July 22, 2025 • 41 mins
Mark Kohler and Mat Sorensen are back for another Open Forum episode of the Main Street Business Podcast — answering real tax, legal, and wealth-building questions from listeners across the country.
In this episode, they cover advanced strategies and insider tips for:
- The Mega Backdoor Roth: How it works and who can use it
- Maximizing vehicle deductions and depreciation the smart way
- Fixing a broken S-Corp partnership structure
- LLCs vs. business trusts in California
- Solo 401(k) contribution strategies to hit the $70K cap
- Combining multiple accounts in a Multi-Member IRA LLC
- RV write-offs: What full-time RV entrepreneurs can (and can’t) deduct
Whether you're a business owner, investor, or just want to stop overpaying the IRS — this episode is packed with strategies and answers that could save you thousands.
- 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 bestselling 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
(00:22):
building generational wealth.
Crucial for saving more,stressing less and 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):
This is how you build wealth.
This is how you build yourAmerican dream.
Speaker 3 (00:37):
The business trust is the same and you don't have to
pay 800 bucks to the state ofCalifornia.
I know you want me to give youthat answer, william, but I'm
not, because there's no suchthing as a business trust in the
state of California.
Speaker 2 (00:49):
Three partners have equity ownership in the same S
corporation.
You're in the wrong structure.
Whoever recommended an S corpfor the three of you and didn't
fix this when you added yourlast partner?
That would have been a greattime to do it.
They just made it worse.
This is bad.
This has cost you thousands ofdollars.
So here's the perfect structure.
(01:14):
Welcome everybody to the MainStreet Business Podcast.
My name is Mark Kohler.
I'm here with the infamous MattSorenson, author of the
self-directed IRA handbook,second edition, the best-selling
book in the industry.
Boy, this sounds really.
Was that too commercially, matt?
Because I don't know.
I appreciate the plug.
Speaker 3 (01:30):
I mean, we had a special going for Amazon Prime
just a couple weeks ago.
Speaker 2 (01:36):
You could have got the book for a dollar.
Well, I'm excited to be hereagain with Matt.
I learn something new everytime Matt and I hold a podcast
Again with Matt.
I learn something new everytime Matt and I hold a podcast.
It always blows my mind whenCPAs and attorneys think they
know it all, because the more Ilearn, the more I realize I
don't know.
An open forum is a greatopportunity for you, the
(01:56):
listener to.
I guess and I hate to say itsome tough love is feel the same
way, because when you hearthese questions, you're like, oh
my gosh, I never thought to askthat.
So we're excited to be herewith you today.
Open forum I know, matt, thisis one of your favorites.
Speaker 3 (02:08):
I love open forum because we got to hear what
people want to know.
A lot of times Mark and I arelike you know, we're in the
weeds.
Sometimes we're like we're likewe got to pop our head out for
open forum, like, oh, this isactually what people are asking
about, because you get to submityour questions.
At MainStreetBusinessPodcastcomyou can submit your questions.
I've looked up a couple ofthese because sometimes we know
I'm off the top of our head.
Mark and I have done the 10,000consults as lawyers for 20 plus
(02:31):
years, so we've had a lot ofthe same questions over and over
again and this is what we doevery day.
But every once in a while I'mlike I got to look that one up a
everyone for submitting thequestions and can I be lead-off
hitter?
Speaker 2 (02:50):
Yeah, yeah.
And if you're watching here onYouTube, you're going to see
Matt and I doing a lot of kindof research in between questions
while Matt's covering somethingand I'm prepping for the next
one.
These are not easy questions,so some are, but, matt, you're
up to bat.
What do you got?
Speaker 3 (03:06):
Okay, lead off hitter .
This question is from Dave.
Dave said do most 401k plansallow for an after-tax
contribution and in-servicedistribution so that I can do
the mega backdoor Roth strategy?
For those of you that don'tknow what the mega backdoor Roth
is, this is a way if you have a401k plan maybe this is your
employer you work at incorporate America in your day
(03:28):
job We'll get to a solo K herein a second, but let's talk
about your 401k at your day job.
You can put up to $69,000 ayear into that account If it
allows for an after-taxcontribution which you can roll
out and do what's called thismega backdoor Roth strategy.
Now what Dave's asking here ishey, but I have to do an
(03:50):
after-tax contribution in orderto let this strategy work.
Do most 401k plans allow that?
Great question.
Vanguard did a study on that in2024, and they came out and
said about 25% of 401k plans inthe US allow for an after-tax
contribution, which is whatenables this mega backdoor Roth
(04:13):
strategy.
So short answer here is Dave,about a fourth of the 401k plans
out there allow for thisafter-tax contribution that
enables this mega backdoor Rothstrategy.
So you want to check with yourcompany's 401k whether they
allow for it or not.
For you business owners that arelike well, I own the business,
I'll just allow it in my 401k.
The mega backdoor Roth doesn'twork for you business owners
(04:35):
that own your own business.
There's a snag in that.
Unfortunately, for solo Kowners, where you don't have
other employees, it's just youor business partners, you can do
the mega backdoor Roth, and oursolo 401k plan certainly allows
for after-tax contributions, soyou can execute that with a
solo 401k.
So a little detailed, nerdyquestion there.
Loved it, though, dave, becausewe do love the mega backdoor
(04:56):
Roth strategy and, by the way,it is alive and well.
I saw a lot of Yahoo's onYouTube posting videos saying
the backdoor Roth is gone.
The mega backdoor Roth is gone,and those idiots were talking
about build back better billthat never passed when Joe Biden
was in office.
They didn't realize the otherBBB big beautiful bill was a
different law that actuallypassed.
(05:17):
So careful who you get youradvice from, particularly people
with zero credentials onYouTube trying to give you tax
advice.
We're actually taxed lawyers,so we know what we're talking
about.
Those strategies are alive andwell.
Speaker 2 (05:28):
Yeah, and if you go to Grok or ChatGBT and put in
what was the rule under BBB, youwill get the bill back better.
So I want to remind all of youthe actual bill name is the one
big beautiful bill.
So you put in there, let itstart with the letter O.
And, by the way, I am holdingit right here, the entire bill,
(05:52):
double-sided bill, the act, andit's a monster.
I think I got my social mediamanager in the house, jolie
helped me get this thing printed, so it was funny.
When I went to Kinko's to pickit up, I was like, oh, I got to
pick this up and they're likegeez, what the hell is this?
I go oh, this is the bigbeautiful bill.
And everybody in the whole,there was a waiting line.
(06:15):
You know, waiting in line,that's it.
I go, this is it, this is whatit looks like.
And it was like oh, my gosh,you know.
And they were like can I lookat it?
And it was kind of cool.
You know people are like neverseen a bill and how big it
really was.
Yeah, yeah, kind of fun.
Speaker 3 (06:28):
All right, I thought you were like a senator or
congressman having a vote onthis thing or something right.
Speaker 2 (06:33):
And you're like oh, we voted on that last week.
I guess I better read it pen atthe King Ghost table and a desk,
all right.
Well, this next question isfrom Collins M13.
Now he says.
He asks does the IRS cap totalfirst year depreciation at
(06:58):
$11,600 per vehicle?
This is what my accountant toldme.
Everything I've researched saidin 2024, I could deduct 12,400,
plus the 8,000 of bonusdepreciation is my vehicle is
less than a 6,000 pound vehicletruck, so he's got dealing with
an auto and for a total of20,400.
Is this true about first yeardepreciation limits?
(07:20):
I'm considering amending my taxreturn.
I don't know what to do.
Is this inaccurate or accurate?
And he says, finally, I'mconsidering amending my tax
return.
I don't know what to do.
Is this inaccurate or accurate?
And he says, finally, I'mactively looking to switch to
someone in the Mark Kohler TaxPro Network.
And thank you, colin, we wouldlove to have you.
We have a network of over athousand accountants that have
been trained by Matt and I inour Main Street Tax Pro
(07:41):
certification, where we try tobe on the cutting edge and be on
the same page, frankly.
So on this question, this is agood one, colin.
Yeah, your accountant was right.
For 2023, sorry, the limit was$11,600 in 2023, plus you got
the $8,000 bonus kicker.
(08:04):
Plus you got the $8,000 bonuskicker.
So that was 2023.
In 2024, it is 12,400 plus8,000.
And you were correct.
So that's a total of 20,400 in2024.
This year, everybody, the firstyear depreciation limit for
vehicles.
Now, again, if you've got a6,000 pound greater vehicle,
(08:25):
it's a whole other equation is12,200 plus bonus, matt.
It went down.
So it's very fascinating thatmaybe it's fuel costs going down
.
The depreciation limit actuallywas adjusted downward in 2025.
Now, with that, said everybody,this is a great question, to
(08:46):
downward in 2025.
Now, with that, said everybody,this is a great question.
Just because you can do itdoesn't mean you should.
How many of you 21-year-oldshave faced that one right?
So let's be careful, because wehear about bonus depreciation.
I got to take bonus.
I got to do it.
It's in the big beautiful bill.
No, you got to think, should I?
So I'm just going to quicklysay this when you look at a
vehicle, say, am I going to puton more miles than if I went
(09:11):
with mileage deduction?
I might get more bang for mybuck, rather than going with gas
fuel repairs and maintenanceand depreciation because there's
going to be a limit anddepreciation, because there's
going to be a limit.
So if you buy a $40,000 vehicle, the most you can write off the
depreciation in year one is$20,400 plus your fuel.
Well, if you're going to burn abunch of miles in the first
(09:34):
couple of years maybe threeyears, if you're a realtor,
you're on the road a lot, youmight put on 20,000 miles and
your deduction could be wellover $12,000, $13,000 a year.
In two years you've surpassedwhat you've gotten with actual
doing bonus.
So just because you can do itdoesn't mean you should.
Now, last thing I'll say.
