February 21, 2024

Are Educational Courses Tax Deductible?

1 hour 12 minutes

This episode of Tax Tuesday, Toby Mathis, Esq., and Eliot Thomas, Esq., cover topics including paying your children from your business, when you can write off meals as “business” - (hint: it all comes down to ‘intent’), and how often you should meet with your CPA. Submit your tax question to taxtuesday@andersonadvisors.

Highlights/Topics:

"Does my S-corporation where I am the sole owner and sole employee have to issue a 1099 to me as an individual?" - In general, you're S-corporation, you're an employee, so you would get a W-2. It's what we call reasonable income.

"If my husband and I, both shareholders of our C-corp, discuss business over dinner, are we able to be reimbursed for our meals? Is there a list of reimbursable expenses for employees/owners of C-corps that is easier to read than the tax code?" - If the intent was to talk about business, then generally speaking, you can deduct it

"Can I sell my solo 401(k) held property, do a 1031 into another investment, and then buy the property back with an LLC?" - first of all, we wouldn't have a 1031 going on with a solo 401(k). We don't have deductions, we just have cash in cash out with our retirement plans.

"How are taxes handled differently with capital assets versus repairs, maintenance, and labor of rental properties?" - Every time you lay out cash for one of these repairs or labor, that's going to be an immediate deduction for the full amount.

"How do I get tax benefits from paying my children for doing work in the business?" - basically you can just pay them out whatever entity you have.

"Are the costs of education specifically related to starting a business deductible, specifically paid webinars or courses taken online. I've read that they are, but apparently many say they are not. Is there some special way to categorize them so that they are deductible?" – If its in a C-corporation or an LLC taxed as a C-corp, we're allowed to deduct the training as training our employees, which you would be an employee of.

"I recently purchased a small camper trailer to rent out, my camper rental side hustle per se. "Does this type of rental count as an STR, short term rental, as far as taxes are concerned? Some suggest filing Schedule C while others say Schedule E might be more appropriate. We are not going to use this camper personally. It is for rentals." - If you rent it for 14 days or less, you don't have to report it. It's covered under 280A subsection G2. If you rent it for more than 14 days, it is an investment property.

"If I put my rental properties into an LLC, do I have to file both personal taxes and business taxes?" - how is that LLC taxed? It can be a sole proprietorship. It can be a partnership if we had another member, two or more members. It could be an S-corp, could be a C-corp. All those make a difference.

"How often should I be meeting with my CPA a year?" - I'm going to really recommend having quarterly meetings with your CPA just to make sure everything's on track.

"Can I file my taxes for my LLC as a corporation to get a lower tax percentage? I run short term rentals. I host short term rentals for other owners. I also run short term rentals in the properties I own. I have an S-corp with my husband and I work from home. My accountant said, I cannot deduct my home office expens - we never want to put appreciable real estate into a corporation, S or C, if we're holding onto it for a long time.

"Can someone file their taxes through your company?" - Yes, you can. You have to be a tax client

Resources:

Request a Free Cost Segregation Study

https://andersonadvisors.com/CSA/

Tax and Asset Protection Events

https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=aba&utm_medium=podcast&utm_content=are-educational-courses-tax-deductible

Anderson Advisors

https://andersonadvisors.com/

Toby Mathis YouTube

https://www.youtube.com/@TobyMathis

Toby Mathis TikTok

https://www.tiktok.com/@tobymathisesq

Clint Coons YouTube

https://www.youtube.com/@ClintCoons

...more

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