December 20, 2024 • 47 mins
In this episode, Adam is joined by CPA Mike Rey from Jetstream to discuss essential end-of-year tax strategies tailored for pilots. They dive into the intricacies of tax preparation, including retirement accounts and the legality of backdoor Roth IRAs. The conversation highlights specific tax strategies for new airline pilots, financial transitions in aviation, and the benefits of Health Savings Accounts (HSAs). They also explore tax planning for pilots with real estate interests, considerations for short-term rentals, and the implications of state and federal taxes. The episode emphasizes the importance of professional financial advice and introduces the Jetstream Alpha community as a resource for pilots.
www.jetstream.cpa
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:16):
Hey, network.
Another episode of the Pilot Network podcastcoming back at you.
I'm your host, Adam.
Thank you so much for joining us on this end ofthe year closeout with Pilot Network
Podcasting.
2024 was very interesting of a year, especiallyfor me with my tax situation.
This was a new one.
I had a lot going on.
(00:38):
I switched accountants for the 3rd time in 3years because I was not happy with the last 2.
And I finally found somebody who got me, whogot what I did, not only in aviation, but in
real estate, having the pilot network, as abusiness, man, it was challenging for me to
figure out who to go to.
And, somebody just reached out, found me.
(01:01):
So, I did some due diligence, someinterviewing.
He came up to TPNX and I said, Oh yeah, this isthe guy.
He gets it.
Mike Ray from jet stream dot cpa.
Amazing human being.
Somebody that now I have to have full faith andconfidence in for the rest of my life because
he is such a, wonderful accountant that we'rekeeping him on for a long term.
(01:25):
Now okay.
That's all sales pitchy.
Right?
But I really, really, really like what he hasto say and what he taught me.
Okay?
Not only did he just do my taxes, but he taughtme about all the stuff that I have been, I
don't know, missing out on.
Anyways, I could go on and on, but you don'twanna hear from me.
You wanna hear about how you can save money onyour taxes.
(01:48):
Now the one thing I gotta say is do the wholethis is not financial advice.
If you need to if you need, financial advice,go and contact Mike at jet stream dot cpa.
He will get you through that.
So this podcast is meant as entertainment andinformation only for you out to go and do, your
(02:10):
due diligence.
So this is not meant as any financial tax orlegal advice.
Please contact your tax attorney or your CPA toget those things squared away.
Now that that's all done, let's listen to Mike.
Hope you enjoy.
Mike, welcome to the pilot network podcast.
(02:31):
Mike is a kind of a newfound friend.
Came up to t p n x.
We we we chatted, and next thing I know, he'smy accountant.
So thanks for joining us today, Mike.
We're gonna get right into it because we have awhole another podcast that's gonna come up much
later, don't we, about, your what you do, whatyour day job is as opposed to what, we're
talking about today.
(02:53):
Mike's a dispatcher, and we wanna get into theworld of dispatch at a later time.
But with the end of the year coming up, theholiday season, upon us, it's time to look
forward to what we all have to start doing onJanuary 1st, and that's get ready, get our
start putting our taxes in order.
Right, Mike?
That is correct.
So I figured we'd have Mike on to talkdirectly, to airline pile and, well, aviation,
(03:20):
folks in general, but it really hits on theairline pilot stuff hard.
And so for those of you out there who are, thisis gonna help a little bit.
And for those of you out there that are not,this will help, when you move and make them.
Now to caveat all that or to put a nice bigbanner, this is not tax, legal, or financial
advice from the pilot network, myself, Adam, orMike Ray.
(03:41):
What it is is just fun little tips and tricksthat, Mike knows.
And if you need that tax legal, or financialadvice, you need to get, get ahold of him
directly at jetstream.cba.
Did I do that right?
That's correct.
Oh, look at me, man.
I'm on fire today.
There you go, man.
If you have real questions and you wanna startlooking at this stuff in-depth, have a meeting
(04:04):
so you can actually prepare yourself in thefuture and not get your, tax, legal, or
financial advice from any podcast, which youshould never do, is you need
The only TikTok.
That's the only legal source.
Yeah.
That's the only TikTok's the only legal source.
Right?
Right?
We we kid.
Get out there and make these direct connectionsbecause it's a pilot network.
We talk about networking all the time, and thisis how we do that.
(04:25):
So I'm gonna let Mike go.
Let's let Mike, let's just get into the the thebasics here.
Let's start, you know, let's crawl then walk,and then we'll we'll start running towards the
head.
So what what's the first thing you wanna tellpeople out there as we approach the end of the
year that they can start doing to to mostefficiently make their time, valuable as they
get ready for the 2025, fiscal year?
(04:47):
Yeah.