This is that limit is after youlook at business use percentage
(09:57):
.
So let's say that realtor outthere says I got one vehicle I'm
cranking, I'm out there.
It could be Uber.
You could be an Uber driver andsay I'm going to be using it
10% or 20% for personal use.
I only have one vehicle.
So 10% to 20%.
Going to the grocery store andout to the movies and up to the
lake on the weekend.
Okay, so 80% business use.
(10:18):
So if I buy that same vehiclefor $40,000, new or used, cash
or credit, doesn't matter I haveto take off 20% for personal
use.
So that would be, in thatexample, $40,000.
I would take off $8,000.
So now my depreciable basis is$32,000.
So in the first year I mightwrite off $20,000.
I've only got another $10,000or so to write off in year two.
(10:39):
So then it's just fuel.
You're going to put on a lot ofmiles by year.
Three bonus would have screwedyou.
So be careful, be looking atyour use, the cost of the car
and the amount of miles and tryto project.
And, by the way, once youchoose your method, you're stuck
with it.
So this is why a tax advisormight help you through that
(11:00):
process.
Great question, colin.
Wish you the best.
Speaker 3 (11:03):
Dang awesome tip Love that.
So help you through thatprocess.
Great question, colin.
Wish you the best.
Dang Awesome tip Love that.
So good, so well said.
It's actually kind of a trickyanalysis there, and some good
rules of thumb are like theexpensive car right, you may
want to that you don't drive alot of miles Maybe, but then you
go with the.
Speaker 2 (11:17):
L word lease it, ooh, lease it.
There you go.
See, I'm going to go with the80% of the lease payment because
I'm not going to put on a bunchof miles and I'm going to kick
it back in three years anyway.
High value cars I like thelease method.
Speaker 3 (11:29):
I was going to say the low value cars with high
miles.
We're doing mileage?
Oh, absolutely, yeah, rule ofthumb, yeah, yeah, um, great
question.
Uh, incredible answer.
Mark J Kohler.
All right, here's this one'sfrom.
I don't even know if I can dothis name, yan Zizo.
I don't know, this has got tobe a.
(11:49):
This is a terrible handle, yan.
I'm just going to go with that,all right.
Yan's question is I have aMaryland LLC and a Pennsylvania
LLC that hold title to rentalproperties.
They are single member LLCs toa Wyoming LLC.
I presume this means yourWyoming LLC owns the Maryland
LLC and it owns the PennsylvaniaLLC, and those LLCs own their
(12:09):
respective rental properties inthose states.
Question is when it comes to taxfiling time, how many 1065
returns should I file?
Do I need to file anything forthe Maryland and PA LLC?
Great question, let's go workbackwards on this.
Jan, if you have an LLC for arental property in Maryland,
you're going to need to befiling a tax return in Maryland
(12:31):
Now.
Whether this is a 1065 or thisis your personal return getting
filed in Maryland, it doesn'tmatter.
Something's going to need toget filed in Maryland Now.
Maybe you live in Maryland, soyou're already filing and I'm
not worried about it.
But if you have a rentalproperty in Pennsylvania for
this Pennsylvania LLC, you'regoing to also need to be filing
a state return into Pennsylvaniafor that property.
(12:52):
So there's going to be a statefiling, not because of the LLCs
necessarily or not because of a1065, but because you have
rental properties in thosestates.
If these are single member,which I'm assuming they are here
that's what you said.
The Maryland LLC andPennsylvania LLC is single
member.
I'm assuming the Wyoming LLC issingle member here.
We'll come back to that in asecond.
(13:13):
Everything's just flowing onyour 1040.
There is no 1065 LLC orpartnership return being filed.
This is simply going on yourpersonal return.
But you'll also need to file astate return into Maryland or
Pennsylvania if you don'talready live in one of those
states.
So yes, there's going to needto be something filed in
Maryland and Pennsylvania.
I just don't know if it's theLLC level because single member
(13:34):
LLCs there's no tax return filedto the IRS.
Everything's flowing down ontoyour personal return.
Now, if that Wyoming LLC is apartnership, maybe this Wyoming
LLC that owns the Pennsylvaniaand Maryland LLCs that owns the
rental property.
Okay, we're working down hereIf that Wyoming LLC is a
(13:55):
partnership, then it would befiling a 1065 partnership return
, all right, and then that wouldbe flowing obviously down to
your 1040 as well.
Speaker 2 (14:05):
Great answer, matt Love it.
I can't add or take away fromthat.
Do I hit a gavel?
Done, there you go.
So let it be done.
So ordered, so ordered, allright, okay.
Brian Cato 69.
This is a tough one.
I'm going to try to hit thehighlights quickly.
Speaker 3 (14:26):
I hope Brian was born in the year 1969.
I hope that's what that's about.
Speaker 2 (14:30):
You know, usually that'd be something I'd say you
let that ride, you didn't eventouch it.
I've been trusting my insidevoice for way too long and after
three separate lawsuits Ithought I'm going to let it go,
okay, no, I'm just joking.
No lawsuits, all right.
Okay.
Patty says yeah, you have thatinside voice moment.
(14:51):
That's the key to not say it.
But, matt, you got my back.
I love it today, I'll get yoursnext time, okay.
So Brian Cato 69 says hey guys,love the podcast.
Here's the question.
Three partners have equityownership in the same S
corporation.
The two founding partners have45% equity each and the most
recent partner was given 10%equity to come in and run sales.
(15:14):
The two founding partners havesalary of 90K.
The 10% partner has a salary of140 plus commissions.
The company is in growth modewith a plan to sell down the
road.
Love it.
Here's the question Can the twofounding partners limit their
reasonable comp to lower theirSocial Security and Medicare
taxes without having to do thesame for the minority owner who
(15:37):
really needs to work on the FICAissue?
I'm all same myself really needsto work on the FICA issue.
Seems like they could lowertheir pay salaries to maybe 40 K
and then bonus out the extra tolower their FICA.
Please advise.
All right, brian, you'rethrowing out some loaded
language there.
I don't want to do any bonusesper se, maybe in concept, but
all right, let's back up, brian,you're going to.
(15:59):
You're going to love thisanswer and you're going to hate
it.
You're in the wrong structure.
Whoever recommended an S-corpfor the three of you and didn't
fix this when you added yourlast partner?
That would have been a greattime to do it.
They just made it worse.
So if an accountant has talkedyou into this structure, I've
(16:25):
got a major.
I've got a major concern withthat accountant.
I would please recommend theyconsider joining our Main Street
Tax Pro certification andupgrade their knowledge on this
issue.
I literally have a chapter in mybook, in the Tax and Legal
Playbook, on how to structure apartnership.
I want you to read it.
You can get it on Amazon, brian, give it to your partners.
You guys need to get on thesame page because if one of you
goes to this accountant thatsold you this structure, that
(16:48):
account is going to find everyreason in the book to prove that
they're right and then you'regoing to have three partners
that start fighting.
I would recommend, before yougo to your accountant first
let's all get on the same pageget a second opinion, do your
homework and I'm going to tellyou what the answer is right now
, and then you can decide to goto your prior accountant Notice
how I said prior.
(17:09):
Go to that accountant and saydo you want to stay the current
or do you want to become theprior?
Because this is bad.
This has cost you thousands ofdollars for I don't know how
many years.
So here's the perfect structure,the perfect structure.
We've got to get there througha reorganization.
It may just be a few thousanddollars and you're going to save
(17:30):
that in taxes real quick.
We need an LLC for yourpartnership and each individual
partner has their own Scorporationporation.
Then they can regulate, dial up, dial down their salaries, have
other expenses they might wantto write off Auto travel, dining
, family board meetings,electronics, all sorts of
(17:51):
goodies at the individual levelwith their own S-Corp.
Right now, brian, you can'teven write off a trip to Florida
for a conference in this S-Corpbecause you are an employee
shareholder.
There is no unreimbursedemployee expense deduction on
your 1040.
And this is so bad in so manyways.
(18:12):
Let alone, you can't controlthe FICA without screwing up
your partnership compensationplan.
So what you want to do is areorg, create a new LLC, start
moving operations to that LLC,depending on your structure and
your business.
I know you can be doctors andhave Medicaid billing issues or
insurance.
You could be in a constructionscenario where you've got
(18:34):
vendors and suppliers using theEIN of this company.
I know sometimes it's easy tosay this, sometimes it's not,
but you want to get a new LLC,get S-Corps for everybody.
Start pushing out money thatdirection.
It's going to save youthousands in about four or five
different ways.
Get a consult with one of thetax lawyers at my office,
kkoslawyerscom.
(18:54):
They'll give you the plan.
They'll build your trifecta,they'll show you how it works.
Then we'll hand you, if youneed it, an incredible tax
advisor out of our network tohelp carry out the orders and
make it happen.
Then you circle back once ayear, just like your dentist.
You're going to come back tothe tax lawyer and go hey, by
the way, we added some rentals.
(19:14):
Or we're going to do this, orwe're going to do that.
Let's get our estate plans done.
This is how you build wealth.
This is how you build yourAmerican dream.
You've gotten some bad advice.
Let's get you turned around.
Get you into that structure.
Get over to kkoslawyerscom andget that second opinion of what
this should really look like.
Get a copy of my book, brian.
You're going to love it andyour intention is.
(19:36):
You're right on, spot right,spot on.
The FICA is out of control, solet's dial that in with a bunch
of other strategies.
You'll freaking love it.
Speaker 3 (19:44):
Yeah, and I just not to pile on here and that was an
awesome answer, mark.
But it's like Mark and I haveour own S corporations.
We are not partners in an Scorporation, we have an LLC,
basically a partnership entitythat employs the employees, that
receives the income, that paysthe business, it pays each of
our S corporations.
We do our salary and payourselves out of that structure.
(20:04):
We recommend it for a lot ofour clients.
