welcome everybody to another week of talking about your American Dream my Main Street business owners out there side hustles big hustles and you're scaling your business whatever level you're at I want to help you in your decision-making for the legal structure the tax structure and that wealth building structure they all interplace so much it's absolutely critical that you kind of look at it with a holistic approach now I'm a CPA attorney real estate investor small business owner author of three four books and I've been I've done my 10,000 consultations with clients from around the country over the last 25 years helping small business owners currently a senior partner in a law firm on the board of directors of uh directed Ira helping clients invest their IAS around the country and the Main Street tax Pro Network so I am in your world I got you I want you to get some straight answers and some real advice today that you can rely on with that said please be careful about taking advice about llc's es corpse by just doing Google searches or talking to someone that's not and I know this may drive some of you crazy but a licensed attorney or tax lawyer that understands all the nuances of this and I know if you look on Google hard enough you're going to find the answer you want and if someone goes well this is the way I did it and you don't need to pay a big lawyer and you don't do oh be careful now by the way we are very very affordable as a law firm helping clients around the country in all 50 states getting on zoom and helping set up entities we set up hundreds of entities at a month and do it right and it does not have to be expensive frankly we're cheaper than some of the influencers out there trying to sell entities to others we're cheaper and we're a real Law Firm so with that I want you to have faith and confidence in this and we're going to break it down I want to do the Whiteboard we're going to do Q&A I'm here for you and I'm going to give away a flash sale benefit here to one of my biggest events of the year so that you can collaborate interact with and be in an event virtual and live with other CPAs attorneys enrolled agents and small business owners all working together to get the best solution affordably without big Mastermind upfront fees I don't do that you're gonna have a good time today all right so talking about the S corporation the title of this whole broadcast was don't do an S corporation until you watch this and that's very very important because the S corporation can save you a lot in taxes but it's it's really phase two in the growth and life cycle of a business for example I'm going to put this on the Whiteboard there's very very common for so many small business owners they may start out as a sole proprietorship many of you out there might be just doing a little side hustle you might be driving Uber selling online you're doing some YouTube things some Etsy things you're doing a service a product and this is just kind of a side hustle new small business and you might be making uh just a few bucks and you're getting going I love it go for it build your dream test the product and it's a service and get out there now quite quickly and you may even come out of the gate and form an LLC a limited liability company they're not called limited liability corporations and you're going to set it up in let me just make this clear in your state you are not going to run off to Nevada or Wyoming or Delaware or some crazy pitch sales pitch you're going to get online watch out for that I've talked about it for 20 years on articles in podcasts in videos warning people not to set up in a state where you don't live set it up where your business is and where you live and operate that is absolutely critical and I can I'll take Q&A here and you can call me a liar you can call me a cheat and I'll freaking debate it with you I'll Charlie Kirk you we'll talk about it with real facts okay now that's our that's phase one I'm actually going to call that phase one phase one is kind of this sole proprietorship scenario then your business is starting to mature your business is growing and you're starting to make more money and this is phase two and again many people jump straight to this first the second phase and so that's why I was kind of calling the S corporation was phase three in that example or phase two so phase three we are going to graduate to the S corporation now this can be extremely simple you can take an LLC and convert it to an escorp with a simple form it's called a 2553 super expensive we charge 200 bucks very very simple to make this conversion over to the S corporation we might be 250 I got to confirm that there's some important forms there so this S corporation is your next phase and I don't want you to run straight to the S Corp and I don't want you to stay over here languishing or stay in the LLC mode Let's talk about why these are different an LLC does not save you taxes here's what happens in the S prop I'm going to go SP here's your LLC and here's your escorp now this is absolutely important everybody it's super simple don't let some lawyer accountant over complicate it let's say you bring in a 100 grand for the year 100 Grand same example Apples to Apples to Apples we're going to keep it simple and you spend 25 Grand in expenses cell phone travel Auto Electronics Home Office the list goes subcontractors marketing everything blah blah blah blah you're going to spend all this money out here making your business grow I love it and you net 75,000 you net 75,000 you net 75,000 so you make the same amount of money in each structure same amount of money but here you are going to pay