So to start off, like, you know, the big itemsthat you're gonna hear so many other tax
professionals address, but it's because it's soimportant.
It's, you know, at the very least with your 401k is getting that match.
Right?
It's, like, it's free money.
So it's one of those where if you haven'talready done, I don't know, maybe you forgot or
(05:10):
maybe it was one of those things that you puton pause and never reactivated.
Like, double check.
Make sure that those 401 k withholdings are inplace and that you're getting that match
because that is, like, the easiest way to getsome extra free money.
Right?
So in terms of whether it's a traditional orRoth, that's gonna depend on on your your
airline or your company, but that's far andaway probably number 1.
(05:34):
I'm always gonna issue for that one.
Like so then next up or anything on that one?
I mean, it's pretty straightforward.
Right?
Yeah.
It's pretty straightforward.
Yeah.
So next up is going to be IRAs.
Again, another retirement account.
With the IRAs, you have it's a little morenuanced, but it's not terrible.
(05:55):
You have your traditional on your Roth, and youhave something called the backdoor Roth IRA.
And so a lot of this is gonna depend on yourincome, your filing status, and things like
that.
Right?
So, I'm a huge proponent of anything Roth.
And I know there's always gonna be argumentswith, like, well, you know, the traditional
makes more sense because, if you're in thehigher income, because you're not you know,
(06:20):
you're gonna be on a lower tax bracket later.
Right?
So the main two difference between thetraditional Roth is when you're paying your
taxes.
I like to, for me, personally, I guess, just anindividual, not even a tax for anything.
I like to take a step back and see, like, whatis the, like, easiest and, like, what's the,
like, most straightforward thing?
And for me, the Roth just is it's great in thesense of you don't once you put that money in,
(06:46):
you've paid tax, you don't have to worry aboutthat later on.
You don't have to worry about making theserequired minimum distributions that are gonna
be necessary on your on traditional IRAs.
Right?
And and so I don't know.
Like, for me, yes.
If you really are in a super high income, taxbracket and there's a you know, where that
planning really comes into play,
(07:08):
yeah.
Sit down.
Take a look at those numbers.
But I tend to lean on the side of, you know,just pay the piper now and don't you won't have
to worry about it later.
Like, the last thing I wanna do in retirementis be like, woah.
Let me make sure I'm not withdrawing too muchso I don't put myself in the next tax bracket
and things like that.
So, again, it's gonna vary based on theindividual, but something to keep in mind.
(07:35):
For most listeners, I'm you know, one thing Iknow about this podcast and this, a lot of the
people that listen to this, they also listen toother ones like Passive Income Pilots with Tate
and Ryan and, you know, pilot finance money.
I think it's Timothy Pope's one.
But, the your audience, for the most part, ispretty familiar with your traditional Roth, and
(07:56):
they may have most of them might know or mayhave heard of the backdoor Roth.
Right?
And that's one where backdoor Roth is gonna beone where, like, if you're making too much
money first, congratulations.
That's a great problem to have.
But, the backdoor Roth is a way of contributingafter tax money into a traditional IRA and then
(08:17):
converting it to a Roth.
So you've already paid tax on this money, andyou're moving it over to a Roth IRA, which will
grow and you can withdraw tax free.
And the one big thing that comes about the, theRoth IRA, people kinda get worried.
Right?
Like, well, is this legal?
Is this tax fraud?
Am Am I gonna get audited?
(08:38):
And the answer is no.
Like, this is a 100% legal.
Like, there's been IRS rulings on this.
Like, it is it's a great strategy.
And so, there's certain steps you have to do interms of getting that process rolling.
The one big thing I am gonna say regarding thatthat tends to be missed for the backdoor Roth
(09:03):
IRA, there's a specific form.
It's form 8606 that needs to be filed.
That's where working with an accountant willhelp is making sure all that is all tidied up
and good to go.
But, it is, it's the second tip in termsespecially for the higher higher income earners
is, you know, your 401 k match and then the,the IRAs and stuff like that.
(09:26):
So, those are the first two.
Any questions on those?
No.
So yeah.
No real questions.
I think the the idea here is for the and thethe I'm I'm hoping that most of the folks my
age and older have already taken care of allthat stuff.
They Yeah.
They know at least the they either are doing itor they know, like, I've never done the
backdoor Roth,
(09:47):
for other yet.
Yeah.
Not yet.
That we've
discussed, many times in person or in not onlyin person, but, in our, in our interactions as
I was getting my taxes ready to file.
Because I I'm looking at I have alternativeinvestments that I'm doing right now.
And to pay the taxes on what I've alreadycontributed to then roll over is, it's it's a
(10:12):
burden that I'm not ready to take on.
However, that doesn't mean I'm not going to doin the future.
