How To Turn Your 9-5 Into A Tax Write-Off (2022)

business and blood don't mix like politics with no tricks fighting business serious risks number eight know the date your taxes do if you miss the deadline they'll be coming for you number nine should have been number one to me if you start a business stay away from hobbies [Music] pull up to the table let's go yo what's going on bamsha boy anthony o'neil welcome back to the table you guys already know we keep it real relevant and relatable every single monday and i'm super excited because today is monday so it's money making monday today because i got my boy money making mitch and sanea in the building today because we're gonna teach you how nine to five check this out how nine to fivers can turn their lives down your lifestyle into a tax right off legit legally and ethically so before i introduce my guests let me turn off my phone uh but before i introduce my guests i did some research because today we're really talking about you know how to properly write off some things um how to not get over on the government because i don't want to promote something illegal or wrong morally but dad going to there are some ways that we can properly uh write off some things legit put more money back into your pocket into my pocket and i bought my cpas in the building okay they in the building and so we're going to get to them here in a little bit but i want to set this up this way okay this year the irs issued 96 million refunds totaling 270 billion dollars during this year's filing season all right so that means 96 million people overpaid on their taxes this year think about that if you got a refund check this year you overpaid got your money back with no interest none so you loaned your money to the government who don't love us who don't like us who really don't care about us and you didn't get a dime for it so no wonder why 50 of americans feel like they paid too much money um on their taxes because honestly they did look here's the truth we work very hard for our money you get up every single day you get a monday tuesday wednesday thursday friday saturday sunday started all the way over you put in hard labor for your money and taxes do help us pay for a lot of the public amenities that we really enjoy like parks and roads and i'm all for that but wouldn't it be great think about this wouldn't it be great to lower our tax bill and keep more money in our pockets put more money into our investment for that year to get the proper return to help us build wealth for our kids to help us go out there and build wealth so we can eventually buy that dream home buy that dream car do something for our family so we can have the fruit of our labor so real much think about that because you know what there's a little secret out there not knocking nine to five it's because we've all been there but if you own a business taxes are probably your biggest expense you could potentially increase your profits by lowering your tax bill well guess what today we're talking to two amazing people two dope black people i said it i'm black and i'm proud they black and they dope okay uh because these two people are absolutely amazing they're going to teach us how we can lower our tax bill legally and ethically and take advantage of the tax code and we know trust me most wealthy people most millionaires and especially billionaires take advantage of the tax code so you and i can do that as well so today i'm joined by money making mitch michelle valbarn and the people cpa shania wilson both are industry leading tax experts and wealth educators here at the table boy michelle is an award-winning author and speaker from florida now sinea has been a future thought leader in cnbc and forbes and is also a real estate investor from the bronx new york so y'all welcome to the table my cpas your cpas for today uh michelle and chanel welcome to the table fam what up bro yo let's let's let's let's get straight into it all right because here's one of the things that i really have learned that my tribe they work hard all right and uh my tribe are looking for ways on how do they want to get out of debt okay and i believe that we can save money on paying a lot of taxes it'll help us put that money towards that for sure um and then we have a lot of entrepreneurs following me who have a full-time nine-to-five job but they have a legit business on the side majority are ladies all right so 62 percent of my tribe are women who are out there starting businesses amazing right and so i want to help them and i want us to take our time today we ain't no rush y'all in nashville y'all came all over from atlanta to chill with me so i want to talk about what can we do to help my tribe do it but before we get there i like to set my whole show with who are you all and not not the you know the cpas not the well-known people who are experts in this space but at the core who are you what's your story let's go from ladies first of course oh thank you thank you so hello hello everyone again thank you so much anthony for having me at the table thank you you saved me listen we got you right um so again i was born and raised in the bronx new york i'm raised by a single mother who i also have two younger brothers um so that pretty much was my beginning um from there i not grew up in the bronx so there was no talks about well snow talks about how tax code is actually a blueprint to wealth building um but i went on to study accounting at suny mooresville suny oswego and rutgers university wow so i actually do have an associate's degree a bachelor's degree and two master's degrees two math hello and the counselors you were educated how old are you is that two i'm 27 years 27 yeah 27. are you educated like that no i ain't trying to put your business out there because you know before you know before i before we met i had to research it you know um you just recently even purchased your your mother a car yep so i bought my mom actually a house 2018 i bought her the house you bought your mom a house because let's talk about the asset first before we talk about the liabilities so the house was purchased in 2018. my mom because she was a single mom how to put her education on pause so she just graduated with her master's degree this year so that car was her gift from me you know because she put her stuff on pulse so that i can be great so now that i you know i could say i'm a little great i can give back and no allow to live her life as she would have had she not had to take care of her kids so so let me just say this all jokes aside a 27 year old at the cost of her mother went on to get her education you took advantage of that opportunity now you've built enough wealth to where you can help your mom get her a house and get her a car yes at 27 years old a black sister from bronx from the bronx listen so if y'all are questioning what do these young people know about building wells i mean she's done something i haven't done i haven't bought my parents a house so i'm bringing people to the table who are legit doing what they're saying and they're doing and they're going to help us do that as well i i just wanted to just stop right there no joking i mean that's major thank you i'm proud of you thank you i didn't know you bought your own house i did not know that thank you i mean you know some things you just don't publicize because you have to understand okay well what's important to you right so when it comes to me making money like that may not be relevant it means grateful audience for inspiration but i'd like to keep my personal life personal because that's what i'm doing it for and a lot of times people can mix both and get distracted from what's important so i allow my work to take me to what's important um now that she's good though it's all about me now so i'm trying to figure out where i'm about to buy my house so i mean have you have you purchased anything nice for yourself so yes i actually own um three on three rental properties i own a duplex and detroit okay i own two buildings in ohio one's five unit one is six unit and i also co-own a salon suite in atlanta with my business partner and dm monet are you serious yes i mean you see why she's the hat one and a half of my cpas because she about to help me get right you know what i'm saying i love you so let me ask you this question what was one thing as what motivated you to go this hard this young let's be real you're on the show we keep it real i don't sugarcoat nothing you're young you're beautiful are you married no are you are you dating because most young successful black ladies yourself are not really thinking about that they're thinking about no disrespect queens but you know they're thinking all right i'm educated but let me find me a man that can you know you know at least help you know take care of some things and it seems like as a young millennial actually you're not even a millennial are you she's young what do i fall into i and so i want to know what what what's the mindset that you had early on to really get to where you are today yes so really it's okay a lot of black women like you know we we're queens right right right um the thing about being a queen is that you have to control your kingdom oh you know and cut that off a lot of times you know people are looking for people to come and fix their kingdom but as queens we have capabilities to fix our own so i watched my mom from you know when i was young make sure even though she was a single mom we grew up in the bronx we never had the struggle right and i give her so much kudos for that because she was wasn't working jobs she would make a lot of money but she was making sure that we were always good um so i saw her hustle she was working at least two jobs at once um i was seeing her go to school take care of us and then also work so from a very young age i already knew that i had no excuses right you know my mom's out here she can raise three kids and go to work and go to school and take care of the household and make sure i got no excuses all i had to do and she enforced that the reason why i'm working hard because your only job is to get an education and make good for yourself right so um as i grew up and it came down to like you know at this point in our lives where i'm able to do the first do that i wanted to do was making sure that i would allow my mom to be alleviated from the duties of running the kingdom by herself wow and that's who we are so even with things like my little brothers i have one brother who's 14 another one is 24 um you know able to help my younger brother get a job my brother who's 14 years old you know now i got a little bit money my mom's biggest issues with him was him being focused in school him being focused just outside of school i put him in martial arts and i got us a tutor you know so like having money that's why i'm so passionate about wealth building and saving money from your taxes because they say that money does not solve problems it can solve a lot of things whoever said that is a lie i don't like it don't make no sense because it solves 99.9 percent of mine [Laughter] i would probably say it solves about 100 but it doesn't bring just it doesn't bring joy and i think that's the part it definitely solves problems for sure but it doesn't bring you joy it doesn't bring you peace it doesn't bring you that that that that joy that really god and pretty much god can give you yeah and so i i definitely hear that but if you got a you know a problem when it comes to paying your mortgage i mean it's good you got joy right [Laughter] it's good that you love the lord right yeah but you still need some money for sure so money is definitely definitely important wow give me some love yeah i'm already this is all new information to me too like bro bro i knew she was amazing but like oh bro bro i feel better yeah i mean good hands moving forward my family oh no good hands yeah i got you i mean we gonna announce towards the end too but you know you've been in good hands too that's not your woman that's not his you know that's that's not him no he's not you are married right i am happy you got kids no kids no kids yet not yet is kids in the future absolutely who is michelle you actually gave me a story that was emotional when we first met sure and so tell the people man a little bit about yourself and who you are yeah so michelle valverin aka money making mitch certified public accountant tax strategist award-winning author really for me my story starts off in florida right so my parents are haitian so they came to the united states really to give my sisters and i an opportunity to live the american dream