self-employment tax of 15.3% that's 10 grand oh in LLC you're going to pay the pay the same 10 grand then you're going to pay fed and state income tax oh well I'm going to set up my entity in Nevada I won't pay state tax nope you're going to pay state tax where you sleep at freaking night there's no way around it so this this happens with the LLC and soul prop and everybody goes oh well I thought an LLC save me taxes it doesn't but when you graduate over to the es Corp and you make 75 grand we're going to take in this example I'll this is slightly aggressive do far off I'm going to take 25 Grand in W2 and I'll take 50 Grand in K1 now for any of you accounts out there that it drives fear in you and you're calling me a scam artist right now and I'm too aggressive hold your horses in 25 years I have never ever ever had a client audited for reasonable comp I go to Every reasonable comp CE on the planet I've read every reasonable comp case I've worked at KPMG the tax Court I'm a lawyer I'm a CPA and I teach CE on reasonable comp I interview prior IRS agents on my podcast I have never ever ever had a problem with an aggressive position that stands for stands to reason for a payroll allocation now I know this is scary for you because you might have to go to your client and go well last year we did XYZ in payroll we can't change it now it means you did something wrong well you know what your client's starving for good advice you can change your position on this now when I do this I pay my FICA over here and everything else no self-employment tax people this is why the S corporation saves money and I just saved 15.3% on 50 Grand I saved $7500 approximately that is huge so this is why I wanted to talk to all of you that have a small business you start as an LLC and when you start to make close to $50,000 net this is after your expenses you're just taking home four or five grand a month boom we're going to go to the S corporation and it's simply a form that you file you start doing some payroll reports rep in and at the end of the year you do a different tax form that's it you have the same tax ID number the same bank account you're going to take money out of the business anytime you want but on paper we're going to call 25% of it 30% of it 40% of it 50% of it payroll we're going to allocate some of that money to payroll I'm going to do one more example here and then I want to start answering some of your questions u i could talk about s corporations for two hours and they're so I've got literally two sheets of es Corp nuances and I'm going to just see what you guys want to talk about because I just don't want to give you a lecture on ES corporations for two hours I want to hit the highlights so whiteboard again let's say you're a brand new realtor and or a landscaper restaurant owner and again you bring in let's even say you bring in 200 Grand and you have a 100 Grand in expenses employees and all those other expenses we're going to try to write off children Auto dining computers Electronics best spys Apple Store Home Depot we're writing all this stuff off and you net a 100 Grand you just take that money you could have an LLC taxed as an es Corp you could have any sort of structure like this this it could be an ink taxed as an es Corp super easy that 100 Grand is called a draw and you just take it anytime you want it's that easy but then on paper we're going to allocate some to the W2 and some to the pass through and that's called called a K1 it's like a business owner's W2 in this situation I'd probably do a 40% allocation which is 40 Grand and I do 60 Grand in the pass through we just save nine grand on this right here so this is this is a big deal now what that payroll means is throughout the year four times during the year you're going to send off a report in April in July in October and then in January at the end of the year you're going to do what's called a 941 report now I have uh we have a a a a relationship with ADP I love them they have a very very affordable payroll process for small business owners I want to get the link before the end of the podcast uh Dylan in there uh for this for any of you that want to go there it is very very simple and affordable I do my own payroll at ADP now I have an accounting firm and we I could do my own payroll but it's even easier with this so we we provide some Payroll Services to clients but my Network we we have all sorts of people that do pay it doesn't matter the point is this is super easy and once a quarter we're going to send in our payroll deposit and we're going to send in this little deposit and we're going to claim what we need to in payroll so if I'm going to claim 40 Grand in payroll I'm going to take 10 grand and just put it on paper and I'm going to send in my deposit boom boom boom not 10,000 but I'm going to send in a deposit based on this amount so my deposit is based on a 10K payroll so anyway without getting into too much of the minutia the the goal here is for all of you to have a plan where you can graduate into the es Corp when the time is right and you make a special election and I backd it to the first of the year so this is a perfect time of year we're here in May some of you may be hearing watching this video a year from now or six months from now we can even in November go back and backdate your LLC to an escorp on January 1st very very common and the payroll is going to be an adjustment based on your income level and I have a matrix maybe I'll here show you in a minute as well some of the other issues is um I want to make sure that you have all the pieces and parts for an LLC or an S corporation a lot of people just set up one sheet