And and that's the nice part is these arethings aside from the initial making sure that
you have the match, for those of you out therewho have that program and capability, for those
of you who have that, and then for those of youwho can still do Roth IRAs, or if you need to
(10:34):
set up an an IRA for yourself outside of that,I'd I'd I've never really figured out why you
do a traditional or a Roth.
I mean, I guess maybe you want a lower taxburden early, but I again, not really sure why
as opposed to have I like free money at the endbecause, compounding interest is a beautiful
thing and, to let it grow for especially someof you out there who are hearing this for 40
(10:57):
years, that's gonna make quite a difference.
So, and then that backdoor Roth, I think orbackdoor, the backdoor Roth conversion, stuff
like that.
Those are definitely the the crawling Mhmm.
Ways to get into this.
Yeah.
Now our next phase is, and I think one of thequestions I have is it is challenging for
(11:20):
somebody who gets into the airline industry,starts making a very good living to be able to
find ways to, you know, they're saving fortheir retirement.
And if that's all they're doing, they'reprobably gonna be okay.
Yeah.
But to lessen your tax burden legally, there isit starts to become a challenge.
(11:41):
Can we go into some of that stuff on some ofthe basics?
If there is something that if not, we can justmove on to the next kinda next question I have
on
my mind.
Absolutely.
And so, in terms of, like, you know, reducingthat tax liability today, I'm actually gonna
start with, one that might apply more to theindividuals that are just starting off in the
(12:02):
industry, and that's going to be the studentloan interest deduction.
So that one, I really like because even if youdo the standard deduction, which most of us are
gonna be doing especially early on, unless youhave, like, a lot of interest on a on a house,
then maybe you're itemizing.
But from what I've seen, most people are takingthat standard deduction early on.
(12:23):
Right?
The student loan interest deduction, it's a maxof of 2,500, and you can do it even if you're
taking the standard.
There are income, limits and phase outs.
But, essentially, what that ends up doing isit's it's it's a deduction on it's it's a
second deduction.
Right?
Those are rare when you're taking a standard.
(12:46):
And the reason I wanna bring it up now isbecause if you look at the past years, for a
lot of us, that have student loans, whetherfrom flight training or from the university,
whatever that happens to be, first, you know,you know, make sure it's a qualified, student
loan.
But if it's coming towards the end of the yearand you log in and you see, hey.
I've got some accrued interest there that'sreally it's not growing because of the federal
(13:08):
pause on it, but, you know, I have some money Iset aside that I can go ahead and pay on this
student loan.
That's gonna be an immediate tax benefit that'sgonna lower your tax bill.
And so that is one that I don't see talkedabout too much that has a a a real potential
there.
Especially, I would even argue, like again,there are income phase out limits.
(13:29):
I think I'm looking at it right now.
It's, 75,000 for single, a 155 for marriedfiling jointly.
Again, don't take my word on those numbers, forright now.
It's just from when I when I initially looked.
But but like I said, maybe you're wrapping up aCFI or starting 1st year FO or something like
(13:49):
that, and, like, you you're falling below thesenumbers and you're like, hey.
I I do have some this money that I was eithergonna keep saving or pay off, the student loan.
Like, that's an incentive to to pay that extrainterest off on your student loans even though
it's not required right now.
No.
That makes that makes great sense, like, to I'mbecause I'm a big believer in, you know, debt
(14:10):
debt free is a great way to live because it'svery it's stress free.
Yeah.
The
other thing that's kinda cool is, to to be ableto do that.
I remember when I paid off my my student loans.
It seems like forever going out.
But to be able to take that and, one, you get II'm sure I got a small tax break on that, as a
(14:32):
deduction because I I know I did it.
But then I was able to take that money andreinvest it somehow, put it towards something
else because I kinda looked at that, studentloan as an investment in myself and an
education going forward.
And I was like, well, now I'm I'm paying thatoff.
I might as well just put that money towardssomething else that's going to pay off for me
in the long term and not just go out and, youknow, spend it on whatever.
(14:55):
Have fun.
Blah blah blah.
Hey.
That's always good.
I like doing that too.
But, you now you have that option.
And I totally agree with the idea of if you canget a larger deduction because you put more of
a chunk of something at, like, a student loan,and you're able to wipe that out and be able to
receive a little bit more of a break for that,there that's a win win, and it and it's a very
(15:19):
hard argument to make.
Why not do that in, in that in that time frame?
Absolutely.
So I think and that that definitely goes to alot of our younger, listeners out there or
listeners younger age wise, but younger in theaviation.
Yeah.
Exactly.
Because it's it's the the there's nuance there.
Right?
Uh-huh.
So okay.
So now now I feel like we're starting to walkjust a little bit because we're starting to
(15:41):
okay.
