He Loves Talking Taxes! Steve Moskowitz Talks to A&G

On the Friday February 21, 2025 edition of The Armstrong & Getty Extra Large Podcast...

• Joe talks to A&G's long-time tax expert, tax attorney Steve Moskowitz, who provides some tips for saving money when you file your taxes.  

 

Stupid Should Hurt: https://www.armstrongandgetty.com/

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Episode Transcript

Speaker 1 (00:00):
Because four hours. Simply, this is Armstrong and Getty extra large,
something we can all use. A conversation with longtime friend
of the Armstrong and Getty Show, Stephen Moskowitz, who has
advised us on tech stuff forever. A founder and tax
attorney for Moskowitz l LP, Steven joins us. Now, Steve,

(00:21):
how are you?

Speaker 2 (00:22):
I'm fantastic And you know I'm happy because I get
to talk about that, and you know I mean that.

Speaker 1 (00:28):
You know it's funny. I was just gonna say, I'm
gonna embarrass Steve and tell the folks this. I have
known professional musicians, athletes, all walks of tech, guys, all
walks off life, and I've never known anybody who's more
excited about their jobs than you are. Steven. You love

(00:48):
helping people deal with taxes.

Speaker 2 (00:50):
Sincerely, I love it. And there's so much in the
tax so there's so many hidden gems. I have everything
from all walks of life. Whether we can tell you
how you can deduct your multimillion dollar yacht to your
struggling and how the government will give you money to
help you take care of your kids, and everything in between.
For example, I have a question for you. Suppose I

(01:11):
told you that you could go on a two week
vacation anywhere in the world you choose, some stranger would
pay for it, and the money the stranger gives you
is tax free. How would you like that?

Speaker 1 (01:27):
When can I leave?

Speaker 2 (01:30):
He said, Oh my god? What is Steve talking about?
And I'm talking about Internal Revenue Code Section two eighty
AG like Armstrong and Getty, also known as the Augusta Rule.
And what happens with that. You can rent your home
for up to fourteen days a year and there's no

(01:51):
tax on it. So the bottom line is in that
home can be the mansion you live in, the studio
apartment you rent, or a boat. And I'll explain that separately,
but the bottom line is supposed. For example, he said, okay,
I'm going to rent my place out for one thousand
dollars a day, and now everything is so many people

(02:11):
like renting a home instead of a hotel. So the
bottom line is you go ahead, and let's assume that
you rented your house for one thousand dollars a day,
so it's fourteen thousand dollars. You go off to Hawaii,
you spend ten thousand on your trip. That fourteen grand
that you god is tax free. It doesn't even go
on your tax return. It's excluded from income. That's just

(02:35):
an example of one of the many, many, many hidden
gems in our tax law. And glad people say, well,
why should there be such things? Because our legislators and
their infinite wisdom thinks this is good for the economy
or the business, or there's some special interest that pushed them.
But the bottom line is this law is for everybody.

(02:57):
All the laws are for everybody. We're all equal under
the law. And the bottom line is you just have
to know where these gems are hidden, because there's two
reasons for the tax code. One is they get money
from us. But the other one if you give us
all kinds of incentives like this, mister, well what a deal.
I mean, think about it. You're off on vacation anyway.
The Airbnb's is so popular and you get fourteen days

(03:21):
tax free. So you can see why I get so
excited over these things.

Speaker 1 (03:25):
Love it so hey, we are happy to have so
many small business people, entrepreneurs, go getters listening to the show.
Also slackers like myself. But what do you see small
business people either failing to take advantage over getting wrong.
What advice would you give them just right off the bat.