of paper and they go oh I've got my corpor I've got my LLC really do you have your minutes do you have your bylaws do you have your operating agreement because with the IRS in order to write off a lot of expenses like travel reimbursements Auto Health Care all these things we need to have an accountable plan provision that's in the documents of your company if you get audited you don't get the write off we it's super affordable to do it properly we have an annual maintenance program with our clients all over the country at kkos lawyers and we help do your minutes make sure all these Provisions are in there and it allows you to save more money and make more money on your tax returns when you set up the proper procedure so uh make sure you've got all the parts we have a service at the law firm of fix my en.com I won't put any other names in there and uh if you down in the description let's make sure Dylan we have kkos lawyers.com you can make an appointment with one of the our paralegals and just go can you clean my my clean up my entity which might be an LLC and can you make an an escorp for me and then can I get a consult and on I have a network of accountants all over the country that speak my language and we'll get a link here to the tax Pro Network so that you can find an accountant in your area or even a state away but they can get on Zoom and speak your language now I really want you to drill me I want you to bring it bring me some questions here I want you to say Mark I heard this well what do I do with my LLC now why do I do an escorp again how do I pay my kids in my es Corp how do I ride off my home office in my es Corp people let's get it down I want this to be a huge part of your overall tax strategy and wealth building now before we go to our first question I want to mention I said it before I have a workshop twice a year and coming up in June is the tax and legal 360 in June in Salt Lake City three-day event 24 continuing education hours for any of you tax professionals small business owners 24 breakout sessions on topics for every area of your business legal tax and Building Wealth IRAs 401K pay kids Auto um dining uh using the escorp using the LLC charitable trust oil and gas uh the list goes on and on and on the website tax and legal 360 you can look at the list of classes Friday night I have a party with food and drink and dancing everybody's invited I I think my general admission ticket is 500 bucks for three days it is so affordable and you can come and hear incredible speakers I'm going to be on the main stage two to three times a day teaching Mark Coler and then breakout sessions for everybody is going to be an amazing time and here's your flash sale you can save a h hundred bucks on a virtual ticket a 100 bucks on a general admission and 100 bucks on a a premium ticket which includes lunches and a couple other special pieces we have a VIP no 100 bucks off that VIP is going to freaking Rock by the way the here's the coupon code flash 360 I think it'll be good through to midnight tonight or tomorrow at most flash 360 you save a 100 bucks on any of those tickets I promise you if you do not have if you come to all the event and I don't save you your cost of the ticket price I'm going to say it right now I'm going to get in trouble with someone I will give you your money back I will give you your money back if you come to the event or you get on Virtual and you don't save twice what you paid to come to the event and just some kick-ass strategy I'll give you your money back now what it entails I'm going to quiz you I'm going to say you attended all the events what classes did you go to and that you didn't learn this you already knew that you were already doing that oh you attended this class you were already doing that you already knew that well so you better have knocked it out of the park and come there and go I'm already doing all this I don't think that's going to happen you're going to love it and it's going to take your business to the next level flash 360 100 bucks off be there all right Dylan have we got some good questions that time is yours everybody I'm here for you yeah we have some fantastic questions to kick things off let's start on Instagram the Vogue Aesthetics asks how much should we be making before making or transitioning to an es Corp okay it's not about how much you're bringing in Gross it's how much you're netting and let's go whiteboard let's just do a quick example if I'm bringing in a 100 Grand you might say oh Mark I need to be an escorp I brought in 100 grand and I'm going to go what's your net and you go oh man I've got tons of expenses I've got this I'm riding off and a new car a new truck and a home office travel some education da D D D D D and I have 80 grand in expenses so what did you net well I netted 20 grand I took home about 2,000 a month okay that's not time to go to an escorp I want to see this at least at 40 Grand so if you say well I wrote off uh 50 to 60 Grand in expenses and I netted 40 okay now we've got traction because I can take is 40 and split it in half and I could do a W2 for 20 and the pass through is 20 and I can save $3,500 that $3,500 makes the cost of the escort process the tax return and payroll because here's the cost I'm not trying to hide this from you you've got to do an 1120s tax return that's going to cost you at least a th and then You' got to do payroll throughout the year and that's going to cost you about I think adps at about 150 to 200 and so you're going to be about uh 800 bucks here so if I let's do the math spend 1,800 I'm gonna have to spend 1,800 I'm G to save 3500 okay this is really hard math spend 18 