right so with that as you can imagine having immigrant parents they didn't know everything that there was about the united states making money finances so i had to do a lot of learning self-education and then growing up you know i experienced some hardships honestly right so my father actually he owned a tax business in florida but you know through that experience one thing that happened with our family is that we were held at gunpoint so they found out basically what he was doing was he kept a lot of his money that he was making and cash for which i'm gonna explain why he did that okay okay keeping the money shoe boxes people found out about that pulled up to our house where i literally pulled me my sisters my grandmother was visiting my uncle literally laid us out on the floor and held us at gunpoint pretty much took the box took the money ran off with it coming to find out my father was avoiding taxes right he was doing what's called tax evasion which we're going to get into that's why he had the cash so he ended up getting on house arrest ended up going to jail he used to visit my father in jail i remember this part yeah well i don't but you know what i'm saying uh i had this experience that he ended up getting kicked out of the country so around the age of 12 13 my mother had to raise me and my two younger sisters pretty much did that she did a phenomenal job because she was able to get i was able to go to you know really great university i went to the university of florida learn about accounting right university of florida yeah yeah uf uf uf yeah yeah gator so yeah went to the university of florida got my uh got my degree in accounting okay went on to become a cpa work for one of the largest accounting firms in the country okay and then one interesting thing that happened was as i was learning and as i was getting into the tax code whatever the case is i was volunteering doing taxes for people right so doing this program called vita basically working with lower income individuals to do their taxes i'm going through the tax return i'm learning and i'm helping them out they end up owing some money and one of the the people i was helping ask me well how can i save money proactively on taxes right right right and i didn't have an answer for him i like froze you know what i mean given like all the education that i went to in the new university floor one of the top accounting schools in the country the country yeah yeah period right so always top ten but you know what i learned from my personal experience maybe cheney can attest to this they don't necessarily go in depth about business taxes and other high-level tax strategies that can really help you save money on taxes it's really geared towards either helping you pass the cpa exam or working in corporate america so with that i have to do a lot of self-education invested a ton of myself to really be able to get to the point where i am where you know since my career been able to help my clients save layer millions of dollars in taxes over their lifetime so that's my story yo fam let's take a pause from today's show because i know you're probably sitting there at home at work uh watching this on your ipad saying yo how is it that wealthy people can make so much money and pay so little in taxes but hey believe it or not and you're gonna learn more about this in today's show as we continue but believe it or not you can do the same thing legally and ethically and so what i wanted to do is make sure that you are aware of the freedom bundle that fola financial has provided just from my tribe only for the table the ao squad i want you to text the word taxes t-a-x-e-s to 615-930-3431 and in return we're going to send you this freedom bundle inside the freedom bundle you're going to get the tax wealth 101 video course you're also going to get an ebook on how to save 10 000 to up to 50 000 in taxes next year also if you have a business we're going to send you business broadcast over a hundred plus deductions that the average business owner is not aware of of what they can deduct then also this is a great part right here what i love if you do have a small business on the side we're gonna send you a tax write-off spreadsheet again this is solely just from my tribe and follow financial is giving y'all 60 off of this bundle that's right so text the word taxes to 615-930-3431 and let's get back over to today's show because these two are killing it listen y'all two are two human beings legit people good hearts good souls and you all like this i mean i love this you're not coming to the table bougie like yeah you know i'm saying is who i am like y'all y'all get people i think that's one thing i like about y'all y'all get people so let's get into it because the people are saying all right cool great people can we get some can you get some knowledge all right cool people she did this for her mama he almost got shot okay okay can you help me with my taxi right um why do you why do you both think that understanding taxes is the biggest return on our investments and on building wealth and honestly is understanding taxes very crucial to building laws for sure can i kick it off yeah i'm like i have to ask permission from the queen i'm i'm gonna set up the alley real quick but basically the way this is the thing about it right so we talk about expenses and this is with everyone i'm not talking about just business owners investors everyone you have expenses in your life car notes mortgage children yeah that right we know children are definitely right expensive right and a lot of people think those things are when i ask people like what's the biggest expense that you have they they've named those things but when you really break it down taxes are literally your single largest expense and you got to think about this right when you pay when you when you make money you pay income tax yes when you pay for something you pay sales tax yes when you buy property you pay property tax yes when you sell the property for more than once you pay for it you pay capital gains tax right when you die yeah right someone could potentially be paying estate tax right right so when you add up all those taxes together without a proper tax plan or tax strategy and tax knowledge that comes out to close to 50 maybe even more of your income yeah yeah it's a lot of money right yeah yeah and it's really not how much you earn is how much you keep and if you have nothing to keep you have nothing to pass down so that's that's a major key building wealth but even despite all those taxes i've mentioned the biggest taxes of all is ignorance tax ignorant tax ignorance tax correct me right ignorance ignorance tax broke right and ignorance taxes the tax that you pay and when i say ignorance get this clear i don't mean not a rude or condescending way when you look at the word ignorance it means a lack of knowledge lack of information so ignorance tax the tax that you pay by either not understanding the tax code by missing out on different tax deductions by doing shady things unfortunately my my dad was doing right which could lead to jail time fines penalties etc right yeah so understanding the tax code is extremely important i always like to kick it off the discussion that way to understand and that could lead to you ultimately what's to end up happening is you overpaying in taxes right a lot of people don't realize what's out there as far as tax savings are concerned so that ignorance tax is the difference that you're paying right so sometimes depending on the type of tax professional that you're working with people may see that as a cost but the cost is really what you're going to end up giving the government more money than you should have right we want to make sure we pay the government right the the purpose of taxes is to increase revenue so we could take care of the society and the community whatever the case so we want to pay our fair share right but you don't have to give them a tip you don't got to pay them extra you feel me so that's that was me but i'm gonna hand it off listen we ain't tipping on myself uncle sam but i have to pay him right he don't get no tip because he ain't working hard exactly he ain't knowing that he just sitting right there exactly exactly um i mean just to to piggyback off of what michelle you know so greatly explains um the tax code once you do have knowledge of it you have that power say knowledge is power and that's even that holds true even with the tax code because once you understand that the tax code was created as also a blueprint to wealth building right there's no there's no um magical reason why you get good tax rewards for doing good things for yourself right you start a business you can open up at least a 600 plus tax deductions you know you purchase a home you can now write off your mortgage interest your real estate taxes right um if you you know have a kid you now get deductions for that things that contribute to you and your well-being um retirement savings included as well you typically are going to get tax credits or tax deductions for a lot of people who complain about the tax code not being in a favor well i can take a look at themselves well what are you doing to put yourself in a more favorable tax benefit right good yeah stop complaining just put yourself in in position exactly all right so let's go there let's go there how do we do that because you have um i'll say about 60 70 of my tribe are nine to fivers who are doing hobbies on the side but they're not a business you know then you have a lot of my tribe members who are they have a nine to five full job w-2 employees but they are legit businesses so let's talk to that nine to five what are some key things that they could be doing right now just w2 employees uh to save money on taxes yeah i'll i'll start real quick with this too so this concept real quick from rich step four that robert kid stock he talks about the cash flow quadrant right the four ways you can make money make money as an employee yeah self-employed individual business owner and investor right okay the majority of the tax code favors individuals on the business owner investor side okay versus the employee and self-employed and most of the wealth is created on that right side of the quadrant right right but as far as employees are concerned as shania put the tax code favors specific behavior that either benefits you but i'm gonna caveat i think it really just favors the government because they know that it increases the wealth in the country yeah so they're able to get more tax revenue so but if we're talking about the nine to fiver there's a few things right there's there's six big ways for you to save money on taxes right the first one is maximizing deductions okay well you say that maximizing deductions what does that mean because i i hear that yeah that means you need to go up when i say maximizing deductions making sure that you're properly deducting the things that you're able to deduct so a deduction is basically let's say you make a thousand dollars right a deduction is an expense money that you're spending okay that the irs allows you to to be able to write off is what when people say deduction that's what a write-off is okay you make a thousand dollars you spend 300 on something that the government says you can you can write off right right specifically mortgage interest you've reduced that now you got 700 they're looking at that 700 to determine your tax rate and then you're going to get hit with your marginal tax rate well the different progressive tax rates or whatever but just keep the math simple yeah let's say it's 30 right that's 700 right now you're at uh 210 on taxes so that's that's the way it goes that's the breakdown got you so nine of fivers you could look into doing what i call itemized deductions okay so there's different categories for that there's some related to your home as i mentioned mortgage interest payments you got property taxes there's things related to medical and dental expenses okay yep right you got things related to charity yeah as well church et cetera yep tithe stuff yeah yep so those are some of the categories as far as the itemized deductions are concerned okay then um for nine to fivers you have retirement that's going to be a key way for you to save money on taxes as well okay all right nine to fivers usually you're gonna have an option to be able to put money into a traditional 401k yeah basically retirement account we all know that's a good thing to put your money in absolutely you want to make sure you can maximize it if if you're looking to build your retirement that way yeah and put and do