Is your 2018 personal tax return ready to be submitted to the Internal Revenue Service (IRS) by April 15? Or, are you still hungry for Toby Mathis and Jeff Webb of Anderson Advisors to answer your tax questions? They bring tax knowledge to the masses; although sometimes they would rather bring tacos. It’s like Taco Tuesday, but with tax. Do you have a tax question? Submit it to taxtuesday@andersonadvisors.

Highlights/Topics:

When’s your personal tax return due? April 15, but you can file an extension to submit it on October 15

What’s the penalty for not filing a 5500 first solo 401(k)? About $750

I have a C Corp with no business; do I still need to file? Yes; if filing as a corporation that exists, you are required to file a return, but partnership rules are a bit different

What’s the $250,000 of income are total asset value? Total value of all assets; not for an IRA, but a 401(k)

What deductions can I take as a W2 contractor? Most employee reimburse expenses were removed; take standard deduction, or itemize without reimburse expenses

Can I reimburse health insurance from the S Corp I own? Yes, but you account that as wages, so you're paying tax on it

How do you report and issue a 1099 MISC? Report payments of more than $600 made to others that are not corporations on the 1099 MISC form with the vendor’s name on it

What’s required to move an existing business to an opportunity zone? You can’t take something you already own and make it into an opportunity zone property, unless somebody's investing in it that's not related to you

What's the difference between an opportunity zone and 1031 exchange? 1031 exchange is for real estate only, and you have to exchange property for more real estate

Where do I find areas that are opportunity zones? Is there a Website? Yes, just search for Opportunity Zone Heat Map on Google

Can we write off repair expenses, like roof shingles for personal hall? No because It is personal property; you can’t write things off for repairing your house

For all questions/answers discussed, sign up to be a Platinum member to view the replay!

Go to iTunes to leave a review of the Tax Tuesday podcast.

Resources

Schedule K-1(Form 1065)

Extension of Time To File Your Tax Return

One-Participant 401(k) Plans

IRA Club

TD Ameritrade

Charles Schwab

Medi-Share

Tax Cuts and Jobs Act, Provision 11011 Section 199A - Qualified Business Income Deduction FAQs

1099 MISC

Tax Cutting Jobs Act (TCJA)

Opportunity Zones FAQ

Opportunity Zone Heat Map

1031 Exchange

Toby Mathis

Anderson Advisors

Anderson Advisors Tax and Asset Protection Event

Tax-Wise Workshop

Anderson Advisors on YouTube

Toby Mathis of Anderson Business Advisors welcomes Meg Busing, founder of the Midwest YouCan Foundation. During her freshman year of high school, she sustained a traumatic brain injury (TBI) that put her in a coma and on life support. Eventually, Meg recovered physically, but had some mental challenges. About 10 years later, while at nursing school, she started having seizures. She shares her long journey of dealing with epilepsy and not being able to find a cure with medications. She had brain surgery to remove part of her brain and scar tissue from the TBI. Meg’s personal experience inspired her to give back by creating Camp YouCan for kids and teens to help them discover what they can do, despite their epilepsy.

Highlights/Topics:

Traumatic events that occur in life either shape you, or you use it to shape yourself

Meg’s TBI was the main reason why she wanted to be a nurse; she saw how much of a positive impact nurses can have on patients

Different types of seizures occur with epilepsy; they can occur at any time, and you have no control over them - emotional impact of epilepsy is as bad as the physical part

Meg’s camp brings kids with epilepsy together to do regular camp activities, including the zip line, rock wall, shooting bow and arrows, catching fish, and being on a boat

Camp YouCan benefits parents; allows them to leave their kids in a safe environment  

Initially, Meg asked a local organization to help publicize the camp, which allowed her to operate it under another non-profit and use the other foundation’s tax ID number

Meg parted ways with the other non-profit and achieved a 501(c)(3) status for Camp YouCan to control decisions on what to do with money raised and what activities to offer

Start with an idea, believe in yourself, and find the right people to help you achieve your goal; don’t bombard yourself with limiting beliefs and learn from your failures

Tax reasons to do a non-profit; you can give or raise money and time

Resources

Midwest YouCan Foundation

Yes You Can - Meg Busing’s TED Talk

501(c)(3)

Toby Mathis

Anderson Advisors

Tax and Asset Protection Event

Toby Mathis and Jeff Webb of Anderson Advisors encourage you to look at taxes as something that's enjoyable because it's a very rewarding subject. Learn how to use tax laws to your advantage and put money in your pockets. Do you have a tax question? Submit it to taxtuesday@andersonadvisors.