save 35 I don't know don't are we making money that's so complicated it's so complicated sometimes you got to spend money to make money people so here's here's the trick another times this is an important question well Mark why do I have to wait till it's 40 because the IRS when you're only making 20 grand they're like you can't split that you got to pay FICA self-employment tax on all that oh once you make 40 or 50 okay we can allocate a little bit that of that to Goodwill to you to just your brand your name and likeness and image you started something that doesn't always take your labor okay that's pass through that's the split and so we're gonna find the right amount but I'll tell you everybody if you're netting on paper at the end of the day after all your writeoffs $50,000 or more and you think you're going to do that this year call me let's get that into an escorp right freaking now and start your payroll procedure and you're going to save thousands thousands right next question Dylan next question comes from sunny on YouTube and they ask how about a seasonal business and I'm assuming they're talking about an escorp of course uh a kind of business they just mentioned a seasonal business something like say Halloween or Christmas trees oh Halloween or Christmas trees okay so if you have your escorp Everybody Let's Do seasonal so here's our escorp and let's say U what's her first name or name Sunny Sunny so say that Sunny's going to make um 80 grand that's his net and he's like man I should be an escorp you want to take your payroll during the year when it's seasonal and you're making money so you might have first quarter second quarter third quarter fourth and you're like I make all my money in fourth quarter let's say like Dylan said it's like Christmas or Halloween type business so you're making all your money here you make zero zero zero you're making all your profit here well I'm going to take a big ass payroll right here at the end of the year so I might I might even take um I'd probably take 30 in payroll and 50 in draw a pass through and I'm going to save 7500 bucks there's my savings if not just be an LLC you're going to pay $7,500 more to just be an LLC but if I can elect the es Corp I'm going to save and you're going to do your payroll right here so in these other reports you do zero you just do zero reports throughout the year and then whatever your profit is you estimate you're going to do a big payroll here at the end of the year and that's how you do it so seasonal businesses is the same story at the end of the day you've got your 1120s and you're taking in this example 30 grand on a W2 and you're taking profit of 50 see everybody you still pay tax on 80 grand you're going to still pay income tax on 80 grand but I'm only paying the f word f I'm only paying F on this piece this is the damage and so I'm only going to pay it on this if I do it right all right next question comes from an individual on Facebook Deepa and I'm asking this one because it it does sound very similar okay so they said I have an escorp and I'm the sole person working for the company and I take a paycheck once a year should I take it quarterly okay if you're taking okay by the way everybody Deepa I'm not saying you ever ever ever take a paycheck you're you never have to pay yourself people you're just going to put the payroll amount on a report so Deepa let's say we're doing uh 50 grand net and he's like I'm going to take payroll of 25 and we've got our four quarters you never give yourself a paycheck you're just he's saying at the end of the year I put on my 941 report I put it all on the fourth quarter report 25 Grand I put it all here and then Deepa you still have to do your quarterly report so you're going to get a nasty letter from the IRS so you do a 9410 941 0 9410 and then you pick it all up on the last report of the Year okay that's what deep is doing everybody now here's the problem do you think the IRS wants to wait for their dollars in tax on FICA at the end of the year or would they like it throughout the year now if the business is seasonal deep is okay I yeah I made all my money in the fourth quarter that's what I'm going to pay you your IRS damn it but if I'm making money throughout the year the IRS is like nah we'd like our money sooner so there is a good chance you could get a nasty letter from the IRS saying just Do deposits throughout the year let's divide this 25 into oh my gosh eight grand eight grand eight grand eight grand now here's another benefit of doing that if you just divide your payroll up throughout the year okay you're actually making deposits that don't break the your Brack if you take all your payroll at once at the end of the year that's right after Christmas you're writing a check to the IRS for almost three four grand holy crap I'd rather write that check throughout the year of $800 $900 a quarter then throw it all at once at the end of the year so Deepa can you do it this way yes do you have the risk the IRS could get a little pissed yes maybe some penalties in interest it's not going to be bad but from a practical reason why not do it throughout the year make your deposits when the cash flow is there rather than hitting yourself over the head in end of December early January with a big deposit so hope that helps next question comes from Galina on YouTube and they asked how do you set up a reimbursable account in an escort for home office payments o I like this okay when it comes to the home office deduction everybody um should I whiteboard this I maybe I'll white I love my whiteboard okay let's say I'm just an LLC or Soul propop okay if I'm an LLC or Soul propop I'm