February 11, 2025 • 44 mins
In this episode of the Main Street Business Podcast, Mark J. Kohler and Mat Sorensen answer your top tax and legal questions. From choosing the right tax advisor (without overpaying for empty credentials) to navigating HSAs, S corp taxation, and solo 401(k) limitations—this episode is packed with practical strategies to keep your business and investments in top shape. Plus, they break down how their Crypto IRA can help you leverage cryptocurrency in your retirement portfolio.
Here are some of the highlights:
- Mark discusses the importance of choosing a good tax advisor and the potential pitfalls of high fees without proper credentials.
- Mat clarifies the difference between an HSA account and an HSA-qualifying insurance plan, emphasizing that the account can be set up anywhere, including with Direct IRA.
- Mark and Mat cover the benefits of self-directing an HSA account, including the ability to invest in various assets like crypto, real estate, and private companies.
- Upcoming changes in 2025 regarding 1099-K forms for payment apps like Cash App and Venmo.
- A workaround involving picking up FICA wages on a Schedule C and ensuring proper documentation on the 1120-S form.
- The challenges of setting up an IRA LLC for buying crypto and recommends using the Crypto IRA product instead.
- The process of transferring funds from a retirement account to a Gemini account for buying and selling crypto.
- Mark and Mat encourage listeners to invest time in finding the right professional team for their business, including accountants and lawyers.
- Grab my FREE Ultimate Tax Strategy Guide HERE!
- You don't want to miss this! Secure your tickets for the most significant business, tax & legal event of the year: Main Street 360
- Looking to connect with a rock star law firm? KKOS is only a click away!
- Are you ready to get certified in EVERY strategy I teach? Start your journey with a FREE 15-minute discovery call to explore the Main Street Tax Pro Certification.
- Check out our YOUTUBE Channel Here: https://www.youtube.com/markjkohler
- Craving more content? Check out my Instagram!
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Welcome to the Main Street Business Podcast with
your distinguished hosts, mark JKohler and Matt Sorenson.
Both are best-selling authorsand have over 25 years of
industry experience, with 10,000client consultations, making
them the leading tax and legalexperts in the nation.
Together, they'll unpack themost complex tax, legal and
financial strategies crucial forsaving more, stressing less and
(00:23):
building generational wealth.
Today they're your personaladvisors, ready to break it down
for you and make the tax andlegal game easier than ever.
Here is Mark and Matt.
Speaker 2 (00:34):
How much should I be paying for a tax advisor?
I think a good tax advisorshould save you far exceed what
you're paying them.
Speaker 3 (00:42):
Don't be gun shy with the high fees, but make sure
they do have the credentials andthe understanding.
Worst thing is to pay a lot ofmoney for a service provider
that doesn't know the strategiesthat's going to actually help
you save money.
Starting out in 2025, Cash App,Venmo, all these payment apps
are going to start sending you1099Ks.
Speaker 2 (00:58):
And you don't want to cheat on your taxes and then
have to answer.
Speaker 3 (01:08):
What Mark's saying is you don't want to be going to
hell for this.
The question is what are myoptions?
Speaker 2 (01:13):
Am I screwed?
Welcome everybody to today'sepisode of the Main Street
Business Podcast.
My name is Mark Kohler, herewith the illustrious Matt
Sorenson and this is the PeopleShow.
I love doing the open forum,yeah it's the open forum.
Speaker 3 (01:26):
This is where we answer your questions.
Of course, those are moreimportant than what Mark and I
have questions about in life,but this is tax and legal
planning guys.
Speaker 2 (01:35):
So we got Whoa whoa.
I thought we were talking aboutthe Super Bowl this weekend and
the spread.
That's not.
We're not answering thatquestion.
Speaker 3 (01:41):
I barely know who's in the super, let alone have any
ideas on what the spread isgoing to be.
And even if I did, you wouldn'twant to know what I think.
All right, all right All right,but I do got something to say
about some of these tax andlegal questions wealth, wealth
building.
So we're going to be divinginto that and, uh, if you're
like, hey, why don't you guystalk about this?
That says why we do this show,go to
(02:02):
mainstreetbusinesspodcastcom andyou can submit your question
there, and that's where we'regetting the questions from today
.
Speaker 2 (02:10):
Yeah, we have several categories tax, general, q&a,
estate planning, finance soseveral categories and please
submit questions.
We love it and it's fun.
Dating tips, whatever you need.
Yeah, dating tips, we'll gothere and uh, and uh.
Yeah, if you want to talk taxin bed man, I'll tell you right
(02:30):
now.
It's the, it's the secretweapon.
Speaker 3 (02:32):
Yeah, it's a secret weapon.
Yeah, I want to put someone tosleep, but whatever, that's
right.
Speaker 2 (02:37):
Okay, I've got one here, or do you want it?
You got your first one, I'll gofirst, okay, okay.
Speaker 3 (02:41):
Since you're you're yielding, I will.
I will take the time.
Okay, all right, this is fromLynette.
She says how the heck do I putmoney into an HSA?
Seems like a ridiculousquestion, but I specifically
chose insurance that allowed meto open up an HSA.
And here I am two weeks, twoweeks before the end of the year
, trying to figure out where doI put the money in.
I I'd like to make it happenfor this year.
(03:01):
Can you help?
Then she says my husband and Iare small business owners.
We buy our own insurancethrough the marketplace.
I appreciate you guys for allthe inspiring podcasts you bring
us.
All right, excellent question,lynette.
Speaker 1 (03:11):
So much to unpack.
Speaker 3 (03:12):
Yeah, you get into so many different great things,
which is why I want to do yourquestion, all right.
So let's say deadline first,want to make sure you don't miss
anything, all right.
Speaker 2 (03:24):
Okay, I'll back clean up on your question, because I
know you're going to blow it.
Yeah, no, no pressure.
No pressure Okay.
Speaker 3 (03:33):
Let's work from the deadline here and get that out
of the way first.
Speaker 2 (03:37):
Well, that's a novel idea.
Speaker 3 (03:38):
I thought we should start there, lynette.
Okay, all right.
So the good news is, lynette,is you've done right.
You've set up the HSAqualifying plan.
That's the first thing.
You needed the qualifying planin 2024.
We're sitting in February 2025as we're recording this, but you
talked about this back inDecember, setting up the HSA
(03:59):
qualifying high deductible plan.
But you're like, but I don'tknow where to put the
contribution.
And that's okay.
You have until April 15th tomake your contribution for the
prior year, as long as you hadthe HSA qualifying plan in the
prior year.
Okay, that's point number onethat I want to make for you,
lynette.
So don't worry, if you didn'tdo this yet by year end, you're
okay.
(04:19):
Now the second question of wherethe heck do I put this?
Make sure you all understand anHSA account is different from
your HSA qualifying insuranceplan.
An HSA account can be set upwherever you want.
Your bank probably offers one.
Maybe the health insurancecompany you're with has a
referral that they send peopleto.
Or, even better, you could goto our company Directed IRA,
(04:42):
where you can have an HSA thatcould invest in crypto, into
real estate, into privatecompanies.
It could do stocks or mutualfunds, but the health savings
account is the place where youput your contribution, where you
get a tax deduction.
You can invest it and pay notax on the gains, and it comes
out tax-free for your qualifyingmedical.
That's different than yourinsurance plan and the company
(05:03):
you got the policy with on themarketplace.
All right, one other thing, andthen I'll let you clean up here
.
Speaker 2 (05:09):
Well, there's so much here You're doing fantastic.
Speaker 3 (05:12):
Thank you.
Thank you, you've hit so manygood things.
I started off where I should.
Yeah, I'm working with you, ohmy gosh, you're so passive,
aggressive Just having fun here.
You know all right guys.
We're talking about healthinsurance and health savings
accounts.
Speaker 2 (05:26):
We got to ham this up a little.
We got to work with what we gothere, okay.
Speaker 3 (05:31):
So here's what I want you to know, lynette, and this
is an awesome concept right nowyou can put 8,500 bucks
approximately for a family youmentioned.
You got a spouse, you got ahusband, so you guys could be
doing 8,500 bucks.
I think it's 8,550 a year forwhat you put in 2024 and 25.
(05:53):
It's a little different, butright now you could do both.
You could be having $16,000into the HSA right now.
And I want to talk about why2024 contributions you can still
do up until April 15th.
2025 contributions areavailable right now because
we're in 2025.
Now there's one thing I want youto know about your scenario,
lynette, and this is reallyimportant for anyone else that
just set up an HSA qualifyingplan last year.
(06:15):
There's something called thelast month rule that says, as
long as you had this HSAqualifying plan before in
December, before the end of theyear, you can make the
contribution as if you had itfor the whole year, because
there's something called the prorata rule for HSA contributions
that says, let's say, forexample, in 2025, you close your
(06:36):
HSA qualifying plan in June.
It says, well, you can only dopro rata six months.
You only do half of an HSAcontribution for that year.
But when it's the first yearwhen you set it up, that pro
rata six months you can only dohalf of an HSA contribution for
that year.
But when it's the first yearwhen you set it up that pro rata
rule doesn't apply and a lot ofpeople misapply that and say,
well, I can only do one 12thbecause I only had it for one
month.
No, your first year when you'resetting it up, as long as you
have it by year end, you can dothe full year of contribution.
(06:59):
So hopefully that's a goodlittle tip for everyone else.
But that's some of the coolstuff about an HSA.
Hopefully that's helpful.
Speaker 2 (07:05):
Yeah, and I'll, I'll.
I got to add a little cleanuphere and this would be
insightful, hopefully.
Yeah, first, I want to say thistoo, in a simple way.
When you said, how do I fund myHSA?
You open up the account.
You ACH the money in or send ina check.
You can go to directediracom toopen up that HSA account there
(07:28):
so you can self-direct it.
And again, like Matt said, justfind a platform that sponsors
HSAs.
Don't worry about insurancecompanies.
That's where you buy theinsurance.
This is where this kind ofthink of it like an IRA for
healthcare.
So you're just going to openthat HSA anywhere.
That's the easy part.
Now I will throw this out.
I'm playing a littleinvestigator here.
No, and Lynette's question.
She said I just opened my HSAinsurance plan two weeks ago and
(07:50):
I want to make my depositbefore year end.
Okay, let's think about this.
If she just set up her healthinsurance plan in the middle of
December, I have a feeling itmay not be effective until
January 1st.
If that's the case, Lynette,you've missed out on 2024
contribution because the planhad to be in effect by December
(08:13):
1st, so not sure.
I'd say look into that.
Make sure if it was effectivein December, you're good to go.
Everything Matt said awesome.
Also, you said oh, I'm a smallbusiness owner and we've got all
these other things going on.
I suspect you probably have anS corporation, an S corporation,
and if you do make acontribution for last year, make
(08:36):
sure that your S corporationW-2 payroll indicates that,
because you can lower your FICAwages on your W-2 and save
another 15% on the HSAcontribution if you put it on
the W-2 properly.
Now, that's a little technical,but a good tax advisor can make
(08:57):
that happen very simply with noadditional cost.
Because this is just.
This is ABC's 101 for a goodtax advisor.
They're going to be all overthis.
So I'm just so proud of you forlistening to the show.
You're on this, you're takingthe initiative and now it's
making sure you're aligned withyour advisor.