Highlights/Topics:

What happens if I forget to submit Form 8606? You don’t have to file a return if you let the IRS know there’s something you put in, but you are not taking a tax deduction for it

What principle assets should I use for my LLC, if I work from home? Depends on where you set up the LLC; a physical address, but not your home address, as principal address

Can paying my minor kids for their work in my business offset taxes? Yes, if they do something of value; shift money from a higher bracket to someone in a lower bracket

How can we pay kids? Is there a limit? If you're a sole proprietor, you don't have to put them through payroll; if you're anything else, you do put them on the payroll

Can I pay my parents for babysitting? Yes, but you're not going to write that off because it’s not an expense

Do I have to file tax through each state where I own a rental property? If you're making money in a state, you must report that income somewhere

Can a self-directed 401(k) invest in an opportunity property? Self-directed IRA means you don't have to have a custodian; you can be your own administrator or trustee

Can I invest in opportunity property? Yes. Opportunities zones and opportunity funds get the tax exemption; you can invest in those areas and defer capital gains

What documents need to be filed for a C Corp? Depends if you're filing it with the state, then there’s three areas to be aware of: State, third parties, and federal government

Do you need a real estate license to be considered a real estate professional? No.

What is a good IRA platform to use, has the lowest fees? IRA Club

Is partnership income in an IRA required to be income taxed? No. An IRA owning a partnership doesn’t pay tax on that income

Do you lose long-term capital gains being a real estate professional? No. Capital gains are capital gains; you don't lose them because the losses aren’t considered passive

Do kids pay FICA taxes? If it's payroll, yes; they're not going to pay on employment taxes

What are the main tax advantages of a C Corp? Separate tax bracket and fringe benefits that are not taxable to you and not available through others

I have a home office in the basement. Is that basement going to be deducted? Yes, if you’re a sole proprietor; have an accountable plan and reimburse yourself by determining how much square feet of the house you're using

I formed a single-member LLC. What tax form do I report? You don't; it's disregarded

What's the best bookkeeping system for real estate investors and financial services corps? QuickBooks

For all questions/answers discussed, sign up to be a Platinum member to view the replay!

Resources

Form 8606

Form 1065

Form 1099-C

Form 1099-A

Form 1120

Section 280A: Home Office Deduction Rules

UBIT

Backdoor Roth IRA

TAFTA

It's not a dream: My Pillow hit for $1.1 million in unpaid NY sales tax

Family Owned Non-Corporate Entity (FONCE)

26 U.S. Code 7702

ACA

SS-4

199-A Dividends

IRA Club

501(c)(3)

Schedule C

Schedule E

1031 Exchange

QuickBooks

Qualified Retirement Plan (QRP)

Toby Mathis

Clint Coons

Anderson Advisors

Anderson Advisors Tax and Asset Protection Event

Tax-Wise Workshop

Get Access to all 3 of our Tax-Wise Workshop Livestreams in 2019

Anderson Advisors on YouTube

Ready to join Toby Mathis and Jeff Webb of Anderson Advisors for a fun Tax Tuesday in the middle of tax season? Do you have a tax question? Submit it to taxtuesday@andersonadvisors.