what's called a pre-tax contribution so basically before the money comes into your pocket it automatically gets deducted from your paycheck and go and set a retirement account and that's gonna give you a deduction there so as far as nine to fivers are concerned those are probably the two big ways to save you got anything else i mean outside of that it's okay you know turn your hobby into a business right because the hobby expenses are only going to be deductible up into the hobby income and the thing about earning income ordinarily which is through your w-2 um when you have a business it's also considered ordinary income and then when your income categories match you can use one to offset the other so you can earn ordinary income from your 905 through your w-2 and have some you know ordinary losses from your business that can now offset your ordinary income from your w-2 so even though you had excess taxes withheld from your pay stubs throughout the year when it comes down to fire taxes you put your w-2 on that tax return once you complete your schedule c for your small business with those expenses those expenses are now eating at the ordinary income you earn from your job thus lowering your overall taxable income therefore either increasing your tax refunds or lowering your tax liability ladies and gentlemen nine to fivers if you all are not listening right now you all need to be listening i think about 50 of you all right now have a hobby on the side and you haven't taken the opportunity to start an llc legit business on the side i know this answer but i want the experts to say it how hard is it to start a legit business oh not hard i'll get it i'll give you a real life example right yeah yeah my wife yeah loves wine loves wine loves wine okay loves champagne well i like your wife [Laughter] no but specific liquors wine the the you know the more sophisticated spirits i got i got the right all right so the wine bougie right and she actually became and because of her passion with wine what she did was okay i love wine how can i create a business centered around something i love enjoy and do something i'm already doing it i'm already drinking wine i'm always already traveling and going to different vineyards and stuff like that doing wine tastings what can i do so what she did was she started her career that there was a network marketing company that sold wines and she was doing and she was and with that company they were also doing in-home wine tastings so she was doing in-home wine tastings that was her business she was generating revenue they would pay her she'll come inside the house they'll talk about the taste the smells the smell all of that stuff right and she was able to do something that she loves that she also loves people okay and she loves she loves hosting events yeah yeah so she was able to do that and turn that into a business and now what she's doing now is different wine experiences right we had her we just did an event in atlanta she came and did like a whole champagne brunch and taught people about the the bubbles and then she ultimately this is in this she's overachiever right my wife has like 100 certifications she's always setting she's always becoming she's always becoming she's really big on getting certified in something she became what's called the somalia so what's that that's a wine expert that's like that's like the cpa that's the cpa wine person yeah essentially you know so that's like the cpa equivalent of a wine expert but she basically went through a process to show and prove that she's knowledgeable about wine she could taste wines and know what region it came from et cetera that's but that now that's a legitimate business right she's she's gonna host an event uh this weekend at a cabin online experiences with people doing something that she loves and she's making money and it's a legitimate business because one of the one of the things in the tax code is say they say that um basically if you're in the pursuit of income pursuit of profit right really to pursue the profit right you want to you want to make sure you're profitable i mean you can you can sustain lawsuits for a few years right right no more than three years i would say within a five year period right so you don't get that those losses disallowed right but if you are legitimately in a pursuit of profit what she is cause she's always looking at her expenses she's like this is expensive i'm not gonna do that right okay then you can legitimately become a business and then obviously there's different protocols to make sure you make the business even more properly structured and protected like getting a limited liability etc so yeah so literally we just call it turning your passion into profits right yeah yeah even if you do have a nine to five like what else are you passionate about yeah you know if you like to walk dogs if you just have dogs and you walk well why not walk your friend's dog for you know a good price um but now being able since you are a dog walker you can deduct expensively that's even taking care of your dog right because everybody's going to ask well how can i write off my dog that's one way right turn that into another business so now your dog is an expensive or you can you know have your dog model for your business you can have your dog be a mascot for your business [Laughter] you're trying to tell me i can i can have her model for my business and i can write off her expense of course so again imagine if your dog is a mascot for your business right now you're grooming that's going to be a deduction if you have to feed your dog to be on set that day that can now be a deduction as well god yes exactly grooming just paid for yeah who just paid for it yes a lot of my influence for clients that are on youtube i'm like listen throw your dog in that video because now your dog is a part of your brand so just like we can deduct a lot of your expenses because you are an influencer well guess who's your sidekick now what doggie i'm about to put raven in the set [Laughter] this is the type of information we need we need to know yes because it's like it's not about getting over but it's about capitalizing on everything that we can you know it's capitalizing off of knowledge because the knowledge is there right so it's like it's not like you're doing a disservice to everyone else by doing this you're doing the justice to yourself and we all should all be thinking about how can i put myself first and that's about putting more money back in your pocket so you can invest into your future well let's be smart about how we look at the knowledge that's present in the tax code and use it to our advantage now this is black actually that's this you see that's why we seen yeah i came through with the fettuccine yeah yeah she came through with the sauce what he was saying that's what we gonna do right but listen i would say this and and the foundation piece of it is this right so as she was mentioning this person has a legitimate business so that's number one okay now to be able to write things off the duck things for your business there's four requirements i call those the tax-free deductions okay say that one more time yeah all right tax-free deductions yes and there's four requirements for that four requirements that the rs has and it's an acronym so it's gonna be free f-r-e-e f-r-e-e the first part of that is f yeah it needs to be for your trade business or profession for your trade business or profession yes okay if the expense relates to your trade business or profession that's requirement number one so again you need to have that trade business or profession okay okay number two it needs to be considered regular for that business okay regular is gonna be ordinary for that business so like if you're a photographer writing off a camera is regular exactly that is ordinary for your business all right for my business writing off a dog not regular not regular not regular but depending on if i can legitimately show how it's going to generate revenue profits for my business than possibly but we have a lot of social media influencers who are doing naturally model they you know promote maybe different they get paid to promote different merchandise out there on social media so they can have their dog in there to help promote that merchandise so that is regular am i right possibly yeah okay so yeah with the irs is all up it's not only about um what happens it's about how concrete can you stand on your position right because it's lost you know when you have fully good cpas on your team is able to depend upon your business and this is why we like to know our clients because there's certain things that we can pull in if i can defend that for you as an expense because i can say like okay you're a cpa you got a dog well you know how about is your dog in your your commercials is your dog a part of your branding is your dog um walking around with your logo on his back people love dogs they love the pet dogs and say oh my god so cute well guess what also follow follow financial now i'm using you know that dog as a part of my marketing it could fit into my marketing budget okay so again having the cpa career team who can be able to use the tax code to defend you um because you can tell them like hey because i bought this honestly for most things that my clients tell me i could figure out a way to write it off right from almost everything because especially in this new age of entrepreneurship we're not only building businesses we're correspondingly building personal brands right so we also look at okay well what are some things you you're doing to entice or make your personal brand a lot more monetizable because those things can also contribute to you having more tax deductions as well all right that's fine f r e first e yeah so the first e and going and alluding to her point right so when we talk about taxes at the end of the day taxes law okay so really you're going to in the event that you get audited if you could defend your position and explain how you fit into these requirements yeah then you have a better chance of winning the case and that's the thing too the tax code is actually intentionally they it's a lot of gray area right because they want you to make the decision because it's going to be case by case so you want to make sure you talk to your cpa professional to make sure or us yeah yeah to be assured yeah we're going to drop their information y'all don't get it twisted all right in order to to make sure that you're on point so fre so the first the set first is going to be essential essential so it needs to be considered essential to your business they are recall the irs calls that necessary you have some necessary expenses they're going to be advertising you paying for fire flights staff business meals etc anything that you're doing to essentially be able to create profit and income for your business and last but not least super key again a lot of judgments going to be based on this economical economical economical okay economical the errors cause that nat lavish or extravagant under the circumstances okay so again says the libra doesn't really mean a lot right so what specifically they're late alluding to is looking at how much money your business is making yeah and what kind of expenses you're using and would that be lavish right for someone who is a multi-millionaire yeah like grant cardone right graham cardone talks about writing off his jet that cost him like 13 million dollars wright talks about writing off vehicles does all these different things he has multi multi millionaires right i mean he has multi multi millions right right he could easily justify that right if you're just starting off in business even if you have jet money and it's just going to zero you out that's not a while that's that's that's that might be seen as live okay why do you need it yeah you just got you just made 500 000 how are you trying to right make payments on the jet or whatever the case that looks crazy okay what i'm saying so you want to you want to make it make sense so that's really that's really what that means make it make sense okay we talk about writing off the g wagon all these different vehicles yeah you want to make sure you can make you make substantially more to be able to justify that expense yes so maybe that might not be something that you could do on year one if you're only making 50 000. right cool so so let let's go there because i wrote this question down because i mean i specifically was the eye let me let me uh let me write this stuff down um for business owners now let me ask this question first how much does it