So good stuff, great stuff.
Now that does lead me into myquestion from Quality Pool
(09:19):
Service.
Oh, it said hey guys, let mefirst take a minute.
Thank you for all the videosand you make to help educate us
newbies.
I don't always understand itall, but you brought my
knowledge from zero to a hundredreal quick, so thank you.
That really does.
That's a little payoff fortoday's.
Yeah, matt and I rushed intothe studio.
I got so much work.
(09:40):
But every Wednesday for 10years, matt and I have been in
here at least 10 years, that's aheck of a good time.
It's been good, it's the bestmeeting of the week, it is Okay.
So he said I bought a poolroute about 1.5 years ago.
I spoke to 1-800-ACCOUNTANT andthey put together a great plan.
Okay, when I told them that yousaid to file an S corporation,
(10:03):
they wanted $5,000 to preparetwo years of returns.
I don't know why they do twoyears.
I wasn't sure if they wouldeven save me that much and they
offered no guarantee.
So I ended up going to a CPAthat only wanted $500 for my
personal return with a ScheduleC and $750 for the S corp filing
.
So they went to the otherextreme and they recognize this
(10:26):
and says um, who's that CPA?
I know, but it seems I'mtelling them what to do now
instead of them advising me.
So you go with a cheaper person,you're in charge.
You go with a super expensiveone you get taken advantage of,
so it's, they're in a hard spot.
So the question is she says oneyou get taken advantage of, so
it's, they're in a hard spot.
So the question is she says, orhe hears um, how much should I
(10:47):
be paying for a tax advisor?
My pool route is generatingabout 100 grand as a bonus
question.
The expensive advisor I don'tknow which one, oh, the
expensive would want to be thefirst one said that I should
lend the business the amount andcharge 50% interest oh good
Lord, I know and write it off inthe S-corp.
(11:10):
The less expensive advisor saidthat would make no sense
because I would have to pay taxon the interest income, because
you'd have to pick up theinterest income with the
business paying you and you geta write-off.
It's a vicious cycle.
At least the cheap accountantcould see that.
Speaker 1 (11:23):
Yeah.
Speaker 2 (11:25):
Now here's where quality pool service.
I want to just my heart goesout to you and I know there's
many, many listeners.
You're just so frustrated withthe accounting industry and you
become apathetic and startsaying I'm just going to
freaking, knock it out onTurboTax and listen to Mark and
Matt and do the best I can.
And I can understand why when Ihear stories like this.
So I want to just tell you yeah, I'm sorry, it's sad.
(11:47):
Now, what I've been trying todo, my mission the last two to
three years has been and Mattand I've been doing it together
is helping accountants aroundthe country level up.
So I've been spearheading theMain Street Tax Pro Network
where I've now educated athousand accountants around the
country and they speak Mark andMatt now and they're certified
(12:10):
on 80 topics and da, da, da, dada.
Well, here's the good news forall of you.
I'll come back to how much youshould pay, but let me just say
that network is available to allof you listening or watching
today.
You can go to markjkohlercom,click under services and go to
the Tax Pro Network, can go tomarkjkohlercom, click under
services and go to the TaxProNetwork.
Taxpro Network it's like aLinkedIn page with almost 400
(12:32):
different accounts around thecountry, and they can't be on
that list unless they havetested out on all the topics
Matt and I teach, and they'reincredible.
I learned from them many, manytimes.
It's an incredible community.
So if any of you are lookingfor a tax advisor this tax
season and you're alreadyfrustrated that you're going to
be going to the same bozo thatyou did last year, level up, so
go to the MainStreetTaxPronetwork.
(12:52):
We should have a link downbelow, maybe.
Okay Now, with that said, whatshould you expect?
First of all, it's sad here, oneperson's charging way too much
and giving bad advice.
The other person they'recharging way too little and not
giving any advice.
And it's a very common quandary.
If you go to one of the taxpros on our network, they get to
charge what they want to charge.
(13:12):
We don't tell them and we don'tmake any money on what they
charge.
So that's nice.
You can do several discoverycalls with advisors.
I recommend all of you do that.
But here's what I would expect.
You're going to be probablypaying a monthly fee, which is
nice for your budget, which willinclude your tax prep for the
year and a quarterly phone callor strategy session throughout
(13:33):
the year.
We call that tax advisoryservices.
We want our advisors to have arelationship with their clients
where they're meeting at leastquarterly.
Some of you may want them tomeet monthly but the price, what
you pay monthly, could be $500,a thousand a month, 2000 a
month, I don't know.
It depends on what you need.
Is there bookkeeping involved?
Is there payroll involved?
(13:54):
How many tax returns areinvolved?
You get to negotiate that andtalk with the advisor and find
the right price.
I think in your situation havingan S-corp return, a 1040, some
payroll needing some advice,you're going to be between
probably $500 to $1,000 a monthand I don't know how much
bookkeeping support you mightneed.
(14:14):
But that $4,000 or $5,000during the year is going to not
only get your tax work done,some payroll done, some minor
support with bookkeeping,depending on what you need there
, but it's going to get youadvice.
A good tax advisor should saveyou, far exceed what you're
paying them and they're going tosolve this S-corp issue and all
(14:38):
the strategies of paying thekids and board meetings and
travel and all that.
So any strategy Matt and Iteach they're going to bring to
bear to help you in that process.
So get to the network, do somediscovery calls, find someone.
The nice thing is you're goingto know they have the knowledge.
Now you're just looking for theservices you need at a price
point that works for you.
Young or old, east Coast, westCoast, big firm, little firm you
(15:01):
get to choose.
Speaker 3 (15:03):
Love it.
I was just looking up what Ipaid for my own S-corp tax
return just to give you an idea,and I paid $2,500 for my S-corp
return.
So now that's a good accountant.
Happy with them.
They know what they're doing.
Speaker 1 (15:17):
They're in our network.
Speaker 3 (15:18):
They're actually one of the CPAs in our network.
They're firm, they got a numberof accounts there and so now I
would say they even discountmine a little bit.
So so you do get what you payfor a little bit.
And this is for a lot ofprofessionals.
And here's what happens to agood CPA and like any other
professional anybody this couldbe someone that you know paints
(15:41):
houses, does build homes, fixescars, I don't care.
Anybody that has you knowthat's good at what they do.
Their clients don't leavebecause they're great and they
get to charge more.
Now sometimes you do get thepeople who are great at
marketing but shitty at whatthey do and they so they get a
lot of people in and they burnthem and they don't keep them
and so they just keep charginghigh fees.
(16:01):
So get good referrals.
Make sure they understand thestrategies.
The number one solution to thatis the tax advisor network Mark
just mentioned.
Don't be gun shy with the highfees, but make sure they do have
the credentials and theunderstanding, and I like your
diligence where you startedtalking about the strategies you
want to do.
If they don't understand thatrun, the worst thing is to pay a
(16:22):
lot of money for a serviceprovider that doesn't know the
strategies that's going toactually help you save money.
It's one thing if they get thestrategies and you're getting
all the tax savings and the costof them helping you is minimal
to the tax savings you realize.
Speaker 2 (16:34):
So, oh, I want to say one just one last thing too.
Matt's book, the Directed IRAHandbook incredible.
My book, the Tax and LegalPlaybook love it.
I think those are two mainstaysthat should be on your business
desk, and you and we've writtenthem so they're very
understandable for the averagebusiness owner.
They're not made for theprofessional, they're made for
you.
And but here's the point whenyou go out, some of you are like
(16:56):
, well, I've got this greataccountant.
Kinda, I'm not ready to quit onmy accountant.
Ask them to level up.
Say, hey, I've been readingMark's book.
It's a bestseller.
Matt's book bestseller.
Take him a copy as a gift.
Say, please read these.
I want to be on the same pagewith you.
If you don't like what they'resaying, let's talk.
But they've got credentials,they're not out there crazy
(17:19):
talking.
And then if they're like, wow,thank you.
Say, go, level up.
Go to the Main Street Tax ProCertification, I'll bring you
more friends.
Because if I have moreconfidence in you, mark and Matt
are going to send you clientstoo and you might be able to
help them level up.
This could be yourbrother-in-law, whatever.
Okay, next question let's keepmoving.
Send you more friends.
Speaker 3 (17:39):
All right, okay, cp Gator asks.
He says great show, I have asingle member LLC for my rental
house and my tenant pays methrough my personal cash app
account.
When I get a payment, I depositit over to my business account.
Would these be consideredcommingling, since it's
originally coming into apersonal account?
I'm going to come back to that.
Actually, let me answer thatbecause you got a second
(18:01):
question.
It's a great question too, cpGator.
Okay, actually, let me answerthat because you got a second
question.
It's a great question too, cpGator.
Okay, I don't love that, cpGator, for a number of reasons.
Yes, you do have this issue ofsomeone being able to pierce the
corporate veil when you have anLLC.
One of the reasons you set upan LLC for your rental property
is if the tenant slips and fallsor there's any liability or
something happens, they can'tsue you, they have to sue the
(18:22):
LLC.
So all your personal assets,your job, your business, your
paycheck, your retirementaccounts, all your home, all
those personal assets areuntouchable to anything that
happens in the LLC, unless aplaintiff's lawyer can pierce
the corporate veil.
The corporate veil is thisprotection an LLC has that says
you can't go after the owner.
You can just get to the LLC.
(18:44):
Well, how can a lawyer piercethe corporate veil if you didn't
respect the corporate veil?
If you treated the LLC like itwas your personal bank account,
how can a lawyer show thatyou've done that?
Well, if you're using personalbank accounts for the LLC's
business, whether it's a CashAppaccount or an actual bank
account so stop doing that.
You can still use CashApp.
(19:05):
I'm okay with that.
They have business accounts andI know it's like well, my
tenant, it's an easy way forthem to pay rent.
Okay, fine, you can get a CashApp account in your business.
All right, that was questionnumber one here.
Anything you want to add onthat?
Speaker 1 (19:19):
one Nope, filled it.
Okay, I'm filling it.
Okay, all right.
Speaker 3 (19:22):
Yeah, good, good, okay, question.
Let me add one other little tiphere actually on that Cash.
Another little tip hereactually on that Cash app.
Venmo all these payment apps,by the way are going to start
sending you 1099 Ks.
They're going to start sendingthose start now, in 2025.
If it's a personal account,they don't send it to you.
(19:42):
If it's a business account,they do send it to you.
Now I know what a lot of peopleare thinking.
I'll just collect all thismoney in my business, whether
it's a rental property or mainbusiness side hustle, I don't
care what it is.
That way, I'm not going to geta 1099K from the cash app.
That's wrong.
You're jacking up the corporateveil here and the protections
of the LLC, which is the wholereason.
You have an LLC for your rentalproperty and even if you got
(20:03):
paid the money, you still haveto claim it on your taxes.
The fact of you getting a 1099K is just a piece of paper that
you're getting in.
The IRS gets too, but you stillowe the tax anyways.
Speaker 2 (20:11):
Yeah.
And when the real problem is iswhen you go up the escalator,
that fateful day comes and, youknow, peter, james or John asked
you hey, did you cheat on yourtaxes?
They can be showing you the waydown to the other escalator
that's going down and you don'twant to cheat on your taxes and
then have to answer, you know,to the big guy.