That's what the smart peopleare doing because it works.
It's more efficient.
It might seem a little moreactually because you're like,
wait, there's more entities inthe mix, but it actually, once
you start operating and thebusiness is making some money,
it's so much better, it's moreefficient, it's less tax, it's a
better structure.
Okay question here.
This was from William.
(20:26):
William has a question aboutbusiness trust versus LLC.
This is a good one.
We used to get this one a lotmore.
William asks will setting up abusiness trust offer the same in
California rather than an LLC?
Will the trust need to pay the$800 tax to the franchise tax
(20:47):
board like an LLC would?
Great question, william.
This is a question so manypeople in California want the
answer to be the business trustis the same and you don't have
to pay $800 to the state ofCalifornia.
I know you want me to give youthat answer, william, but I'm
not, because there's no suchthing as a business trust in the
state of California.
I know you want me to give youthat answer, william, but I'm
not, because there's no suchthing as a business trust in the
state of California.
(21:07):
Tell me where in the code inthe state of California there is
a business trust?
There's not one.
Now a lot of people will pointto some opinion from the
franchise tax board that says,hey, business trusts don't have
to pay $800 because Californiadoesn't have them.
And I know there's other statesthat have business trusts.
I know that you can set up abusiness trust in those states
(21:28):
and then you can come toCalifornia and say, hey, I'm
operating in California withthis business trust, but in the
state of California, when you'rein court in California, there's
no law there that says you haveany liability protection.
But if you have an LLC in thestate of California, there's a
law there, and there's a law inall 50 states.
California has one for LLCsthat says, hey, if something
happens in this company, youhave a lawsuit against the LLC.
(21:50):
They're stuck there.
They can't come after youpersonally as the business owner
or the management of this LLC.
They're stuck at the LLC level.
There's not the same equivalentthing for a business trust in
the state of California.
I know you want it to be so.
We would set up tens ofthousands of these for our
clients in California if it werethe case.
We want that to be the case too, because you could pay us,
(22:11):
instead of sending theCalifornia franchise tax board,
800 bucks every year.
So I know I came off a littlehot on that, but I just don't
want you to fall into this trap.
Okay, We've had clients fallinto this.
The other problem I've seen withclients that actually have any
business of significance is youtry to go transact, you try to
go get a loan, you try to makean agreement with a large
(22:33):
company, you try to sell aproperty and you're done with
the title company.
They're going to be like whatthe hell do you have here in
California?
What is this business trust?
What the hell do you have herein California?
What is this business trust?
And you're like well, somebodyhad sold it to me at a holiday
inn and I, because they selltrusts and they have a document
for it and I and I bought it.
(22:53):
So it's not a substitute for theLLC.
I know you can get around the$800 franchise tax on it, but it
is not the same thing.
Most of the time you're usingsome document that has no
context with California law ormost state laws.
There's not many states thatoffer actually a business trust,
so be careful on that.
I would recommend just do theLLC suck up paying the 800 bucks
to the state of California.
(23:13):
You get to go to the beach onthe weekends, you have in and
out, you got HollywoodDisneyland, you know.
Just just chalk the 800 bucksup to that.
Speaker 2 (23:23):
Great answer, man, I love it.
I love it when Matt gets hot.
Speaker 3 (23:26):
I just you know this one.
Just I want you to be right,william, I really do.
Speaker 2 (23:30):
Yeah, yeah, you know, Matt almost dropped an F-bomb
in there, I could feel it.
You know a well-placed F-bomb,you know it can be respected.
Speaker 3 (23:39):
Yeah, you gotta.
I mean, you have to be measuredon them.
If you overdo them, they justdon't have effect.
Speaker 2 (23:44):
No, no, it was funny.
Donald Trump drops that F-bombbefore he jumped on a helicopter
out on the lawn Unbelievable, Imean, it was mic drop level.
And then it was funny, therewas a comedian saying you know,
I think I have a problemswearing because I just can't
say the F word anymore.
I have to add adjectives to itto really get the emphasis I
(24:06):
need, because I've blown it,I've used it too much.
So it's like mother, this, that, this, you know.
And I'm like okay, yeah, you'vegot a problem, let's just dial
it back.
You know, just bring it in.
Speaker 1 (24:16):
All right.
Speaker 2 (24:17):
Yeah, well, anyway, okay, anyway, okay Just another
good tip.
Speaker 3 (24:20):
You know, you didn't know you'd get that.
That's another good tip for anyof you on.
You know appropriate use of theF word.
Speaker 2 (24:24):
Yeah, that's right.
That's right.
Well, you dropped out with yourkids.
They're like Dad, are youserious?
Dad's pissed.
Yeah, I'm in trouble on severallevels.
All right, okay, this question'sfrom Becky.
This is a great question.
It's about a solo 401k, herS-corp and getting the maximum
contribution.
(24:45):
Now, becky, I'm going to turnyou around a little bit on this,
but you're going to love thisanswer.
At the end of the day, she saysI'm an S-corp and just set up
my directed IRA, solo 401k.
Congrats, she's in the familyhere.
Although I would love to hit the$69,000 cap which, by the way,
is $70,000 in 2025, I don'tthink I can get there.
(25:08):
I expect to bill between$230,000 and $300,000 this year.
What is the strategy forsplitting contributions into my
solo as an employer and employeecontribution?
And she says I expect to build233.
I'm not sure if she's thinkingthere, but that may be gross
(25:30):
revenue or in her business netprop, I don't know.
So we're not going to worryabout that.
Becky and everyone out thereDon't worry about Becky's total
income yet.
Let's just look at her goal,and her goal is I would like to
put away $70,000 in my 401k thisyear.
How do I get there, is herquestion and then she goes
(25:50):
through two or three points.
Well, do I do the employercontribution of 25% based on my
salary, and then that's going tobe $80,000, and then I add that
to the salary but then max outmy employee contribution after
that when my salary is 103,because I put that on top of the
80.
Becky, you're all turned aroundhere.
She goes there's some softwareout there that says Roth or
(26:12):
traditional and X dollars isemployee versus employee.
Okay, listen up.
And everybody here that has asolo 401k and an S corporation.
You are going to love thisanalysis.
Here's where I start.
Number one what is yourreasonable comp requirement
Meaning?
If you have an S corporation,you have to take a certain
(26:32):
amount of W-2 income, pay yourfair share of FICA to keep the
IRS happy.
I always want to know what thatfigure is first and see what
that gets us before we starttrying to play with our salary,
which we can.
But let's find out what ourbare minimum needs to be.
So in Becky's example, let'ssay she's going to net like a
(26:52):
net profit of her S corporationand she's going to pull out all
that money and live on itwhatever.
That's another issue foranother day but say she's going
to bring home 180 grand, okay,well, I'd want to at least peg
30 grand at 30%.
I would at least want to peg30% to salary.
So I'm going to go 60 grand onsalary and take the other 120 as
(27:13):
K1.
All right, then I'm going to askmy client how much do you want
to put in your 401k and whatwould make sense?
Have you already funded yourRoth IRA first?
Oh no, I haven't.
Have you already funded yourRoth IRA first?
Oh no, I haven't.
Have you already funded yourhealth savings account?
Oh no, I haven't.
Okay, well, let's kind of hitthe base hits and take some of
(27:33):
the easy things off the table.
So I would say, based on a$60,000 salary first, I would
love you to do your regular RothIRA, so seven grand.
In this example we're going toassume Becky's under age 55.
So she's going to do sevengrand in her Roth IRA.
Now, assuming she's married,she might be able to do over
eight grand.
If she's single, it'd be overfour grand.
(27:55):
But I'm going to say let's getthat health savings account
funded as well, which you canself-direct as also.
So let's take that seven togosh 14, 15 grand off the table
and get that put away.
Even with health savings accountI'll get a tax deduction With
the Roth.
I know I'm cranking awaytax-free.
Then I want to do you always doyour employee contribution or
(28:20):
deferral first.
So this year she could do$23,000.
Then we are going to stack theemployer piece on that, which is
25% of her 60 grand.
So right now we're at 38,000 inher 401k, 7,000 in her Roth IRA
and I'll just let's throw inanother five grand somewhere in
(28:42):
the middle for good measure inthe health savings account.
So right there, we're at 50K.
Now what I would recommend whenpossible for my clients is
they're going to go with RothIRA and Roth solo always,
because we know in the long runthat Roth is going to give us a
lot better bang for our buckwith tax-free growth and
tax-free withdrawals.
So I've got my four pieces hereput together the Roth, the HSA,
(29:07):
the employee deferral and thenthe company match On 60 grand of
salary.
I put away 50.
50 grand between those fourlittle pieces and I put it in a
little cylinder and stack themtogether pieces.
And I put it in a littlecylinder and stack them together
.
That's 50K.
(29:28):
Now if you want to do more, thenI've got to start taking more
FICA.
So if I add 20 grand of salary,I'm only going to get 25% in
employer match and so this FICA.
I'm going to be chasing acontribution after paying 15% in
FICA.
Sometimes that's not a goodapproach, so that's when the
(29:49):
real strategy goes to anotherlevel.
But I would stick with yourcurrent salary level.
What does it need to be?
How much could I put away withthat?
Make sure you always do yourRoth IRA and possible HSA in
that mix.
Do your employee deferral, theemployer match, then reevaluate.
You can ramp up your salaryfrom there and then decide from
(30:10):
there should I take more insalary just to get a deferral?
I don't know, that's going tobe very personalized.
Speaker 3 (30:17):
Yeah, I mean, that's so much tax advantage money
you're putting away right thereon such a little salary.
Only thing I would just add onthat too is if you're above 150K
single, 230K married, that RothIRA might need to be a backdoor
Roth IRA.
Just keep that in mind.
If you're usually putting away50K of money just from a living
(30:37):
and cost, you might be in thatcategory where your Roth IRA
needs to be a backdoor Roth IRA.