cost to get a legit llc started so really the cost to get started really depends on your state okay um the fallons per state will differ um so for example state like michigan starting at llc may just be fifty dollars in the state of new york that's 250 state of california you're looking at eight hundred dollars right what's the largest one i'm curious um feel like california mixed with delaware mixed with texas are like the highest states for loc formation right 800 to a thousand yeah so think about california is even though you're you're paying one fee to incorporate llc you're also going to be liable to pay franchise tax no matter if you make zero dollars that franchise tax has a minimum so it's very expensive there um so some states so they have low loc formation costs you want to make sure that you thoroughly understand all the costs that you are going to incur when you're operating the business because filing is just one thing again your state may have annual filing requirements your state may have franchise tax um but essentially on average i would say 200 if you take all 50 states and aggregate i would say 50 i'm 200 and you can do the loc process yourself if you are going to be somebody who's going to read right people love saying hey watch llc by yourself get your ein by yourself and people then they come to me and i got to fix what happened because forming an llc that's just one business type there's this couple of others that you can also choose from that llc may not be right for your business so if you didn't make the right entity choice in the beginning it can cost you later on so though you can follow yourself you still always want to consult with the cpa or an attorney to figure out whether that entity structure is proper for your line of business because if you're trying to start a biotech company having an llc is not going to give you the protection that you need in that specific industry you know um so you definitely want to make sure even if you are starting a company and your future goal is to sell it well seller investors typically are looking for c corps so that may be your ideal structure in the beginning so though you can do it yourself you at least want to make sure you understand what you're doing yeah right because again that's going to lead into the creation of having ignorance tax be your business oh no listen that's literally this is the thing about it right so one of the things i do is i talk to several business owners individuals yeah and that is very consistent there's legitimately everyone i speak to there is something that i can show them and teach them as it relates to saving more money on taxes so it's and this is the thing about there's over 74 508 pages in the tax code if you were to print it out i mean this book is like and that and this number is taken back in 2011. and then imagine so we had all the different changes related to kovid yeah and the and the changes and the cares act all of that stuff right and now biden's looking to make some significant changes to the tax code in the future right proposed tax changes which are probably going to pass because the house and the senate have are both democrat right right so that's probably going to slide through yeah so yes it is complex albert einstein said the hardest thing in the world to understand is income tax his income tax he called it he's quoted saying that so albert einstein yeah albert einstein literally the the genius of the history right quote-unquote this guy he said that right because sometimes sometimes it's it makes sense other times it's just based on specific reasons that they had intentions right so people who are in position could save money on things that they want to do and these people in positions have businesses they're investors they're doing all these things like okay let's try to get some some things or put some things in the in the code to allow us to save money but i'm taking a step back and shenanigans went all the way like she's she went yeah she went there she went all the way to pluto with it i was like yeah she's listen the goal right she went all the way to pluto i'm gonna take it back to mars a little bit i'm gonna bring i'm gonna go to the earth now yeah yeah step number two yeah so talking about llc's business structure whatever the case is yeah one thing that people need to understand when they they start a business is this so you can start a business with your social security number not recommended i'm just letting you know it's possible so that's so you can be in business you could literally be in business you can be business today right now yeah so i i sell and make money hate and have legit write-offs yeah yeah i have legitimate write-offs no llc no no no you have no attention no protection but you are still in business and business yep and i'm getting into that protection piece so that's what that's where the llc comes in place but it is not required to be in business okay so just want to let people know that yeah you can sell something on ebay and be able to write things off okay that's number one you're in a pursuit of profit pursuing making money yeah so one of the things that you want to do to protect yourself and your identity is to have an ein employer identification number that's like the social security for the business business right so that's one thing that you can do but then even before that you want to look into having what are called legal entities legal entities yeah no no no listen because i'm telling you she goes to pluto she's like her mind is she's she's a yeah she's going to be she says thank you so but legal entities so legal entities are entities that you have that are registered with with your state usually right okay they provide legal protection depending on the entity type for your business there's four legal entities you could be a sole proprietorship yeah that doesn't provide any legal protection and that's pretty much you just going to business without any cupcakes if you are you know print teachers when you're home just for fun but you're selling them you are a sole proprietor by default yeah by default that's the default setting so this escort there's that's all you're jumping ahead that's like that's not not where now you're getting into jupiter let me let me just give it a listen i'm getting there no no but you know you're right though i'm just i just want to i want to make sure that people get yeah yeah get all of it yeah um to make sure everyone's following along so we got and i know we're going deep with this but but i want but i want them to really get this to me this is like the most important and not talked about often so i want to acknowledge you yes for having the song so thank you for this yes i want people to get this yes we got some proprietorship now you got partnerships right okay okay when one or more people get together possibly right well that's a done deal right that i told the people they are partners it's new y'all right then that's that's that's one or more person that's considered a partnership okay now you have what's called the uh llc limited liability company okay llc and llc's a bomb and i'm gonna tell you why they're bomb in a minute then you have corporations so these are the four legal entities sole proprietorship partnership llc corporation llcs and corporations they provide that legal protection yes legal protection means and even that your business gets sued yes then your personal assets are protected are protected it's separated it's a separate entity it's like a separate person yeah they can't come big yeah try to come out you ales but you got yeah but they can't come after okay the llc or corporation ah so it's two different entities it's two different entities okay right and there's different rules and requirements in order to maintain that one of the big things making sure that's keeping your personal business separated okay is one of those key requirements a whole bunch of requirements to make sure you get with your yeah legally legal perception on that right that and that's that's state law yeah but the llc what one of the dope well let me let me know i'll talk about the llc a minute now you have what i call tax entities okay okay tax entities are actually how you're taxed okay okay and this is the funny thing a lot of tax professionals don't even understand that concept wait wait so people who do what y'all do don't understand that concept they don't so just to emphasize what he says if there's a difference between your legal entity and your tax entity because a lot of these legal entities can actually have several ways that they can be taxed yep yeah this is why they they they work for me they ain't cheap i ain't gonna see him in problem with y'all but what hey oh well i feel good i feel good i'm all right if y'all say no no okay better not do that one day because we don't we make sure that you know the clients that we work with you know if we can do it we're going to do it right but we can't do it because we're in this for the long term again it's not worth it here yeah right for the long game because we can't do it now right but for our way to do in the future though right right you know so just be patient especially when you're with working with like laws um know that you know certain things may not come to fly but when working with good people they're they'll do up until up to what they can legally ethically and outside of that like you know if we can't do it now we can figure out a way that we can do it in the future yo what's going on fam real quick so we can get back to today's show listen we have a brand new home yes so we not just have youtube but i've also created a patreon community so you and i can connect better now i know i am extremely late to the patreon game but here's why trust loyalty and death you see i value our relationship and i want to make sure that i created a community that can help you get closer to your goals so in this community you guys we're gonna be able to chat more one-on-one i'm gonna be doing live streams only in patreon only on patreon i also created a brand new show called the table uncut it's only 20-25 minutes but i bring people to the table uncut with wine with some little bourbon and we're having an honest conversation about life what are some things that we're doing it's unscripted and it's real raw and relevant not only is that i've also created a private group to where you all would get actually access to some of my new products coming up some of the events i'm going to speak in that you can get into those for free so listen i'm going to drop the patreon community link in today's show notes i want you to go check it out come join the community come join the family i'm cutting it off at a certain number so the first few people to get over there can be a part of this community it's your boy ayo and i approve this message let's get back to today's show yo if y'all just now tuning in welcome back to the tech it's your boy anthony o'neil man and i am at the table with two i want to say gurus i mean i think these two individuals um are taking over um the tax world the building wealth world i mean the wealth of information we have received thus far and we haven't really talked about really business owners yet and i'm sitting here like what ignorance tax but before we get back into the show you guys i want to make sure also a good part of building wealth um is making sure you have a solid savings account making sure that you have uh an emergency savings account at least three to six months so that way if something does happen um you have somewhere to go to pull this up and you don't have to get back into debt because one of the key things y'all know me is my so uh to build wealth you got to eliminate your debt okay i'm cool with a mortgage payment but you shouldn't be having all this other other kind of debt so i teach having three to six months uh set aside for your emergency i park my emergency fund at prize pool once you go to prize pool um and check them out they are 100 fee and check this out they're giving you point 30 interest rate now that's not a lot of money but it's 7.5 times higher than the average bank account out there and it's right there on your app and what i love about prize pool is they're actually making it a little fun so if you just park your money in there let's say you have ten thousand dollars sitting there well every single month you'll get ten thousand tickets and they're drawing for ten thousand dollars every single month and every single week they're giving away thousands of dollars so you might be able to get not just a point thirty percent