Speaker 3 (20:29):
What Mark's saying is you don't want to be going to
hell for this.
Be honest, you know, in yourdealings with your fellow men.
Speaker 1 (20:36):
Okay, All right.
Speaker 3 (20:37):
Second question here from CP Gator, which is a great
one too.
It says second question on thisLLC for my rental house.
It's a single member LLC.
How do I tell if I signed foran S Corp?
How do I tell if I signed foran S-corp?
Where would I check to makesure I did that?
It's been a few years.
I'm not sure if I filed thatform.
Don't.
Hopefully you didn't.
I hope you didn't file thatform.
Okay, an LLC for a rentalproperty.
(20:59):
You do not want an S-selectionon it.
Do not have that taxed as anS-corp.
Why do we do an S-selection orturn an LLC into an
S-corporation for tax purposes?
To save on self-employment tax.
If you have a rental property,you get two types of income on a
rental.
Rental income is you're owningit and cash flowing it, and
capital gain income when yousell it.
(21:19):
Neither of those types ofincome are subject to
self-employment tax at all, soyou don't need an S-corporation
for your LLCs that hold rentals.
Now if you're selling goods orservices, products, whatever it
is, that's ordinary businessincome.
You do pay self-employment taxon that.
That's where, for smallbusiness owners, side hustle,
main hustle.
We love the S selection on anLLC, so hopefully you didn't
(21:43):
file that CP gator Never, andthis is for everybody here.
This is why we do left side,right side when we talk about
our trifecta.
Your right side is assets likerental properties.
We don't want you to have Selections over there.
We want you to have LLCs thatare flowing through directly to
you or down to your trust.
Speaker 2 (22:00):
The one thing I'm concerned about is CP Gator
might be using the same LLC forhis business and the rental
property and that's why they'rethinking I made an S election.
If that's the case, again makean appointment with one of the
lawyers at our law office.
It's very affordable anddefinitely in the big scheme of
things and we're a boutique firmfor the small business owner
we're very affordable.
(22:21):
We're not a big city firmthat's going to take advantage.
We want a relationship.
You may have to restructurethis LLC, so get a call doing a
review and getting your trifectawould be great anyway.
Okay, kt Bagels, I use a licenseplate frame that has my.
Now I'm going to try.
I've got to go faster becausehe goes on for a paragraph, but
here's the gist of it.
He has a license plate framewith his business phone number.
(22:42):
I've got a front license platewith the QR code of my business
and I and I'm writing off mileswhen I go to my appointments and
all that.
But every time I drive I've gotthis QR code on my license
plate and I've got this coollicense personalized plate, so
can I ride off my entire carBecause I'm technically
advertising everywhere I go.
(23:04):
Well, kt Bagels is a very, verycommon question and I think
it's a very valid question.
It's common to valid question.
It's common to think thatYou're like hey, I use this car
to drive around town andadvertise.
Of course we see clients thatuse vinyl wrapping and go much
more extensive than just alicense plate.
The problem is no.
The IRS has been very, veryclear on this.
Congress courts that you canonly write off the mileage or
(23:28):
your vehicle based on where youdrive it.
And commuting to your day jobdoes not count.
Going to the grocery store doesnot count, even if you're
advertising along the way.
So it's errands for yourbusiness meeting with customers,
meeting with vendors, going todifferent work locations or
conferences or whatever.
(23:49):
But just because your licenseplate is an advertisement or you
wrap your car, it is not goingto allow you to write your
vehicle off more aggressively.
So be careful there, continueto track your miles and I love
the auto deduction.
I want to be very aggressivewith the auto deduction, but
(24:09):
whenever you put down, I'mwriting off this auto 100%.
Just know that the IRS'scomputer system is going whoa,
whoa, whoa, is this a deliveryvehicle?
Because who in the hell drivestheir car?
100% for business?
They just don't.
They're going to pick up agallon of milk.
They're going to go to a movietheater.
They're going to go up to thelake on the weekend movie
theater, they're going to go upto the lake on the weekend.
You're hosed.
(24:29):
So be very, very careful.
If you say it's a hundredpercent business, because I
don't even do that, I may go 90,but I'm not going to go a hundy
.
So be careful, all right.
Speaker 3 (24:38):
All right, alec Bradley asked if I'm a small
business owner and do not offera safe Harbor 401k to employees,
but I have a separate smallbusiness where I do consulting
work without any other employees.
Would I be eligible to set up asolo K in my consulting small
business?
What is the best option to helpemployees with retirement?
If so, okay, let's ask yourfirst question.
(25:00):
All right, alec, you have abusiness with employees.
You have another business thatjust does consulting, that has
no employees.
Can you set up a solo 401k?
No, you cannot.
Sadly.
What the IRS has said is andCongress is they created the
retirement account rules.
If you're a business owner andin general the rules get a
little there's a couple shiftshere, brother, sister,
(25:21):
affiliated group rules andeverything but in general if you
own 50% or more of any businessand you basically can that has
employees, you cannot do a solok and now matt says sadly, but I
want to say, the flip side ofthat is this there's a purpose
here and it's it's so thatemployees are going to be
(25:43):
allowed to have a, a place to doretirement planning and a 401k
safe harbor.
Speaker 2 (25:50):
And it's not the worst thing in the world the
safe Harbor plans either.
But but yeah, so there's twoways to look at it.
Business owners are like butyou know, in the big scheme of
things, the 401k is amazing.
We all should be participatingin 401ks, whether we're a
business owners or not?
Speaker 3 (26:04):
Yeah, and let me just give an example.
Like Mark and I, we own 50% ormore of businesses that have
employees.
We cannot do a solo 401k.
Okay, I'm in your same boat,Alec.
Okay, Another way to thinkabout this is when Congress came
out with 401ks.
They basically were, like thisis for employees, whether you
own the business or you don't.
But then they said you knowwhat?
(26:25):
We're not going to just let thebusiness owner be like well,
I'm just going to do it for me.
And then later on they came outand said, hey, we're just
self-employed people, we don'thave employees.
And like, well, we'll let youdo solo 401ks.
Speaker 2 (26:35):
Yeah, solos came in later.
Speaker 3 (26:36):
There's no other employees here, so let's just
let you do a solo 401k just foryou.
But the problem is now peopleare saying the business owners
over here with employees are Iwant to do that.
No, no, no, no.
This is only the solo key isonly for you that have no other
employees.
Now let me give anothervariation, though.
Let's say you have a businesswith four partners and you own
(26:57):
25% of it, but you also have aseparate consulting business and
the other 75% of that businesswith employees, with other
partners, um has no other family, it's just other some business
partners.
You got another separatebusiness that you don't have any
employees in.
Well, you could do a solo Kover here, likely All right.
So it just kind of depends onyour ownership where your
(27:18):
employees sit, and is thatbusiness truly separate or not?
So hopefully that helps.
Speaker 2 (27:23):
And any of the tax lawyers at our office could
guide you through this.
So another important phone call, because we can set up that
solo 401k for you and allow youto self-direct it and invest in
real estate and all thosegoodies, and they can guide you
through the pitfalls of tryingto do it and then having to
unwind it if you're not allowed.
Okay, so BizGeek27 says so.
(27:48):
I elected an S Corp status formy single member LLC just before
Christmas.
Love it, assuming you had theincome to justify that.
So that's a great move andeverybody, what we're hoping.
Bizgeek27 doesn't say this, buthopefully he or she backdated
that S election to 1-1-24.
So they made the S electionright before Christmas, but on
(28:11):
that form, they hopefullyelected it back to 1-1-24, which
you can do.
Some of you accountants might befreaking out.
The 75-day rule doesn't applywhen you refer to Rev Proc.
2013-9, I think, or 2019-13,whatever.
Anyway, there's a way to roundthat so we can easily go back
and elect S-Corp status 1-1-24.
(28:32):
Next sentence but there was notime to have my accountant do
payroll before year end.
By the way, your accountantcould do payroll before January
31st and you'd be okay, but I'massuming that's what you mean.
So anyway, hopefully youraccountant didn't say sorry,
(28:55):
can't do this, because theycould have done it in January.
So the question is what are myoptions?
Am I screwed?
The answer is no, you are notscrewed.
There is a workaround.
The first year you claim that Selection.
Now, assuming you made itbackdated to 1-1-24, assuming
you have the income to justifythis and assuming your
accountant knows what the hellthey're doing, you might have to
upgrade your accountant.
Go back to the second questionof the show regarding the
(29:16):
network.
But what your accountant can dois drive some FICA wages
through a Schedule C and makesure that this is indicated on
the proper line of 1120S andmake sure that this is indicated
on the proper line of 1120S.
Pick up the FICA wages on aSchedule C and pay your FICA.
Do not double dip with the QBIdeduction and be careful with
(29:39):
the process.
But it is audit proof.
You will be okay if the IRScomes asking what the hell
happened.
And then this year you're goingto do it right, you're going to
get on top of quarterly payroll, your accountant's going to do
it correctly and not overchargeyou and you're going to be just
fine.
So there is a workaround thisfirst time.
If your accountant listens tothis show, send them the show if
(30:00):
they give you a hard time.
And I will say this to anyaccountants out there that don't
like this workaround we havenever had a client fail in,
rarely ever get audited or failin an audit in 25 years.
Because you pick up the FICAwages.
As long as you pay the FICA,what's the damage?
The IRS can't complain.
Now they may have questions whyis it not on box seven of the
(30:21):
1120S?
When, or is it or was therepayroll withholding?
You know there's some questionsthere, but you're okay.
Now we teach this strategy andhow to do it.
In the Main Street Tax Proprogram I have a whole module
just on S corporations whereyou're going to test out 15 to
20 questions.
You work in the community.
We're on the cutting edge ofissues like this and many, many
(30:43):
others, so make sure youraccountant's up to speed on that
.
If you accountants out therewant to level up right now, even
during tax season, please go tomarkjkohlercom and sign up for
a discovery call and we'll getyou certified and help get you
more clients, charging more,helping more clients, and your
clients will love you.
It's a win, win, win, love it.
Speaker 3 (31:02):
Let's put an amen to that.
All right, I'm going to do mylast question.
I don't know if you had to doyour last one here.
All right.
This is from RJ growth 48 andsays is an IRA LLC able to buy
Bitcoin?
If so, how?
Great question.
Let me say a couple of thingsjust for everybody who are like
well, how does a retirementaccount buy crypto?
(31:23):
Well, we have a couple optionson the ways to do it.
The easiest way RJGrowth48, todo this is to use our crypto IRA
product.
It's Directed IRA.
Go to DirectedIRAcom.
We have a crypto IRA product.
What happens is you cantransfer over money from any IRA
that you might have somewhereelse.
Roth IRAs could be even an HSA,traditional IRA, sep IRA, solo
(31:43):
K, whatever it is, and we it'sspecific for crypto.
We then open up a Geminiaccount.
We have a special relationshipwith Gemini, one of the major
exchanges out there, and we fundit.
But who's the owner of thatGemini account?
Not you.
Your IRA, or it's going to be,can get Roth IRA, traditional
IRA, doesn't matter.
Now you're right on the Geminiexchange and you can buy and
(32:05):
sell crypto right there.
That's our crypto IRA product.
It's easy, we handle it.