doing my taxes on a schedule C the home office deduction is right here you do the math you take the ride off and it just kicks out and then here's your net plus or minus all right when you're an S corporation you're doing the 1120s tax return well here's the thing an escorp can't have a house you have a house you're a sole proprietorship and ESC Corp is a company so it can't have a home office because it's not a person it doesn't have a home it's a corporation so how do you do it so you're going to take a deduction for rent you are reimbursing the shareholder which is you so this is down here you you're reimbursing the shareholder for the use of their home it's almost like you hire an employee and say hey if you work from home I'll give you an extra hundred bucks a month and you get a write off as a business owner and it's taxfree to your employee because you're reimbursing them for using the home it's not going in their paycheck but you get a write- off and so you take it as a rent expense so as an es Corp owner this is the first point where you ride off home office is in rent the escorp is paying rent to you to use your house okay now I'm not talking about the austa rule chill out everybody the company is just reimbursing you for the use of your home now there's two ways to get this on the books the first option is having a re imbursement process that's physically driven the company is going to write you a check for 200 a month to reimburse you for the use of your home now it cannot be a big amount it's got to be the cost of what it would normally be for a home office expense you can't say oh well to my home rent my rent my uh home office would rent for $200 a month so the corporation's going to pay it if the corporation pays fair market value rent you got to claim that rent what we're trying to do is reimburse you for the cost of your room in your house then it's taxfree to you and a deduction for the escorp so our our question here is Mark how do you set up that account well there's not an account the first option I said there's two options the first option is the corporation you guess what you figure out what the reimbursement is going to be let's say it's $2,400 a year so that's 200 a month so you write a check from the escort to you and you call it rent as the escorp level and it's taxfree to you you don't have to claim it as income super cool now the pain in the butt part is you got to remember to write yourself a check or do an online transfer every month for $200 and you better have an accountable plan in the minutes for your corporation which we do that for you at the law firm we charge 200 bucks a year to do all your minutes and include all this but you're doing a physical reimbursement there's no account it's just going from rent into your pocket taxfree option two this is what I do option two just do a freaking journal entry at the end of the year accountants do this all the time in December or actually after even in the end of the year I go hey we're doing home office right yeah we're doing home office okay let's see what the cost might be and we do the same worksheet that you would do for a Schedule C and you go okay home office is going to be 200 a month okay and they go why I didn't write myself a check for 200 month that's fine we're going to do a journal entry so the accountant does a debit credit we're going to debit uh expense rent and we're going to credit a capital account I contributed $200 of money from my home to use my home office for the business so it's it's a journal entry there's no money that changes hands there's no account it's a journal entry all accountants out there know how to do it do it and it's just a journal entry on the books of the escort to close it out for the year and it's based on the accountable plan it's in the minutes for your bylaws of your corporation or the minutes for your LLC operating agreement and we do this whole setup for you and your structure at the law firm so affordably and our tax Pros know how to do it so that's how you got two options do a physical check or transfer or do a journal entry at the end of the year both are satisfactory just choose the right amount next one next question comes from Anthony on YouTube and he asks if you can touch on any franchise taxes on California es corpse he believes it's just the 1.5% but he's asking if there are others as well okay in the state of California and I'm sorry it sucks there is a tax called the franchise tax on the net income of an S corporation and it's around 1.5% there's a gross receipts tax on llc's now once you take an LLC and convert it to an es Corp the gross receipts tax goes away because you're not in LLC anymore in the state of California you may it may say John Doe LLC but once you make an S election you've changed the color of your LLC you're now in escorp so the state of California Franchise Tax Board says okay no more gross receipts tax you're an escorp now okay we're going to tax the net well the net is an $800 minimum until it's more than that and it starts to exceed $800 with the 1.5% test at about 250 I don't have the number in front of me it's around 250 to 300 grand net if you go above that now that $800 goes up a little bit now let's think everybody this is where uh a lot of people get upset you know what let's do this this is going to be fun let's go to the Whiteboard so I'm in California let's just say and this is good for everybody to learn it's a good point if my gross is 400 Grand and my net is 200 Grand okay what's that mean my expenses were 200 so I brought in Gross and I netted 200k and I'm an LLC now over here I'm an LLC taxed as an es Corp and I have