but you may walk away with ten thousand dollars just because your money is sitting right there so it's gonna sit there anyways why not see if you can get some more money for it so hit this uh hit the link in my show description check that out join me over at prize pool let's get back to uh this conversation on how do we get this bag keep the bag and make more bags that probably was improper grounding yeah it's the urban dictionary it's the urban decision how do we get the bag keep the bag and then flip that back there um drop your business name in the show not the show knows in the um comments below if you're on and listening to this on podcast jump over to youtube go over to my youtube channel what i want you to do if you are a nine to five person with a hobby and you want to start a business i want you to put the name of your business and give me one or two sentences of what the business will do all right and i'm going to choose one person no matter what state you're in and i'm going to pay i'm going to pay you all right i'm gonna pay you to get your llc started man one person one person and then check this out check this out check this out i'm not even done yet because i love you and i want to help my tribe win not only would i pay for llc but i'm gonna pay for one hour just one hour because they expensive to sit down with my cpas to at least help me get started and answer some of your questions up front so all you got to do is go in the comments on youtube tell me your the name of your company you want to start what is it that you're going to be doing all right and then i'm going to choose one i'm gonna have my team member just choose one whatever is a good good one creative one i don't know how we're gonna do it because i believe every business is a good and needed business so no no business is better than the next but um we'll choose one and so not only not only will you get your loc funded by me but i'm also gonna pay you one hour to sit down have y'all named jaws partnership yet so the business name is full of financials what's that again follow financial yeah that's fine i can also explain like what fola means um so when i was creating i'm figuring out names to name the business yeah you know i'm very proud of my roots and where i came from and especially being in finance where as you know it's pretty much you know white male dominated industry i'm a black woman so i'm the opposite of what people are expecting to see when they see a cpa yeah yeah i wanted to make sure that when they were doing business with us the name has some significance and specifically cultural significance come on so follow us actually a uraba nigerian heritage name it means honor and wealth oh and bringing michelle you know and as a partner is perfect because him and i both value integrity yeah right so being honorable having integrity but then also the fact that again we're here to help you build wealth not only build that wealth but keep that wealth so stay in that well throw that wealth through not overpaying uncle sam good god boy i love it yeah i mean i i'm sitting here like i'm just real talk and i joke a lot on my show and i get a lot of muscle real talk just sitting across the table from two black people who are who have character who have integrity who want to help people build true wealth legally who you you all want to help us understand how to properly use the tax code and our benefit first of all and you're black black and proud exactly and here's the thing y'all are knowledgeable you don't just help people file the taxes no you take that so much deeper yeah and that's what i love for sure all right all right so let's get to this because a lot of people are business owners all right all right get to me get to me so for business owners how should we properly structure our businesses to protect our profits and assets so prime example how do we pay children through our businesses one of my homegirl in atlanta um you met her um uh bougie banker yes she pays her daughter raquel right she pays her daughter and she's able to write off that money and also pay her daughter so how do our people be able to do that legally and ethically and then two we got to go down you know we got to go there we we sat down and we talked about this oh yeah yeah we got to go down uh uh she she she she got me you know let's talk about it because people are excited and i learned something that you can write off a mercedes g-wagon that grant cardone wrote off his jet yeah okay let's get to work how do we what is this how do we do this legally and ethically yeah there's and there there's so many concepts and questions that you brought in there i'm gonna touch the business and i'm gonna get through the business structure real quick yeah yeah get to the children and i'm gonna let my sisters talk about the g wagon jones okay joint thing okay item all right so tax entities and this is gonna help with the how do you structure the business piece yeah yeah so you tax you could be taxed in four ways sole proprietorship partnership s corp this is where the s corp comes in or c corporation okay okay now with that sole proprietorship that's the default for an llc if you're a single person yeah with the sole proprietorship you're going to pay 15.3 in taxes 15.3 percent of taxes yep on the profit of the business that 15.3 social security medicare et cetera so that's as if you're if you're working at nine to five nine to fivers yeah you're paying seven point six five percent your employers are paying seven point six five percent now your employer employee essentially they're going to want to collect all that on the profit of the business okay it's cool yeah if if you're just starting off right but now if your business makes more substantially more in profit that number is gonna as you can imagine get bigger and bigger and bigger right so one of the strategies that you can look into right to save money on the on self-employment tax taxes what that 15.3 is is to make and switch over to an s corporation make what's called a s corp election yeah yeah because what happens is now instead of paying 15.3 on the profit of the business yeah you're not paying that on the salary that you're paying yourself reasonable compensation so you have to figure out how much you want to pay yourself so that's going to be something to consider if you want to if you're making more at least 150 000 in profit right more than how much 50 000 okay if you have an llc sold and you're making less than 50 000 profit which is net yep uh then you'll be paying 15.3 in addition to your ordinary income in addition to the ordinary yeah so really once you put it together it can be up near 25 percent 30 percent and they do say that individuals who are so proprietor um tax they pay the highest effective tax rates for that reason wow and so then if you go llc s corp now you only pay money on your salary not on the business did i hear that correctly no you're paying 15.3 on the the sap on the salary that you're paying yourself okay but because if it's going to through an llc it's still a pass-through entity so that that remaining profit still gets passed on to your ordinary income slash neo was talking about she she was saying how that 15.3 on the llc sole proprietorship you're paying taxes on that yeah but then if you're making money nine to five or side hustlers yeah you're making the money that you're making making at the job that's being taxed and those combined incomes are going to effectively increase your taxes but one thing you can consider is if in those first few years you're unprofitable meaning that your business operating at a loss right let's say you're making fifty thousand dollars and you're nine to five and you have like a five thousand dollar or ten thousand dollar loss yeah that ten thousand dollar loss can then be applied to that nine to five income bringing your taxable income to forty thousand and thus potentially lowering your tax liability overall so let's say this business owner is already making fifty thousand dollars in that profit and net profit so let's say this business owner thank you for correcting me um is let's say this business owner is making a hundred and twenty five thousand dollars gross right and then after that what they're paying themselves is the fifty thousand dollars in net profit are they llc or they do they need to be an escort so at that stage um if you're grossing you know 125 000 um and you're netting a comfortable 50 it depends on what went in between that 125 and the 50 because with our clients we're going to make sure that in that those expenses it includes hopefully a salary at that gross level you should hopefully depend yourself a little something even if it's thirty thousand dollars right um because the benefits of being an escort the irs also understand that people can take advantage of it so you don't want to let as corporate taxes if you can't afford to put itself on payroll right because because you can potentially avoid that 15.3 percent taxes the irs is looking at okay well they're expecting to recoup that 15.3 percent in payroll yeah um but the good thing about being a business owner is that your payroll is now a tax deduction so it ends up lowering your um your net income yes exactly which lowers your taxable income exactly so you see the ripple effect and also eliminating the additional 15.3 percent what yeah yeah we're gonna drop all her information below i know y'all sitting at the table like what in the world did she just say it sounded good if i need some more information i'm telling you what okay cool all right so um how is it legally to write off a now okay what are the cars you can and what explain that whole thing because i was like what the irs 170s nine 179 yes so section 179 deduction so again the tax codes change i would say every year not really every year they change whenever they want to change them for referral but it's up to your cpas well you know you get cpas because we do continuing education yeah so we're always sitting on top of new tax codes um they should be in knowledge of what tax code can positively benefit you so again we work with influencers creatives um a lot of them having lavish cars are part of their image right so rather than um choosing to depreciate the vehicle which is means you just take that expense and spread it over year over year if by your end we're looking for a way to substantially lower your taxable incomes to save you a lot in tax liability rather than depreciating year over year let's look at vehicles that we can legally deduct in full in the current year right so this is where that section 179 deduction comes from section 179 where it states that if you own um a business uh a business and buy a vehicle that you're placing in service for for business right you have to place it in service it's one of the requirements so you can't just buy it and it's just your personal car it has to be placed in service for business so even if that's you going to and from the post office to and from client meetings you're placing that vehicle in service if that vehicle weighs more than 6 000 pounds carrying weight definitely know that because it's specifically carrying weight right carrying weight means like when you sit when it's just sitting there it weighs 6 000 pounds no so carrying weight is um the weight of the vehicle um plus if you were going to like what's the carrier weight when it's fully loaded so basically that's what it is yeah so basically fully loaded so you want to make sure like some gy this may fall right under that that 6 000 right so you want to make sure that the gross weight of that vehicle grows i think gwr gross weight of that vehicle weighs is over 6 thousand pounds right okay so with that and basically a little bit of history with that and you can see how the tax code is used to incentivize and do different basically one of the things is because they realize that they can dictate and change behavior by changing the tax code yeah they put specific things so the history with that is george bush was in office yeah he thought he's the old oil and gas guy yeah so he was just like how can we keep these sc how can how can people keep these suvs how can we get people to keep buying these suvs so we put this code in place to get people to incentivize people to buy suvs and buy heavier vehicles right to keep the the oil industry around so with that yes the six thousand pounds it needs to be placed in service before the end of the year okay and also again talking about the economical piece very very important making sure that your business making substantially more than the cost of