But don't believe any of thisnoise you might hear about.
Oh, high-income earners can'tdo Roth IRAs.
Yes, they can.
They just do the backdoor RothIRA.
Speaker 2 (30:51):
And let me just say you don't have to figure this
out with an online calculator onyour own.
Becky, you've done a great jobgetting to this point.
You know exactly what you want.
Do your comprehensive taxconsult with one of our tax
lawyers, have that annual review, look at this and 20 other
issues.
Make sure your structure'sdialed in.
Where are you at on your estateplan?
(31:12):
What about all your otherwrite-offs, your board meetings,
family members and blah, blah,blah.
This is just a piece of aquality plan that you could get
for two grand approximately hereat the law firm.
So please make an appointmentthe link's down below and then
we can help you choose thatright dollar amount and then get
you with a tax advisor.
(31:32):
That will add even more bellsand whistles throughout the year
.
Speaker 3 (31:36):
Awesome.
Speaker 2 (31:36):
All right next.
Speaker 3 (31:38):
Yeah, I got a question here from J Marm.
J Marm says Hi, can I do amulti-member IRA LLC in order to
simplify investments, includingmy children's Coverdell, my
solo K, their Roth IRA, mywife's Roth IRA and a personal
stake from myself in order toincrease money into the business
and, if this is permissible, ifI need to add more money in a
(32:02):
year and I add it personallywould I just have to restructure
the ownership percentage in thebooks?
Thanks, you guys rock.
All right.
Well, we got a yes and no here,james Arms.
The first part is absolutelyyou can combine Coverdell, solok
Roth IRA, your account, yourspouse's account, all into one
LLC.
You've all got to go in at thesame time and this is the
(32:24):
multi-member IRA LLC.
We break up the ownership inthat LLC based on those dollars
invested from the differentaccounts.
They'll have differentownership stake.
So like, let's say, you put$100,000 total in this LLC and
your Roth IRA, put in 10 grand,it would get 10%.
Right, your kids covered,they'll put in five grand,
they'd get 5%.
Now if you put in a personalstake as well, you can get
(32:46):
ownership personally in there.
Now you'll pay tax on thoseprofits when you get a K-1 from
this LLC.
That piece will be taxable thatyou personally own, versus the
tax advantage accounts hereyou've rattled off.
So yes, we can combine allthose different sources of funds
into one multi-member IRA LLCto go out and make specific
investments.
Now that's the benefit of themulti-member IRA LLC.
(33:10):
We can combine multipleaccounts and sources of funds
into one LLC to go makeinvestments.
The downside is ownership isfixed.
You cannot change ownershipbecause you own a Roth IRA.
You personally are in there,your kids' accounts are in there
.
When we change ownership, thatis, transferring ownership from
you to you personally or fromyour Roth IRA to your spouse's
(33:31):
Roth IRA.
Those are disqualified personsunder the rules.
We've got a whole Directed IRApodcast on this.
If you're like I'm not sure Iunderstand or following this,
this is about self-directed IRAsand prohibited transaction
rules.
We cannot change ownership inthose multi-member IRLCs because
it causes a prohibitedtransaction as we're
transferring ownership betweenwhat are called disqualified
(33:51):
persons.
So hopefully that makes sense,jim Arms.
So the nice thing is, yes, youcan form this LLC.
The ownership will be fixedthere, so we can't restructure
or change percentages later.
Now you could put more money innext year, but it's going to
need to follow the sameownership percentages as when
you formed it in the beginning.
Speaker 2 (34:10):
Great answer, matt, love it All right.
Well, this will be my lastquestion I'll take here today,
and this is from Jay Wepka,about an RV.
An RV Now.
Before I continue, pleaseanyone out there that is all of
a sudden thinking of all thesequestions that someone didn't
ask and you're like, oh my heck,I really would like to know
(34:32):
about X, y and Z.
Please go toMainStreetBusinessPodcastcom and
submit a question.
We would love to hear from youand we would actually like to do
more open forums and helpanswer these questions around
the country.
We love this engagement andit's just.
This is one of my favoriteshows to do.
I just love hearing from you.
So Jay says great content.
(34:53):
Guys new to the channel andjust listen to your RVer episode
.
I am a full-time RVer and decideto start a new business as a
mobile RV repair technician.
I'll spend part of the year ona family property, but the
question is when I travel southfor the winter, I plan on
working while I travel and Iassume mileage and fees to stay
(35:16):
at RV campgrounds are able to bewritten off.
Oh, if you can only wish it so,but the question is at what
percentage?
If there are days I don'tprovide any service work?
Can I park fees still where I'mwritten off?
Also, what about meals andgroceries?
Thank you Well, jay, good newsand bad news.
I'm always a glass half fullguy, so I'm going to start with
(35:37):
the good news.
First of all, jay, I love yourstyle here.
I'm living in an RV on a ranchthat we're starting to build out
this summer.
Patty and I are doing the RVlife campfires every night and
working with contractors anddirt movers and excavators.
It's a lot of fun and I lovethe RV lifestyle.
So I hope you're having fun.
(36:01):
But for those out there, there'sa big fork in the road on those
that have an RV parked on theside of their house and use it
occasionally and they don'trealize they're sitting on a
little gold mine right outsidethe door.
Maybe I'll go there for amoment.
But then we have the full-timeRVers that are like I sold the
house, blah, blah, blah, boughtan RV, new or used, fifth wheel,
(36:22):
whatever and we hit the openroad.
There's pros and cons.
So here's let me tell you thegood news you don't have a house
payment, you are not payingproperty taxes somewhere, you
are living with a lower cost ofliving overall, I'm sure.
And you're out there in theopen road going wherever your
gypsy heart wants to take you,and I just love it.
(36:44):
That's a lot of fun.
You're going to make money onthe road.
You're going to be able to taketax write-offs directly related
to your business.
But the con your RV is your home, it is your primary residence
and you can't write off the foodwhile you're out there.
You can't write off the RVitself.
(37:05):
It's your home.
You are simply moving yourpersonal residence around the
country and once you get there,those fees for the hookups and
the pad rental and blah, blah,blah those are for your home,
where you live.
Now I will take mileage to getwhere you're going.
I'm cool with that becauseyou're going to move to a new
(37:27):
place for your business.
It's not under the movingexpense category, it is fairly
aggressive.
But you have probably an Scorporation that you're going to
be using for your RV tech andrepair.
So just live with mileage andthat's it.
And repair, so just live withmileage and that's it.
Now, if you've got a fifthwheel going on, once you get
(37:50):
there and you unhook the truckand cruise around, we might be
able to ride off more of thetruck, but the RV is going to be
a hard one.
It's your home.
So last point if you are asticks and bricks think of the
three little pigs you've got asticks and bricks home and that
RV parked on the side.
Oh my gosh, you are sitting onso much opportunity because now
that becomes a business vehicle,a work truck, you're going to
go park it at the rentalproperties you're working on.
(38:11):
You're going to go park it atconferences you might be going
for your business.
Frankly, you're not even usingit for personally.
You're cruising around doingbusiness with it.
Think of a contractor thatparks an RV at their work sites.
That's what I want you doingwith your RV and you can put it
on Waverly and rent it out whenit's not being used by you.
(38:32):
You can then use it 14 days outof the year.
Personal use is still right of100% of it.
As long as you've got it onWaverly, you could be making
cash flow with that RV and usingit as 100 hundred percent
business vehicle and rentalproperty Amazing.
So look into that.
For those that have that RV onthe side of the house that
you're kind of regretting thatyou bought, let's put it to use
(38:54):
for you.
Full-time RVers.
Enjoy your benefits, but have alittle bit of a reality check
on how much you can write offwhile you're out there.
Speaker 3 (39:03):
I love it, God going A to Z for the RV owners out
there.
You know, Mark, he's living thedream right now Some RV
lifestyle.
Speaker 2 (39:12):
Matt's nightmare, my dream.
Speaker 3 (39:14):
Yeah, it's like my worst nightmare is Mark's dream.
That's the last place you'regoing to want to see me.
I just will not be happy.
Speaker 2 (39:22):
I've invited him out and I'm like we've got s'mores,
uh, and we got our you know sidefolding tables and a camp chair
, and uh, yeah, I've got alittle pond with 50 trout.
I had 50 trout delivered thisweek.
Oh, I'm, I'm, I'm in for that12.
Speaker 3 (39:38):
Oh my gosh, I'm allergic to trout.
I'm allergic to trout.
I did one of those blood tests,those food blood tests, and I
was like, and literally, troutwas on the list of like, and
wheat too.
That's more complicated.
Speaker 2 (39:54):
You can still catch them and release them.
Speaker 3 (39:56):
Yeah, it's all fun.
Speaker 2 (39:57):
I guess no more trout almondine for Matt.
Okay.
Speaker 3 (40:01):
Can you put something else in there?
Speaker 2 (40:03):
Well, I could.
I guess bass.
You know they're predatory,though I don't know.
I got it totally dialed in fortrout.
But you know, last night I justwent out there after sunset I
sat in my lawn chair.
I caught two rainbow.
Let them off.
I went swimming.
Okay, I can do that It'll catchand release Very relaxing.
Speaker 3 (40:21):
I'll eat your beef.
Speaker 2 (40:22):
You got cattle up there I got three Wagyu's
brewing.
They're going to be sweet.
Speaker 3 (40:28):
All right, I'm in for that Well, always a great hour
with Mark J Kohler here.
I've learned so much, somegreat, tangible tips.
I'm always learning on thispodcast.
But thank you everyone forsubmitting your questions.
Make sure you're sharing theshow with your friends and
family.
If you need any tax planningspecific advice, some
structuring all these tax legalquestions we were diving into,
(40:48):
our lawyers do this every dayfor clients across the country
at KQS Lawyers.
