5 Tax Tips for the 4th Quarter | 515

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Tax Tips

Increase your passive income and decrease your tax liability with 5 tax tips! Brush up on the 2 ways to escape the rat race, why you should start a small business, and why you should buy an income property in the 4th quarter.

Tax Tips

What You Will Learn About 5 Tax Tips for the 4th Quarter:

  • The 2 ways to escape the rat race
  • Why you should start a small business
  • How you should approach vacations
  • What cell losing of investments is
  • How to adjust the cost basis of your investments
  • Why you should buy an income property in the 4th quarter
  • How to increase your passive income and decrease your tax liability with real estate

Whenever you’re ready, here are a few ways we can help:

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  • Grab my book, Epic Freedom ($1) 
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  • Also, check these out:

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Transcript:

Matt Theriault: Hey, welcome to another episode of Tax Hacker Tuesday, and just a quick note before we get on with the show. A quick note about paying less to Uncle Sam this year. Waiting until April 14th, that’s not the time to do it. There’s nothing you can do. There’s nothing your CPA or tax preparer can do at that point. And December 31st, that’s not the time to do it, either. It’s too late. Besides, your CPA will probably be ringing in the new year and not picking up the phone on December 31st. So, if the thought of writing that big check to the IRS is as nauseating to you as I remember it being for me, then the time to deal with it and minimize the amount that you have to pay, that time is right now. I mean, we’re in the fourth quarter. Tax planning needs to happen right now.

Consider this, if I offered to give you $2,000, I’ve got $2,000 in my hand, and I offered to give it to you for $1,000, meaning you give me 1,000, I give you 2,000 back. Would you make that trade? Of course, you would. You’d double your money with that simple exchange, right? It’s what we call a no-brainer. Well, that’s the very offer that Tim Berry has been extending to you all year long with the Tax Hacker Blueprint. Normally, $3,000 a year for this level of planning and consulting that he’s offering, and the introductory offer is half off, just $1,500. And if Tim and his team can’t save you at least double that, then it’s free, you pay nothing.

So, go to taxhacker.com, grab Tim’s free book on how to navigate the loopholes in Trump’s new tax plan. You’re gonna need that, and after you’ll have an opportunity to schedule some time with Tim and his team and just let them know that you heard on The Epic Real Estate Investing Podcast and tell them you want your tax hacker blueprint. Go to taxhacker.com and everything you need is right there. All righty? Now on with the show.

Speaker 1: This is Theriault Media. Did you know that up to 50% of your lifetime income will be wiped out by taxes? What if you could stop this madness? Isn’t it about time you play on a level playing field with the wealthiest 1%? Now you can. Tim Berry, Attorney at Law, shares here each and every week current tactics and strategies that anyone can implement to hack the tax code, protect your assets, and keep what’s rightfully yours. It’s time for Tax Hacker Tuesday.

Matt: Hey, this is Matt, over at Epic Real Estate Cash Flow Savvy, and we help a lot of people over here escape the rat race, and there’s two ways that you can do that. You can do that by either increasing your passive income, and we do that by helping people purchase income properties. Or, the second way you can do it, or and/or the second way you can do it is work on decreasing your expenses, and we help people with that, as well. And our big advice is always to start with your biggest expenses and start there and reducing those and just kind of working your way down. Suze Orman would have you start with your daily cup of coffee. Let’s preserve that, let’s enjoy that. Let’s start with our bigger expenses where we can make a bigger impact right away, and then if we get down to that point where we gotta start minimizing our coffee, that means you’ve done some great work and you’ve probably got enough money to enjoy that coffee anyway.

So, let’s just start with our biggest expense in life, which would be your taxes. It’s your tax liability. It’s gonna take up to 50% of your lifetime’s income, so that’s a great place to go to work to have a significant impact and an immediate impact on your escape of the rat race. So, with it being the fourth quarter, there’s some things that you’re gonna wanna do before the end of the year to really maximize your profit for this year, and so in the spring, when it’s time to pay Uncle Sam, that tax liability is much lower.