Nah.
That's a little bit of in the weeds.
So I am a, I'm a I'm a new FO or not even I'mI'm brand maybe I'm a new FO.
Look Yeah.
But I'm getting out of the military.
Dude, I don't know.
I just filled up my tax stuff.
Mhmm.
Let it go for however long I was in themilitary.
And now I'm starting off with this new job.
Mhmm.
(16:02):
I have no idea how I should be filing.
I've got a wife and 2 kids.
You know, I I I got paid x amount of dollarsevery month.
I had my housing was paid for.
I got all this stuff tax free from thegovernment.
Mhmm.
And, it was awesome, and I had this minimum,salary.
Well, now I'm, an airline pilot, and none ofthat stuff except for my per diem.
(16:25):
And everything else is has some sort of tax,piece to it that I don't necessarily understand
from before.
Yeah.
How should I start to be looking at that maybeif I'm going to be starting a new job here?
Or if I just did, it's the end of the year.
How should I fill out that tax work?
Again, this is not tax legal or financialadvice from the pilot network or myself or
(16:46):
Mike.
You have to contact Mike at jet stream dot CPAif you want more.
But, like, if I were to do this, you're talkingto me directly.
I mean, I new job.
What what would be a a good starting point so Ican, you know, then tweak my numbers and base
stuff off of that afterwards?
So a good starting point is if if you have anaccountant, it's it's and I'm gonna talk about
(17:09):
this more later on, but it's it's periodiccheck ins.
And those check ins include providing yourlatest pay stub because then, you can do this
yourself as well as go online, look for one ofthose income tax calculators.
You show, what you wanna look for on on yourpay stub is your federal income tax wages.
Like, there's the gross wages, then there's thetaxable wages.
(17:31):
So you might have certain deductions thatreduce that.
And so you plug those numbers in, and you cansee kind of more or less, like, what you're
gonna be owing in taxes.
And so if you if right off the bat, you seeyou're getting a large refund, it's like, okay.
Maybe I don't have to withhold so much.
Or maybe it's one of those things where, you'rein the negatives, like you're gonna be owing.
It's like, okay.
(17:51):
I gotta bump these contributions, thesewithholdings up.
So that's something that I would I highlyencourage, like, throughout the year.
I'm not saying you have to do it every week orevery paycheck, but maybe maybe once a quarter,
maybe at the halfway point.
That's probably step 1 because that'sultimately the amount that's being withheld is
(18:12):
ultimately what's applied to, for the taxreturns.
So checking on that, and then in terms ofminimizing the actual taxes owed, it's it's
it's a lot of these strategies, especially forfor somebody who is either coming out of the
military or just getting out of, becoming aCFI, it's, it's taking advantage of a lot of
(18:35):
the work, benefits.
Right?
Again, even your health insurance, and which isis what I'm gonna be talking about next is
actually the if you have let's say you have theoption of doing an HSA through a high
deductible, program at work or you have a PPO.
Let's say you're, you know, relatively healthy,like, you know, really don't go to the doctor
(19:00):
often.
I would argue genuinely consider the HSA slashhigh deductible health plan because that HSA
has, like, a triple tax benefit.
It's like the best of, like, you know, 4 o onek's, IRAs.
I mean, the 4 zero one k because you might geta match.
But besides that, like, the HSA, the triple taxbenefit is that money goes in tax deferred.
(19:24):
So, like like, if you're putting a $100 in,round numbers, that's a $100 less in taxes that
you're paying up front.
The money grows tax free.
And then whenever you take that money out forqualified medical expenses, it's not taxable.
So it's a triple tax benefit there.
Now the key with the HSA and and one that isreally game changer is, let's say, you do have
(19:51):
medical expenses come up.
I would personally argue, try to pay that outof your own pocket and let the HSA continue to
grow.
And when I say grow, it's because the HSA is anaccount that you can invest in stocks and
bonds.
And especially if you have a a self directed,which kinda wanna I'll bring come back to that
(20:11):
later in terms of IRAs, but self directed, HSAsand IRAs, like, then you can start investing in
everything, in real estate, in crypto, and thiscontinues to grow tax free.
And so let's say medical expenses come up overthe next 5 years.
You save those receipts.
Right?
Because later on, when you wanna take moneyout, now you have these medical receipts that
(20:36):
you can be like, I'm taking it out based onthis.
You're able to take that money out tax free.
The the key is to let it grow as much aspossible.
Right?
Like, keep letting it grow and, like but it issuch a powerful account.
And I know for, especially military, thatreally isn't an option, the high deductible.
Like so once you're coming into the world ofairlines or charters or whatever it is, that if
(21:02):
that's an option and you feel, let's say it'snot even tax or legal, financial, or health
advice at this point.
