Learn the Tax Hacks Used by Millionaires

Mike Pine: [00:00:00] So, it's almost June of 2024. Are you tax planning already? Because you should be.

I can't tell you how many times we meet with new clients or new prospective clients in the months of September, October, really a lot in November and December, and they're starting to realize, or maybe they didn't even realize until they spoke with us-

they're going to have a tax problem when the year's over, and if you don't start thinking about it until October or November, you're not going to have much time to do things to change your tax. You have to change your facts to change your tax.

So, let this be a friendly, encouraging reminder to anyone hearing this.

June is the right time to start your tax planning. It's actually a little late in my opinion, but you need to be tax planning while there's still time to change your tax by changing your facts.

Kevin Schneider: I like that- that rhymed.

You're exactly right, because if we come up with a creative tax plan in October, which we do- we can... [00:01:00] or November, you're going to be 'feet are on fire' running to get this thing implemented by year end.

There are some things in tax planning where you can implement after the year end...

majority of it, it's going to be on a cash basis in the calendar year that we're trying to plan for. So, if you come to us or go to your CPA in June, like- 'Hey, I had a windfall. I had a huge commission bonus. I'm making a million dollars this year.' --Great! We got six months to tackle this problem,

not one month, because what if you do want to buy real estate? What if you do want to open up a side business with this money you got out of a job, and you want to start a business, there's a lot of work to be done and we only have six months to do it. Let's give us some time to do it.

So, the worst thing you could do is just procrastinate. Stick your head in the sand, put your hands over your ears, pretend like nothing's happening, and that this problem will fix itself. It won't! It's not going to. You're going to either be a victim of this, or you [00:02:00] can use it to your advantage.

Mike Pine: Absolutely. I mean, I get it. Tax is not always fun. It's complicated. It's even intimidating at times. But look at it this way- if you choose to, like Kevin said, 'put your head in the sand' because you don't want to deal with it, or you got some time to deal with it later... you hope... and that time never comes around...

what you're really doing- understand this- you are making a decision to say, 'All right, I'm just going to let tax happen. I am just going to be a victim of tax. Whatever happens with tax, it is... and we're not going to change it.' --The big thing we're trying to get across to our listeners on Hidden Money is- No! You can take charge of your tax world.

You can control it, within reason. If you do that, like Kevin said, you are utilizing the tax code.

You're leveraging it to grow in your financial freedom. Or, you're choosing to be a victim. That costs money. Consider the actual cost of choosing to do nothing right now. Come on, [00:03:00] it's June! Let's get into the tax planning season.

Let's have fun with this. Let's save some money.

Kevin Schneider: Yeah. And it does cost money to save money, and that's some people's barrier to entry- 'I don't want to pay a CPA in June. I just paid y'all to do my taxes.' But you got to think about on the backend- your June 2024 self is going to be smart, and your April 2025 future self is going to thank your June past person...

if that makes any sense. If you plan, you will have a better outcome on your taxes. Now, we can't guarantee that... no CPA can. You could come to us with a set of facts and circumstances where we're just like- 'It is what it is.' -- We can't manipulate and create things out of thin air, but at least give yourself a shot, and having at least a consultation, a one hour, 30 minute- just get your foot in the door somewhere, and start it.

That's the best place to start is just that simple step of, even if you don't know what to ask, you don't know what to do, call up a [00:04:00] CPA, call us up and say, 'Hey, I've never tax-planned. Help!' -- Then let them take it from there- that's a good first step, and then, let them guide you along the way.

Mike Pine: In a lot of our previous episodes, we talked about big tax planning ideas, big investments, big things you can do. But, there's a lot of little things- if you do them, they can add up and make a big difference. One of those things is- I just had a conversation.. I think you also had a similar conversation with one of your friends..