the same numbers I brought in 400 I spent 200 and I net 200 okay that's cool now over here there's a gross receipts tax it's $800 minimum plus this gross receipts tax well it would be it it would be zero in this example and the net and over here the net tax it's a franchise tax would be Net Zero here because it's below the threshold this is below the threshold now if I double this and I go to 800 Grand there's going to be a gross receipts tax and I'm going to net 400 now I'm paying self-employment tax on o oh my gosh the self-employment tax on 400 Grand would be probably $30 to $40,000 and over here my net would be 400 or really because I'm going to take payroll over here so let's say I Take payroll of 100 now my net is only 300 and I'm only going to pay this 1.5% on everything over 200 let's say I'm just being giving you rough examples but the point is whatever this number is it is a lot less than paying out self-employment tax on every dollar and so by doing the es Corp I'm paying it on the net and I'm also not paying self-employment tax on all of this I'm only paying it over here so here's my now for those in California that may have made a lot of sense for some of you I'm sorry I'm I'm not going to ever hide the ball I'm going to answer your freaking questions but let me say this everybody you have to look at the net cost of your strategy if I have an LLC and no gross receipts tax but I'm paying out the butt on self-employment how much is that or I come over to the es Corp and oh I've got to pay a little tax on the net but I have the split and I'm paying a lot less in self-employment tax what's the cost compare the two oh the es Corp is a lot cheaper overall yeah but I'm paying I'm paying Franchise Tax yeah but you're paying a lot less in self-employment tax you've got to look at the net net so sometimes you have to pay a dollar to save five rather than over here oh I didn't have to pay a dollar yeah but you're paying five more oh so I'm going to tell you the moral of the story is in California if you're doing a salary div split the S Corporal save you every time compared to the LLC because the self-employment tax is so bad it's worse than the gross receipts tax or the net Franchise Tax so do the math talk to your tax adviser sweet next question next question comes from fell Marie sorry if I mispronounced your name she asks I am a full-time registered nurse and a part-time realtor I'm making 197k as a nurse and less than 50k as a realtor per year should I do an escort no that's the gist of it but I'll answer why now I'm going to repeat this for everybody she's got a W2 up here at the hospital and what's cool is she's got probably a group 401k at the hospital right and you've got probably Kick-Ass benefits so you're getting health care and then on the side and she's making like 190k so she's paying FICA out the rear end and then she has a side hustle she's a realtor and she's a realtor with an LLC and she's making 50 Grand over here should she do an escorp well Part Of You' be like well yeah cuz she's going to pay FICA on 50 Grand and Mark so let's split it let's do 25 here 25 here and she's going to save a ton of money because she's already maxed out her FICA up here this 25 she's only only going to save 2.9% on it because she already paid her 15.3% this year it goes to 170 1685 so she's going to pay 15.3% on the first 70 170 so what I'm getting at is the savings is not enough now if you said as a realtor you were making 200 Grand we'd go to an escorp so the answer is whenever you have a big fat W2 on a day job with your side Hustle the more you make the more likely we're going to go to an ESC Corp the less you make the less likely we're going to do it so you it's all about the math you just got to Crunch the math now I want to tell everybody this is why I want you to get over to the Main Street tax Pro Network Main Street and Dylan make sure this is down in the description the Main Street tax Pro network is over 500 accountants that have gotten certified with me trained with me every week and in that Network you can choose an accountant that speaks Mar Coler so get over to that link I make no money if you hire them or not I make money when I train them they're paying me but when they engage with you that's that's your relationship and I've got a network of hundreds of them please get over there if you've got an accountant that doesn't speak this language and Dylan I'm going to email you as well that information on ADP so what's our next question next question comes from James and he asked if he can do a back door WTH even if I could contribute or even though he contributes to a Roth regularly can he do a backdoor Roth even though he contributes to a Roth regularly okay everybody um if this year I've got my handy dandy calendar I I'm not sure what his age is but this year you can do um 7,000 if you're under age 50 or 8,000 if you're 50 or older into a Roth okay now if you make too much money you have to do a backdoor method if you don't make enough money or less than a certain amount you can go in the front door so you either got to go in the front door and put in Seven Grand or you go around the back and put in Seven Grand now the question is a little no offense a little odd because you're like well I'm already putting in my Seven Grand in my WTH can I do a back door too no you get to put in Seven Grand that's either to do the front door or you do the back door for Seven Grand you got we got to find out how much money you're making now because I've done this a long time time I have a feeling what you're asking is can I do the mega mega backdoor Roth on top of my regular $7,000 Roth yes but