Highlights/Topics:

Do I have to 1099 a hard money lender for interest payments? No, hard money is for a property mortgage, so use Form 1098

How do I list a shareholder on my 1120, if I am a C Corp? Ignore the LLC and remove it; list yourself as a shareholder because you’re the owner

If 501(c)(3) provides housing for veterans, can I hold homes in separate LLCs under the non-profit? Even if your 501(c)(3) provides housing, it doesn’t need to own the property; you could own houses in a for-profit LLC and rent or give them to the 501(c)(3)

What is an RMD? Required minimum distribution for deferred retirement account; you put money in tax deferred and write it off against your taxes

Are RMDs added to adjusted gross income? Yes, they are taxable as retirement income; give RMD directly to charity to not make your social security more taxable

Who can open up an HSA account that allows us to invest proceeds into alternative investments in real estate notes? You can go to almost any bank, including Mellon

What things can be listed as a liability for business? Any loans - anything you owe to a third party or shareholder

How do I file my C Corp with 50/50 partnership? C Corp files Form 1120; if you haven’t made money yet, it'll all be expenses - offset losses to not pay tax in the future

With the new Schedule A rules, I’ve heard that since mortgage interest probably isn't usable for most of us, is HELOC interest deductible elsewhere? Mortgage interest is still deductible up to $750,000, if used for acquisition indebtedness

Any changes in how donations to charities are handled in 2019 compared to 2018? Same rules apply; 60% of adjusted gross income can be offset on Schedule A

I don't want to take profit from a house. Can I transfer the house to another LLC, and the other house can do the lending or funding? Yes, you can always borrow money on a piece of property without having to trigger a tax

Where do I write fees for LLC state renewal and registration fees on my tax form? There's a couple places; on the taxes and licenses line, or in other deductions

Are there opportunity zone funds to invest in with similar tax deferral? Absolutely, that’s what big brokerage houses are doing; defer your money

I hold a recreational property in LLC. Can I claim special assessments for the property as a loss against sources of income outside the LLC? It depends on how that LLC is taxed

On Form 5500, do you not need to file it if it’s less than $250,000? If you have a retirement plan less than $250,000, married and filing jointly, don’t worry about it

Formed an LLC in Wyoming, taxed as a partnership, I have no activities or expenses besides formation cost. Do I need to file the tax as a partnership? Yes, but you don’t have to file a partnership return, if there was no income or expenses to report

If Airplane A leaves New York, heading west at 11 a.m. EST and Plane B leaves San Francisco at 6 a.m. PST, can I get an extension on filing for my corporation until Oct. 15? No, but if it’s an S Corp, you get until Sept. 15; if it’s a C Corp, it depends on its tax years

For all questions/answers discussed, sign up to be a Platinum member to view the replay!

Resources

1031 Exchange

Form 1098

501(c)(3)

Opportunity Zones

Schedule K-1

Mellon Financial

Theresa Fette

Schedule E

Schedule A

Home Equity Line of Credit (HELOC)

Form 1120

Form 5500

1099-R

529 Plans

MileIQ

TD Ameritrade

Tragedy Assistance Program for Survivors (TAPS)

Infinity Investing Workshop

Toby Mathis

Anderson Advisors

Anderson Advisors Tax and Asset Protection Event

Tax-Wise Workshop

Anderson Advisors on YouTube

Some people are very interested in protecting the environment. Some want to protect their land to make sure it’s not altered from its true nature. Toby Mathis is joined by Tyler Surat, who works in the alternative energy sources industry. Tyler helps farmers and others with the conservation and preservation of their land by creating easements. They discuss the “ins and outs” of conservation easements, which involve tax credits and benefits.

