The more you know and learn about taxes, the less likely you are to be audited. According to the recently published 2018 Internal Revenue Service (IRS) Data Book, only 0.5 percent of all returns filed in the 2017 calendar year were audited. Toby Mathis and Toni Covey of Anderson Advisors often answer your tax questions with “it depends.” Why? Facts and circumstances. Do you have a tax question? Submit it to taxtuesday@andersonadvisors.

Highlights/Topics: 

How do you know if you're overpaying taxes for your LLC? Refer to tax designation of LLC and compare it to other choices (i.e., corporation, partnership, sole proprietorship)

What are the most beneficial types of qualified retirement plans (QRPs) and LLCs for tax shelters? It depends, but try things that defer taxes (401k, real estate, C or S Corp)

How can we protect a Special Needs Trust from probate? Avoid probate through a living trust by adding special needs provisions for when it becomes irrevocable

I have several personal IRA accounts and want to convert them to a QRP in our real estate investment company. Can I use that money to purchase more properties? Yes

I have owned a property located in a qualified opportunity zone for a number of years. Is there any special tax benefit, if I install a new roof? No

Do I always need to take salary out of my C Corp? No, salary is a part of compensation and still requires withholding and paying taxes

How do owners receive a yearly salary from their businesses? You pay it; there's no federal rule for pay periods, but some states require pay periods for certain employees

Do I have to designate myself as a dealer, if I do fix and flips? IRS designates you as a dealer based on facts and circumstances; doesn't matter how long you hold a property

Can I write off a vehicle that’s 6,000 pounds or more? Yes, you can write off entire cost, but limited to $18,000 a year, and more than 50% must be for business use

What is a 1031 exchange? Selling real estate and buying more of equal or greater value to not pay taxes and use an intermediary

Does S Corp need to pay payroll taxes? You pay some payroll taxes, as opposed to sole proprietorship - where you pay 100% of payroll taxes 

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Resources:

2018 IRS Data Book 

Traditional IRAs

Roth IRAs

Google Maps

501(c)(3) Nonprofit/Charitable Organizations

Schedule E

Schedule A

Types of Trusts

Tax Cutting Jobs Act (TCJA)

Opportunity Zones FAQ

Opportunity Zone Heat Map

Business Vehicle Deduction

Modified Accelerated Cost Recovery System (MACRS)

Using Cost Segregation in Residential Real Estate

1031 Exchange

Bonus Depreciation

MileIQ

Explaining the Trump Tax Reform Plan

Home Office Deduction

Uber

Form 1120

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

1099 MISC

Self-employment Tax

HUD

Toby Mathis

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Infinity Investing Workshop (use code: FREETAX)

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