We link your retirement accounttax favored account to your
Gemini trading account, which iswhere you have access to 60
plus cryptocurrencies.
This could be Bitcoin, thiscould be XRP Solana, whatever
you want to buy and sell.
Mark and I have both done this,by the way, ourselves.
(32:27):
Well, what if I want to use anIRA LLC, as RJ Gross said?
Well, that's the old school wayto do it.
The reason that structure thatI say is the old school way to
do it is it's much harder toexecute on now.
When I first shot my videotalking about how you can buy
crypto with a, how you can buyBitcoin and crypto with an IRA
in 2017.
And I showed how I boughtBitcoin was 2,500 bucks per BTC
(32:50):
back then.
This is an old, terrible videoquality, but you know I was.
I was showing you how to dothis.
We used an IRA LLC to do it.
That's what I used in thatstructure.
When you have an IRA LLC and I'massuming you know what that is
already where you're here, whereyour IRA owns an LLC typically
100% you're the manager of theLLC.
The LLC has a business checkingaccount.
What I did back then and whatyou can still do today is I
(33:13):
linked that LLC businesschecking account to an exchange
wallet.
I used Coinbase back then whenI did it.
I've since linked it to otherproviders and we typically will
use Kraken right now if you'retrying to do this.
But here's the problem If you goto any reputable place that
offers an exchange becausehere's your issue you have US
(33:34):
dollars in a bank account ownedby the IRLC that you need to get
on an exchange somewhere to gobuy crypto, right?
Well, how do I do that?
Well, I got a link to somereputable crypto provider,
whether it's a Coinbase, aGemini, a Kraken or whoever it
may be.
Well, guess what they're busydoing right now Opening up
business institutional accountsfor people trying to buy tens
and hundreds of millions ofdollars of crypto.
(33:55):
So if you're a small businessowner with $100,000 or someone
with an IRA LLC and you'retrying to open up a business or
institutional account with acrypto provider, it's freaking
complicated.
They treat you like you're ahedge fund that has hundreds of
millions of dollars to ignoreyou or ignore you, which they do
right now.
Now, if you were trying to dothis a year or two ago, you
(34:15):
would have been okay.
Why?
Because they're not freakingbusy.
It's like you went, got intothe restaurant at busy time
asking for a special request andorder and to get seated in a
special spot, and they're likewho are you Okay?
It's not a good time to do itright now.
I'm just telling you thereality of it because I get
clients calling me Now.
It doesn't mean you still don'ttry.
It doesn't mean you still don'tbe like well, matt, you said I
(34:38):
could do this, you can, but nowwe do that.
Like I said, kraken is probablythe best at it right now.
Gemini has been okay, but theydon't have a special product for
this, so they treat you likeyou're an institution.
Okay, just know that you'regoing to be filling out a
questionnaire that's like howmuch money under management do
you have, what licenses andinsurance do you have?
(34:58):
And how much money undermanagement do you have, what
licenses and insurance do youhave?
Speaker 2 (35:00):
And you're going to be like what the hell?
This is my LLC, but answerquestions because you are an
institution.
Speaker 3 (35:04):
Yes, you are a business, You're going through
the institution application.
Speaker 2 (35:07):
Don't lie on it but just answer it oh, under a
million or whatever.
So don't get frustrated, justtell them what they need to hear
to get the damn account open.
Speaker 3 (35:17):
Yeah, but here's why I'm saying it in this way, and
maybe you can see my frustrationin this is way too many people
think I could set up my cryptowallet right here in 30 seconds
to do crypto personally.
Yeah, you can.
Good luck doing that with anLLC.
It's just not the same.
So if you want the easy route,that's why we have the crypto
IRA product, we open it, we haveaccess to Gemini to link that
(35:41):
specifically to our accounts andwe do a lot of regulatory and
stuff in that process to makesure it happens right.
So that's why we've done thequick and easy route, which is
what I do.
Now.
I don't use the IRA LLC anymorefor my crypto.
I use the crypto IRA product,even though I have an.
IRA LLC.
Speaker 2 (35:54):
All right, love it, love it, love it Okay, that was
a little ranty, huh, no, no, no,it was good, it was a wake-up
call, wake-up call, all right,boy, usually Mark Kohler's the
one ranting.
Speaker 3 (36:04):
I need a rock star, maybe All right.
Speaker 2 (36:06):
Last question on this end.
This is from Whelmed in Texas.
He says, or she says S Corp,two shareholders, husband and
wife, made.
Husband and wife made 200K inpassive income via trading but
minus 20 grand in gross receipts.
C Corp same two shareholderscarrying losses, minus 20.
(36:29):
We'll come back to that.
Requests number one and I'll runthrough this quickly and then
I'm going to and I think this isa good wake-up call for a lot
of people listening this isgoing to be good.
Number one is there any way tominimize tax on the S-corp
before the K-1 flow-through, asthe personal itemized deduction
option does not seem to help for2024?
Sub-point I appreciate an emailresponse.
(36:52):
Exclamation point please do notpunt to any MJK affiliates in
Houston.
That's a non-starter.
Oh well, okay, we'll come backto that.
Number two I've also seen enoughMJK videos to know in bold and
italicized we need helprestructuring everything for the
future.
So this is cool.
They're saying don't beat us up.
(37:12):
We get it.
We know we're jacked up as ourkids are adults now.
Don't know why that matters,because other issues have
nothing to do with kids.
And then finally request Infofor an in-person meet with MJK
man.
My wife's trying to get one ofthose, so get behind her.
Good luck.
Do include if an in-person meetin Vegas or Houston is an
(37:36):
option.
Yeah, I'm trying to go to Vegasfor Valentine's, you know,
maybe squeeze you in All right.
Okay, all right.
Now I'm surprised you took thisquestion.
Speaker 3 (37:46):
I mean I.
Speaker 2 (37:48):
I'm not trying to mock this person.
I'm really not.
It's, it's funny and Iappreciate the request.
I mean you don't if you don'task it's not going to happen.
Speaker 3 (37:57):
Yeah, shoot a shot.
You know, you know.
People have been trying to meetwith Mark J Kohler for a decade
now.
Speaker 2 (38:02):
Just please, know like he's yeah, no, and I'm
flattered by that and Iappreciate it and I appreciate
the question.
Now, the reason why I took thisquestion is because some of you
may have the same desire orinterest or issues and I want to
respond because we do havesolutions for this and I want
you to feel confident in those.
So, number one, s corp, twoshareholders, 200 grand in
(38:25):
passive income that's not good.
You cannot, you shouldn't havepassive, that much passive
income in the S corp, so youdon't need an S corp.
So we'd start and you said thisearlier.
Later you're like we need, weknow, we need restructuring, how
you have minus 20 in grossreceipts.
That's like you had 20 grand inreturns but no sales.
(38:47):
It's kind of weird.
Like what you made me meaningis we have minus 20 grand in
profit because gross receipts isa positive, then you have law
expenses, then you're going toend up with negative, but anyway
, that's okay.
Now is there any way tominimize expenses?
Dah, dah, dah and says we needan email response.
Don't punch to an affiliate.
Well, first thing is Iapologize.
This is an open forum show tohelp people in general nature
(39:10):
and guide you.
If you need an email responsehire one of the lawyers, and I
think that's what you'reimplying here.
I want an email response.
Well, you're not going to getone for free.
It gets to be personal advicethat we're liable for at that
juncture, you know.
I mean, we got it.
You need some help here and yousay I need Mark.
I want to pay Mark.
Okay, but and then please don'tpunt to an MJK affiliate in
(39:34):
Houston.
That's fine, we do have ournetwork.
I don't even care if they're inHouston or not.
I just want you to have a goodperson.
Speaker 3 (39:43):
Yeah, I'm in Phoenix, my CPA is in Dallas.
Speaker 2 (39:45):
Yeah, I mean like our law firm we all work seamlessly
between California, utah,arizona, idaho.
It's so yeah.
So now, yeah, I do want to giveyou some options.
The first one is just schedulewith one of our tax lawyers.
That's not an affiliate.
That is an attorney that worksunder my and Matt's direction
that we meet with almost dailyin ongoing support and training.
(40:07):
That's not an affiliate.
I apologize, I'm not takingpersonal consultations, but our
13 lawyers are freaking amazing.
Some have been with us over 10years.
They're smarter than Matt and Ion a number of topics, for sure
.
So please meet with one ofthose tax lawyers.
It's not an affiliate.
Now you may need a goodaccountant I don't care if
they're in Houston or not.
So get to the network there.
(40:27):
But in conjunction with thelawyer, they're going to help
you overcome this restructuringthat you need.
And thank you for the requestfor a meet, but I apologize,
it's just not on my.
It's not just.
My schedule is too demanding.
We're really trying to trainadministratively, our team
(40:48):
internally and then our networkto impact more people's lives,
and me being on a one-off callis actually not good for you,
because then you're going to belike okay, when are you going to
follow up?
In three months, so you're likewell, that sucked.
So when you work with one ofour team members, they're going
to have the time and ability tofollow up and cause.
It's not just one meeting.
The meeting is the beginning ofa journey and you don't want me
(41:11):
on this journey because I willbe um coming and going and
that's not fair to you.
It's not it's not you, it's me.
Speaker 3 (41:22):
Mark just did the classic breakup there and I
don't want this for you.
I'm going to be terrible.
I don't want this for you.
Speaker 2 (41:34):
How'd I do I?
Speaker 3 (41:34):
thought it went well until you marked the end.
That was really good, dude,that was really good.
I was like all in on it, sothat was so good.
I want to just say just to taginto that for just a second is I
get the frustration of wherethat person is coming from and
even some of the other questionsPeople are trying to figure
these strategies out.
Speaker 2 (41:52):
And their professional is not there for
them.
Speaker 3 (41:53):
Yeah, and their professional is not like on it
and like, oh yeah, it's justlike anybody building a business
and many of you that are askingthese questions.
You have a business and many ofyou that are asking these
questions, you have a businessand some of you have big
businesses.
Think of your CPA, youraccountant, your lawyer.
This is your team and just likeyou've got to work hard at
recruiting great people to helprun your business and work side
(42:14):
by side you in your business dayto day, you have to go recruit
a good team too, and I think somany times people just think,
well, I'll just call.
You should invest some time inwho this professional is going
to be.
Are you out there networking?
Are you going to events?
Have you talked to your friendthat's another business owner,
or maybe someone that you'veaspired to be, like to see who
(42:35):
they use?
Are you getting referrals fromthese people?
Like, start networking a littlebit, listen to the stuff.
Like we're putting out thispodcast, of course, to give you
all the strategies and ideasthat you need, but maybe come to
one of these conferences.
Maybe come to Tax and Legal 360.
Maybe come to our Self-TrictedIRA Summit, because who's there?
Other people doing what you'redoing and trying to learn these
(42:56):
strategies and theirprofessionals are there too.
Speaker 2 (42:59):
Yep, and I want to just add to that too, like
there's another problem outthere.
Or mindset oh, as soon as Ifind the perfect accountant, I
don't have to worry about itanymore.
You know I'll find the bestlawyer and then I can just
forget about it.
No, once you find them, youwant an incredible relationship
with them.
They're going to be your bestfriend, with the biggest cost in
(43:19):
your life and the biggest riskin building the American dream
the tax and legal and so you'renot just looking for that
perfect solution so you cancheck out.