The Main Street Tax Pro Networkis an incredible resource to
you as well.
If you're like I need a newaccountant, I need someone
that'll help strategize with meand not just spit numbers into a
computer and spit out a returnat the end of the day.
So we're here for you.
We've got a lot of resources.
Thanks for being with you.
We'll see you next time.
Speaker 2 (41:09):
Thanks everyone.
Welcome to the Main Street Business Podcast with
your distinguished hosts, mark JKohler and Matt Sorenson.
Both are bestselling 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
(00:22):
building generational wealth.
Crucial for saving more,stressing less and 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):
This is how you build wealth.
This is how you build yourAmerican dream.
Speaker 3 (00:37):
The business trust is the same and you don't have to
pay 800 bucks to the state ofCalifornia.
I know you want me to give youthat answer, william, but I'm
not, because there's no suchthing as a business trust in the
state of California.
Speaker 2 (00:49):
Three partners have equity ownership in the same S
corporation.
You're in the wrong structure.
Whoever recommended an S corpfor the three of you and didn't
fix this when you added yourlast partner?
That would have been a greattime to do it.
They just made it worse.
This is bad.
This has cost you thousands ofdollars.
So here's the perfect structure.
(01:14):
Welcome everybody to the MainStreet Business Podcast.
My name is Mark Kohler.
I'm here with the infamous MattSorenson, author of the
self-directed IRA handbook,second edition, the best-selling
book in the industry.
Boy, this sounds really.
Was that too commercially, matt?
Because I don't know.
I appreciate the plug.
Speaker 3 (01:30):
I mean, we had a special going for Amazon Prime
just a couple weeks ago.
Speaker 2 (01:36):
You could have got the book for a dollar.
Well, I'm excited to be hereagain with Matt.
I learn something new everytime Matt and I hold a podcast
Again with Matt.
I learn something new everytime Matt and I hold a podcast.
It always blows my mind whenCPAs and attorneys think they
know it all, because the more Ilearn, the more I realize I
don't know.
An open forum is a greatopportunity for you, the
(01:56):
listener to.
I guess and I hate to say itsome tough love is feel the same
way, because when you hearthese questions, you're like, oh
my gosh, I never thought to askthat.
So we're excited to be herewith you today.
Open forum I know, matt, thisis one of your favorites.
Speaker 3 (02:08):
I love open forum because we got to hear what
people want to know.
A lot of times Mark and I arelike you know, we're in the
weeds.
Sometimes we're like we're likewe got to pop our head out for
open forum, like, oh, this isactually what people are asking
about, because you get to submityour questions.
At MainStreetBusinessPodcastcomyou can submit your questions.
I've looked up a couple ofthese because sometimes we know
I'm off the top of our head.
Mark and I have done the 10,000consults as lawyers for 20 plus
(02:31):
years, so we've had a lot ofthe same questions over and over
again and this is what we doevery day.
But every once in a while I'mlike I got to look that one up a
everyone for submitting thequestions and can I be lead-off
hitter?
Speaker 2 (02:50):
Yeah, yeah.
And if you're watching here onYouTube, you're going to see
Matt and I doing a lot of kindof research in between questions
while Matt's covering somethingand I'm prepping for the next
one.
These are not easy questions,so some are, but, matt, you're
up to bat.
What do you got?
Speaker 3 (03:06):
Okay, lead off hitter .
This question is from Dave.
Dave said do most 401k plansallow for an after-tax
contribution and in-servicedistribution so that I can do
the mega backdoor Roth strategy?
For those of you that don'tknow what the mega backdoor Roth
is, this is a way if you have a401k plan maybe this is your
employer you work at incorporate America in your day
(03:28):
job We'll get to a solo K herein a second, but let's talk
about your 401k at your day job.
You can put up to $69,000 ayear into that account If it
allows for an after-taxcontribution which you can roll
out and do what's called thismega backdoor Roth strategy.
Now what Dave's asking here ishey, but I have to do an
(03:50):
after-tax contribution in orderto let this strategy work.
Do most 401k plans allow that?
Great question.
Vanguard did a study on that in2024, and they came out and
said about 25% of 401k plans inthe US allow for an after-tax
contribution, which is whatenables this mega backdoor Roth
(04:13):
strategy.
So short answer here is Dave,about a fourth of the 401k plans
out there allow for thisafter-tax contribution that
enables this mega backdoor Rothstrategy.
So you want to check with yourcompany's 401k whether they
allow for it or not.
For you business owners that arelike well, I own the business,
I'll just allow it in my 401k.
The mega backdoor Roth doesn'twork for you business owners
(04:35):
that own your own business.
There's a snag in that.
Unfortunately, for solo Kowners, where you don't have
other employees, it's just youor business partners, you can do
the mega backdoor Roth, and oursolo 401k plan certainly allows
for after-tax contributions, soyou can execute that with a
solo 401k.
So a little detailed, nerdyquestion there.
Loved it, though, dave, becausewe do love the mega backdoor
(04:56):
Roth strategy and, by the way,it is alive and well.
I saw a lot of Yahoo's onYouTube posting videos saying
the backdoor Roth is gone.
The mega backdoor Roth is gone,and those idiots were talking
about build back better billthat never passed when Joe Biden
was in office.
They didn't realize the otherBBB big beautiful bill was a
different law that actuallypassed.
(05:17):
So careful who you get youradvice from, particularly people
with zero credentials onYouTube trying to give you tax
advice.
We're actually taxed lawyers,so we know what we're talking
about.
Those strategies are alive andwell.
Speaker 2 (05:28):
Yeah, and if you go to Grok or ChatGBT and put in
what was the rule under BBB, youwill get the bill back better.
So I want to remind all of youthe actual bill name is the one
big beautiful bill.
So you put in there, let itstart with the letter O.
And, by the way, I am holdingit right here, the entire bill,
(05:52):
double-sided bill, the act, andit's a monster.
I think I got my social mediamanager in the house, jolie
helped me get this thing printed, so it was funny.
When I went to Kinko's to pickit up, I was like, oh, I got to
pick this up and they're likegeez, what the hell is this?
I go oh, this is the bigbeautiful bill.
And everybody in the whole,there was a waiting line.
(06:15):
You know, waiting in line,that's it.
I go, this is it, this is whatit looks like.
And it was like oh, my gosh,you know.
And they were like can I lookat it?
And it was kind of cool.
You know people are like neverseen a bill and how big it
really was.
Yeah, yeah, kind of fun.
Speaker 3 (06:28):
All right, I thought you were like a senator or
congressman having a vote onthis thing or something right.
Speaker 2 (06:33):
And you're like oh, we voted on that last week.
I guess I better read it pen atthe King Ghost table and a desk,
all right.
Well, this next question isfrom Collins M13.
Now he says.
He asks does the IRS cap totalfirst year depreciation at
(06:58):
$11,600 per vehicle?
This is what my accountant toldme.
Everything I've researched saidin 2024, I could deduct 12,400,
plus the 8,000 of bonusdepreciation is my vehicle is
less than a 6,000 pound vehicletruck, so he's got dealing with
an auto and for a total of20,400.
Is this true about first yeardepreciation limits?
(07:20):
I'm considering amending my taxreturn.
I don't know what to do.
Is this inaccurate or accurate?
And he says, finally, I'mconsidering amending my tax
return.
I don't know what to do.
Is this inaccurate or accurate?
And he says, finally, I'mactively looking to switch to
someone in the Mark Kohler TaxPro Network.
And thank you, colin, we wouldlove to have you.
We have a network of over athousand accountants that have
been trained by Matt and I inour Main Street Tax Pro
(07:41):
certification, where we try tobe on the cutting edge and be on
the same page, frankly.
So on this question, this is agood one, colin.
Yeah, your accountant was right.
For 2023, sorry, the limit was$11,600 in 2023, plus you got
the $8,000 bonus kicker.
(08:04):
Plus you got the $8,000 bonuskicker.
So that was 2023.
In 2024, it is 12,400 plus8,000.
And you were correct.
So that's a total of 20,400 in2024.
This year, everybody, the firstyear depreciation limit for
vehicles.
Now, again, if you've got a6,000 pound greater vehicle,
(08:25):
it's a whole other equation is12,200 plus bonus, matt.
It went down.
So it's very fascinating thatmaybe it's fuel costs going down
.
The depreciation limit actuallywas adjusted downward in 2025.
Now, with that, said everybody,this is a great question, to
(08:46):
downward in 2025.
Now, with that, said everybody,this is a great question.
Just because you can do itdoesn't mean you should.
How many of you 21-year-oldshave faced that one right?
So let's be careful, because wehear about bonus depreciation.
I got to take bonus.
I got to do it.
It's in the big beautiful bill.
No, you got to think, should I?
So I'm just going to quicklysay this when you look at a
vehicle, say, am I going to puton more miles than if I went
(09:11):
with mileage deduction?
I might get more bang for mybuck, rather than going with gas
fuel repairs and maintenanceand depreciation because there's
going to be a limit anddepreciation, because there's
going to be a limit.
So if you buy a $40,000 vehicle, the most you can write off the
depreciation in year one is$20,400 plus your fuel.
Well, if you're going to burn abunch of miles in the first
(09:34):
couple of years maybe threeyears, if you're a realtor,
you're on the road a lot, youmight put on 20,000 miles and
your deduction could be wellover $12,000, $13,000 a year.
In two years you've surpassedwhat you've gotten with actual
doing bonus.
So just because you can do itdoesn't mean you should.
Now, last thing I'll say.
This is that limit is after youlook at business use percentage
(09:57):
.
So let's say that realtor outthere says I got one vehicle I'm
cranking, I'm out there.
It could be Uber.
You could be an Uber driver andsay I'm going to be using it
10% or 20% for personal use.
I only have one vehicle.
So 10% to 20%.
Going to the grocery store andout to the movies and up to the
lake on the weekend.