Someone who's got a W2 job, they don't think there's anything they can do for taxes, but one of my friends, he and his wife started doing this as a hobby. Apparently this is a thing, Kevin- when kids are graduating high school, or having a birthday party, or prom season... I never did this as a kid... but apparently you get yard signs put up big signs that say Happy Birthday! Or Congratulations! And apparently, people are willing to pay a lot of money, hundreds of dollars to put a sign up in your [00:05:00] yard for one day, and then, like $50 a day after that, if you want to keep it there.

So, they've been doing this for a while- didn't even think about it as a business, even though they're making money on it, and he was saying, 'Is there anything I can do?' --I was like- 'Dude! You have a business, you're making profit. What are you doing about tracking your expenses?' --He's like- 'What do you mean expenses?' -- And I let him think for a while. I was like- 'You don't think there's anything that you spend money on to make this money that you're making in this yard sign thing?' --And he was like- 'Well, I guess, we drive the truck, and we have to get a van out a lot of times.' -- Mileage. That's business.

They buy wood. They buy supplies. They put stuff together. They even pay contractors at times to put these signs together. Those are all expenses, but they also have this van that they don't really want, but they have to keep it to be moving these signs from yard to yard, and from their garage back to other yards.

The only real reason they have it is for this. They have a storage unit for this van. Guess what? If the only reason you have that van is for your business, and you have [00:06:00] to pay to store it, those storage expenses are tax deductible! They're ordinary, necessary. --'How do you take your orders?' --'Oh, well, over our cell phones.' --'Your cell phone bill is deductible.'

--There's a lot of those things that people are paying already. Why not get a tax deduction for it, if it's a legitimate tax deduction? What do you think, Kevin?

Kevin Schneider: Yeah, I'll give you a personal example on top of that too. No, you're exactly right.

All that stuff is right, ordinary, and necessary. So, almost a year and a half ago, it was going to be my youngest daughter's 8th birthday, and my wife is the creative type.

She loves to create, design, party plan, and all this stuff, so she actually had a vision to create a party planning business. What we did was we bought a bunch of air mattresses, a bunch of teepees, balloons, supplies and inventory for her business that she was doing.

She went to the school, and she solicited, and we did some other parties for some teachers' kids, and all this kind of stuff, so she was trying to get this off the [00:07:00] ground.

Well, for my own daughter's birthday party, it was a substantial amount of inventory.

We overbought because you buy the air mattress, we bought sheets, we bought covers, we bought these trays... all this upfront costs to get this business going- we used it for my daughter's own birthday party- but it was for the business.

She was test running this. It was ordinary, necessary. So, I got to expense my daughter's party, basically, because she was actually trying to form this business. She bought an iPad, she bought her iPhone- all of this, we ran through this LLC that we created for her. So, yeah, you start looking at those things.

Now, you can't just funnel personal expenses. If my wife was doing this, and we're just like- 'Hey, we're going to expense a personal birthday party.' ---No, no, no! The whole point was she's trying to get this business off the ground and get it going, and she would test run it on my daughter-

it was ordinary, necessary. So, be looking at those things, and be careful with hobbies- because hobbies will get you in trouble over the course of time. The IRS is going to [00:08:00] want an actual profit motive for these businesses. You can't just do something you love and expense it.

Mike Pine: Yeah, let's talk about hobby losses and the tax rules around that for a minute.

A hobby is something you do for fun, and you don't have profit motive.

The IRS has a threshold that they will challenge, in most cases. If you don't show a profit 3 out of 5 years in any business, their alerts come on. I'm sure there are red flags that get triggered automatically on the computer and say, 'Oh, hobby, hobby, hobby!' -- So, you have to have a profit motive.

That means you truly are intending and trying to make more money than you're spending. You've got to have customers. Your family can't be your only customers. You actually have to be out working with the public, and trying to solicit in getting new customers. You've got to have a profit motive.

If you have a profit motive, and you truly are pouring yourself into making this business work, and even if 3 years go by, and you haven't made any money, it's not necessarily, definitively, a hobby [00:09:00] at that point. The IRS will make the assumption that it is, but if you have a profit motive, if you can prove, 'Hey, look, this is just taking more time than I thought to make money.' --You can get through it.