Highlights/Topics:

History of Conservation Easements: U.S. government trades tax for land to incentivize people for conservation via a deduction on donated land based on its asset value

If you don’t have land to donate or your land isn’t worth anything, find people who do and only want a portion of the tax deduction

Landowner raises money by having other people buy into a partnership to put a conservation easement on the property and have rights to the land

Example: Investor/partner gives $100,000 and gets a $400,000 tax deduction

Landowner has three options: Do nothing, develop land, or conserve it

Limitations: 60% of adjusted gross income with federal donations and can carry forward unused portion (i.e., a a $200,000 benefit for $100,000 investment)

Deal with reputable entities; know who you’re dealing with and how they create the lead

Avoid investing in properties with no developmental value; invest in aggregate types of conservations that hold their value

IRS is aware of abuse where investors who make most of the income in the United States try to mitigate their tax liability

Investors get 4.5-5 multipliers, a $5 deduction for every $1 donated; for the IRS to audit that deduction on your personal tax return, it would have to question the entity/easement

If you want to go green, have a tax appetite, or need an investment strategy, the IRS offers a 30% tax credit for solar or any other renewable energy

Resources

Tyler Surat’s Email

Tyler Surat’s Phone Number: 719-580-3051

Ducks Unlimited

501(c)(3)

Schedule A - Charitable Deduction

Zillow

Mar a Lago

Residential Energy Credit: Instructions for Form 5695 (2018)

Toby Mathis

Anderson Advisors

Tax and Asset Protection Event

Toby Mathis and Jeff Webb of Anderson Advisors help people do the best they can with what they’ve got and keep as much money in their pockets as possible by answering their tax questions. Do you have a tax question? Submit it to taxtuesday@andersonadvisors.

Highlights/Topics:

We inherited farmland real estate that we rent to tenants per a crop-share agreement. Do we get the 20% write-off? Yes. Rental income is subject to a 20% deduction

I’m a realtor and make edible baskets for clients. Can I write off these expenses as advertising? Write off $25 per person per year for the baskets

Are holding companies only for rental LLCs or can they hold an active business LLC? A holding LLC is for LLCs in different states/assets, and to make a single entity for taxation

What taxes must revocable trust beneficiaries pay upon distribution? Grantor who funded trust owns the assets; income from the trust is taxable to them, not the beneficiary

Which IRA with checking privileges do you recommend?  IRA Club; if you want check writing privileges in an IRA, it’s better to do a 401(k) and not have a custodian

If I open an account as a trader in a personal property trust, what’s the LLC’s role? The personal property trust is used because brokerage houses call you a professional trader and charge extra fees; LLC needs to be a partnership to write off expenses

Are expenses (utilities, insurance, and homeowner’s dues) deductible for a C Corp? Business-related expenses are deductible to a C Corp under an accountable plan

Can a S Corp shareholder deduct personal health insurance? You can’t reimburse your own health insurance, but you can deduct premiums as income on your W2

Do most land easement syndications offer three-five deductions? Companies get together, buy a property, and give air rights/restrictions on buildings; you can get three-five times the investment - invest $1, get a $9 deduction, but that’s aggressive

The standard deduction was basically doubled, will the tax burden lessen by 50%? No, the standard deduction is what you take or itemize; standard deduction went up, and took away all exemptions and exclusions

I’m on research landscaping. If I’m not being taxed as an S Corp and my kids work for the business, should I issue each of them a 1099? Yes, hire them and give them a 1099

What’s the benefit of parents doing IRS paperwork to declare a $15,000 annual gift exclusion? Don’t file it; $15,000 and under is what you can give without reporting it

Clarify an accountable plan that includes corporation directors not taking a salary? Officers are considered employees by being around directors presumed to be employees; do an accountable plan with the director, but identify what they’re doing

My C Corp didn’t do any business this year. Do I have to file a return? Yes, C and S Corps have to file a return every year of their own existence

What are the top deductions eliminated for 2018, with the exception of the SALT limitation? Exclusions, personal exemptions, miscellaneous itemized deductions, and entertainment expenses

What’s the best way to get precious metal holdings into an OJ retirement plan, meaning what entity is needed? Self-directed IRAs or self-directed 401(k) primarily because banks hate hard assets

For all questions/answers discussed, sign up to be a Platinum member to view the replay!