It was interesting my wife's dadwhen he passed away the last
week, he had cancer, soeverybody had their visits and
it was just very, very emotional, and one of his key phone calls
(43:40):
and meetings was with hisaccountant.
Yeah, and he said come on over,I want to talk you through
everything.
I want you to be a good theretransition for my wife, my soon
to be widow, and they had arelationship.
I mean, if you were going todie next week, would you call up
your accountant and have ameeting with him?
If you're, if you wouldn't, youdon't have the right accountant
.
Yeah, I mean they should bethat glue for your legacy and
(44:01):
your family, and so let's getthe right person on the team.
Speaker 3 (44:05):
So love it All right.
Well, thanks everybody forthese amazing questions.
Again, if you want to get yourquestions answered on the
mainstream business podcast, getover to the website, make sure
business podcastcom and submityour question there, and if you
love the show, please share itwith your friends.
Welcome to the Main Street Business Podcast with
your distinguished hosts, mark JKohler and Matt Sorenson.
Both are best-selling authorsand have over 25 years of
industry experience, with 10,000client consultations, making
them the leading tax and legalexperts in the nation.
Together, they'll unpack themost complex tax, legal and
financial strategies crucial forsaving more, stressing less and
(00:23):
building generational wealth.
Today they're your personaladvisors, ready to break it down
for you and make the tax andlegal game easier than ever.
Here is Mark and Matt.
Speaker 2 (00:34):
How much should I be paying for a tax advisor?
I think a good tax advisorshould save you far exceed what
you're paying them.
Speaker 3 (00:42):
Don't be gun shy with the high fees, but make sure
they do have the credentials andthe understanding.
Worst thing is to pay a lot ofmoney for a service provider
that doesn't know the strategiesthat's going to actually help
you save money.
Starting out in 2025, Cash App,Venmo, all these payment apps
are going to start sending you1099Ks.
Speaker 2 (00:58):
And you don't want to cheat on your taxes and then
have to answer.
Speaker 3 (01:08):
What Mark's saying is you don't want to be going to
hell for this.
The question is what are myoptions?
Speaker 2 (01:13):
Am I screwed?
Welcome everybody to today'sepisode of the Main Street
Business Podcast.
My name is Mark Kohler, herewith the illustrious Matt
Sorenson and this is the PeopleShow.
I love doing the open forum,yeah it's the open forum.
Speaker 3 (01:26):
This is where we answer your questions.
Of course, those are moreimportant than what Mark and I
have questions about in life,but this is tax and legal
planning guys.
Speaker 2 (01:35):
So we got Whoa whoa.
I thought we were talking aboutthe Super Bowl this weekend and
the spread.
That's not.
We're not answering thatquestion.
Speaker 3 (01:41):
I barely know who's in the super, let alone have any
ideas on what the spread isgoing to be.
And even if I did, you wouldn'twant to know what I think.
All right, all right All right,but I do got something to say
about some of these tax andlegal questions wealth, wealth
building.
So we're going to be divinginto that and, uh, if you're
like, hey, why don't you guystalk about this?
That says why we do this show,go to
(02:02):
mainstreetbusinesspodcastcom andyou can submit your question
there, and that's where we'regetting the questions from today
.
Speaker 2 (02:10):
Yeah, we have several categories tax, general, q&a,
estate planning, finance soseveral categories and please
submit questions.
We love it and it's fun.
Dating tips, whatever you need.
Yeah, dating tips, we'll gothere and uh, and uh.
Yeah, if you want to talk taxin bed man, I'll tell you right
(02:30):
now.
It's the, it's the secretweapon.
Speaker 3 (02:32):
Yeah, it's a secret weapon.
Yeah, I want to put someone tosleep, but whatever, that's
right.
Speaker 2 (02:37):
Okay, I've got one here, or do you want it?
You got your first one, I'll gofirst, okay, okay.
Speaker 3 (02:41):
Since you're you're yielding, I will.
I will take the time.
Okay, all right, this is fromLynette.
She says how the heck do I putmoney into an HSA?
Seems like a ridiculousquestion, but I specifically
chose insurance that allowed meto open up an HSA.
And here I am two weeks, twoweeks before the end of the year
, trying to figure out where doI put the money in.
I I'd like to make it happenfor this year.
(03:01):
Can you help?
Then she says my husband and Iare small business owners.
We buy our own insurancethrough the marketplace.
I appreciate you guys for allthe inspiring podcasts you bring
us.
All right, excellent question,lynette.
Speaker 1 (03:11):
So much to unpack.
Speaker 3 (03:12):
Yeah, you get into so many different great things,
which is why I want to do yourquestion, all right.
So let's say deadline first,want to make sure you don't miss
anything, all right.
Speaker 2 (03:24):
Okay, I'll back clean up on your question, because I
know you're going to blow it.
Yeah, no, no pressure.
No pressure Okay.
Speaker 3 (03:33):
Let's work from the deadline here and get that out
of the way first.
Speaker 2 (03:37):
Well, that's a novel idea.
Speaker 3 (03:38):
I thought we should start there, lynette.
Okay, all right.
So the good news is, lynette,is you've done right.
You've set up the HSAqualifying plan.
That's the first thing.
You needed the qualifying planin 2024.
We're sitting in February 2025as we're recording this, but you
talked about this back inDecember, setting up the HSA
(03:59):
qualifying high deductible plan.
But you're like, but I don'tknow where to put the
contribution.
And that's okay.
You have until April 15th tomake your contribution for the
prior year, as long as you hadthe HSA qualifying plan in the
prior year.
Okay, that's point number onethat I want to make for you,
lynette.
So don't worry, if you didn'tdo this yet by year end, you're
okay.
(04:19):
Now the second question of wherethe heck do I put this?
Make sure you all understand anHSA account is different from
your HSA qualifying insuranceplan.
An HSA account can be set upwherever you want.
Your bank probably offers one.
Maybe the health insurancecompany you're with has a
referral that they send peopleto.
Or, even better, you could goto our company Directed IRA,
(04:42):
where you can have an HSA thatcould invest in crypto, into
real estate, into privatecompanies.
It could do stocks or mutualfunds, but the health savings
account is the place where youput your contribution, where you
get a tax deduction.
You can invest it and pay notax on the gains, and it comes
out tax-free for your qualifyingmedical.
That's different than yourinsurance plan and the company
(05:03):
you got the policy with on themarketplace.
All right, one other thing, andthen I'll let you clean up here
.
Speaker 2 (05:09):
Well, there's so much here You're doing fantastic.
Speaker 3 (05:12):
Thank you.
Thank you, you've hit so manygood things.
I started off where I should.
Yeah, I'm working with you, ohmy gosh, you're so passive,
aggressive Just having fun here.
You know all right guys.
We're talking about healthinsurance and health savings
accounts.
Speaker 2 (05:26):
We got to ham this up a little.
We got to work with what we gothere, okay.
Speaker 3 (05:31):
So here's what I want you to know, lynette, and this
is an awesome concept right nowyou can put 8,500 bucks
approximately for a family youmentioned.
You got a spouse, you got ahusband, so you guys could be
doing 8,500 bucks.
I think it's 8,550 a year forwhat you put in 2024 and 25.
(05:53):
It's a little different, butright now you could do both.
You could be having $16,000into the HSA right now.
And I want to talk about why2024 contributions you can still
do up until April 15th.
2025 contributions areavailable right now because
we're in 2025.
Now there's one thing I want youto know about your scenario,
lynette, and this is reallyimportant for anyone else that
just set up an HSA qualifyingplan last year.
(06:15):
There's something called thelast month rule that says, as
long as you had this HSAqualifying plan before in
December, before the end of theyear, you can make the
contribution as if you had itfor the whole year, because
there's something called the prorata rule for HSA contributions
that says, let's say, forexample, in 2025, you close your
(06:36):
HSA qualifying plan in June.
It says, well, you can only dopro rata six months.
You only do half of an HSAcontribution for that year.
But when it's the first yearwhen you set it up, that pro
rata six months you can only dohalf of an HSA contribution for
that year.
But when it's the first yearwhen you set it up that pro rata
rule doesn't apply and a lot ofpeople misapply that and say,
well, I can only do one 12thbecause I only had it for one
month.
No, your first year when you'resetting it up, as long as you
have it by year end, you can dothe full year of contribution.
(06:59):
So hopefully that's a goodlittle tip for everyone else.
But that's some of the coolstuff about an HSA.
Hopefully that's helpful.
Speaker 2 (07:05):
Yeah, and I'll, I'll.
I got to add a little cleanuphere and this would be
insightful, hopefully.
Yeah, first, I want to say thistoo, in a simple way.
When you said, how do I fund myHSA?
You open up the account.
You ACH the money in or send ina check.
You can go to directediracom toopen up that HSA account there
(07:28):
so you can self-direct it.
And again, like Matt said, justfind a platform that sponsors
HSAs.
Don't worry about insurancecompanies.
That's where you buy theinsurance.
This is where this kind ofthink of it like an IRA for
healthcare.
So you're just going to openthat HSA anywhere.
That's the easy part.
Now I will throw this out.
I'm playing a littleinvestigator here.
No, and Lynette's question.
She said I just opened my HSAinsurance plan two weeks ago and
(07:50):
I want to make my depositbefore year end.
Okay, let's think about this.
If she just set up her healthinsurance plan in the middle of
December, I have a feeling itmay not be effective until
January 1st.
If that's the case, Lynette,you've missed out on 2024
contribution because the planhad to be in effect by December
(08:13):
1st, so not sure.
I'd say look into that.
Make sure if it was effectivein December, you're good to go.
Everything Matt said awesome.
Also, you said oh, I'm a smallbusiness owner and we've got all
these other things going on.
I suspect you probably have anS corporation, an S corporation,
and if you do make acontribution for last year, make
(08:36):
sure that your S corporationW-2 payroll indicates that,
because you can lower your FICAwages on your W-2 and save
another 15% on the HSAcontribution if you put it on
the W-2 properly.
Now, that's a little technical,but a good tax advisor can make
(08:57):
that happen very simply with noadditional cost.
Because this is just.
This is ABC's 101 for a goodtax advisor.
They're going to be all overthis.
So I'm just so proud of you forlistening to the show.
You're on this, you're takingthe initiative and now it's
making sure you're aligned withyour advisor.
So good stuff, great stuff.
Now that does lead me into myquestion from Quality Pool
(09:19):
Service.
Oh, it said hey guys, let mefirst take a minute.
Thank you for all the videosand you make to help educate us
newbies.
I don't always understand itall, but you brought my
knowledge from zero to a hundredreal quick, so thank you.
That really does.
That's a little payoff fortoday's.
Yeah, matt and I rushed intothe studio.
I got so much work.
(09:40):
But every Wednesday for 10years, matt and I have been in
here at least 10 years, that's aheck of a good time.
It's been good, it's the bestmeeting of the week, it is Okay.
So he said I bought a poolroute about 1.5 years ago.
I spoke to 1-800-ACCOUNTANT andthey put together a great plan.
Okay, when I told them that yousaid to file an S corporation,
(10:03):
they wanted $5,000 to preparetwo years of returns.
I don't know why they do twoyears.