Okay, so 80% business use.
(10:18):
So if I buy that same vehiclefor $40,000, new or used, cash
or credit, doesn't matter I haveto take off 20% for personal
use.
So that would be, in thatexample, $40,000.
I would take off $8,000.
So now my depreciable basis is$32,000.
So in the first year I mightwrite off $20,000.
I've only got another $10,000or so to write off in year two.
(10:39):
So then it's just fuel.
You're going to put on a lot ofmiles by year.
Three bonus would have screwedyou.
So be careful, be looking atyour use, the cost of the car
and the amount of miles and tryto project.
And, by the way, once youchoose your method, you're stuck
with it.
So this is why a tax advisormight help you through that
(11:00):
process.
Great question, colin.
Wish you the best.
Speaker 3 (11:03):
Dang awesome tip Love that.
So help you through thatprocess.
Great question, colin.
Wish you the best.
Dang Awesome tip Love that.
So good, so well said.
It's actually kind of a trickyanalysis there, and some good
rules of thumb are like theexpensive car right, you may
want to that you don't drive alot of miles Maybe, but then you
go with the.
Speaker 2 (11:17):
L word lease it, ooh, lease it.
There you go.
See, I'm going to go with the80% of the lease payment because
I'm not going to put on a bunchof miles and I'm going to kick
it back in three years anyway.
High value cars I like thelease method.
Speaker 3 (11:29):
I was going to say the low value cars with high
miles.
We're doing mileage?
Oh, absolutely, yeah, rule ofthumb, yeah, yeah, um, great
question.
Uh, incredible answer.
Mark J Kohler.
All right, here's this one'sfrom.
I don't even know if I can dothis name, yan Zizo.
I don't know, this has got tobe a.
(11:49):
This is a terrible handle, yan.
I'm just going to go with that,all right.
Yan's question is I have aMaryland LLC and a Pennsylvania
LLC that hold title to rentalproperties.
They are single member LLCs toa Wyoming LLC.
I presume this means yourWyoming LLC owns the Maryland
LLC and it owns the PennsylvaniaLLC, and those LLCs own their
(12:09):
respective rental properties inthose states.
Question is when it comes to taxfiling time, how many 1065
returns should I file?
Do I need to file anything forthe Maryland and PA LLC?
Great question, let's go workbackwards on this.
Jan, if you have an LLC for arental property in Maryland,
you're going to need to befiling a tax return in Maryland
(12:31):
Now.
Whether this is a 1065 or thisis your personal return getting
filed in Maryland, it doesn'tmatter.
Something's going to need toget filed in Maryland Now.
Maybe you live in Maryland, soyou're already filing and I'm
not worried about it.
But if you have a rentalproperty in Pennsylvania for
this Pennsylvania LLC, you'regoing to also need to be filing
a state return into Pennsylvaniafor that property.
(12:52):
So there's going to be a statefiling, not because of the LLCs
necessarily or not because of a1065, but because you have
rental properties in thosestates.
If these are single member,which I'm assuming they are here
that's what you said.
The Maryland LLC andPennsylvania LLC is single
member.
I'm assuming the Wyoming LLC issingle member here.
We'll come back to that in asecond.
(13:13):
Everything's just flowing onyour 1040.
There is no 1065 LLC orpartnership return being filed.
This is simply going on yourpersonal return.
But you'll also need to file astate return into Maryland or
Pennsylvania if you don'talready live in one of those
states.
So yes, there's going to needto be something filed in
Maryland and Pennsylvania.
I just don't know if it's theLLC level because single member
(13:34):
LLCs there's no tax return filedto the IRS.
Everything's flowing down ontoyour personal return.
Now, if that Wyoming LLC is apartnership, maybe this Wyoming
LLC that owns the Pennsylvaniaand Maryland LLCs that owns the
rental property.
Okay, we're working down hereIf that Wyoming LLC is a
(13:55):
partnership, then it would befiling a 1065 partnership return
, all right, and then that wouldbe flowing obviously down to
your 1040 as well.
Speaker 2 (14:05):
Great answer, matt Love it.
I can't add or take away fromthat.
Do I hit a gavel?
Done, there you go.
So let it be done.
So ordered, so ordered, allright, okay.
Brian Cato 69.
This is a tough one.
I'm going to try to hit thehighlights quickly.
Speaker 3 (14:26):
I hope Brian was born in the year 1969.
I hope that's what that's about.
Speaker 2 (14:30):
You know, usually that'd be something I'd say you
let that ride, you didn't eventouch it.
I've been trusting my insidevoice for way too long and after
three separate lawsuits Ithought I'm going to let it go,
okay, no, I'm just joking.
No lawsuits, all right.
Okay.
Patty says yeah, you have thatinside voice moment.
(14:51):
That's the key to not say it.
But, matt, you got my back.
I love it today, I'll get yoursnext time, okay.
So Brian Cato 69 says hey guys,love the podcast.
Here's the question.
Three partners have equityownership in the same S
corporation.
The two founding partners have45% equity each and the most
recent partner was given 10%equity to come in and run sales.
(15:14):
The two founding partners havesalary of 90K.
The 10% partner has a salary of140 plus commissions.
The company is in growth modewith a plan to sell down the
road.
Love it.
Here's the question Can the twofounding partners limit their
reasonable comp to lower theirSocial Security and Medicare
taxes without having to do thesame for the minority owner who
(15:37):
really needs to work on the FICAissue?
I'm all same myself really needsto work on the FICA issue.
Seems like they could lowertheir pay salaries to maybe 40 K
and then bonus out the extra tolower their FICA.
Please advise.
All right, brian, you'rethrowing out some loaded
language there.
I don't want to do any bonusesper se, maybe in concept, but
all right, let's back up, brian,you're going to.
(15:59):
You're going to love thisanswer and you're going to hate
it.
You're in the wrong structure.
Whoever recommended an S-corpfor the three of you and didn't
fix this when you added yourlast partner?
That would have been a greattime to do it.
They just made it worse.
So if an accountant has talkedyou into this structure, I've
(16:25):
got a major.
I've got a major concern withthat accountant.
I would please recommend theyconsider joining our Main Street
Tax Pro certification andupgrade their knowledge on this
issue.
I literally have a chapter in mybook, in the Tax and Legal
Playbook, on how to structure apartnership.
I want you to read it.
You can get it on Amazon, brian, give it to your partners.
You guys need to get on thesame page because if one of you
goes to this accountant thatsold you this structure, that
(16:48):
account is going to find everyreason in the book to prove that
they're right and then you'regoing to have three partners
that start fighting.
I would recommend, before yougo to your accountant first
let's all get on the same pageget a second opinion, do your
homework and I'm going to tellyou what the answer is right now
, and then you can decide to goto your prior accountant Notice
how I said prior.
(17:09):
Go to that accountant and saydo you want to stay the current
or do you want to become theprior?
Because this is bad.
This has cost you thousands ofdollars for I don't know how
many years.
So here's the perfect structure,the perfect structure.
We've got to get there througha reorganization.
It may just be a few thousanddollars and you're going to save
(17:30):
that in taxes real quick.
We need an LLC for yourpartnership and each individual
partner has their own Scorporationporation.
Then they can regulate, dial up, dial down their salaries, have
other expenses they might wantto write off Auto travel, dining
, family board meetings,electronics, all sorts of
(17:51):
goodies at the individual levelwith their own S-Corp.
Right now, brian, you can'teven write off a trip to Florida
for a conference in this S-Corpbecause you are an employee
shareholder.
There is no unreimbursedemployee expense deduction on
your 1040.
And this is so bad in so manyways.
(18:12):
Let alone, you can't controlthe FICA without screwing up
your partnership compensationplan.
So what you want to do is areorg, create a new LLC, start
moving operations to that LLC,depending on your structure and
your business.
I know you can be doctors andhave Medicaid billing issues or
insurance.
You could be in a constructionscenario where you've got
(18:34):
vendors and suppliers using theEIN of this company.
I know sometimes it's easy tosay this, sometimes it's not,
but you want to get a new LLC,get S-Corps for everybody.
Start pushing out money thatdirection.
It's going to save youthousands in about four or five
different ways.
Get a consult with one of thetax lawyers at my office,
kkoslawyerscom.
(18:54):
They'll give you the plan.
They'll build your trifecta,they'll show you how it works.
Then we'll hand you, if youneed it, an incredible tax
advisor out of our network tohelp carry out the orders and
make it happen.
Then you circle back once ayear, just like your dentist.
You're going to come back tothe tax lawyer and go hey, by
the way, we added some rentals.
(19:14):
Or we're going to do this, orwe're going to do that.
Let's get our estate plans done.
This is how you build wealth.
This is how you build yourAmerican dream.
You've gotten some bad advice.
Let's get you turned around.
Get you into that structure.
Get over to kkoslawyerscom andget that second opinion of what
this should really look like.
Get a copy of my book, brian.
You're going to love it andyour intention is.
(19:36):
You're right on, spot right,spot on.
The FICA is out of control, solet's dial that in with a bunch
of other strategies.
You'll freaking love it.
Speaker 3 (19:44):
Yeah, and I just not to pile on here and that was an
awesome answer, mark.
But it's like Mark and I haveour own S corporations.
We are not partners in an Scorporation, we have an LLC,
basically a partnership entitythat employs the employees, that
receives the income, that paysthe business, it pays each of
our S corporations.
We do our salary and payourselves out of that structure.
(20:04):
We recommend it for a lot ofour clients.
That's what the smart peopleare doing because it works.
It's more efficient.
It might seem a little moreactually because you're like,
wait, there's more entities inthe mix, but it actually, once
you start operating and thebusiness is making some money,
it's so much better, it's moreefficient, it's less tax, it's a
better structure.
Okay question here.
This was from William.
(20:26):
William has a question aboutbusiness trust versus LLC.