that vehicle yeah and you want to make sure you're doing it under your business name as well put your car in your business name yeah so when you go to that dealership you want to make say specifically hey this is for my business okay and they're going to give you a separate form different documents depending on where you're at you may have business credit a lot of people just starting off that you might not have business credit so you you can you can do what's called you might be able to co-sign right you're gonna is there a different process yeah that's a great question that's a very great question so it's a base this is the beautiful thing about depreciation as shania mentioned depreciation's probably one of the biggest tax tax in the world okay because depreciation doesn't match how much money you spend depreciation think about this depreciation is based on the purchase price that relates to the home that relates to the car that relates to several other properties so if one of our business owner purchased a car for twenty thousand dollars break that down if you purchase the vehicle for twenty thousand dollars right even if you put down five you can still right off the sole now in the event of a g wagon so let's go there go down start it right now so not an event wagon if that vehicle is let's say a hundred and fifty thousand it's typically what a new one's gonna go for all right dragon right now it's gonna about 225. you can't they're not producing them yeah yeah but if they're 20 i'll bite in cash just for even numbers two hundred thousand two hundred thousand dollars but if you put down fifty thousand yep to get that asset right well and no no no that's not really asking no hold on but it could be i see but it is in in the tax world yeah right right right and that wasn't maybe it is a depreciating because you can't you can't depreciate a liability in the tax world exactly that's what we call the appreciating asset right i have to be careful because you know yeah i'm with you yes so say it but the total cost was 200 000 well guess we're writing off all right not 200 000 even though you put down fifty thousand exactly so doesn't it that first year exactly okay so now i don't promote financing cars i don't promote that i'm gonna be very clear right on this camera right here cj i do not promote financing cars but this is a fair question for people who do have car payments especially again those who are in business and you're looking for ways to you know cut costs um towards the end of the year these are going to be top top five strategies that you're gonna use for sure so if someone goes in there and finance they finance the vehicle and their payment is 500 a month if it's above that 6 000 pound they can still write off the entire car even though they're making current payments on the vehicle exactly because again the purchase purchase price purchase price now and then and there's different and that's why from from uh from a tax perspective and from a cash flow perspective right this is a good thing now if your goal solely is to if if it's solely to be debt free then you know thank you then thank you bro thank you you know i see we know how we do over here not everyone watching this is going to believe in my message for sure so i respect that and and with us too we always like to put out the options right absolutely because a lot unfortunately what happens is with a lot of tax professionals they're like you can't do that and for me that's disrespectful you can't you shouldn't tell someone what they should it should be like how can you make this happen these are your options this is what you can do if you want to do it yeah like you like you come to me and say hey i want to write off my whole i want to ride off my porsche when i'm riding my whole vehicle right i'm not going to tell you you can't do that i'm going to say this how you do it okay are you in financially positioned right at the economical piece okay are you do you have the business credit to do it okay do you even need the car right now too that's another question i'm gonna ask you like what's are you do you just are you just looking for a write-off or were you already in the market for a vehicle okay you know what i mean that's important to me okay so that's that's that's one piece so and then two with the the financial piece if hypothetically some person out there wants to finance their vehicle yeah you could do the you could do the car notes you could also do a leasing as well i think leasing is the most expensive way to purchase a car it is and but it but sometimes mathematically it ends up being a bigger tax write-off if you do with the lease but and that's why business owners do lease it because they could continue to write it off right now cause you could do it based on the least this is where you could do just the lease payments instead of the whole purchase price and you could just write off the lease payments wow i didn't know that yeah that's new for me yeah so that's why business still ain't leasing right now no no i don't do payment no no no but if you're not see what you mean if you're an individual that wants to do lease payments then that's that's another thing too and uh just to be very clear i had an another asterisk nuance to this based on the business use right so you could have a business vehicle but maybe you're using it seventy percent of time for business and thirty percent time for personal so right dean you can only write off 70 70 exactly so i just want people to be clear it's not always 100 it's based on the business use so if you go out there and you person a g-wagon and you legit come back and say y'all asked me hey anthony how often you are using it for the business made about 50 technically i only can write off 50 percent of the vehicle the expenses right because again being able to when you are hiring professionals we have to be able to back you up right right because not irs so let's say you're you have this vehicle well how did you get to your regular drive or how did you get to from the supermarket you got something how did you get to them from because when we filed taxes they do ask like do you have another vehicle available for personal use yeah let me ask this question now you know what me i'm thinking what people are thinking about so i purchased a g-wagon what if i but purchase a hooptie then then when they ask that question i could say yes a hundo exactly now you can defend me exactly because we have a legit car exactly and you need to drive it legit exactly but now you can honestly on paper oh you can say i only use this car though when i'm going to business meetings when i'm going to business events when i'm taking care of clients that's what this called my houthido i get to walmart right i get to the kids pick up from school with this car right yes all right cool great great great oh man boy listen i mean we got a little bit of time y'all here y'all drove all the way up here you know we're going to dinner after this so we got a little bit of time i don't want to rush this because i think it's very important um one of the things that on a personal finance uh financial side of things in my space right is i have a lot of entrepreneurs and actually you were talking about this because i'll be moving and he was like hey this is how you do it to win one of the things i see is when people go get a mortgage and they're entrepreneurs and they can't get a mortgage because they're not showing that they made money one because you know with me just starting out on my own transitioning and starting my own llc and building my own brand on my own it's like okay cool i know upfront i want to purchase a home here in the next few months in the next year or so and how do i do that properly while still writing golf i spent a lot of money to to to build this studio um i have a team of people who are paying so i'm like how do you take advantage of the write-offs without hurting you to go and get a mortgage with your income yeah so what is that when you think about expenses and this is for everyone to know every financial decision that you make are gonna have two type implications okay we're gonna have the economic implication and we are going to have a tax implication okay right okay um so again financial decision let me write a bunch off but what's my economical um consideration what's my tax consideration tax wise i'm gonna save a lot economically you're not gonna look good on paper to get a loan right so every decision that you make you want to weigh both um the good thing about tax planning is that we will wait out both for you okay based upon your financial goals let's figure out what the economical impact is going to be and what the tax impact is going to be um and get you go quicker because you're telling me hey look listen let's hold up one expensive for this year i'm asking accountant oh let's defer some expenses let's defer some because i want to get a mortgage right that's that's my goal right now well as your cpa i'm going to make sure that you are in the best position for that that's going to enhance your economic capabilities but it may negatively impact your tax you know so it's always going to be a way of the two yeah that's so good man because that is something that really really alarms me uh when i see these entrepreneurs oh you can write this off i write off everything man yeah i didn't make no money last year and then they'd be like yeah i can't get a mortgage like why you just made like a half a million dollars the thing about it is like you have to ask yourself what did you lend to you if you have zero dollars in your tax return oh man oh cause i'm not giving you one of my dollars yeah you haven't found that profits even i'm not doing that oh man all right um let's end on this one it's going to be a tough question uh oh that means you got to take care of it and we're going to cover this i want that the children's piece is key too how do you do because that's a good one because i think hiring your kids you do so much there for sure one is you're teaching them entrepreneurship you're teaching them about ownership uh two you're teaching them about money you know how to be a good steward how to work um in exchange for money right three that's a it sounds like it's a good tax write-off absolutely so break that down for us yeah i'll give you a real quick run uh rundown of it so yes you could as a business owner you could pay your children through the business and there's a couple of requirements in order to do so right so the child has to be under the age of 18 in order to do it okay there's no age minimum okay to do it but i generally recommend starting at the age of seven because there's a court case based on a seven-year-old and they pass that court case some people do it younger than that but i'm just putting it out there publicly conservatively yeah yeah seven years old right is the rate is a number to consider and then you could pay them up to the standard deduction amount right so this year twelve thousand five hundred and fifty is that number you want to make sure you pay them up to that amount and then they don't have to pay taxes you don't have to pay taxes on that income that you're paying them okay and then you want to make sure they're performing legitimate business services for you for your business right so you're not just paying them the money they're actually working in the business yeah so you want to look at things that they can do clean up the house help you with ads maybe help you with internet marketing whatever the case is okay and it also needs to be based on what the market's going to pay them for that type of service right so pay that 7 euro or pay anyone to do that generally like anyone and even like a seven-year-old too because the seven-year-old can only do certain duties of that job description okay at a certain quality like i love it right so if you're paying a seven-year-old to say hey clean up the office for me yep you're not paying that seven-year-old seven-year-old two hundred dollars an hour you're not right you can't no yeah come on nice okay that's that's i mean unless they're magical right harry potter you got the one maybe yeah these new kids is different these days not a 15 year old you might be paying them a hundred dollars an hour if they go in and they really do a good job right maybe not i wouldn't maybe not maybe internet stuff maybe like i was i got you yeah yeah yeah if you got it for that service if you got the average market value for that cleaning service it may just be 25 30 an hour yeah so how can we justify that 100 i got you so that's what we want to make