I wasn't sure if they wouldeven save me that much and they
offered no guarantee.
So I ended up going to a CPAthat only wanted $500 for my
personal return with a ScheduleC and $750 for the S corp filing
.
So they went to the otherextreme and they recognize this
(10:26):
and says um, who's that CPA?
I know, but it seems I'mtelling them what to do now
instead of them advising me.
So you go with a cheaper person,you're in charge.
You go with a super expensiveone you get taken advantage of,
so it's, they're in a hard spot.
So the question is she says oneyou get taken advantage of, so
it's, they're in a hard spot.
So the question is she says, orhe hears um, how much should I
(10:47):
be paying for a tax advisor?
My pool route is generatingabout 100 grand as a bonus
question.
The expensive advisor I don'tknow which one, oh, the
expensive would want to be thefirst one said that I should
lend the business the amount andcharge 50% interest oh good
Lord, I know and write it off inthe S-corp.
(11:10):
The less expensive advisor saidthat would make no sense
because I would have to pay taxon the interest income, because
you'd have to pick up theinterest income with the
business paying you and you geta write-off.
It's a vicious cycle.
At least the cheap accountantcould see that.
Speaker 1 (11:23):
Yeah.
Speaker 2 (11:25):
Now here's where quality pool service.
I want to just my heart goesout to you and I know there's
many, many listeners.
You're just so frustrated withthe accounting industry and you
become apathetic and startsaying I'm just going to
freaking, knock it out onTurboTax and listen to Mark and
Matt and do the best I can.
And I can understand why when Ihear stories like this.
So I want to just tell you yeah, I'm sorry, it's sad.
(11:47):
Now, what I've been trying todo, my mission the last two to
three years has been and Mattand I've been doing it together
is helping accountants aroundthe country level up.
So I've been spearheading theMain Street Tax Pro Network
where I've now educated athousand accountants around the
country and they speak Mark andMatt now and they're certified
(12:10):
on 80 topics and da, da, da, dada.
Well, here's the good news forall of you.
I'll come back to how much youshould pay, but let me just say
that network is available to allof you listening or watching
today.
You can go to markjkohlercom,click under services and go to
the Tax Pro Network, can go tomarkjkohlercom, click under
services and go to the TaxProNetwork.
Taxpro Network it's like aLinkedIn page with almost 400
(12:32):
different accounts around thecountry, and they can't be on
that list unless they havetested out on all the topics
Matt and I teach, and they'reincredible.
I learned from them many, manytimes.
It's an incredible community.
So if any of you are lookingfor a tax advisor this tax
season and you're alreadyfrustrated that you're going to
be going to the same bozo thatyou did last year, level up, so
go to the MainStreetTaxPronetwork.
(12:52):
We should have a link downbelow, maybe.
Okay Now, with that said, whatshould you expect?
First of all, it's sad here, oneperson's charging way too much
and giving bad advice.
The other person they'recharging way too little and not
giving any advice.
And it's a very common quandary.
If you go to one of the taxpros on our network, they get to
charge what they want to charge.
(13:12):
We don't tell them and we don'tmake any money on what they
charge.
So that's nice.
You can do several discoverycalls with advisors.
I recommend all of you do that.
But here's what I would expect.
You're going to be probablypaying a monthly fee, which is
nice for your budget, which willinclude your tax prep for the
year and a quarterly phone callor strategy session throughout
(13:33):
the year.
We call that tax advisoryservices.
We want our advisors to have arelationship with their clients
where they're meeting at leastquarterly.
Some of you may want them tomeet monthly but the price, what
you pay monthly, could be $500,a thousand a month, 2000 a
month, I don't know.
It depends on what you need.
Is there bookkeeping involved?
Is there payroll involved?
(13:54):
How many tax returns areinvolved?
You get to negotiate that andtalk with the advisor and find
the right price.
I think in your situation havingan S-corp return, a 1040, some
payroll needing some advice,you're going to be between
probably $500 to $1,000 a monthand I don't know how much
bookkeeping support you mightneed.
(14:14):
But that $4,000 or $5,000during the year is going to not
only get your tax work done,some payroll done, some minor
support with bookkeeping,depending on what you need there
, but it's going to get youadvice.
A good tax advisor should saveyou, far exceed what you're
paying them and they're going tosolve this S-corp issue and all
(14:38):
the strategies of paying thekids and board meetings and
travel and all that.
So any strategy Matt and Iteach they're going to bring to
bear to help you in that process.
So get to the network, do somediscovery calls, find someone.
The nice thing is you're goingto know they have the knowledge.
Now you're just looking for theservices you need at a price
point that works for you.
Young or old, east Coast, westCoast, big firm, little firm you
(15:01):
get to choose.
Speaker 3 (15:03):
Love it.
I was just looking up what Ipaid for my own S-corp tax
return just to give you an idea,and I paid $2,500 for my S-corp
return.
So now that's a good accountant.
Happy with them.
They know what they're doing.
Speaker 1 (15:17):
They're in our network.
Speaker 3 (15:18):
They're actually one of the CPAs in our network.
They're firm, they got a numberof accounts there and so now I
would say they even discountmine a little bit.
So so you do get what you payfor a little bit.
And this is for a lot ofprofessionals.
And here's what happens to agood CPA and like any other
professional anybody this couldbe someone that you know paints
(15:41):
houses, does build homes, fixescars, I don't care.
Anybody that has you knowthat's good at what they do.
Their clients don't leavebecause they're great and they
get to charge more.
Now sometimes you do get thepeople who are great at
marketing but shitty at whatthey do and they so they get a
lot of people in and they burnthem and they don't keep them
and so they just keep charginghigh fees.
(16:01):
So get good referrals.
Make sure they understand thestrategies.
The number one solution to thatis the tax advisor network Mark
just mentioned.
Don't be gun shy with the highfees, but make sure they do have
the credentials and theunderstanding, and I like your
diligence where you startedtalking about the strategies you
want to do.
If they don't understand thatrun, the worst thing is to pay a
(16:22):
lot of money for a serviceprovider that doesn't know the
strategies that's going toactually help you save money.
It's one thing if they get thestrategies and you're getting
all the tax savings and the costof them helping you is minimal
to the tax savings you realize.
Speaker 2 (16:34):
So, oh, I want to say one just one last thing too.
Matt's book, the Directed IRAHandbook incredible.
My book, the Tax and LegalPlaybook love it.
I think those are two mainstaysthat should be on your business
desk, and you and we've writtenthem so they're very
understandable for the averagebusiness owner.
They're not made for theprofessional, they're made for
you.
And but here's the point whenyou go out, some of you are like
(16:56):
, well, I've got this greataccountant.
Kinda, I'm not ready to quit onmy accountant.
Ask them to level up.
Say, hey, I've been readingMark's book.
It's a bestseller.
Matt's book bestseller.
Take him a copy as a gift.
Say, please read these.
I want to be on the same pagewith you.
If you don't like what they'resaying, let's talk.
But they've got credentials,they're not out there crazy
(17:19):
talking.
And then if they're like, wow,thank you.
Say, go, level up.
Go to the Main Street Tax ProCertification, I'll bring you
more friends.
Because if I have moreconfidence in you, mark and Matt
are going to send you clientstoo and you might be able to
help them level up.
This could be yourbrother-in-law, whatever.
Okay, next question let's keepmoving.
Send you more friends.
Speaker 3 (17:39):
All right, okay, cp Gator asks.
He says great show, I have asingle member LLC for my rental
house and my tenant pays methrough my personal cash app
account.
When I get a payment, I depositit over to my business account.
Would these be consideredcommingling, since it's
originally coming into apersonal account?
I'm going to come back to that.
Actually, let me answer thatbecause you got a second
(18:01):
question.
It's a great question too, cpGator.
Okay, actually, let me answerthat because you got a second
question.
It's a great question too, cpGator.
Okay, I don't love that, cpGator, for a number of reasons.
Yes, you do have this issue ofsomeone being able to pierce the
corporate veil when you have anLLC.
One of the reasons you set upan LLC for your rental property
is if the tenant slips and fallsor there's any liability or
something happens, they can'tsue you, they have to sue the
(18:22):
LLC.
So all your personal assets,your job, your business, your
paycheck, your retirementaccounts, all your home, all
those personal assets areuntouchable to anything that
happens in the LLC, unless aplaintiff's lawyer can pierce
the corporate veil.
The corporate veil is thisprotection an LLC has that says
you can't go after the owner.
You can just get to the LLC.
(18:44):
Well, how can a lawyer piercethe corporate veil if you didn't
respect the corporate veil?
If you treated the LLC like itwas your personal bank account,
how can a lawyer show thatyou've done that?
Well, if you're using personalbank accounts for the LLC's
business, whether it's a CashAppaccount or an actual bank
account so stop doing that.
You can still use CashApp.
(19:05):
I'm okay with that.
They have business accounts andI know it's like well, my
tenant, it's an easy way forthem to pay rent.
Okay, fine, you can get a CashApp account in your business.
All right, that was questionnumber one here.
Anything you want to add onthat?
Speaker 1 (19:19):
one Nope, filled it.
Okay, I'm filling it.
Okay, all right.
Speaker 3 (19:22):
Yeah, good, good, okay, question.
Let me add one other little tiphere actually on that Cash.
Another little tip hereactually on that Cash app.
Venmo all these payment apps,by the way are going to start
sending you 1099 Ks.
They're going to start sendingthose start now, in 2025.
If it's a personal account,they don't send it to you.
(19:42):
If it's a business account,they do send it to you.
Now I know what a lot of peopleare thinking.
I'll just collect all thismoney in my business, whether
it's a rental property or mainbusiness side hustle, I don't
care what it is.
That way, I'm not going to geta 1099K from the cash app.
That's wrong.
You're jacking up the corporateveil here and the protections
of the LLC, which is the wholereason.
You have an LLC for your rentalproperty and even if you got
(20:03):
paid the money, you still haveto claim it on your taxes.
The fact of you getting a 1099K is just a piece of paper that
you're getting in.
The IRS gets too, but you stillowe the tax anyways.
Speaker 2 (20:11):
Yeah.
And when the real problem is iswhen you go up the escalator,
that fateful day comes and, youknow, peter, james or John asked
you hey, did you cheat on yourtaxes?
They can be showing you the waydown to the other escalator
that's going down and you don'twant to cheat on your taxes and
then have to answer, you know,to the big guy.
Speaker 3 (20:29):
What Mark's saying is you don't want to be going to
hell for this.
Be honest, you know, in yourdealings with your fellow men.
Speaker 1 (20:36):
Okay, All right.
Speaker 3 (20:37):
Second question here from CP Gator, which is a great
one too.
It says second question on thisLLC for my rental house.
It's a single member LLC.
How do I tell if I signed foran S Corp?
How do I tell if I signed foran S-corp?
Where would I check to makesure I did that?
It's been a few years.
I'm not sure if I filed thatform.
Don't.
Hopefully you didn't.
I hope you didn't file thatform.
Okay, an LLC for a rentalproperty.
(20:59):
You do not want an S-selectionon it.
Do not have that taxed as anS-corp.
Why do we do an S-selection orturn an LLC into an
S-corporation for tax purposes?
To save on self-employment tax.
If you have a rental property,you get two types of income on a
rental.