Right?
Like, all 4 of them.
This is not.
But if you're at a spot where you're like, youknow, I feel comfortable with, like, with my my
health situation.
I'm okay doing that.
Absolutely do that.
Like, that is one that, like, dig into it alittle more.
Do do your research.
(21:22):
Talk with a with a professional.
But, like, you're so that's such a huge taxbenefit there that, is another one that's not
really talked about too much.
Yeah.
I
think I've seen it more lately, but yeah.
Another, another piece of that that's veryinteresting is, my company, so most airlines
(21:42):
have profit sharing of some of some level.
Mhmm.
And when, you get your profit sharing check, alot of times you can either, pension it, I.
E.
Put it in your 401 k.
Mhmm.
Or you can match day.
And, if you have a high deductible plan like wedo, we have a, I think, a mid deductible plan
It's pretty high.
(22:04):
But, you can pretty much max out your HSA Mhmm.
With with with your profit sharing check, whichbasically means it's done for the year or 2 on
top of it.
And you're that's just extra money that youdidn't even know.
I mean, you There you go.
Fees.
So that's another really great way to justknock it out, be done, and then have that money
in the future.
(22:25):
And I I can't I, this year was a kind of a highexpense year for us, with the daughter going
through surgery and some other stuff like thatgoing on.
So all those receipts are saved for futureexpenditures down the road to be able to pull
out of the HSA and use that money to pay off,what was our expense earlier on.
So And here's
the other point that you I I wanna bring up aswell with with the with the, health insurance
(22:49):
is that every year when your open enrollmentcomes around, you can change.
You don't lose your HSA just because youswitched to a different plan.
So, like, if you have a bunch of surgeriescoming up next, like, year where it's, you
know, it's not like it needs to be done today.
But, like, let's say, you know, next year, Ihave a feeling we're gonna be doing a lot of
dental work.
We're gonna be doing a lot of business andthat.
Go ahead and switch the plan for next year.
(23:10):
You don't get to contribute to the HSA, butthen your deductibles and your out of pockets
are lower.
And so then you kind of hit that hard.
And then the year after that, you come back tothe HSA.
And so, that's one strategy there as well.
It's it's kind of a little bit of planning.
Like, obviously, you can't plan too much for,like
Emergencies, but you can't like, if you're ifyou're if you're getting a knee replacement
(23:33):
Mhmm.
And you know that you're getting it in Februaryof 2025, well Yeah.
You're enrollment season right now, so youmight as well shift your plan a little bit
because you you were planning to do it anyways.
Again, not health legal tax or financialadviser.
There you go.
Adam Yuan and the pilot network or basicallyanybody involved with this show.
It's just a bunch of dudes talking about moneyand, how to save a little bit for themselves so
(23:55):
they can retire, when they want.
Exactly.
So okay.
So we've got a little bit about how we're nowmaximizing and how
I wanna throw one more thing about these.
The,
so for we had we talked high deductible HSA.
If you have, like, a PPO or something likethat, the other the one there is the FSA.
That one is good, especially because in thisscenario that we were talking about, we're
(24:16):
like, well, we know we have these expensescoming up.
Start start, padding that up as well becausethat is a tax deductible account.
So, you know, I I tend to max out my so I don'thave the option for a high deductible where I'm
at currently.
But because of certain health things, like, Iknow that I'm gonna need this money, and so
I'll max that out, and that lowers my taxableincome.
(24:38):
But if you're somebody but here's the thingwith the FSA is that it's a use it or lose it.
So if you're somebody who puts a few thousandin there and never goes to the doctor or
whatever, you have that potential to lose it.
Like, you can buy certain things at the end ofthe year through h FSA funds.
But my rule of thumb is, like, pad it up if youknow you're gonna be having some big medical
(24:59):
expenses.
Yeah.
Great point.
So for guys and gals in my position who havelittle kids, you know that if you put a $1,000
in there for the year, you're gonna use it.
Oh, yeah.
Because you have little kids.
You're gonna be going to the doctor.
And each doctor visit is somewhere between $75a150 depending on where you're at and what
you're doing.
(25:21):
And that's in that's in my neck of the woods.
It's a lot more in other places.
I'm I'm quite certain.
But those are some bay the so this is kind ofcovering some basics.
So Yeah.
We're walking through the woods in our on ourtax journey here.
Now getting to that Sorry.
No.
It's alright.
And this is where, this is where things get Imean, there is some PhD level stuff that we're
(25:45):
not gonna even look into.
I mean, I'm currently looking at a a highlevel, tax plan to best put some of my real
estate work into Mhmm.
The way we do business network and all thatstuff.