you're going to use a 401k to kick that you're going to be have your little small business set up a solo 401k or we're going to take more payroll in our es Corp and do what's called an after tax contribution and I can drop over $70,000 in your WTH this year but it's going to be part of a Roth 401K so I've got podcasts on this more information make an appointment with one of my lawyers and they will help get you the information you need on the mega backd door Roth which is a combination of your front door or back door and then the 401K that's what I think you're asking all right Dylan next next question comes from Gerard on YouTube and he asks I'm a real estate broker doing short-term flips personally can I hire my es Corp to run the project to ultimately super charge my solo 401K uh can you hire your esort you should be doing all of this in the es Corp anyway what was he saying like I'm I I've got my I'm doing fix and flips to run the well who's doing the project you are personally is that what he's saying he does the project personally but you want to hire your escorp uh let me throw this out and Dyan I'm sending this to Dylan at Mark J Coler make sure you put this this is the ADP info for any of you out there that need payroll in an es Corp you got to get this going and ADP is a great place to start so send that over Dylan um and you just email Brandon and say Mark ker sent you all right now here's the I'm doing fix and flips and I'm gonna hire my escorp to do it doing the flip personally yeah don't you do not do flips personally so I think what you're trying to ask is is what you I need you to do is if you're doing flips personally so you're house hacking you're doing whatever I love it I'm a huge fan I do fix and flips and you're doing this personally you're putting it on a schedule C and you're getting killed tax-wise you don't hire your sorp you just quit freaking doing it you set up an LLC taxt as an s or you do an Inc taxed as an S and you start moving the operations over here so now you're doing all the flips in the es Corp you don't hire the es Corp to do it you're going to get asset protection here too you want the Corp to do the flips so stop the insanity no more doing flips let the SC Corp do the flips you don't hire your es Corp you say I'm not doing this anymore I got a new entity The Entity doesn't now if you're like well I got mortgage lending I've got hard money loans and all that I get it you don't think this is my first rodeo you're going to learn to do the entire deal in the es Corp on title and whatever it takes I teach classes on this we've got podcasts we've got 14 lawyers that can meet with you to do this and trust me you're going to save more money get better asset protection you just kind of don't know what you don't know so get a console and I promise you it'll save you thousands and thousands of dollars hey next question next question comes from an individual on YouTube and they ask how do we turn our regular employees over to W2 employees all employees are W2 and so if let me rephrase that how do we tra TR how do we move our regular employees to W2 employees I think what you're saying is you have a bunch of people you're paying as subs or under the table until you pay them with a W2 they're not employees by definition an employee gets a W2 so what I think you wanted to say was Mark how do we move our workers who are paying in some crazy way we shouldn't be how do we move our workers over to an employee with a W2 you simply set up an payroll service and you start doing it right and trust me you're going to get better protection with workers comp State unemployment federal unemployment you're doing it right well these people they don't want they don't want me to withhold from them then fire them I was about to flip them off I am so sick of people going well yeah if you give me a W2 I'm not going to work for you then fine go work in another country because this is how we do it here we're going to do it legit here so quit paying people under the table if you need to pay them an extra dollar an hour and withhold from them it protects you do you know you can't ride it off if you don't pay them properly with a 1099 or a W2 you cannot take a ride off for paying someone under the table so if you're asking how do I move my workers who I'm not paying properly to a W2 employee did you get that link you're going to see a link in the chat and all the chats of Brandon Berkeley he's over at 80P he gives all of my referrals a great price and they're sponsors of my events they're great so get over to Brandon and go Brandon bring all my employees on board and he'll hook you up um next question dlan how do you feel about two more questions sure that sounds great great okay next question comes from fired Tradesman and he asks Fleet of vehicles owned personally and 100% depreciated via Soul prop disregarded LLC if making an S selection on that LLC do vehicles have to be rein retitled into the name of the LLC no no and this is what you're doing is great except you should be an escort so you've written off all these vehicles you're operating on a schedule C and I already know what's going on you're probably smiling you are paying taxes out the butt the vehicles don't have to change anything they don't need to change on title your your account is going to perfectly move you over to an S elction 1120s it's not high you know everybody you reduce your chances of an audit with the IRS when you come an es Corp if you're an LLC let just fire the Tradesman if you're an LLC on a schedule C you're paying you're sorry you're chances of an audit are 15 times more than being an escorp you may go one