First time I ever got audited, Kevin, I was in college, and I started prepare tax returns. I was actually in grad school at this point, and I needed extra money. All the money I'd saved up for school was running out, and I didn't get the scholarship I was trying for, and I realized either I'm going to have to borrow money or figure out how to make money,

and I didn't want to be the guy that graduated with tons of student loans. So, I started preparing tax returns- $25 a pop. I got Drake software. You remember that? I think that's what I got that time. Drake software- $1,000- you can prepare all the returns. So, I got that. I got a better printer.

I got all the FedEx supplies to be able to send stuff. I ended up spending almost $2,000 in stuff that I needed to prepare these tax returns, but it also so happened, I needed a new computer for school. I could [00:10:00] use the old one I had for school, but I couldn't use that old computer to prepare other people's tax returns.

It was too slow and it wouldn't fit the tax software on there, so I had to buy a new computer. That was tax deductible. And I tried my best- $25 a pop in Bozeman, Montana, to do tax returns. I didn't know how to advertise, but I tried. First year- I only got 7 or 8 paid tax returns. Part of that was my fault too, because I was doing a bunch of free tax returns for people in the military.

Second year- I did a little bit better. I got 20-some-odd returns, paid returns, but not enough money to pay for all the money I'd put into it. Third year- I grew more. I had 40 returns, and barely had a net loss. I did not make a profit that year, but I was on the way. I filed it. I took deductions for all that

the first three years. I got a notice from the IRS- 'Hey, we think this might be a hobby. Please tell us the facts.' -- I got this IRS agent on the phone, and I was explaining the facts. I said, 'Yeah, that's a hobby.' --'Yeah. You're not doing it for a real [00:11:00] business.' --I said, 'Baloney! I'm trying. You come show me where I can get more clients, and I'll make a profit this year.'

The IRS agent didn't like it and went to a manager's conference. The manager said, 'Yeah, man, no one prepares tax returns as a hobby. We'll go ahead and give that to you.' --and I won my first audit before I was even a CPA.

Kevin Schneider: That would be the most boring hobby you would ever have. Like- you go to school, and you come home, you're like- 'I've time to relax and crank out some returns. This is great.' --Good! Yeah. You won your first audit in defending yourself.

Mike Pine: I did. And then, I got addicted to it. I wanted to keep fighting the IRS.

Kevin Schneider: You got an adrenaline high.

Mike Pine: I did. That was fun. I'll never forget that.

Kevin Schneider: Yeah. The hobby-loss rules- I've seen them a lot in farming. You see them a lot in ranching because there's so much tax deductions, especially here in Texas. So, if you retire, or you just have a hobby and love to ranch, or mess with horses, or cattle, or whatever it is- a [00:12:00] lot of people in our state like to do that- but there's tremendous tax benefits for a profit motive farm.

If your actual motive of developing a ranch, buying some land, getting some cattle- if that actual decision is to make profit, then we can start expensing the land, improvements. We can start expensing the fencing, the supplies, the fertilizer, the feed- anything that goes into this. And you may enjoy it,

it may be a passion that you love to go out there and ranch, and just be outside and do that work, and we can maybe get some tax deductions for it if you're out there actively trying to make a profit selling either a crop or cattle or something. Now, the hobby-loss rules for horse breeders are different.

I don't know why, I guess, because horses, a lot of people like to race horses, breed horses and things like that, so it may take some more time to generate profit. Same thing with farming. It takes more time. You got to plant, water, harvest. So, it takes time. So, there's going to be a lot of costs up front and the same with horses.

Horses, [00:13:00] you only have to show a profit 2 of 7 years instead of 3 of 5. So, they are trying to work with different industries on these hobby-loss rules, but be careful with them because if you're a W2 employee, and you just like to go out to your ranch on the weekends, or every other week, or whatever it is, and you just want to write that stuff off on a Schedule F, be careful, if there's not a profit motive. I've had clients try to do that and say, 'Oh no, I'm trying to make money out here.