And and when I have an idea of how to actuallyput this together correctly, I'm going to
(26:05):
approach Mike with the ideas and the plan thatI have because to me, as I have heard many
times, some of this stuff sounds, you know,illegal.
I mean, the first time I heard of a megabackdoor Roth, I was like, that's now I'm much
further along than that kid was who knew that.
So now I know that some of the stuff is notillegal and not only not illegal, it's
(26:26):
actually, accomplished by lots of differentpeople that are out there.
And upheld in court.
Like, the IRS literally says, yeah.
You can do this.
And so you have a ruling that says, yeah.
Go for it.
Yeah.
So so if we're getting into the run phase now,we're starting to move to that next level.
I want to best maximize what I'm doing as maybeI have I've got my airline job.
(26:49):
I've been doing it for a decade or so.
I'm, you know, I'm a captain or international.
Whatever.
I'm making really good money.
Yeah.
I'm not we'll use my example.
My spouse is is currently, not employed outsidethe house.
Mhmm.
I have a, I'm I'm I've got I get a k nine fromthe pilot network as a business owner, which we
(27:09):
know, we've seen doesn't, actually generatemuch, in value to the bottom line.
For me personally, yeah, you can't sayanything, but I can.
But it is it is a business that I do spendpersonal funds on to make sure things work.
Lights stay on the house.
That kind I have my own I have my own booth, myoffice, stuff like that.
Mhmm.
(27:29):
And then also, I have real estate interestboth, active properties that I that I own as
well as being in, shameless plug for TurbanCapital, and Tate and Ryan's, wonderful
business that they're putting together.
Yeah.
I'm
doing real estate syndications, which I getcanine and tax benefits from there.
So if we're at that level or we're beyond thatlevel, now the people who are beyond that on
(27:53):
500 rental properties, this podcast, they don't
need it.
Yeah.
They've they're way beyond that anyways.
But if we're starting to move to that one
Yeah.
Now where are we going?
Now what are we looking at?
You've touched upon 2 items that kind of, like,talk about, I guess, your advanced stage.
That's going to be a small business side hustlekind of concept there.
(28:15):
And then rentals, specifically short termrentals.
Right?
So those are gonna be the 2 kind of big playerswhere once you really wanna start hammering
away, this is where you go.
With a small business, there let's say you'reyou've been wanting to start a small business
and you're ready to go.
(28:36):
When it comes to, like, set setting up these, asmall business, the one thing the IRS initially
is gonna check is it's a hobby loss rule.
So if if you're generating more than 2 years oflosses within a 5 year period, they're gonna be
like, this is a hobby.
This isn't an actual business for profit.
Like, you're not able to take deductions onthis.
(28:57):
Mhmm.
And and there's the key.
Take deductions.
So if you're starting a business and you'redumping all this money into it, like and
they're legitimate business expenses, there'ssome startup costs that I think is capped at,
like, 5,000 that won't right.
But let's say you open the doors, you're readyto go, and you start taking all these expenses.
You can take those expenses on on schedule cagainst your w two income as long as you're
(29:20):
active and it's like an active business.
But, like so let's say you have $10,000 and,like, gear 1, it's a $10,000 loss because it's
just been nothing but throwing expenses andgetting this thing up and running.
You can take those losses against your w twobecause it's you're an active participant.
You're still within the hobby loss rules.
(29:40):
And and so yeah.
Like, obviously, double check accountant, makesure that's good, but that's one strategy.
The other one is, the short term rentals.
And, again, there are other individuals that dosuch a great job.
I mean, like, as you were take talking aboutTate and Ryan at passive income, those guys,
the speakers they talk, they bring in, theytalk about this stuff.
(30:03):
It's just an excellent
Yeah.
Yeah.
This is this the I'm gonna tell people go thereafter.
This is a primer for the basics.
If you want you go.
That's like you're starting to work on your PhDand your master's program.
Yes.
This is freshman 101 stuff.
Exactly.
Think of this as orientation where it's likeyou're you're learning about what what this
even is.
Right?
Yeah.
Right.
This what this is is that, like, let's saylet's say you have some money.
(30:25):
If you've been wanting to buy a rental and,like, you're looking at getting your 1st rental
and, you know what, you find this one andyou're like, actually, this would be really
good as, like, an Airbnb, a short term rental.
Right?
There are ways of setting this up, this rentalup, and, you know, if the average stay is under
a certain amount of days, it's and you'reactively participating.
(30:48):
There's a there's a bunch of rules associatedwith it, but it's it's not terribly difficult
to do.
Then you can do what's called a costsegregation on this property, and then you can
start taking these deductions against your wtwo income.
And so you can generate these crazy losseslegally by doing these short term rentals.
Again, super high level.
(31:09):
I mean, it's a lot more intricate, but, I kindawant you know, plant the seed.