Speaker 2 (03:42):
Oh, the first one is retirement plans. There's over twenty
different types of plans. You can have multiple plans in
the same year, and you can put away so much
by there's four benefits to that one. You pay less taxes.
Usually when I'm talking to a client, people say sign
me up, Steve, You got me say taxes. Besides that,
the money sits in your plan and the income doesn't

(04:05):
tax wells in the plan, so no brainer. Everything grows
faster and bigger if there's no taxes on it. Also,
it's exempt from lawsuits, so take a level. I hate
to mention his name. Suppose you pick a look at
OJ Simpson who had a multimillion dollar judgment against him
for many, many years, and he never lost a penny

(04:27):
of his pension. So that's good when you're in business,
so you don't have to worries to take it away
from you. And most tax planning you have to write
to check by December thirty first twenty four to deduct
it in twenty four. But with most of the pensions,
not all of them, but most of them, you have
up to the time of filing your returns, including extension,

(04:48):
which in English means, depending on your business entity, you
could have as late as October fifteenth, twenty five to
set up the plan, fund it and still deduct it
from the previous year before. And there's all kinds of
things in here. So for example, if you're in a pension,
there's no everybody knows about forty one k's and Irish

(05:09):
and all that. But there's all kinds of additional plans,
what I call the fancy plans, which you can put
in much much more money, and they're based on your age,
your earnings. There's an actuarial evaluation ticket. But people can
put away a tremendous way more than this. But when
we talk about putting things away, everybody should have a

(05:29):
pension plan. Everybody should put that away.

Speaker 1 (05:31):
So well, I was just gonna say, and that includes
if like I'm my only employee, I'm a solid proprietor,
I can have a pension plan for myself.

Speaker 2 (05:40):
Right, absolutely, absolutely, And again with retirement plan, there's so
much in there. For example, suppose you say, well, you
know what, I'm listening to the show today, but I'm
a little bit older, and you know, I haven't had
the money in there. Well, there's something called a ketchup plan.
If you're over fifty, you can put in bigger deductions.

(06:02):
And our legislators in their infinite wisdom and get this.
If you're sixty, sixty one, sixty two, or sixty three,
only those ages, you have a super catchup plan this
beginning this year in twenty twenty five, where you put
it even more. The bottom line is there's so much here.
And then what about taking money out of plans? He said, well, okay,

(06:25):
you know I need the money, but I don't want
to get hit with that penalty. There's all kinds of
exceptions to that. If you're a victim of domestic abuse,
you can take money out without the penalties. If you
need it for emergency purposes, you can take it out
wild penalties. If you take it out because of federally
declared disasters, think about O the wildfires in California, let's

(06:48):
mention Hawaii and other places. You can take it out
without penalty if someone's terminally ill. And also a no
to are firefighters. If they're age fifty or twenty five
years of service, they can take it out without penalty.
I have to go on and on and on. But
there's just so much here for everybody, and whether you

(07:10):
know with being a small business owner, this is just
the trumendous. Say I get so excited over this. But
if you're in business, there are so many benefits to
you just it's incredible, and it's all kinds of things.
For example, supposed to me says, you know, I'd like
to have an electric vehicle. Well, guess what, you know

(07:32):
the government will give you seventy five hundred bucks. And
you say, well, that's nice. I can go ahead and
take seventy five hundred dollars off my tax return, right
you can. But even better, when you're at the dealer,
you say, you know what, there's a special program where
I can say to the dealer, I'll give the credit
to you. You knock seventy five hundred bucks off the price,

(07:52):
so I never have to give you the money and
ask for it back. You get the seventy five hundred
from the government. There's so much, so much. Then there's
another thing that gets me really excited, something called opportunity zones.
Suppose you have this situation you sell something anything, some gold, coins,
some stock, real property, anything, and you have capital gain

(08:16):
and you say, well, all right, you know I realized
that there's three capital gains rates zero what's a nice one.
But you have to be making less than forty seven
grand for that or fifteen percent, which is between forty
seven grand and over just half a mil. You know,
most people are making under half of mil. Fifteen percent bad,

(08:37):
and it goes to twenty percent if you're over five
hundred and eighteen thousand. But the bottom line is you say,
you know, I don't want to pay that either. So
you can go into an opportunity zone and you can
defer the taxes until twenty six. As you say, when
somebody gives you something nice, what do you.