Rental income is you're owningit and cash flowing it, and
capital gain income when yousell it.
(21:19):
Neither of those types ofincome are subject to
self-employment tax at all, soyou don't need an S-corporation
for your LLCs that hold rentals.
Now if you're selling goods orservices, products, whatever it
is, that's ordinary businessincome.
You do pay self-employment taxon that.
That's where, for smallbusiness owners, side hustle,
main hustle.
We love the S selection on anLLC, so hopefully you didn't
(21:43):
file that CP gator Never, andthis is for everybody here.
This is why we do left side,right side when we talk about
our trifecta.
Your right side is assets likerental properties.
We don't want you to have Selections over there.
We want you to have LLCs thatare flowing through directly to
you or down to your trust.
Speaker 2 (22:00):
The one thing I'm concerned about is CP Gator
might be using the same LLC forhis business and the rental
property and that's why they'rethinking I made an S election.
If that's the case, again makean appointment with one of the
lawyers at our law office.
It's very affordable anddefinitely in the big scheme of
things and we're a boutique firmfor the small business owner
we're very affordable.
(22:21):
We're not a big city firmthat's going to take advantage.
We want a relationship.
You may have to restructurethis LLC, so get a call doing a
review and getting your trifectawould be great anyway.
Okay, kt Bagels, I use a licenseplate frame that has my.
Now I'm going to try.
I've got to go faster becausehe goes on for a paragraph, but
here's the gist of it.
He has a license plate framewith his business phone number.
(22:42):
I've got a front license platewith the QR code of my business
and I and I'm writing off mileswhen I go to my appointments and
all that.
But every time I drive I've gotthis QR code on my license
plate and I've got this coollicense personalized plate, so
can I ride off my entire carBecause I'm technically
advertising everywhere I go.
(23:04):
Well, kt Bagels is a very, verycommon question and I think
it's a very valid question.
It's common to valid question.
It's common to think thatYou're like hey, I use this car
to drive around town andadvertise.
Of course we see clients thatuse vinyl wrapping and go much
more extensive than just alicense plate.
The problem is no.
The IRS has been very, veryclear on this.
Congress courts that you canonly write off the mileage or
(23:28):
your vehicle based on where youdrive it.
And commuting to your day jobdoes not count.
Going to the grocery store doesnot count, even if you're
advertising along the way.
So it's errands for yourbusiness meeting with customers,
meeting with vendors, going todifferent work locations or
conferences or whatever.
(23:49):
But just because your licenseplate is an advertisement or you
wrap your car, it is not goingto allow you to write your
vehicle off more aggressively.
So be careful there, continueto track your miles and I love
the auto deduction.
I want to be very aggressivewith the auto deduction, but
(24:09):
whenever you put down, I'mwriting off this auto 100%.
Just know that the IRS'scomputer system is going whoa,
whoa, whoa, is this a deliveryvehicle?
Because who in the hell drivestheir car?
100% for business?
They just don't.
They're going to pick up agallon of milk.
They're going to go to a movietheater.
They're going to go up to thelake on the weekend movie
theater, they're going to go upto the lake on the weekend.
You're hosed.
(24:29):
So be very, very careful.
If you say it's a hundredpercent business, because I
don't even do that, I may go 90,but I'm not going to go a hundy
.
So be careful, all right.
Speaker 3 (24:38):
All right, alec Bradley asked if I'm a small
business owner and do not offera safe Harbor 401k to employees,
but I have a separate smallbusiness where I do consulting
work without any other employees.
Would I be eligible to set up asolo K in my consulting small
business?
What is the best option to helpemployees with retirement?
If so, okay, let's ask yourfirst question.
(25:00):
All right, alec, you have abusiness with employees.
You have another business thatjust does consulting, that has
no employees.
Can you set up a solo 401k?
No, you cannot.
Sadly.
What the IRS has said is andCongress is they created the
retirement account rules.
If you're a business owner andin general the rules get a
little there's a couple shiftshere, brother, sister,
(25:21):
affiliated group rules andeverything but in general if you
own 50% or more of any businessand you basically can that has
employees, you cannot do a solok and now matt says sadly, but I
want to say, the flip side ofthat is this there's a purpose
here and it's it's so thatemployees are going to be
(25:43):
allowed to have a, a place to doretirement planning and a 401k
safe harbor.
Speaker 2 (25:50):
And it's not the worst thing in the world the
safe Harbor plans either.
But but yeah, so there's twoways to look at it.
Business owners are like butyou know, in the big scheme of
things, the 401k is amazing.
We all should be participatingin 401ks, whether we're a
business owners or not?
Speaker 3 (26:04):
Yeah, and let me just give an example.
Like Mark and I, we own 50% ormore of businesses that have
employees.
We cannot do a solo 401k.
Okay, I'm in your same boat,Alec.
Okay, Another way to thinkabout this is when Congress came
out with 401ks.
They basically were, like thisis for employees, whether you
own the business or you don't.
But then they said you knowwhat?
(26:25):
We're not going to just let thebusiness owner be like well,
I'm just going to do it for me.
And then later on they came outand said, hey, we're just
self-employed people, we don'thave employees.
And like, well, we'll let youdo solo 401ks.
Speaker 2 (26:35):
Yeah, solos came in later.
Speaker 3 (26:36):
There's no other employees here, so let's just
let you do a solo 401k just foryou.
But the problem is now peopleare saying the business owners
over here with employees are Iwant to do that.
No, no, no, no.
This is only the solo key isonly for you that have no other
employees.
Now let me give anothervariation, though.
Let's say you have a businesswith four partners and you own
(26:57):
25% of it, but you also have aseparate consulting business and
the other 75% of that businesswith employees, with other
partners, um has no other family, it's just other some business
partners.
You got another separatebusiness that you don't have any
employees in.
Well, you could do a solo Kover here, likely All right.
So it just kind of depends onyour ownership where your
(27:18):
employees sit, and is thatbusiness truly separate or not?
So hopefully that helps.
Speaker 2 (27:23):
And any of the tax lawyers at our office could
guide you through this.
So another important phone call, because we can set up that
solo 401k for you and allow youto self-direct it and invest in
real estate and all thosegoodies, and they can guide you
through the pitfalls of tryingto do it and then having to
unwind it if you're not allowed.
Okay, so BizGeek27 says so.
(27:48):
I elected an S Corp status formy single member LLC just before
Christmas.
Love it, assuming you had theincome to justify that.
So that's a great move andeverybody, what we're hoping.
Bizgeek27 doesn't say this, buthopefully he or she backdated
that S election to 1-1-24.
So they made the S electionright before Christmas, but on
(28:11):
that form, they hopefullyelected it back to 1-1-24, which
you can do.
Some of you accountants might befreaking out.
The 75-day rule doesn't applywhen you refer to Rev Proc.
2013-9, I think, or 2019-13,whatever.
Anyway, there's a way to roundthat so we can easily go back
and elect S-Corp status 1-1-24.
(28:32):
Next sentence but there was notime to have my accountant do
payroll before year end.
By the way, your accountantcould do payroll before January
31st and you'd be okay, but I'massuming that's what you mean.
So anyway, hopefully youraccountant didn't say sorry,
(28:55):
can't do this, because theycould have done it in January.
So the question is what are myoptions?
Am I screwed?
The answer is no, you are notscrewed.
There is a workaround.
The first year you claim that Selection.
Now, assuming you made itbackdated to 1-1-24, assuming
you have the income to justifythis and assuming your
accountant knows what the hellthey're doing, you might have to
upgrade your accountant.
Go back to the second questionof the show regarding the
(29:16):
network.
But what your accountant can dois drive some FICA wages
through a Schedule C and makesure that this is indicated on
the proper line of 1120S andmake sure that this is indicated
on the proper line of 1120S.
Pick up the FICA wages on aSchedule C and pay your FICA.
Do not double dip with the QBIdeduction and be careful with
(29:39):
the process.
But it is audit proof.
You will be okay if the IRScomes asking what the hell
happened.
And then this year you're goingto do it right, you're going to
get on top of quarterly payroll, your accountant's going to do
it correctly and not overchargeyou and you're going to be just
fine.
So there is a workaround thisfirst time.
If your accountant listens tothis show, send them the show if
(30:00):
they give you a hard time.
And I will say this to anyaccountants out there that don't
like this workaround we havenever had a client fail in,
rarely ever get audited or failin an audit in 25 years.
Because you pick up the FICAwages.
As long as you pay the FICA,what's the damage?
The IRS can't complain.
Now they may have questions whyis it not on box seven of the
(30:21):
1120S?
When, or is it or was therepayroll withholding?
You know there's some questionsthere, but you're okay.
Now we teach this strategy andhow to do it.
In the Main Street Tax Proprogram I have a whole module
just on S corporations whereyou're going to test out 15 to
20 questions.
You work in the community.
We're on the cutting edge ofissues like this and many, many
(30:43):
others, so make sure youraccountant's up to speed on that
.
If you accountants out therewant to level up right now, even
during tax season, please go tomarkjkohlercom and sign up for
a discovery call and we'll getyou certified and help get you
more clients, charging more,helping more clients, and your
clients will love you.
It's a win, win, win, love it.
Speaker 3 (31:02):
Let's put an amen to that.
All right, I'm going to do mylast question.
I don't know if you had to doyour last one here.
All right.
This is from RJ growth 48 andsays is an IRA LLC able to buy
Bitcoin?
If so, how?
Great question.
Let me say a couple of thingsjust for everybody who are like
well, how does a retirementaccount buy crypto?
(31:23):
Well, we have a couple optionson the ways to do it.
The easiest way RJGrowth48, todo this is to use our crypto IRA
product.
It's Directed IRA.
Go to DirectedIRAcom.
We have a crypto IRA product.
What happens is you cantransfer over money from any IRA
that you might have somewhereelse.
Roth IRAs could be even an HSA,traditional IRA, sep IRA, solo
(31:43):
K, whatever it is, and we it'sspecific for crypto.
We then open up a Geminiaccount.
We have a special relationshipwith Gemini, one of the major
exchanges out there, and we fundit.
But who's the owner of thatGemini account?
Not you.
Your IRA, or it's going to be,can get Roth IRA, traditional
IRA, doesn't matter.
Now you're right on the Geminiexchange and you can buy and
(32:05):
sell crypto right there.
That's our crypto IRA product.
It's easy, we handle it.
We link your retirement accounttax favored account to your
Gemini trading account, which iswhere you have access to 60
plus cryptocurrencies.
This could be Bitcoin, thiscould be XRP Solana, whatever
you want to buy and sell.
Mark and I have both done this,by the way, ourselves.
(32:27):
Well, what if I want to use anIRA LLC, as RJ Gross said?
Well, that's the old school wayto do it.
The reason that structure thatI say is the old school way to
do it is it's much harder toexecute on now.
When I first shot my videotalking about how you can buy
crypto with a, how you can buyBitcoin and crypto with an IRA
in 2017.
And I showed how I boughtBitcoin was 2,500 bucks per BTC
(32:50):
back then.
This is an old, terrible videoquality, but you know I was.
I was showing you how to dothis.
We used an IRA LLC to do it.
That's what I used in thatstructure.
When you have an IRA LLC and I'massuming you know what that is
already where you're here, whereyour IRA owns an LLC typically
100% you're the manager of theLLC.