This is a good one.
We used to get this one a lotmore.
William asks will setting up abusiness trust offer the same in
California rather than an LLC?
Will the trust need to pay the$800 tax to the franchise tax
(20:47):
board like an LLC would?
Great question, william.
This is a question so manypeople in California want the
answer to be the business trustis the same and you don't have
to pay $800 to the state ofCalifornia.
I know you want me to give youthat answer, william, but I'm
not, because there's no suchthing as a business trust in the
state of California.
I know you want me to give youthat answer, william, but I'm
not, because there's no suchthing as a business trust in the
state of California.
(21:07):
Tell me where in the code inthe state of California there is
a business trust?
There's not one.
Now a lot of people will pointto some opinion from the
franchise tax board that says,hey, business trusts don't have
to pay $800 because Californiadoesn't have them.
And I know there's other statesthat have business trusts.
I know that you can set up abusiness trust in those states
(21:28):
and then you can come toCalifornia and say, hey, I'm
operating in California withthis business trust, but in the
state of California, when you'rein court in California, there's
no law there that says you haveany liability protection.
But if you have an LLC in thestate of California, there's a
law there, and there's a law inall 50 states.
California has one for LLCsthat says, hey, if something
happens in this company, youhave a lawsuit against the LLC.
(21:50):
They're stuck there.
They can't come after youpersonally as the business owner
or the management of this LLC.
They're stuck at the LLC level.
There's not the same equivalentthing for a business trust in
the state of California.
I know you want it to be so.
We would set up tens ofthousands of these for our
clients in California if it werethe case.
We want that to be the case too, because you could pay us,
(22:11):
instead of sending theCalifornia franchise tax board,
800 bucks every year.
So I know I came off a littlehot on that, but I just don't
want you to fall into this trap.
Okay, We've had clients fallinto this.
The other problem I've seen withclients that actually have any
business of significance is youtry to go transact, you try to
go get a loan, you try to makean agreement with a large
(22:33):
company, you try to sell aproperty and you're done with
the title company.
They're going to be like whatthe hell do you have here in
California?
What is this business trust?
What the hell do you have herein California?
What is this business trust?
And you're like well, somebodyhad sold it to me at a holiday
inn and I, because they selltrusts and they have a document
for it and I and I bought it.
(22:53):
So it's not a substitute for theLLC.
I know you can get around the$800 franchise tax on it, but it
is not the same thing.
Most of the time you're usingsome document that has no
context with California law ormost state laws.
There's not many states thatoffer actually a business trust,
so be careful on that.
I would recommend just do theLLC suck up paying the 800 bucks
to the state of California.
(23:13):
You get to go to the beach onthe weekends, you have in and
out, you got HollywoodDisneyland, you know.
Just just chalk the 800 bucksup to that.
Speaker 2 (23:23):
Great answer, man, I love it.
I love it when Matt gets hot.
Speaker 3 (23:26):
I just you know this one.
Just I want you to be right,william, I really do.
Speaker 2 (23:30):
Yeah, yeah, you know, Matt almost dropped an F-bomb
in there, I could feel it.
You know a well-placed F-bomb,you know it can be respected.
Speaker 3 (23:39):
Yeah, you gotta.
I mean, you have to be measuredon them.
If you overdo them, they justdon't have effect.
Speaker 2 (23:44):
No, no, it was funny.
Donald Trump drops that F-bombbefore he jumped on a helicopter
out on the lawn Unbelievable, Imean, it was mic drop level.
And then it was funny, therewas a comedian saying you know,
I think I have a problemswearing because I just can't
say the F word anymore.
I have to add adjectives to itto really get the emphasis I
(24:06):
need, because I've blown it,I've used it too much.
So it's like mother, this, that, this, you know.
And I'm like okay, yeah, you'vegot a problem, let's just dial
it back.
You know, just bring it in.
Speaker 1 (24:16):
All right.
Speaker 2 (24:17):
Yeah, well, anyway, okay, anyway, okay Just another
good tip.
Speaker 3 (24:20):
You know, you didn't know you'd get that.
That's another good tip for anyof you on.
You know appropriate use of theF word.
Speaker 2 (24:24):
Yeah, that's right.
That's right.
Well, you dropped out with yourkids.
They're like Dad, are youserious?
Dad's pissed.
Yeah, I'm in trouble on severallevels.
All right, okay, this question'sfrom Becky.
This is a great question.
It's about a solo 401k, herS-corp and getting the maximum
contribution.
(24:45):
Now, becky, I'm going to turnyou around a little bit on this,
but you're going to love thisanswer.
At the end of the day, she saysI'm an S-corp and just set up
my directed IRA, solo 401k.
Congrats, she's in the familyhere.
Although I would love to hit the$69,000 cap which, by the way,
is $70,000 in 2025, I don'tthink I can get there.
(25:08):
I expect to bill between$230,000 and $300,000 this year.
What is the strategy forsplitting contributions into my
solo as an employer and employeecontribution?
And she says I expect to build233.
I'm not sure if she's thinkingthere, but that may be gross
(25:30):
revenue or in her business netprop, I don't know.
So we're not going to worryabout that.
Becky and everyone out thereDon't worry about Becky's total
income yet.
Let's just look at her goal,and her goal is I would like to
put away $70,000 in my 401k thisyear.
How do I get there, is herquestion and then she goes
(25:50):
through two or three points.
Well, do I do the employercontribution of 25% based on my
salary, and then that's going tobe $80,000, and then I add that
to the salary but then max outmy employee contribution after
that when my salary is 103,because I put that on top of the
80.
Becky, you're all turned aroundhere.
She goes there's some softwareout there that says Roth or
(26:12):
traditional and X dollars isemployee versus employee.
Okay, listen up.
And everybody here that has asolo 401k and an S corporation.
You are going to love thisanalysis.
Here's where I start.
Number one what is yourreasonable comp requirement
Meaning?
If you have an S corporation,you have to take a certain
(26:32):
amount of W-2 income, pay yourfair share of FICA to keep the
IRS happy.
I always want to know what thatfigure is first and see what
that gets us before we starttrying to play with our salary,
which we can.
But let's find out what ourbare minimum needs to be.
So in Becky's example, let'ssay she's going to net like a
(26:52):
net profit of her S corporationand she's going to pull out all
that money and live on itwhatever.
That's another issue foranother day but say she's going
to bring home 180 grand, okay,well, I'd want to at least peg
30 grand at 30%.
I would at least want to peg30% to salary.
So I'm going to go 60 grand onsalary and take the other 120 as
(27:13):
K1.
All right, then I'm going to askmy client how much do you want
to put in your 401k and whatwould make sense?
Have you already funded yourRoth IRA first?
Oh no, I haven't.
Have you already funded yourRoth IRA first?
Oh no, I haven't.
Have you already funded yourhealth savings account?
Oh no, I haven't.
Okay, well, let's kind of hitthe base hits and take some of
(27:33):
the easy things off the table.
So I would say, based on a$60,000 salary first, I would
love you to do your regular RothIRA, so seven grand.
In this example we're going toassume Becky's under age 55.
So she's going to do sevengrand in her Roth IRA.
Now, assuming she's married,she might be able to do over
eight grand.
If she's single, it'd be overfour grand.
(27:55):
But I'm going to say let's getthat health savings account
funded as well, which you canself-direct as also.
So let's take that seven togosh 14, 15 grand off the table
and get that put away.
Even with health savings accountI'll get a tax deduction With
the Roth.
I know I'm cranking awaytax-free.
Then I want to do you always doyour employee contribution or
(28:20):
deferral first.
So this year she could do$23,000.
Then we are going to stack theemployer piece on that, which is
25% of her 60 grand.
So right now we're at 38,000 inher 401k, 7,000 in her Roth IRA
and I'll just let's throw inanother five grand somewhere in
(28:42):
the middle for good measure inthe health savings account.
So right there, we're at 50K.
Now what I would recommend whenpossible for my clients is
they're going to go with RothIRA and Roth solo always,
because we know in the long runthat Roth is going to give us a
lot better bang for our buckwith tax-free growth and
tax-free withdrawals.
So I've got my four pieces hereput together the Roth, the HSA,
(29:07):
the employee deferral and thenthe company match On 60 grand of
salary.
I put away 50.
50 grand between those fourlittle pieces and I put it in a
little cylinder and stack themtogether pieces.
And I put it in a littlecylinder and stack them together
.
That's 50K.
(29:28):
Now if you want to do more, thenI've got to start taking more
FICA.
So if I add 20 grand of salary,I'm only going to get 25% in
employer match and so this FICA.
I'm going to be chasing acontribution after paying 15% in
FICA.
Sometimes that's not a goodapproach, so that's when the
(29:49):
real strategy goes to anotherlevel.
But I would stick with yourcurrent salary level.
What does it need to be?
How much could I put away withthat?
Make sure you always do yourRoth IRA and possible HSA in
that mix.
Do your employee deferral, theemployer match, then reevaluate.
You can ramp up your salaryfrom there and then decide from
(30:10):
there should I take more insalary just to get a deferral?
I don't know, that's going tobe very personalized.
Speaker 3 (30:17):
Yeah, I mean, that's so much tax advantage money
you're putting away right thereon such a little salary.
Only thing I would just add onthat too is if you're above 150K
single, 230K married, that RothIRA might need to be a backdoor
Roth IRA.
Just keep that in mind.
If you're usually putting away50K of money just from a living
(30:37):
and cost, you might be in thatcategory where your Roth IRA
needs to be a backdoor Roth IRA.
But don't believe any of thisnoise you might hear about.
Oh, high-income earners can'tdo Roth IRAs.
Yes, they can.
They just do the backdoor RothIRA.
Speaker 2 (30:51):
And let me just say you don't have to figure this
out with an online calculator onyour own.
Becky, you've done a great jobgetting to this point.