Speaker 1 (08:56):
Say thank you?

Speaker 2 (08:58):
Of course, no, say more? I want more. And what
happens is there's a provision with these opportunities zone. Suppose
I do this. Suppose what is an opportunity zone. There's
designated areas in our country where the government says, invest
here and we'll give you special tax benefits. And there's
a tremendous number of them. So you go ahead and

(09:19):
do that. And let's assume that you buy a real
property for million bucks. Ten years later you sell it
for one hundred million. You've made a gain of ninety
nine million. You know, I can calculate the tax on
that right now in my head. You know, the taxes zero.
What Steve Wait talk about, there's a special provision that

(09:43):
if you hold this property for more than ten years,
when you sell it, there's zero capital game, there's no
cap on it. So in my example, you made a
profit of ninety nine million bucks, you pay zero taxes.
Talk about an incentive. So you see, that's why I
get so excited about this and our laws filled with
these things.

Speaker 1 (10:03):
Stephen Moscowitz found our tax Atturning moscow at s LP
is online, longtime tax advisor of the show and our friends.
So Stephen, in a couple of minutes, we have left
what notable changes to the tax code have happened recently
or do you expect to happen as the Trump administration
gets going.

Speaker 2 (10:22):
So I think there's going to be a lot with
the Tax Cuts and Jobs Act. When President Trump was
president in the first term, he had a lot of
stuff that was going to be Basically he expected to
be re elected and he had a lot of stuff
in the tax law that was expiring right after where
there's the second term, so it's expiring now they're probably
going to make changes and keep a lot of the things.

(10:44):
And also a lot of things that have changed are
the numbers, like the standard deduction went up a little
bit for twenty twenty four, and a little bit of numbers.
You know, for example, the art didn't come credit. So
we talked about the other end of this. For example,
suppose you have three kids and you're making under sixty

(11:04):
six eight nineteen. The government will give you seven eight
hundred and thirty dollars, but is give them will give
you the money, so you have those things. There's also
a change to the kittie tax. It's a small change
for kids that are under age nineteen. The first thirteen
hundred bucks is tax free. The next thirteen hundred bucks

(11:26):
is taxed at the child's right, so it's a little something.
Then the amounts for the flexible spending accounts and the
health savings accounts have gone up. So what are those things. Basically,
there are two different types of accounts where you can
put some pre tax money at i e. Don't get taxed,
and then you use it for healthcare. Now there's differences

(11:50):
between them, so and with an exception, you can't have both.
There's an exception, but we won't get into that right
now on Michelle. But for the most you say, well,
what's more important to me? And you look at these
and basically the best way to do it is their charts,
and you say, okay, well, a flexible spending account, here's
the advantages. With the health savings account, here's the advantages.

(12:14):
But basically the idea here is you get a tax deduction,
you use the money for medical and isn't that nice?
You don't have to pay tax on that amount of
your earnings. And the bottom line, for example, with a
health savings account, you can triple benefits. There's no taxes
on the money you put it in, it grows tax free,

(12:35):
and there's no taxes when you use it for medical bills.
So again, I mean, you look at this stuff and
you say, well, okay, why shouldn't I have it? There's
so much in tax Lobbrady complaints about their taxes. My
taxes are too much. They're that, but people overlook all
these benefits. And again I'm just throwing out a few
samples and teasers. There's so much there. If you're interested

(12:58):
in this to me. This has fascinated me my whole life,
and it's here. It's available for everybody.

Speaker 1 (13:05):
Well, if you want to get in touch with Stephen,
his number is one Triple A Tax Deal. It's one
triple A tax Deal, Stephen. It's always a pleasure. Thanks
for the time, interesting and fun as always, be well.

Speaker 2 (13:16):
Thanks so much. I had a great time as always.
Thanks for inviting me all right.

Speaker 1 (13:19):
Thanks

Speaker 2 (13:21):
Extra large