The LLC has a business checkingaccount.
What I did back then and whatyou can still do today is I
(33:13):
linked that LLC businesschecking account to an exchange
wallet.
I used Coinbase back then whenI did it.
I've since linked it to otherproviders and we typically will
use Kraken right now if you'retrying to do this.
But here's the problem If you goto any reputable place that
offers an exchange becausehere's your issue you have US
(33:34):
dollars in a bank account ownedby the IRLC that you need to get
on an exchange somewhere to gobuy crypto, right?
Well, how do I do that?
Well, I got a link to somereputable crypto provider,
whether it's a Coinbase, aGemini, a Kraken or whoever it
may be.
Well, guess what they're busydoing right now Opening up
business institutional accountsfor people trying to buy tens
and hundreds of millions ofdollars of crypto.
(33:55):
So if you're a small businessowner with $100,000 or someone
with an IRA LLC and you'retrying to open up a business or
institutional account with acrypto provider, it's freaking
complicated.
They treat you like you're ahedge fund that has hundreds of
millions of dollars to ignoreyou or ignore you, which they do
right now.
Now, if you were trying to dothis a year or two ago, you
(34:15):
would have been okay.
Why?
Because they're not freakingbusy.
It's like you went, got intothe restaurant at busy time
asking for a special request andorder and to get seated in a
special spot, and they're likewho are you Okay?
It's not a good time to do itright now.
I'm just telling you thereality of it because I get
clients calling me Now.
It doesn't mean you still don'ttry.
It doesn't mean you still don'tbe like well, matt, you said I
(34:38):
could do this, you can, but nowwe do that.
Like I said, kraken is probablythe best at it right now.
Gemini has been okay, but theydon't have a special product for
this, so they treat you likeyou're an institution.
Okay, just know that you'regoing to be filling out a
questionnaire that's like howmuch money under management do
you have, what licenses andinsurance do you have?
(34:58):
And how much money undermanagement do you have, what
licenses and insurance do youhave?
Speaker 2 (35:00):
And you're going to be like what the hell?
This is my LLC, but answerquestions because you are an
institution.
Speaker 3 (35:04):
Yes, you are a business, You're going through
the institution application.
Speaker 2 (35:07):
Don't lie on it but just answer it oh, under a
million or whatever.
So don't get frustrated, justtell them what they need to hear
to get the damn account open.
Speaker 3 (35:17):
Yeah, but here's why I'm saying it in this way, and
maybe you can see my frustrationin this is way too many people
think I could set up my cryptowallet right here in 30 seconds
to do crypto personally.
Yeah, you can.
Good luck doing that with anLLC.
It's just not the same.
So if you want the easy route,that's why we have the crypto
IRA product, we open it, we haveaccess to Gemini to link that
(35:41):
specifically to our accounts andwe do a lot of regulatory and
stuff in that process to makesure it happens right.
So that's why we've done thequick and easy route, which is
what I do.
Now.
I don't use the IRA LLC anymorefor my crypto.
I use the crypto IRA product,even though I have an.
IRA LLC.
Speaker 2 (35:54):
All right, love it, love it, love it Okay, that was
a little ranty, huh, no, no, no,it was good, it was a wake-up
call, wake-up call, all right,boy, usually Mark Kohler's the
one ranting.
Speaker 3 (36:04):
I need a rock star, maybe All right.
Speaker 2 (36:06):
Last question on this end.
This is from Whelmed in Texas.
He says, or she says S Corp,two shareholders, husband and
wife, made.
Husband and wife made 200K inpassive income via trading but
minus 20 grand in gross receipts.
C Corp same two shareholderscarrying losses, minus 20.
(36:29):
We'll come back to that.
Requests number one and I'll runthrough this quickly and then
I'm going to and I think this isa good wake-up call for a lot
of people listening this isgoing to be good.
Number one is there any way tominimize tax on the S-corp
before the K-1 flow-through, asthe personal itemized deduction
option does not seem to help for2024?
Sub-point I appreciate an emailresponse.
(36:52):
Exclamation point please do notpunt to any MJK affiliates in
Houston.
That's a non-starter.
Oh well, okay, we'll come backto that.
Number two I've also seen enoughMJK videos to know in bold and
italicized we need helprestructuring everything for the
future.
So this is cool.
They're saying don't beat us up.
(37:12):
We get it.
We know we're jacked up as ourkids are adults now.
Don't know why that matters,because other issues have
nothing to do with kids.
And then finally request Infofor an in-person meet with MJK
man.
My wife's trying to get one ofthose, so get behind her.
Good luck.
Do include if an in-person meetin Vegas or Houston is an
(37:36):
option.
Yeah, I'm trying to go to Vegasfor Valentine's, you know,
maybe squeeze you in All right.
Okay, all right.
Now I'm surprised you took thisquestion.
Speaker 3 (37:46):
I mean I.
Speaker 2 (37:48):
I'm not trying to mock this person.
I'm really not.
It's, it's funny and Iappreciate the request.
I mean you don't if you don'task it's not going to happen.
Speaker 3 (37:57):
Yeah, shoot a shot.
You know, you know.
People have been trying to meetwith Mark J Kohler for a decade
now.
Speaker 2 (38:02):
Just please, know like he's yeah, no, and I'm
flattered by that and Iappreciate it and I appreciate
the question.
Now, the reason why I took thisquestion is because some of you
may have the same desire orinterest or issues and I want to
respond because we do havesolutions for this and I want
you to feel confident in those.
So, number one, s corp, twoshareholders, 200 grand in
(38:25):
passive income that's not good.
You cannot, you shouldn't havepassive, that much passive
income in the S corp, so youdon't need an S corp.
So we'd start and you said thisearlier.
Later you're like we need, weknow, we need restructuring, how
you have minus 20 in grossreceipts.
That's like you had 20 grand inreturns but no sales.
(38:47):
It's kind of weird.
Like what you made me meaningis we have minus 20 grand in
profit because gross receipts isa positive, then you have law
expenses, then you're going toend up with negative, but anyway
, that's okay.
Now is there any way tominimize expenses?
Dah, dah, dah and says we needan email response.
Don't punch to an affiliate.
Well, first thing is Iapologize.
This is an open forum show tohelp people in general nature
(39:10):
and guide you.
If you need an email responsehire one of the lawyers, and I
think that's what you'reimplying here.
I want an email response.
Well, you're not going to getone for free.
It gets to be personal advicethat we're liable for at that
juncture, you know.
I mean, we got it.
You need some help here and yousay I need Mark.
I want to pay Mark.
Okay, but and then please don'tpunt to an MJK affiliate in
(39:34):
Houston.
That's fine, we do have ournetwork.
I don't even care if they're inHouston or not.
I just want you to have a goodperson.
Speaker 3 (39:43):
Yeah, I'm in Phoenix, my CPA is in Dallas.
Speaker 2 (39:45):
Yeah, I mean like our law firm we all work seamlessly
between California, utah,arizona, idaho.
It's so yeah.
So now, yeah, I do want to giveyou some options.
The first one is just schedulewith one of our tax lawyers.
That's not an affiliate.
That is an attorney that worksunder my and Matt's direction
that we meet with almost dailyin ongoing support and training.
(40:07):
That's not an affiliate.
I apologize, I'm not takingpersonal consultations, but our
13 lawyers are freaking amazing.
Some have been with us over 10years.
They're smarter than Matt and Ion a number of topics, for sure
.
So please meet with one ofthose tax lawyers.
It's not an affiliate.
Now you may need a goodaccountant I don't care if
they're in Houston or not.
So get to the network there.
(40:27):
But in conjunction with thelawyer, they're going to help
you overcome this restructuringthat you need.
And thank you for the requestfor a meet, but I apologize,
it's just not on my.
It's not just.
My schedule is too demanding.
We're really trying to trainadministratively, our team
(40:48):
internally and then our networkto impact more people's lives,
and me being on a one-off callis actually not good for you,
because then you're going to belike okay, when are you going to
follow up?
In three months, so you're likewell, that sucked.
So when you work with one ofour team members, they're going
to have the time and ability tofollow up and cause.
It's not just one meeting.
The meeting is the beginning ofa journey and you don't want me
(41:11):
on this journey because I willbe um coming and going and
that's not fair to you.
It's not it's not you, it's me.
Speaker 3 (41:22):
Mark just did the classic breakup there and I
don't want this for you.
I'm going to be terrible.
I don't want this for you.
Speaker 2 (41:34):
How'd I do I?
Speaker 3 (41:34):
thought it went well until you marked the end.
That was really good, dude,that was really good.
I was like all in on it, sothat was so good.
I want to just say just to taginto that for just a second is I
get the frustration of wherethat person is coming from and
even some of the other questionsPeople are trying to figure
these strategies out.
Speaker 2 (41:52):
And their professional is not there for
them.
Speaker 3 (41:53):
Yeah, and their professional is not like on it
and like, oh yeah, it's justlike anybody building a business
and many of you that are askingthese questions.
You have a business and many ofyou that are asking these
questions, you have a businessand some of you have big
businesses.
Think of your CPA, youraccountant, your lawyer.
This is your team and just likeyou've got to work hard at
recruiting great people to helprun your business and work side
(42:14):
by side you in your business dayto day, you have to go recruit
a good team too, and I think somany times people just think,
well, I'll just call.
You should invest some time inwho this professional is going
to be.
Are you out there networking?
Are you going to events?
Have you talked to your friendthat's another business owner,
or maybe someone that you'veaspired to be, like to see who
(42:35):
they use?
Are you getting referrals fromthese people?
Like, start networking a littlebit, listen to the stuff.
Like we're putting out thispodcast, of course, to give you
all the strategies and ideasthat you need, but maybe come to
one of these conferences.
Maybe come to Tax and Legal 360.
Maybe come to our Self-TrictedIRA Summit, because who's there?
Other people doing what you'redoing and trying to learn these
(42:56):
strategies and theirprofessionals are there too.
Speaker 2 (42:59):
Yep, and I want to just add to that too, like
there's another problem outthere.
Or mindset oh, as soon as Ifind the perfect accountant, I
don't have to worry about itanymore.
You know I'll find the bestlawyer and then I can just
forget about it.
No, once you find them, youwant an incredible relationship
with them.
They're going to be your bestfriend, with the biggest cost in
(43:19):
your life and the biggest riskin building the American dream
the tax and legal and so you'renot just looking for that
perfect solution so you cancheck out.
It was interesting my wife's dadwhen he passed away the last
week, he had cancer, soeverybody had their visits and
it was just very, very emotional, and one of his key phone calls
(43:40):
and meetings was with hisaccountant.
Yeah, and he said come on over,I want to talk you through
everything.
I want you to be a good theretransition for my wife, my soon
to be widow, and they had arelationship.
I mean, if you were going todie next week, would you call up
your accountant and have ameeting with him?
If you're, if you wouldn't, youdon't have the right accountant
.
Yeah, I mean they should bethat glue for your legacy and
(44:01):
your family, and so let's getthe right person on the team.
Speaker 3 (44:05):
So love it All right.
Well, thanks everybody forthese amazing questions.
Again, if you want to get yourquestions answered on the
mainstream business podcast, getover to the website, make sure
business podcastcom and submityour question there, and if you
love the show, please share itwith your friends.
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