Right?
Yeah.
Of course.
If you're looking at at doing something to kindof, reduce your taxable income, but also also
increase another source of income, the shortterm rental strategies are are where it's at.
Yeah.
So I've done a little bit of the short termrental stuff and kinda got out of that business
(31:31):
because of just a a host of reasons.
Not to say I wouldn't go back into it.
For those of you who are really interested andwanna get down to the weeds, I highly suggest,
shameless plug.
We do not have any, relationship with them.
I wish we did.
Biggerpockets.com.
You go and you can learn a ton.
They have great podcasts about it.
They have great written material, and they getdeep into the week.
(31:53):
I mean, they have books about how you do shortterm rentals, arbitrage on long term to short
term.
I mean, there's all sorts of stuff that you canlearn.
But I will say to you, if you're planning ongoing into it and you think that you're gonna
invest, you know, 25 to 30 grand in a shortterm rental, and then you're gonna be able to
hire a manager and walk away from it right offthe bat, Plan on losing 25 to 30 grand and
(32:17):
never seeing it again because, that doesn'talways work.
In fact, it doesn't work very often.
So I would I would hope that you'd get wannaget your hands dirty and figure it out
yourself.
The first few times that you do any of thisstuff that Mike and I are talking about is, you
should be doing with the op with the with theintent of turning it to a if not a business, at
(32:38):
least a small, income generator for you in thefuture.
But don't go into it with a, hey.
I'm gonna start a short term rental, and I'mgonna start a business, separately, and I'm
gonna lose all this money, and then I'm gonnamake a bunch back in taxes.
Yeah.
Then I'm gonna close.
That is not going to work for you, and that hasno future, for you or anybody you're,
(33:00):
the Yeah.
And it it comes back down to, like, yeah.
We wanna save on taxes, but what ultimately dowe wanna do?
We wanna make the most money possible legally.
And so, like, if you're if you're saving $25 intaxes, but it costs you $50,
that's a horrible You're losing losing 25.
Yeah.
That's a horrible strategy.
So
Instead, make make a $100 and pay $25 in taxes.
(33:22):
There you go.
And and we could go on the again, this is aprimer.
This is Yeah.
Quotation.
We could go into, how to kill it with just,capital gains, and that's it.
I mean, you know, the old story Warren Buffettmakes pays less taxes than the secretary, all
that kind of stuff and which we don't know ifthat I doubt that's actually true.
But if it is, there's a lot of different stuffout there that can really get you,
(33:46):
knowledgeable on this quickly, as well as andthis is more of an encouragement to go out
there and see what you can do to best improveyour financial situation because a a pilot who
is stressed about money is not capable ofperforming at their at their highest level.
And this is a good way to do it.
And by the way, for those of you who are new tothis industry, whether it's military or
(34:09):
airlines or other, this industry has a greathistory of smacking you in the face right when
things are at their best.
So
That is why I got my CPA license.
I'm not even kidding you.
It was one of those where, like I said, I'm I'man active dispatcher.
And, I got married, and I you know, in the backof my head, I'm like, what if something happens
and, like, you know, like, I need to get a job?
(34:31):
And it's like, I went the accounting routebecause it's like, I want that backup, and, you
know, I ended up really, really enjoying thethe field.
And, but my heart is in dispatch.
Yeah.
No.
I both our hearts are in aviation.
We'll talk about that at a month at a late wewanted to get this out before the end of the
year so people can absolutely have a leak.
(34:53):
There is a couple things I do wanna especiallyfor pilots because Alright.
It's very specific.
The one thing is when it comes to your yourdomicile, like, where you live and where you're
based, one thing I do kinda wanna plant a seed,obviously, this is like, don't let this be the
sole determiner.
But let's say you live in a no income taxstate.
(35:14):
Let's say you live in Florida.
And let's say you're you're coming up onbidding and you have the option between
Nashville and Atlanta.
Something to consider is at, Nashville,Tennessee has no state income tax as well.
So now you have Florida and Nashville where youdon't have to worry about filing any state
income tax on either one of those and you've noreturns, you're you're fine.
(35:36):
But let's say you bid Atlanta.
Now you have to worry about Atlanta stateincome tax even though you live in Florida and
you know?
So when it comes to, like, that kind of stuffwhere it's bidding based on, like, where you
live and where you work and or, like,preferences.
It's something to keep in the back of yourhead.
Again, not not a sole sole driver.
(35:56):
But the other part is also let's say you livein a state with income tax, let's say,
Wisconsin, and you have a choice between acouple different states.
Some Some states have what's calledreciprocity.
So, like, let's say, it's Wisconsin and thenyou're based out of Chicago or something like
that.
Right?