I'm selling goats.' Okay.

Mike Pine: They never sell a goat.

Kevin Schneider: They never sell a goat, or the market- 'The market is so bad, I can never turn a profit.' -- I'm going to dig a pond. It's going to cost $150,000. I'm going to stock it. I'm going to do all this stuff, and I'm a goat farmer. Okay. Yeah. So, we have to have those conversations saying, 'I see what you're trying to do.

Mike Pine: Maybe there's a way we can restructure this, or redo your business model to where you're trying to actually make a profit here. When you think about it, the whole reason the deductions are even a possibility is the [00:14:00] tax law is actually on our side. Tax law says any business that has a profit motive, you are allowed to deduct legal expenditures that are ordinary and necessary or customary.

They happen a lot in whatever type of business you're in. You're supposed to deduct those expenses. You're allowed to deduct those expenses. The reason I think the IRS is not as friendly about this is they know for a fact that a lot of people cheat on this. We have a lot of clients like Kevin said- they have no profit motive, but they claim they read somewhere

if I have a ranch, I can deduct everything, and you don't really need to make a profit. So, the IRS knows people are trying to cheat on this. This is why they apply the extra scrutiny. But that's why it's so good to understand the law, have an advocate on your side that can explain, this is the law.

This is how you prove you have economic profit intent. This is how you prove that this is an ordinary and necessary expense. I remember I had a client that was spending 200 [00:15:00] hours a year doing some kind of hobby, but they were actually making a little bit of money at it, and they really wanted to pour themselves and pour more finances into it.

After I sat down and explained to them- 'Look, 200 hours a year- I'm going to prove that this is an active business, but if you spend 500 hours here, just give me 300 hours more a year on this business, and let's try to focus on growing your sales because that's all you're missing, then you get to do what you love,

you get to make money with what you love, and it is a true business. We worked together. He did that. He accomplished it, and he ended up spending like 800 hours next year on it. He ended up making a profit, but he was able to deduct all those additional expenditures and capital items that he bought, and it was a legit business.

I haven't talked to that guy in over a decade. I wonder if he's still doing it, but he was loving it. He actually turned it into a real business. So, understanding the tax law, understanding the rules in order to be able to do what you want to do, and have it be legitimate with the IRS is a big deal, and all it took for that guy [00:16:00] was an hour conversation, and he went off and running, and for all I know, he could still be doing it.

Kevin Schneider: And another cool client situation we had. It's very unique. Mike and I worked on this together- it might've been, 2018.. 2019. This was when bonus depreciation was 100%.

Those were the good days. We had a client that had a high W2 and he was in the top tax bracket. I can't remember if he was going to retire from this W2 job somewhere in the first half of the year,

and he has a background of being a pilot. That's how he earned his money. I think he was

He was an executive for a big airline. Yeah, but he has actual experience flying planes, So, he has this high W2 at the end of his retirement, and we couldn't plan for it directly inside the W2- he maxed out his 401(k). He was tapped out, so to speak, on that. But he said, 'You know what? On my second stage of life here, what I want to do is develop a flight school.'

--and that piqued our interest. We're like- 'Tell us more about this. What [00:17:00] do you need to do to get this done?' --'Well, I need a plane. I need a hanger. I need some fuel. I'm going to need all the things I need to get a flight school up and running.' --Well, remember bonus depreciation was 100%? So, he had to buy a plane.

Now, that is an ordinary, necessary business.. because he's going from a high W2 to self-employed as a owner of a flight school. So, all the equipment, the plane, all of that was expensed in one year.

We took it all in one year,

and I think it might have been a $300,000-some-odd plane,

and we took 100% deduction on it, plus the supplies, plus all the LLC creation- all these expenses he needed to get this business up and running. So, he had a large loss and this wasn't a hobby. This was for profit, and this was a motive, and we had revenue in the future years.