sure of course the conservative compare comparisons okay what would a normal person you know of this skill level be paid for this exactly all right cool all right for sure so that that's that piece and then yes you just want to make sure it's documented you give them a job description their performance services and that money is going specifically from your business account to their account so they need to have a separate bank account in order to do that so those are general requirements there's a lot of other nuances details make sure you get with your tax professional in order to go and do that properly but yes it's a beautiful thing because we're this is the beautiful thing about the tax code now that you have knowledge right about the tax code you can then save money because these are things that you're already paying for right and there's a saying out there that there's two tax systems one for the rich and one for the poor but i don't agree with that i think that's a lie okay it's really one for the ignorant like we talked about that ain't that ignorance yeah taxes that's that's so if you're enlightened what you're going to know is this you make money you spend money you pay taxes on that money yeah they ain't net yeah you make money right you pay the taxes and then you live on what you have left right and that's no and unfortunately that's what happens to a lot of nine to fivers so it's important to consider getting into business not only for a tax perspective but also as a way to create wealth and legacy for yourself and your family yeah yeah just to also just get one more wealth gem um because parents are okay well i pay my kids money what can i do with it after a great wealth hack is to pay your child that 12 500 go ahead and put six thousand dollars in the roth ira go ahead and start retirement saving or you know education saving with that money don't just leave it in your bank account and let it sit let's also invest that as well y'all hear about that wrong ira dropping yeah so let me ask you this question can you pay your child 12 500 if you do not have a business so let's say if if she is a nine to five employee can she still pay her child twelve thousand five hundred dollars a year and write that off without having a business hmm so i mean we have to just readjust like re-go through the principles okay is that person in pursuit of profit well she's make she has a job so no right so i was going to say like that song oh no oh she has a job now the irs again can say well you weren't infrastructure yeah that's it and it is what it is right so we're not here to you don't have to fight it yeah just know this is this is what it is so to me it just sounds like legit and let's just be real everyone's not called to be this huge business owner for sure but everyone can't have a legit business yes because i think everyone has a hobby so how do we just now just make that hobby still a hobby but it's a legit business that we enjoy but we don't want to call it a hobby no more and the reason and the reason why that is because there's a specific law and rule in the tax school called a hobby loss yes it's it's it's a thing because they know that people like to golf yeah and then write it off and call that a business right so can i write off my golfing if you are are you teaching people how to golf no but i may take people out there to golf and talk about business it depends i mean honestly in that case i like so the thing about it is that they also got rid of entertainment as an expense they did yes so in this tax climate that'll be we have to talk a little bit more about that liquor so it depends if you ordered liquor and you were at a business dinner absolutely and you documented that dinner and it was literally yeah how do you properly document a dinner so properly documenting dinner so we're going at dinner tonight so how do i do that okay yeah yeah so we got you business meals business meals is a very great tax write-off deduction business meals what they allow you to do is if you're if you're having a business meal with a potential client employee someone that you're interviewing for a podcast for instance yeah then you are able to deduct for that business meal you want to document one the business purpose of that meal what are you guys talking about okay coming back on the show again okay okay hopefully gratefully practical part two number two you wanna also document the attendees yeah get their names down yeah then also you want to document how much it costs for that meal and then that includes tips as well so the tips can be included as well so that's not separate okay so those are the things that you want to make sure you document that is if you are having meals locally so now one of the things that you could do is when you're traveling for business purposes business purposes meaning that you're traveling to go to a conference seminar if you're in real estate looking at different properties visiting researching emergency acquisition deals or what other cases you don't necessarily have to have a meal with a person you could have a meal by yourself because now you're away from your home city exactly and you gotta eat yeah travel meals so it's a business travel meal um real quick yes or no can i can you write off a first class plane ticket for a business trip so yeah but given your um economic status if it's as long as it's not luxury if you could afford it now now if at the end of the day when you are self-employed you need a cpa yes because it's like i have a lot of questions and i'm like and i teach personal finance but still on the business side of things you all understand okay here's everything that in that 72 000 page book right that hey anthony you can do this a you can't do that and i don't know all that stuff this is very very very very important all right not to cut you off too this is an important thing too i'm a cpa yeah cheney is a cpa yeah i love my cpas yeah they can't all do this oh and i'm gonna tell you why right again and and this is coming from a cpa right this is coming from a cpa no this is obvious no no it's not even shade this i just just just bring some transparency to the conversation yeah so again the cpa exam uh prepares you to be to have a broad knowledge of accounting and tax concepts there's not a deep dive right and like i said me going to the top accounting school and not understanding how to proactively save me on taxes i didn't know that i had to do a lot of self-learning chanel also did that experience a whole bunch of things right so when you're looking to hire someone it's not enough just to find a cpa you have to find another category and i had to create this this group called the tax elites tax elite tax elite bro say what elites what's the tax elite yeah tax to leave i'm glad you asked tax elite so another acronym so e-l-i-t-e-l-i-t-e yes okay first part of that is education yeah yeah did they go to school for accounting or tax so what you're gonna find is tax preparers people who there's no requirements in order to do people's taxes that's like your h r blocks yes not knocking them um or like your tax layers or people like that online just all that and real quick are y'all fans like those online tax companies i don't really think they do you justice like you you need a human being no i mean if you have simple like you just have a w-2 you just have like dependents and i mean just have a w-2 you make less than i would say like 60 000 a year and it's just w-2 then you're probably fine with just doing it by yourself just plug the numbers in um but once you start you know moving along certain thresholds where you're making retirement contributions that are pretty high um you're paying for child independent care expenses you actually own your home you actually have stocks and you invest and you also have a rental property as your tax code um your tax life becomes more complex and i typically say the people once you start to trigger schedules a through e yeah you definitely want to use a cpa or tax expert schedule a is your itemized deductions schedule b is going to be your interest and dividends schedule c's for your business schedule d's capital gains um the schedule e i c earned income credit um yeah so like once you start to trigger those will schedule ease and royalties so once you start to trigger those schedules a through e you now want to get some help get some help yes all right so we got e and e education yep l legal representation can they represent you from the irs in the event that you get audited as a cpa we have the authority to represent you in front of the irs in any event that you get out here we can hand that for you thank you you'll be like yo yeah i got an issue i got a letter that's why y'all better you know yeah that's why y'all yesterday's price yeah yeah it's not today's favorites [Laughter] yes so that's that's l you also have enroll agents that have the same authority as well enrolled agents also built people so one of the things with enrolled agents the distinction between cpas and royal agents if you're trying to figure out who to work with enrolled agents they took a three-part exam from the irs in order to be able to get this enrolled agent license right yeah the thing with enrolled agents is i kind of see them as real estate agents meaning that you don't have to go to school or anything to be an enrolled agent you can just take the exam and show that you're under understand the tax code enrolled asians are super technically proficient in taxes so they're really great cpas you have to the minimum requires to have a a bachelor's in accounting depending on the state 150 credit hours which is almost like a master's pass a four-part exam that has less than 4 50 of people passing it and then you have to have all these other you have to work under cpa for a year yeah and then one quick statistic less than one less than one percent of cpas are people that look like us well we've said it again so out of 100 only one percent only one percent of them are black less than one percent so we're not even a full one percent yeah are you serious yeah i got the boys i mean i had to pause yeah i mean it's so funny i have my home girl amy porterfield on it and she really spoke about black ladies are black cleaners right yeah and she was like yo we need more black representation and sometimes i get hit hard by the white audience by being so strong for my black community it's not that i don't i don't love white people i love white people but i'm tired of only seeing white people appear especially in finance yeah you know what i'm saying how come we can be up here too and it's like we need more people like yourselves being educated being up there having an intelligent conversation because it will make more black people want to listen exactly right if i see people who look like me with people who don't look like me i feel better i'm more prone to be like yo let me listen because my sister up there my brother up there and i don't know but they look like me but when they don't see us when we don't see us we're kind of like uh do they have our right interest in mind and so you know i'm sorry i ain't mean to go off on that because y'all know me i love all we love everybody what yes representation matters and that bothers me that only one percent of us are black it does it's a real thing and not to go too far on the subject but i did have a a client that told me that she worked with someone of the other race and they did not look out for best interest she she approached them about doing like like an estate plan multi-millionaire she owns a record label yeah and they asked her why do you need that wow so that and that and i work i work with athletes same thing as well just so it's it's it's a real thing and we do need to be represented but i understand too right and i'm and this is something i'm gonna put out there uh we're both cpa rappers you know what i mean yeah so growing up what i'm used to what i've seen was in order to be wealthy or to make money i had to be a rapper or athlete yes i can't play ball i'm trash right i'm not going to lie bro if we're hooping yeah i'm the guy that you pretty much got to like just forget all the rules i'm traveling i'm i'm looking crazy right butterfingers with the football yeah so my drone was i was rapping so i wanted to be a rapper rapper right but then as i grew up and i started looking at when i was taking i went to uh college i did really want an accounting class and that's kind of how i went down that route so that was another side tangent from the elite oh yeah yeah so i got a key we got an l and an eye well we've been