I’ve got five tips for you. If you haven’t started a small business, you wanna do that. That’s probably the number one tax advice or tax strategy, I should say, that any American can do to immediately reduce their tax liability. Because self-employed individuals … I wrote this down in here, so I’m just gonna read from it real loosely … self-employed individuals are eligible for a bunch of tax deductions. And a few of those expenses could include a few business-related vehicle mileages, shipping, advertising website fees, a percent of home internet charges that you use for business, professional publications, dues, memberships, business-related travel, office supplies, and any expenses incurred that run your business. But a lot of those expenses that help you run your business are expenses that you have already right now in your personal life, so you can kind of collapse those a little bit and get a bunch of tax deductions that way.

The second reason for starting a small business, it just has to do with the way that Uncle Sam comes and gets their share. As a W-2 employee, you make your money, Uncle Sam takes his cut, and you get what’s left over. As a business owner, whether small or large business, you have the rights to the same advantages, is, you make your money, you go and pay for all of your stuff, and then you pay taxes on what’s left over. A big impact to the bottom line. And thanks to my good friend Mark Kohler over at Kohler and Kohler, this is one of his top tax strategies for all Americans, so start a small business. If you own an income property, hey, you’ve already got a small business, so you’ve killed two birds with one stone, so just know that. But, go and discuss this with your CPA, and make sure that this is gonna be the right thing for you. In most situations, it will be. It just might be the way that you do it is gonna vary.

So, starting a small business, that’s number one that you can do this fourth quarter if you haven’t done so already. Second thing is, combine your vacation with a business trip. If you’ve got a vacation coming up for the holidays or something like that, see how you can plan some business, I guess, meetings, or research around that and then you can take some of that vacation expense and take that as a tax deduction, as well. You really minimize the expense of your vacation. The third thing is sell losing of investments. If you have losses in your taxable accounts, you can turn those lemons into lemonades, essentially. Just cut those loose before the end of the year, and you can use those losses to offset capital gains in the new year.

Fourth is, adjust the cost basis of your investments. Say you have an income property and you blew an air conditioner this year and it cost a couple of grand to replace it. People look at that, wow, there just went a whole year of my cash flow, my ROI went down the tube. Don’t look at it that way. What you can do is you can take that and adjust your cost basis and it’s gonna reduce your capital gain when you actually sell the investment. Look at it that way, that’s number four.

Number five is to buy an income property. You wanna get one or your next one may … if you can get a couple, you wanna do that by the end of the fourth quarter because this is why, federal income tax rates, they vary, and it’s possible to lower your taxes by reducing your tax rate. The tax rates, they range from 5% to 35%, and the IRS assesses tax on income earned from work at an ordinary income rate, of up to 35%. In contrast, a lower tax rate applies to income earned on real estate investments. When you’re starting to take your active income and convert it into passive income by purchasing income properties, not only are you increasing your passive income and helping your escape of the rat race, but you’re also decreasing your tax liability. So, you’re really killing two birds with one stone.

And that’s why I like real estate so much, and especially income real estate. You increase your passive income, you decrease your tax liability, and it’s also you get all the benefits of running a small business. So, if there’s anything that we can do to help, and you’ve been looking at a passive income or maybe you’ve got some passive income, you’re a little bit frustrated right now, go to investorsguidetopassiveincome.com. Mercedes and I put a document together that we give to all of our clients. You can have one for free. Go to Investor’s Guide To Passive Income. That’ll get you started to help you take the next step in your escape of the rat race.

That’s my tip for this quarter, or actually, my five tips, to reduce your tax liability and maximize your profit for this year. You wanna get that done before the end of the year. I’ll see you next time, take care.

Speaker 1: That’s it for today, as we dream of a tax system that works just for you. But until then, you have Tim Berry. See you next Tuesday for another episode of Tax Hacker Tuesday.

Matt: Hey, rock star, if you have a question here for Tim that you’d like him to answer on the show, anything tax related, anything asset protection related, go to taxhacker.com/questions. Post your question there and then we’ll answer it live right here on Tax Hacker Tuesday.