primary purposes of LLC's are to protect your assets this is very important if you were you have some wealth is when your home and savings account you weren't protected so you're going out and setting up a small business you don't want to risk everything you're putting money in that money is at risk but you don't want a risk of even more money you don't want to come back and take your whole retirement so a lot of times people come in and and they're setting up a business have an idea in their own kitchen table creating this idea and say well I make great cookies I'm gonna start a business selling cookies my advice is yes you can set up an LLC we will charge you money or set up an LLC you don't need an LLC you know you need to start selling cookies and once you start making money and realize and you're gonna be making our profit we can set up an LLC for you and we might be able to have the LLC tax as an S corporation or you might go in a partnership and have it set up as a partnership we could restructure it but your from number one you needed a business plan to make money you don't need to be spending money saying you're going into business start going into business okay very good we'll be right back you're listening to talk radio 1190 with the ask the experts radio show our expert this week John Harmon CPA we'll be right back [Music] cpa john harmon is proud to be selected as the top CPA and Collin and Denton counties by the ask the experts radio show Harmon has been a practicing certified public accountant for over 30 years he's developed new tax strategies for the new tax law Harmon has a new tax strategy that taxpayers who are owners of an S corporation or receive k-1s over $200,000 or have 1099 over $200,000 significant savings for 2018 beyond their current strategy you have to act quickly in 2018 to take full advantage of these new tax strategies his firm offers services in personal financial planning IRS representation small business accounting bookkeeping tax planning preparation payroll and accounting services business plans and new business startups John Harmon with his years of experience can give you peace of mind knowing your businesses and good experienced hands so see why so many of his clients think he's the finest CPA in Collin and Denton County call CPA John Harmon today for a free consultation so he can show you how he can help your business or you personally four six nine seven four two zero two eight three or go to john's website at McKinney tax com ever had an obstructed view in a show or an event that's what it's like relying on checking your credit to protect you from identity theft you get a limited view you might detect credit changes but you can miss threats like someone getting an online payday loan in your name or selling your personal information on the dark web with LifeLock you can see more we use proprietary technology to detect a range of identity threats and if you have a 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gas and the oil changes against you know against your income or you can take the mileage I always prefer the mileage is easier to come to keep track of a lot of times you have gas receipts you put them in your ashtray the cars being vacuumed them out and also on the receipts or up the vacuum so keeping track of mileage is easier it's cleaner and people would ask me well I'm buying a vehicle and I have this business I'm gonna put the vehicle in the business name and this is gonna save me a lot of money not really what happens if you put the vehicle in the business name now you're gonna have to pay additional taxes each year on that vehicle this is a business vehicle your insurance will usually go up because now it's a commercial vehicle so you got two negatives going against you right there you know and also when you're using mileage of vehicle convene your name and you're using it forty sixty percent of the time you keep track of a mileage and the company can reimburse you or use of your personal vehicle it's a lot cleaner way to do it it's a lot simpler way to keep trying you don't have to worry about these receipts that go against it and this is what I recommend generally speaking you know each case is separate you look at it and you make your own decision even now if you're buying a van that's suited for rug cleaning and it's full of is made special for that and you have your equipment bolted down inside of a van that's a commercial van that's not your personal Lexus that you're driving every day to go grocery shopping now we always hear these commercials settle your IRS debt for pennies on the dollar I know what $100,000 I only had to pay $1,000 that I was debt freak is that a real type of thing or what what is the true story yes you can't save money yes you can make an offer and compromise the government wants you to pay them something that they want they're like a credit agency they want to receive some money if all they can receive from you is 10 cents on the dollar they'll take that however there's a big however you have to show that you cannot pay any more most of time is let's say somebody is 65 years old living on Social Security they owe 10 they owe $100,000 there is no there never receive $100,000 they submit the financial statements showing they're just very surviving and then you might get 10% on the dollar offering compromises is really a specialized field I work with another CPA here in Dallas area Jim Matthews he's very good at offering compromises and he actually received one compromised person over $50,000 and he actually negotiated down to one dollar that's not good that's a good that's at first I've ever heard about he said that's a Holy Grail and they actually personally submitted to various joked and laugh at him and said you can't submit offering compromise for $1 he said we're doing it and it was accepted but the person had no assets they had no money coming in they could never pay the day in it is a situation it's a perfect storm our perfect compromise in that regard now if you're 30 years old yo $50,000 there is some weights you out so maybe you're not able to pay this year or next year but that just don't keep your file open know for you know probably 10 years and then wait and see if you're gonna start making money and once you start making money don't want some of it but offers in compromise lot of firms will just take you know three four five thousand dollars up front maybe follow the offer and compromise and just let it go from there I think what statistics was only ten percent of the offering compromises or accepted you can go out to the Arias website and there's a question there about offering compromises do I qualify well you can go through that questionnaire is very few questions and if you don't quite qualify done even the Campins you know spend the money but if you do qualify it is a way out so the option is there but not for everybody yes it's not for everybody just because you owe money you think you can negotiate no they're gonna wait you out there looking at it over a long period of time they're not in a hurry to settle they'd like a settled I want to get as much as possible but as I said if you're 30 years old and you have a