talking about this whole podcast integrity integrity you gotta you gotta work with someone with integrity right right are they going to ask you to do things that are not right saying to claim kids you don't have telling you to invest in companies that you don't really own and then let's be real and i want to say in the black community because i know it happens in all communities but a lot of communities people are claiming other people's kids oh for sure yeah i mean there's some some small tax offices that are like hey do you need any kids yeah yeah we got you they'll like match you up with some random social like it's it's terrible it's a real thing all right what's the next one so that's i t training are they constantly being trained up yeah as a cpa we have to be constantly training that with continuing professional credits yeah cpes and then also two keeping up with the latest greatest tax codes too vita has a whole bunch of changes that are going to impact individuals make it more than 400 000 it's going to impact everyone yeah but the the he the promise is that taxes are not going to increase for people making under four hundred thousand do you have anything else after the t e last e yeah e experience so how much experience would they have do they have experience working with your specific industry and years of experience as well you want to work with someone that at least has 10 years of experience in the industry i think that's a good number yeah um to look into so those are those are the things that that's the elite that tax elites so let's end it right here here's the hard question you brought it up and might buy one more thing with the tax delete all of the taxes do tax planning too so that's the key thing tax planning is sitting down with a client looking at it and that's the expensive part right when i when i got y'all's first bill i mean i was reading i was like planning and here's so funny is i sat down with uh an accountant of the opposite race and i didn't get none of that offer yeah none of it yeah and i called paid for an hour i was like yeah what do you want to do i'll tell them about what i do oh okay yeah do this do that okay go great and none of what you and i talked about in that hour i called i called my boy cj i caught my own girlfriend i'm like yo this did you know this you know this you know everyone's like yo yo i was like yo in one hour the information that you gave me for free made me be like all right let me cut the for an hour that i paid for i'm like i was still lost and confused for sure so when i met you two months ago i felt so good and then a boy hooked me up with you and i was like yo and then you tell me y'all two working together i said this is god yeah and i was like yo i'll pay that fee because i know i'm in good hands and here's another part is i'm sewing in to my community amen yeah and you i don't know what you all are standing for character and integrity but i got to ask this question let's just be real a lot of people were not fans of donald trump specifically who looked like us right and i want to go into that i don't want to go into donald trump was it good would be bad but donald trump was all about taxes he saved a lot of wealthy people on with taxes by it is coming through and making some changes [Music] not from a president talking not from a cut character integrity for on trump or abiding i'm talking about solely when it comes to taxes and money okay who's better for america i mean so all right looking at just the background of these two individuals one was is a businessman yes other person is not yeah right um that dictates where the policies are stemming from okay so of course donald trump i'm doing what's best for me my friends but everybody else who also want to be like me and my friends because it makes the tax code for both individuals who have businesses who have assets you'll be able to benefit if you have business and assets too yeah so a lot of people who were um against um trump's and his tax plans it's because they are not on that playing field but we should never be this that should encourage you to get on that playing field that made me want to start more businesses it made me want to buy more assets right it's like okay people have to understand that you know the tax code again it does provide a guideline to well who is the government favoring now right and we're all under the same legislation so why not be on the right side of the playing field yeah so that's that's my take and isn't it thinking about getting rid of the the 179 this is what he's trying to do he's trying to raise between two to four trillion dollars really in tax revenue over the next i think five ten years right so with that he is going he's eliminating some of the tax incentives that he perceives the rich his eyes you're rich if you make more than 400 thousand the rich are using someone who's making 60 000 are not writing off g wagons per se all right so he's not he's he's like you know we need to get these people we need to get some more money from these people on this side okay so tying it back to what we were talking about before the key thing is tax planning right so looking proactively at your life business regulatory requirements or to help you proactively save money on taxes you made a comment saying that yeah the line item that was expensive um when when you're working when you have that consult right but that's one thing to consider is like really it's not a constant investment and i'll tell you and i'll tell you and i'll tell you why really now tax preparation that's a cost there's really no there's no benefit to you you're just literally checking the box it's compliance work right that's the low-level work if we do that we can help you with that all day every day but tax planning yes that's an investment with a high roi right yeah so hypothetically speaking there's uh let's say you work with a large accounting firm right yeah and and you are a business that has to pay a million dollars in taxes yeah that accounting firm's probably gonna charge you was like we got you but you got to pay us 300 000 to get rid of it but guess what instead of giving the government 1 million you gave them 300 you gave the accounting from 300 000 right and you get to keep 700. so it's that's a three plus x or a live return investment on your investment yo man i'm i i'm blown away i mean i this is the kind of conversations i love having at the table where we can bring educated people whether they're black or white i really get excited when they look like me and they know their stuff you all know your stuff i'm in good hands and i want y'all to be in good hands um do y'all have a course do y'all have anything where they can go online and learn more of this you know i mean and i don't care what the cost is i don't want to be too expensive [Laughter] how can is there somewhere where they can go to really learn more information do y'all teach us on the course online do you have a book do y'all have anything we got a lot what's the first thing they should go and do so um michelle and i both have ebooks available for purchase for the public for those who want to learn a little bit more about tax in that way um and we also do teach a tax training program okay um it's called the tax essentials learning program tax essentials learning program help for short okay where individuals who want to learn how to do taxes themselves to make extra income but a lot of the people who actually come to tell want to learn so if they can just know for themselves right right right right um so that's also an offer as well okay cool yeah anything else yeah so we have a course so basically tax wealth one-on-one right which teaches you how to proactively save money on taxes that includes our ebooks that includes some other materials to help you practically save money on taxes super affordable very reasonable so we'll drop the link in the in the description absolutely so yeah yes yeah we're gonna have that's all but you guys are gonna get hooked up and blessed with this this information yeah we about to go to dinner and my mind is like what in the world i mean this was absolutely amazing and and listen i'm gonna drop all their information uh in the show description and i want try to go follow them on instagram they they both are just dropping knowledge on their social media accounts but most importantly i would definitely say get the courses uh take the telp so that way you can learn more because maybe you don't need to retain their services personally but at least get their mind at least get their education so go check out that information i'll make sure to put that in the show description um and all the information but i will leave you all with this scripture and affirmation of the day because we this show has been long and this is great because i mean i i have more questions but i'm hungry and and we about to go get something to eat real quick that's not to cut you i do have a tax wrap can i get some tax bars off yeah go ahead do it real quick all right it's called ten tax commandments ten tax commandments ten times i'm gonna wrap this whole thing all the things we talked about and literally in this song all right check this out i'm gonna look at the camera look at this put him in his camera right here cj let me check it out yeah she got the check it out yo look i've been in this game for years it made me an animal this rules to this code i wrote me a manual a step-by-step booklet for you to get your game on track the fed's off your back uno let the irs know how much though you hold cause you know yo evasion breeze penalty especially if that prep messed up watch your tasks go up number two document expenses you can prove don't you know them boys treat lying like violence take it from your highness i don't see mad cats and chits cut for their schemes and tricks number three go form a llc a lawyer set that up properly draft up dna stay up yep for them big bucks they'll get that paperwork cleaned up word up number four i know you heard this before always rely on your cpa guy number five never tax prep where you rest at i don't care if they do it free tell them leave number six that's has advanced credit debt it you think they're doing you a favor no forget it seven this rule is so underrated keep your personal in business completely separated business and blood don't mix like politics with no tricks fighting business serious risks number eight you know the day your taxes do if you miss the deadline they'll be coming for you number nine should have been number one to me if you start a business stay away from hobbies try to listen you'll be stressing in the kitchen when the letters start hitting number 10 a strong word corporation strictly forbids me not for freshmen if you ain't got investors then say hell no cause ain't gonna want your money rain sleet health no follow these rules you have mad bread to break up if not 24 years on the wake up flow hit your temple watch your friends shake up care take it did you make up when you passed my bad i hope you rake up a lot of cash will beast front in jamaica with the michelin star chef to hook a stick up gotta go gotta go more returns to make up word uh tax king [Laughter] she's spitting the beat he's spitting the lyrics i'm sitting over here like yo let's go make this money let's go scripture and the affirmation of the day man romans uh chapter 13 verse 7 says pay to all what is owed to them taxes to whom taxes are owed revenue to whom revenue is owed respect to whom respect is owed honor to whom honor is owed this week's affirmation you guys already know repeat after me while you're driving why are you in your showers and while you're watching me live on youtube right now i believe in myself and trust in my abilities to succeed in all that i do i believe in myself and i trust in my abilities to succeed in all that you do do not be afraid to go start that business leave the hobby and go get you an llc and make some money and keep some money and build you up you know your boy anthony o'neil here at the table i'm gonna see you on the next show peace heyo [Music] you

Channel: The Table With AO

Views: 187,677

Keywords: anthony oneal, anthony oneal debt free degree, anthony oneal student loans, money, budget, how to save money, personal finance, debt free, how to budget, debt, how to make money, how to get out of debt, african American, black, hiphop, culture, millennial, student, EYL, Dave Ramsey, save on taxes, tax code, certified public accountant, pay less taxes legally, tax write offs

Id: 5GKbi6qT5Bo

Length: 103min 44sec (6224 seconds)

Published: Mon Nov 08 2021