Tax Tuesday with Toby Mathis 03-30-2021

Don’t be a fool in April! Make sure to get your tax questions answered by Toni Covey and Jeff Webb of Anderson Advisors. Submit your tax question to taxtuesday@andersonadvisors.

Highlights/Topics:

• Do wholesalers of land need to pay self-employment tax? If you are wholesaling that is going to be ordinary income, so if it’s reported on your personal tax return, it’s subject to self-employment tax; instead put it in a corporate entity
• If I run my real estate business from home, can I deduct a portion of all home expenses (i.e. property tax, utilities, and insurance)? Yes, but there are a few rules that need to be followed such as for a home office deduction and Schedule C
• Startup S-Corp has no revenue yet. If I file taxes jointly with my spouse, any concerns? No, but make sure to file a tax return to prove profit motive
• What is the best way to pay my children (teenagers) when they work in my business? Payroll? Cash at time of service? Year-ending 1099? To pay your children, consider what they are capable of doing and what they are going to be paid, which can be done via W-2 or 1099

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Resources:

Infinity Investing: How The Rich Get Richer And How You Can Do The Same by Toby Mathis

http://aba.link/infinitybook

Schedule K-1 Form 1065

https://www.irs.gov/forms-pubs/about-schedule-k-1-form-1065

Self-Employment Tax

https://www.irs.gov/businesses/small-businesses-self-employed/self-employment-tax-social-security-and-medicare-taxes

Real Estate Professional Requirements

https://www.irs.gov/pub/irs-utl/33-Real Estate Professionals.pdf

Charitable Organizations

https://www.irs.gov/charities-non-profits/charitable-organizations

Form 1099

https://www.irs.gov/forms-pubs/about-form-1099-misc

26 U.S. Code Section 168K

https://www.law.cornell.edu/uscode/text/26/168

Section 179

https://www.section179.org/

Entity Formation

https://andersonadvisors.com/entity_formation/

Cost Segregation

https://andersonadvisors.com/using-cost-segregation-residential-real-estate/

Bonus Depreciation

https://www.irs.gov/newsroom/new-rules-and-limitations-for-depreciation-and-expensing-under-the-tax-cuts-and-jobs-act

Depreciation Recapture

https://www.investopedia.com/terms/d/depreciationrecapture.asp

Wills and Trusts

https://andersonadvisors.com/living_trusts/

CARES Act

https://home.treasury.gov/policy-issues/cares

Home Office Deduction

https://www.irs.gov/businesses/small-businesses-self-employed/home-office-deduction

Tax Cuts and Jobs Act (TCJA)

https://www.irs.gov/tax-reform

Schedule A

https://www.irs.gov/forms-pubs/about-schedule-a-form-1040

Schedule C

https://www.irs.gov/forms-pubs/about-schedule-c-form-1040

Schedule E

https://www.irs.gov/forms-pubs/about-schedule-e-form-1040

Form 1040

https://www.irs.gov/forms-pubs/about-form-1040

Form 8829

https://www.irs.gov/forms-pubs/about-form-8829

26 U.S. Code Section 280A

https://www.law.cornell.edu/uscode/text/26/280A

Anderson Advisors

https://andersonadvisors.com/

Anderson Advisors Events

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Events@andersonadvisors.com

Anderson Advisors Tax and Asset Protection Workshop

https://andersonadvisors.com/asset-protection/

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https://andersonadvisors.com/tax-wise-workshop-for-businesses-investors/

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https://andersonadvisors.com/investing-workshop-passive-income-generating-machine/

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