good job or you just lost your job they might not settle they're thinking well over the next ten years you're gonna be making money we're gonna get some of the money we'll be here yeah what do you have to do to end up in debtors prison as they used to go I RS go to Kansas and go to the federal prison well I was reading report years ago that the story about the somebody's house being taken away there is loves news articles and stories like that you know there's one or two a year it scares people and to be compliant and their tax returns they want people you know father returns and be honest about it so when there's a really negative story about the heiress being tough and being cruel Barriss kind of likes that because it makes people more compliant overall though IRS agents and people I'll talk to or or just everyday people they're bureaucrats they're easygoing they have a family they're just you know following the instructions in their manual you know they're not evil people you know and people are scared of day after it's no reason to be scared to death of them if you if you just work with them a lot of times somebody will come into the office and they owe $50,000 and know that five years ago and I said well you know they're you know they got a lien against my house and but you know they're garnishing my wages well other aris wanted was she had to talk to him and we started knowing them they're like any other creditors that keep that come at you a little bit harder you know if you work with them and talk to them you know you even set up a payment plan they're happy and you know setting up a payment plan is fairly easy in just you can actually go online now and set one up and if you owe $50,000 that wants you to pay it back over a six-year period and take 72 months in to $50,000 and that's your monthly payment that they were looking for just thinking about a nice car you know you know so once you're talking to them they're okay and if you can't make your payment if you need to make a lower payment then we'll take that but you have to prove you came back the payment you can't be living driving a Mercedes being have have a $1,500 my car payment just living and have a house with five hundred thousand dollars of equity in it and say oh I can't make money I have no money you know don't look at your financial history and they'll pull records and see what she owned again we're speaking with John Harmon McKinney tax calm is the website for six nine seven four two zero two eight three is the phone number McKinney tax calm so I was easier to remember if you're driving uh you seem like you're really into it what what drove you to get into the tax field well there's two pieces to this answer one is when I was in college I wanted to be a dentist that was my major in my first semester I took biology and chemistry I hated biology and chemistry I've decided there's no way I'm gonna go through four years and get a degree in science I was good in numbers I'm going to be a math major but after my first math class I decided the math in college was totally different from the math in high school so I'm went back to this simple math accounting you know he's adding subtracting some division and started studying accounting and thinking back about it I came from a poor family my mom worked as a clerk in a drugstore he's a single mom and when I was 19 11 years old I was stay in a drugstore in the in the back of one my mom would be working up in the front and there's a person to come come in at night and he would do the books for the drugstore and it's the big old binders the ledgers he's sitting in the back on a card table smoking a big cigar and then do it you know putting in the manual entries in pencil in the ledger and that's it back there and I'll talk to him and I think probably I didn't reach out to him I just bothered him in but he tolerate a kid back there and saw him looking you know he was an accountant so I'm wanting to be kind of like that but of course I kind of sort like that anymore they're not in the back room with a big cigar been making entries and pencil in a book now we're a lot more sophisticated than that now well that's great you found a found something that worked for you you didn't have to take all those science courses if you were to give some advice to someone who is just starting a business other than the LLC anything in particular come to mind about mistakes to avoid I think one of mistakes uh is you're trying to figure out you know how am I going to make money you might have a good idea but can you make money from it and that's the going back to a person who says I can make good cupcakes or I can make great cookies we do you have a plan who you gonna sell it to well I can sell it to the public well you need to start selling some and then once you get started then you'll see better ways to market you see better ways to the mayor factor and Baker cookies you might set up a little two or three ovens and start making a lot more cookies but you need to get started first first of all and see where your best return on investment is coming in out for everybody this is John Harmon we're speaking with CPA if you need any new tax strategies you know about the new tax laws that have come in but you don't really know the new tax laws that have come in and you need to know how to do the best you can with the money you have and how to save as much as you can give John Harmon a call four six nine seven four two zero two eight three or just look up McKinney tax com thank you John for coming in and you're listening ask the experts radio show I'm John wolf on talk radio 11/9 thanks for having John [Music] cpa john harmon is proud to be selected as the top CPA and Collin and Denton counties by the ask the experts radio show Harmon has been a practicing certified public accountant for over 30 years he's developed new tax strategies for the new tax law Harmon has a new tax strategy that taxpayers who are owners of an S corporation or receive k-1s over $200,000 or have 1099s over $200,000 significant savings for 2018 beyond their current strategy you have to add quickly in 2018 to take full advantage of these new tax strategies his firm offers services in personal financial planning IRS representation small business accounting bookkeeping tax planning preparation payroll and accounting services business plans and new business startups John Harmon with his years of experience can give you peace of mind knowing your businesses and good experienced hands so see why so many of his clients think he's the finest CPA in Collin and Denton County call CPA John Harmon today for a free consultation so he can show you how he can help your business or you personally four six nine seven four two zero two eight three or go to john's website at McKinney tax com

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Views: 2,893

Rating: 5 out of 5

Keywords: CPA, Frisco, McKinney, Allen, Prosper, Plano, new tax laws, tax deductions, S corporation, LLC, donations, 2018, certified public accountant, tax strategies, small business accounting, Celina, Princeton, Collin County, Fairview

Id: pPsWAGPCamI

Length: 27min 8sec (1628 seconds)

Published: Mon Feb 19 2018