But we had, at least, a $400,000 or $500,000 loss that year, and that was deductible against his W2. So, he transitioned from a W2 job into another self-employed passion that he loved to do. He loved to [00:18:00] fly and train and he continued on that, and we saved a ton in tax because that was all deductible.

Mike Pine: Well, in reality, what happened is he leveraged the tax code so that the IRS paid 37% of the cost for that plane. He was going to send all that money to taxes from his W2, but he got 37% of what he paid for that plane back as a refund from his W2. And if I remember correctly, the next year he got a couple more planes, and it's been a while since we've talked to him, but I think he had six or seven planes and was making good money at this flight school.

He utilized the IRS. Most people, they only think, 'Hey, the only way I can get started with the business is go to the bank and borrow money.' --No! He took what was rightfully his back from the IRS to fund the beginning of his next stage in life, and his next business and his career. That's the beauty of the tax code!

When we say utilize a tax code to leverage the growth of your financial [00:19:00] freedom, that's exactly what we're talking about, what he did right there. And it doesn't just have to be planes- there's so many ways to do it, but what was so cool about this is Kevin recognized his passion. He was also in this point where, like, 'Hey, I'm about to retire.

I'm still young. I don't want to retire! What am I going to do with the rest of my life?' --and Kevin helped guide him utilizing the tax code to find a new passion in life, that he ended up making a ton of money out of, too. It was pretty awesome.

Kevin Schneider: Yeah. So, you never retire from something- you want to retire to something. That's what our friend Kyle always says. You don't want to just retire and sit there. So, he was retiring to something, and we got to utilize that financially on his taxes. So, it was win-win.

Mike Pine: Absolutely. what are some of these common expenses that we already pay? And if we properly vector those costs into a for-profit business, that can become tax deductible, what are some of the most common ones you can think of, Kevin, that we've seen?

Kevin Schneider: Well, ever since COVID, working from home and remote has been one of the [00:20:00] most common things for everybody. I think everyone went from this lifestyle of- I got to commute into work.. Got to leave my house to earn money- that has shifted, as well as with technology- all these apps and services you could do just at your computer.

So, just look around at my camera, everything you see here is a tax deduction, for the most part. Now, because I use this desk, I use this iPad, I use this computer, I use this mic.. not the Pac Man machine.. but I use the TV behind me. So, all of this, as a reasonable need for my business.

I always tell clients when they're like- 'What can I deduct?' --I'm like- 'What can you touch that you are using for your business?' -

-I have a coffee warmer. Right here. I warm my coffee on it. I think that's probably a normal business expense- now, very immaterial, but that's what I'm trying to get in their thought processes-

What am I touching every day when I'm working, and is that helping me perform my job? So, that's a [00:21:00] good place where I start. If someone picks up a cell phone- 'Okay, I need a new iPhone every three, four years.' --Buy it through the business. I need a new iPad, the keyboard, the pen, the calculator, anything I'm touching-

I want to deduct, and because it's helping me generate profit. So, I always like to just start with that exercise- The Touch- What am I doing?

The home office is just a huge one because you probably already have furniture. You probably already have a nice desk chair.

You probably already have a computer, and all this stuff. So, you might start a business after you've already bought all this stuff. So, what do you do in that situation, Mike? Let's say, I am a W2 employee, but then I break off, and I want to start a side hustle, but I've already bought my equipment-

my desk, my computer, my iPad- I bought that years ago, but I'm going to use it for my future business. What can I do in that situation?

Mike Pine: When you bought all that stuff for personal use, didn't matter for tax. Right? But you created what we call your cost basis, your tax basis. You bought that desk for your personal use 2 years ago. You spent $1,000 on it. That is [00:22:00] your cost basis. Just because you used it personally for two years doesn't mean it's not a potential tax deduction.

As soon as you place that asset into service for a business, it becomes tangible personal property using a Trade or Business Section 1245 property. What 1245 says is you take your original cost basis, and that's what you get to deduct over depreciation or bonus or Section 179- whatever you spend on it.