Resources

199A

Affordable Care Act (ACA)

IRA Club

Tax Information for Corporations

280A

1244

Rollover Business Startup (ROBS)

Section 179 Deduction

Tax Information for Charities and Other Non-profits

COBRA

Medi-Share

1023 Application

Section 721

1031 Exchange

IRS Tax Schedules

ERISA

Livestream: Anderson Advisors’ Year-end Tax Planning

Toby Mathis

Anderson Advisors

Anderson Advisors Tax and Asset Protection Event

What is and what is not a limited liability company (LLC)? An LLC is a creature of state law. With an entity, no matter whether it’s created by a state or you’re creating it through an agreement, you still need to address how it relates to a state, third parties, and the federal government.

Highlights/Topics:

LLC was created under state law; do not exist in federal government

Definition: LLC is an entity created by state law that mirrors or marries various elements, including creating liability protection for an artificial person

LLCs create isolation between you and your business; LLCs are similar to corporations

State: Set up an LLC with the state and pay the state a fee for protection

State gives you certain types of rights/protection, such as from liabilities of the enterprise

States give you protection personally from business activities, but some states give you protection from personal activities going into the business

Third Parties: When dealing with third parties, follow certain formalities - document and maintain books and records of expenses and income for courts and the IRS

Rule of Thumb: The amount of respect you show your business or LLC, is the amount of respect a third party shows it

Federal Government: IRS makes sure you pay your taxes and where you go to get an Employer Identification Number (EIN)

LLC is a separate person, but it’s not recognized by IRS as a separate taxable entity, unless told otherwise

Three Choices for an LLC: Sole proprietor, partnership, or corporation

Resources

EIN

1120 or 1120S

1244 Stock Loss

Toby Mathis

Anderson Advisors

Tax and Asset Protection Event

Toby Mathis and Jeff Webb of Anderson Advisors are here to ease your nerves and help you make intelligent decisions by answering your tax questions. Do you have a tax question? Submit it to taxtuesday@andersonadvisors.

Highlights/Topics:

If I liquidate a 401(k) and take the cash, what taxes will I pay? If your younger than 59.5, you’ll pay a 10% penalty for a traditional 401(k); penalties are different for a Roth 401(k)

I have a home office. How do I indicate that on my taxes? Use Schedule C and Form 8829; but go for a business reimbursement, rather than a home office deduction

My phone is for personal and business use. How do I indicate business use on my tax form? If required to have a phone for business, expense the whole thing by being a corp

I purchased another vehicle for business use. Do I title it under the name of the business? No, to avoid additional liability and higher insurance costs

What’s the minimum income required for social security/medicare benefits to receive your four credits? In 2018, you’d have to earn $5,280; in 2019, it goes up to $5,440

Does the C corp have to be setup in 2018 to carry forward the deductions to next year? No. If you pay during your tax year, it’s not an applicable deduction in that particular year

For all questions/answers discussed, sign up to be a Platinum member to view the replay!

Resources

Rule 72(t)

Schedule C

Form 8829

Home Office Deduction

MileIQ App

26 USC 195

453 - Installment Method

105 Plan

Affordable Care Act

Tax Wise Workshop

Tax Tuesday Special Offer

Toby Mathis

Anderson Advisors

Anderson Advisors Tax and Asset Protection Event

Did you know that you can no longer write off miscellaneous itemized expenses? That’s because of the Tax Cuts and Jobs Act. Toby Mathis talks about how to take personal expenses that are not deductible and make them reimbursable business expenses that you don’t have to report as taxable income.

Highlights/Topics:

Identify expenses that may not be deductible to you as an individual, but to a business; expenses that benefit a business that you incur personally as an employee

How businesses are structured (sole proprietorship, partnership, corporation, etc.) and operate affects personal expenses for business

Accountable Plan - Reimbursements and Expense Allowance Arrangement: Amounts  paid are excluded from employee’s gross income, not reported as wages/compensation

Keep a paper trail; document who, what, why, when, and where you’re writing off

Four-part Test:

Is there a business connection to the expense?

Substantiation: Can you provide proof (i.e. a receipt) to the employer proof that you incurred the expense?

No Excess Payments: It can reimburse you what you paid. But, can it give you extra money?