You know exactly what you want.
Do your comprehensive taxconsult with one of our tax
lawyers, have that annual review, look at this and 20 other
issues.
Make sure your structure'sdialed in.
Where are you at on your estateplan?
(31:12):
What about all your otherwrite-offs, your board meetings,
family members and blah, blah,blah.
This is just a piece of aquality plan that you could get
for two grand approximately hereat the law firm.
So please make an appointmentthe link's down below and then
we can help you choose thatright dollar amount and then get
you with a tax advisor.
(31:32):
That will add even more bellsand whistles throughout the year
.
Speaker 3 (31:36):
Awesome.
Speaker 2 (31:36):
All right next.
Speaker 3 (31:38):
Yeah, I got a question here from J Marm.
J Marm says Hi, can I do amulti-member IRA LLC in order to
simplify investments, includingmy children's Coverdell, my
solo K, their Roth IRA, mywife's Roth IRA and a personal
stake from myself in order toincrease money into the business
and, if this is permissible, ifI need to add more money in a
(32:02):
year and I add it personallywould I just have to restructure
the ownership percentage in thebooks?
Thanks, you guys rock.
All right.
Well, we got a yes and no here,james Arms.
The first part is absolutelyyou can combine Coverdell, solok
Roth IRA, your account, yourspouse's account, all into one
LLC.
You've all got to go in at thesame time and this is the
(32:24):
multi-member IRA LLC.
We break up the ownership inthat LLC based on those dollars
invested from the differentaccounts.
They'll have differentownership stake.
So like, let's say, you put$100,000 total in this LLC and
your Roth IRA, put in 10 grand,it would get 10%.
Right, your kids covered,they'll put in five grand,
they'd get 5%.
Now if you put in a personalstake as well, you can get
(32:46):
ownership personally in there.
Now you'll pay tax on thoseprofits when you get a K-1 from
this LLC.
That piece will be taxable thatyou personally own, versus the
tax advantage accounts hereyou've rattled off.
So yes, we can combine allthose different sources of funds
into one multi-member IRA LLCto go out and make specific
investments.
Now that's the benefit of themulti-member IRA LLC.
(33:10):
We can combine multipleaccounts and sources of funds
into one LLC to go makeinvestments.
The downside is ownership isfixed.
You cannot change ownershipbecause you own a Roth IRA.
You personally are in there,your kids' accounts are in there
.
When we change ownership, thatis, transferring ownership from
you to you personally or fromyour Roth IRA to your spouse's
(33:31):
Roth IRA.
Those are disqualified personsunder the rules.
We've got a whole Directed IRApodcast on this.
If you're like I'm not sure Iunderstand or following this,
this is about self-directed IRAsand prohibited transaction
rules.
We cannot change ownership inthose multi-member IRLCs because
it causes a prohibitedtransaction as we're
transferring ownership betweenwhat are called disqualified
(33:51):
persons.
So hopefully that makes sense,jim Arms.
So the nice thing is, yes, youcan form this LLC.
The ownership will be fixedthere, so we can't restructure
or change percentages later.
Now you could put more money innext year, but it's going to
need to follow the sameownership percentages as when
you formed it in the beginning.
Speaker 2 (34:10):
Great answer, matt, love it All right.
Well, this will be my lastquestion I'll take here today,
and this is from Jay Wepka,about an RV.
An RV Now.
Before I continue, pleaseanyone out there that is all of
a sudden thinking of all thesequestions that someone didn't
ask and you're like, oh my heck,I really would like to know
(34:32):
about X, y and Z.
Please go toMainStreetBusinessPodcastcom and
submit a question.
We would love to hear from youand we would actually like to do
more open forums and helpanswer these questions around
the country.
We love this engagement andit's just.
This is one of my favoriteshows to do.
I just love hearing from you.
So Jay says great content.
(34:53):
Guys new to the channel andjust listen to your RVer episode
.
I am a full-time RVer and decideto start a new business as a
mobile RV repair technician.
I'll spend part of the year ona family property, but the
question is when I travel southfor the winter, I plan on
working while I travel and Iassume mileage and fees to stay
(35:16):
at RV campgrounds are able to bewritten off.
Oh, if you can only wish it so,but the question is at what
percentage?
If there are days I don'tprovide any service work?
Can I park fees still where I'mwritten off?
Also, what about meals andgroceries?
Thank you Well, jay, good newsand bad news.
I'm always a glass half fullguy, so I'm going to start with
(35:37):
the good news.
First of all, jay, I love yourstyle here.
I'm living in an RV on a ranchthat we're starting to build out
this summer.
Patty and I are doing the RVlife campfires every night and
working with contractors anddirt movers and excavators.
It's a lot of fun and I lovethe RV lifestyle.
So I hope you're having fun.
(36:01):
But for those out there, there'sa big fork in the road on those
that have an RV parked on theside of their house and use it
occasionally and they don'trealize they're sitting on a
little gold mine right outsidethe door.
Maybe I'll go there for amoment.
But then we have the full-timeRVers that are like I sold the
house, blah, blah, blah, boughtan RV, new or used, fifth wheel,
(36:22):
whatever and we hit the openroad.
There's pros and cons.
So here's let me tell you thegood news you don't have a house
payment, you are not payingproperty taxes somewhere, you
are living with a lower cost ofliving overall, I'm sure.
And you're out there in theopen road going wherever your
gypsy heart wants to take you,and I just love it.
(36:44):
That's a lot of fun.
You're going to make money onthe road.
You're going to be able to taketax write-offs directly related
to your business.
But the con your RV is your home, it is your primary residence
and you can't write off the foodwhile you're out there.
You can't write off the RVitself.
(37:05):
It's your home.
You are simply moving yourpersonal residence around the
country and once you get there,those fees for the hookups and
the pad rental and blah, blah,blah those are for your home,
where you live.
Now I will take mileage to getwhere you're going.
I'm cool with that becauseyou're going to move to a new
(37:27):
place for your business.
It's not under the movingexpense category, it is fairly
aggressive.
But you have probably an Scorporation that you're going to
be using for your RV tech andrepair.
So just live with mileage andthat's it.
And repair, so just live withmileage and that's it.
Now, if you've got a fifthwheel going on, once you get
(37:50):
there and you unhook the truckand cruise around, we might be
able to ride off more of thetruck, but the RV is going to be
a hard one.
It's your home.
So last point if you are asticks and bricks think of the
three little pigs you've got asticks and bricks home and that
RV parked on the side.
Oh my gosh, you are sitting onso much opportunity because now
that becomes a business vehicle,a work truck, you're going to
go park it at the rentalproperties you're working on.
(38:11):
You're going to go park it atconferences you might be going
for your business.
Frankly, you're not even usingit for personally.
You're cruising around doingbusiness with it.
Think of a contractor thatparks an RV at their work sites.
That's what I want you doingwith your RV and you can put it
on Waverly and rent it out whenit's not being used by you.
(38:32):
You can then use it 14 days outof the year.
Personal use is still right of100% of it.
As long as you've got it onWaverly, you could be making
cash flow with that RV and usingit as 100 hundred percent
business vehicle and rentalproperty Amazing.
So look into that.
For those that have that RV onthe side of the house that
you're kind of regretting thatyou bought, let's put it to use
(38:54):
for you.
Full-time RVers.
Enjoy your benefits, but have alittle bit of a reality check
on how much you can write offwhile you're out there.
Speaker 3 (39:03):
I love it, God going A to Z for the RV owners out
there.
You know, Mark, he's living thedream right now Some RV
lifestyle.
Speaker 2 (39:12):
Matt's nightmare, my dream.
Speaker 3 (39:14):
Yeah, it's like my worst nightmare is Mark's dream.
That's the last place you'regoing to want to see me.
I just will not be happy.
Speaker 2 (39:22):
I've invited him out and I'm like we've got s'mores,
uh, and we got our you know sidefolding tables and a camp chair
, and uh, yeah, I've got alittle pond with 50 trout.
I had 50 trout delivered thisweek.
Oh, I'm, I'm, I'm in for that12.
Speaker 3 (39:38):
Oh my gosh, I'm allergic to trout.
I'm allergic to trout.
I did one of those blood tests,those food blood tests, and I
was like, and literally, troutwas on the list of like, and
wheat too.
That's more complicated.
Speaker 2 (39:54):
You can still catch them and release them.
Speaker 3 (39:56):
Yeah, it's all fun.
Speaker 2 (39:57):
I guess no more trout almondine for Matt.
Okay.
Speaker 3 (40:01):
Can you put something else in there?
Speaker 2 (40:03):
Well, I could.
I guess bass.
You know they're predatory,though I don't know.
I got it totally dialed in fortrout.
But you know, last night I justwent out there after sunset I
sat in my lawn chair.
I caught two rainbow.
Let them off.
I went swimming.
Okay, I can do that It'll catchand release Very relaxing.
Speaker 3 (40:21):
I'll eat your beef.
Speaker 2 (40:22):
You got cattle up there I got three Wagyu's
brewing.
They're going to be sweet.
Speaker 3 (40:28):
All right, I'm in for that Well, always a great hour
with Mark J Kohler here.
I've learned so much, somegreat, tangible tips.
I'm always learning on thispodcast.
But thank you everyone forsubmitting your questions.
Make sure you're sharing theshow with your friends and
family.
If you need any tax planningspecific advice, some
structuring all these tax legalquestions we were diving into,
(40:48):
our lawyers do this every dayfor clients across the country
at KQS Lawyers.
The Main Street Tax Pro Networkis an incredible resource to
you as well.
If you're like I need a newaccountant, I need someone
that'll help strategize with meand not just spit numbers into a
computer and spit out a returnat the end of the day.
So we're here for you.
We've got a lot of resources.
Thanks for being with you.
We'll see you next time.
Speaker 2 (41:09):
Thanks everyone.
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