mark this is really risky no you're actually reducing your risk becoming an es Corp you do not need to change the titles of your vehicles you do not need to change the Ein you do not change the name of your company you're still going to be an LLC on paper but an es Corp for tax purposes and we charge like two 250 bucks to make the change you you've got to get a tax Pro that knows what the hell they're doing because whoever's been doing your taxes should have already recommended this so whoever's doing it I don't care if it's your sister-in-law it's time to fire him an upgrade level up people next question D okay this is the last question now I know you've kind of answered this question already but I want to give um you an opportunity again to reapo that since I'm not lying there have been at least five additional individuals asking the same thing okay and it's all about the seasonal escorp kind of um situation um so uh John from YouTube asks my gross income is made in June July August September it's during the summer months summer sales I know what you're saying summer sales all right they asked do I take a W2 for only these months split or do I put it in one big W2 in September and they did mention that their business is in the Jersey Shore okay all right everybody so here's the year and we're going to say this is 2024 and you're making the bulk of your money here and nothing here nothing here okay everybody you could yours could be the opposite of that it could be similar to that whatever this is typically a summer sale type business or it could be Jersey Shore they're selling boat rentals and uh Beach of gear and maybe they're a shop on the you know on the P Boardwalk or they're at a carnival who knows what okay cool okay now listen to their question do you take a big W2 in the middle of the year or at the end of the year okay everybody you get one W2 see you you always get one W2 so don't be offended you're asking the wrong question so Dylan back to the Whiteboard you're going to get one W2 it comes out in January it's going to be for the whole year what you want to ask is Mark on my 941 reports can I take those here in July and here in October can I make a big fat 941 make my deposit and then do 0 941s here and it saves you time and effort with your payroll company and there's no deposit that's what you're asking and you're asking can I do zero 941s in the fourth quarter and in the first quarter and then pick up all my payroll amount you're not going to get a paycheck you're not going to get a paycheck you're just going to send in a report these two reports one and two you're going to send them up for third quarter and fourth quarter can you do that yes in fact that's what you're supposed to do and then these two total up and you get one W2 at the end of the year that's how it works so no matter who you are seasonally you're going to make your 941 deposit when it makes sense for your business and then you're going to they're all going to add up for one W2 you're not taking W2s throughout the year you're making 941 deposits throughout the year and then they end up on a W2 all right now flash 360 flash 360 that gets you a 100 bucks off an event that you can watch virtually in first week of June and I guarantee you you will save at least three times I'd like to say 10 I've held that before too but I'll say three here verbally record this put up your phone I promise you you will save three times whatever your ticket cost cost is or I'll give you your money back you better attend all the classes you better tell me You' been doing all the stuff in those classes I'm not going to give you refund because you got to show me you didn't save but I know you will and you're going to make new contacts and new relationships quit running off to a sexy Tony robbin's event they're great go do it that's how you make money run over to a mark Coler event once in a while and learn how to save money so you got to make money you got to save money that's how my rich clients get rich that's how how it works so flash 360 sign up for the freaking event you're going to have a great time if you come in person you're going to have an awesome time on Virtual lots of Q&A going on I'm going to have attorneys Manning the Q&A during the entire event you're going to get all your questions answered you're going to freaking love it and everybody here please continue to live the American dream Main Street America needs you America needs you I need you we need each other having a small business stimulating the economy controlling your destiny building a Roth IRA building rental property building your solo 401K investing in what you know people it's the most exciting experience of your life is it hard yeah it's hard it's hard but it's fun because you get to control your own destiny go in with the right mindset don't do it if you don't want to but if you've got a dream you've got a a hobby you've got a a strategy a a a product a service that you're passionate about oh my gosh there are so many consumers out there that want someone that's going to pick up the call that's going to answer the email that's going to provide the service they're looking for if you're passionate about what you do and you do it well you're going to make a ton of money and just do it right and save taxes protect yourself and build wealth in the process I'm just what I'm doing myself we've helped thousands of clients do it I'm not going anywhere check out my books on Amazon check out my podcast Main Street business podcast I'm all over YouTube I'm all over social media I'm not going anywhere people I'm going to be there with you till The Bitter End I love you