Timeliness: Do you let the employer know of expenses every 90 days, for the employer to reimburse you within 120 days?

Examples of expenses that you might get reimbursed on include travel to and from the hotel and business meals

Employee Home Office - Four ways for a home office deduction, if you:

Are an employee doing administrative activities at home, it qualifies as a principal place for business.

Have a cash register for your business, or transacting business and collecting money in your home.

Have a physical place where you meet patients, clients, customers, or whatever.

Have a detached structure that is not part of or attached to the dwelling unit.

Resources

Tax Cuts and Jobs Act

Schedule C

Accountable Plan

FICA

FUTA

Railroad Unemployment Insurance Act

Toby Mathis

Anderson Advisors

Tax and Asset Protection Event

Toby Mathis and Jeff Webb of Anderson Advisors like to spread tax knowledge to the masses. So, here they go again. Do you have a tax question? Submit it to taxtuesday@andersonadvisors.

Highlights/Topics:

My parents own two homes and willing one each to me and my sister. What’s the best way to transfer the properties? Transfer inherited appreciated property through will/ trust

If I offer a small-term life insurance policy for my employees, will tax benefits outweigh costs? Yes, but tax benefit of deducting premiums won’t equate to premiums you pay

What is an accountable plan? How is it formed, described, executed? Plan must be between employer and employee; you account for certain expenses, we reimburse you

How would I be taxed, if I get a loan on a 401K to use toward buying real estate investment properties? A loan isn’t a taxable event; you repay the loan through the 401K

What’s a DB plan? Defined benefit; defined contribution (DC) defines amount you put in

As a sole proprietor, can I write off life insurance premiums as a business expense? You can’t write off insurance premiums unless you're an employee; you don’t get deductions

I've invested money into tech startups that have failed. How can I write off these losses? It's capital loss, and you need capital gains to offset it; can deduct up to $3,000 a year

Can C Corp losses be applied to a personal 1040? Depends. Losses can be applied, if corp is liquidated, it’s a traditional corp, and 1244 stock election was made

Does Anderson Advisors have a favorite app to track mileage? Anderson Advisors doesn’t, but Toby Mathis recommends MileIQ

Can I get advice on how to save money from your company? Yes. We're happy to help, just contact us to talk to any of our representatives

Can I get the $500 credit for my 17-year-old son? Child tax rate cuts off, if they're 17 at the end of the year

If my child earned $11,000 in 2018 and no tax, does he have to file his own tax return? Yes. If you don't have a tax liability, you still have to file a tax return to claim it

If my C Corp didn't make money its first year and all the expenses I had were for education, will I end up paying money to the IRS or receive refunds? The corporation would have the $40,000 deduction; it can reimburse $40,000 as a loss, not a deduction

How do I structure, if I’m working for another company as a day job? Doesn't matter. You can work for multiple employers and set up your own companies

Do I have to hire my wife as an employee to give her a pension? If you want to put money aside for her, she needs to work; you can't just give her a salary for doing nothing

Can I invest directly into real estate in an opportunity zone or only in an opportunity zone fund? Put money into the qualified opportunity zone and invest through a qualified opportunity fund via an entity, not individually; you can take capital gains

What's the best accounting software to use to run an S Corp? QuickBooks is the most used and people are familiar with it; also have a good bookkeeper

I'll be 59 1/2 in March. Can I use my 401K to purchase real estate investments without penalty? How is the tax handled? If you pull money out, it has to be after you're 59 ½, not a day before; you can make a 72T election when you're 55 to spread out contributions

For all questions/answers discussed, sign up to be a Platinum member to view the replay!

Resources

338 H8 or H10 Election

Year-End Tax Planning

Schedule C

Schedule E

Schedule A

Form 1120

1244 Stock Election

MileIQ

1099 Miscellaneous

Form 5500

Securities and Exchange Commission

The Private Vault

QuickBooks

Breaking Bad

72T Election

Taxbot

1031 Exchange

Anderson Advisors Tax and Asset Protection Event

Toby Mathis

Anderson Advisors