Now, the problem gets us a lot of people don't have those records. I don't save receipts for my personal expenses. In a perfect world, you can go back and find that purchase on your bank statement, or credit card statement, and utilize that because if you do get audited, you are required to prove your innocence with the IRS.

You are required to establish, or what they call 'substantiate', your actual expenditure. So, if you don't have the records for it, you've got to go back and look. Try to do some other search to figure out what was the average cost of such an asset? And let's say you bought a $1,000 desk two years ago, you can't go and look [00:23:00] at, 'Well, here's a $10,000 desk.

I'm going to use that as my cost basis.' --It's got to be reasonable. You've got to use your most reasonable and best efforts to come up to what that price is- find a similar desk. Now, in the last three years. We've experienced incredible inflation. I think the IRS would consider that too, and say, 'If I can buy this desk today for $1,500, but it really only costs $1,000.' --you should use the $1,000 the actual original cost basis.

In audits, the IRS- they've got a whole manual on how to deal with clients when they establish or state something and don't have records to prove it. The basis of that manual is use your reasonable best efforts to establish the cost. If you don't have a receipt, you're okay. It's just better if you have a receipt.

Kevin Schneider: Yeah. Well said! I think that's a good place to start. Just, at least, putting pen to paper, getting a small inventory list for your business, and then doing some conservative research on the cost of those, if you can't find the receipts. And then, as long as you're doing everything in good [00:24:00] faith, you're not trying to defraud the government or cheat,

you're probably not going to get hit with punitive penalties if they disagree. They could still disagree and kick it out- the burden of proof is always on the taxpayer, but if they kick it out, at least, you would just pay the tax deduction back of what you took, plus some interest.

Mike Pine: Let's talk about cell phones for a second. I remember when I first started my career in 2000, the rule was people could deduct cell phones, but only their business use of it. I remember going through 12 months worth of cell phone statements. Remember, they used to list out every single call you had- how many minutes it was?

Kevin Schneider: You used to pay at the pay per minute. It was a big deal when you had unlimited minutes.

Mike Pine: Yeah, So, we would have to go through and highlight every business related call, and figure out the percentage of business use versus personal use. Sometime in the late aughts- 2007, 2009, somewhere at a time around then, the IRS finally came to the conclusion. Their treasury department released a pronouncement that says, 'Look, we know it's impossible to be self-employed without a cell phone. [00:25:00] Times have changed. We will go ahead and allow 100% deduction of your cell phone expenses.' --

So, now we don't have to figure out personal versus business. You just got to be able to prove you need it and use it for your business. You get to take 100% of your cell phone. Even if, let's say, you have a side hustle and you're working 10 hours a week, and you're doing a full time job somewhere else, and life somewhere else, and the IRS says, 'It's okay.

We understand. If you're truly using that cell phone, you can deduct the whole thing.' -- Internet is not like that yet. I expect it will happen in the very near future. It should have happened already. You can't, in most cases, run a business without internet access, plain and simple. You can't, but we also use internet access at a home.

Like we cut our cord four years ago, Kevin, no more TV. Everything we watch on TV is through streaming.

So, the IRS doesn't say you can deduct 100% of your Internet bill yet. It still says 'business use'. How do you figure that out? I'm sure there's a lot of really good technical ways- you [00:26:00] could hire some IT guru to go through and look at your logs from your router. See how much do we use Netflix versus how much were we reading tax manuals?

You got to use some reasonable method on the internet. That being said, I don't need as much internet as I have at our home. I increased our bandwidth for our fiber because I need it more for business. I'm doing the Zoom calls, I'm doing these podcasts, I'm doing a lot of stuff. So, what I do is I took the entire increase on myself.

I mean, on my internet bill. It was like an extra $80 a month, or something. I wouldn't have done that without my business- if I didn't need it for business. So, I'm taking that entire increase amount... not taking the rest of it- I probably could get away with taking more... but I'm taking that increase, and I believe, if I get audited on it, I can say with a straight face and a good conscience, the only reason I spent that extra $80 is for this business. That makes it ordinary and necessary. I'm deducting it.

Kevin Schneider: Yeah, and I've had similar [00:27:00] conversations with clients where, almost, the record keeping is not worth the deduction- like the juice is not worth the squeeze in this instance. $80 a month X 12- you're not moving the needle much. So, the conversation I have is revolved around risk, and you and I both have this conversation with clients a lot, of risk- verse-

if you were to get pulled for audit, what is the risks associated with this expense? Now, every time you're audited, there's going to be a materiality level assigned to you- probably your tax return. So, that means if you make a million dollars on your business net income, they're going to set a materiality level, let's say of $2,500, or I don't know.. $5,000 bucks even, because they know anything below that is just not worth the time investigating, testing, and clawing back at.

So, they say anything above $5,000, we're going to inquire about and test, anything below that in these certain accounts, we're just going to let it go because it's just not worth it.

So, the [00:28:00] IRS has a materiality level, but our clients also should have a risk tolerance materiality level, because what Mike said is 100% true.

It's 100% true. You have to have your business use, and you can see the work, the sweat, the brain calories used to find the business use of internet is so hard

that you could take the position- 'Hey, I'm going to deduct the whole dead gum thing, knowing that the risks are I might get pulled for audit and I can't defend it,

and I negotiate with the IRS and deduct half of it, or we'd come up with some reasonable amount, but I'm going to just move on. I'm not going to waste the efforts. And so, that's part an organic conversation you should have with your CPA, back and forth, depending on your risk tolerance, and that's a very small example.

Those risk conversations- I've had those in the $20K.. $30K.. $40,000 range with clients who are doing aggressive things, like buying horses, and art, and all this kind of stuff, that we have those conversations with.

So, that's just a very good example of an area where- Is it worth it? But [00:29:00] just depends on the level of expense we're talking and your own personal risk.

Mike Pine: I think the big concept to pull away from this is- Don't lie! Don't commit fraud, but open your mind up to understanding what the task code says, and if it's legitimate business expenses, if it's legitimate deductions, you should take it. So many people don't. I can't tell you how many new clients or prospects we get that have their own sole proprietorship-

they're not deducting their cell phone, but every single one of them, most likely, uses their cell phone. Those are just things you should consider. And just like everyone that's got a side hustle, they have a home office, most likely. There are some rules about the home office.. they have one. They don't take it, or they were told, 'Hey, that's a big red flag!

Don't take it.' --If it is a legitimate expense, you should deduct it. Don't cheat, but don't let the IRS cheat you either.

And I guess, in summary for this episode, Kevin, I would just remind people, and I'll let you do it [00:30:00] better than me, but don't put your head in the sand! Don't be a victim to the tax code this year.

Let this year be your first year of a long future of you leveraging the tax code legally, ethically, to grow your financial freedom, faster and bigger.

Kevin Schneider: I don't know if I could say it better. That's it. That's this whole podcast in a nutshell- is utilizing the tax code to your advantage, and retaking what is rightfully yours. It is rightfully yours.

That does take effort. That does take some costs. That does take some administration work.

Yes. There's work involved in retaking back your tax situation from the government, and putting that money in your pocket. It's not a magic wand, but where else in life do you gain benefit, and grow in, and succeed in without work? It's just one of those areas people don't know how to work in. Like, I would be uncomfortable fixing my car.

Do you know the amount [00:31:00] of work? I would have to study YouTube videos, buy equipment, buy tools, buy all this, or I could just go to a mechanic, and get a loaner car and be on the road a few days, and not worry about the headache. That's our job as CPAs. You may not know the intricacies of the tax plan.

It's our job to teach you, make you aware of the risks, and then implement for you. We're your mechanics on your tax return. You don't have to do it yourself. Reach out for some help. And now's the time.

Mike Pine: Agreed.

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