Well, those 2 states I'd have to double checkand make sure, but those 2 states have
(36:19):
reciprocity.
So now you don't have to file a Wisconsin andan Illinois state tax return.
Because of that reciprocity, they they justlike, hey.
Wherever you live, just allocate it to wherethat is and that's that.
So you only have to file that one state taxreturn.
Something to keep in mind.
It's something to check.
Right?
Like, if if your company is withholding forboth states, isn't that it's like, hey.
(36:39):
That's a red flag.
Right?
Or, you know, maybe they're not withholding atall for your states, and they should.
That's a red flag.
So kinda go in there and make sure thatwithholdings are are being done correctly.
Yeah.
And, Mike, you're spot on, dude.
Like, check paychecks.
Doesn't matter where you work.
Take a look.
Good luck.
Even the big companies out there, they stillmake mistakes, especially when you have 17,000
(37:01):
or 15,000 or whatever pilots.
Yeah.
Sometimes they make mistakes, and it's notbecause they're, malicious.
It's just the sheer numbers of of money andpilots they have.
It it's challenging.
And it there is there anything else you wannathrow out there specifically pilot stuff?
So it was gonna be just kinda keeping an eyeon, the state stuff.
(37:23):
That tends to be, the one to keep in mind is isthe state.
And and that'll be new for some folks that aremaking their first jump to an airline.
Or if they're not a military person, butthey've just they've lived in the same state
forever.
They like, it lived in Florida and they justworked in Florida and nowhere else.
Mhmm.
And they get job at, United, and now they'rethey're based in New Jersey.
(37:45):
I mean, you gotta check that because Yeah.
I I don't know the rules.
I have no clue.
But if you don't check it, that's gonna thatcould be what bites you at the end of the year,
and you may have a larger bill than youthought.
Or you've been giving an interest free loan tothe state in New Jersey for a year and you
didn't know that.
The other part there is especially for themilitary, community where it's like, let's say
(38:05):
you're about to, you know, about to move to anew state and, like, eve and work for this
airline.
Like, double check your your military stuffbecause they might still be withholding based
on when you signed up.
And if you don't live in Indiana anymore, likeand you're you're living somewhere else where
it doesn't tax on on certain, reserve pay orsomething like that, like, that's something to
keep in mind as well.
(38:25):
Right?
Yeah.
Another thing, guard reserve stuff.
There's a lot we could get into there.
Yeah.
Talk to your accountant and also just a littleside note that came directly from me, that
happened to me is, make sure that you know whatyou're, what you're, contributing to your 401 k
(38:47):
and your TSP.
Mhmm.
Because if you give let's say you max out inthe airline and then you're also maxing out
your TSP, which congratulations, you're a greatsaver.
Yeah.
You that's not how that works.
You don't get max on both ends.
It would be awesome if you could do it, but youcan't.
And you will end up basically giving a, you youI I don't think you're gonna be penalized, but
(39:10):
it happened to me once where I got a big checkat the, when the mistake was found.
Yeah.
And here I am going, oh, man.
I had extra money sitting around that I couldhave invested elsewhere that I didn't.
And that actually, when they sent that check tome, it was all tax deferred money that I ended
up having to submit a, amended tax returnbecause that was never included in my taxable
(39:37):
wages.
So, big mistake on my part, and I was a kid,and I was dumb.
So I figured it out.
I didn't figure it out.
I had somebody who told me, like, dude, youneed to do that.
I'm like, great.
So, again, not tax legal financial advice fromMike Ray or Adam Ewing or the pilot network.
Talk to your accountant.
Mike is a great one.
I plan on actually getting the other mic wherewe do our end of the year, and we're gonna
(40:00):
start doing, more routine visits because I Ineed it.
And I think everybody does when you find a goodtax person out there.
Now this is advice.
When you find a good tax person, a goodaccountant, somebody that you like to chat with
and get along with who knows their stuff, youhang on to them for dear life.
I've had to move on from 2 differentaccountants, both nice guys.
(40:23):
One, I felt didn't know what they were doingwith the real estate stuff, and the other one,
I felt like didn't really understand theaviation piece as well as they could have and
didn't understand the business stuff.
And when I was doing that, I felt like I wasalways paying a little bit more.
And we found some things, this year that wereincorrect, from last year, and we corrected
them.
And I appreciated that immensely.
(40:45):
And, Mike, also one of the things that and thisis, yeah, this is totally a plug for you.
One of my wife and I really liked was we didn'thave a meeting at the end when the taxes were
ready to file because we knew we were gonnahave a hard time finding a time.
You actually sat down and created an 11 minutevideo, which you sped up just a little bit
(41:06):
because you knew you didn't want anybody to sitthere and go through the pain.
Yeah.
I I wouldn't even watch this video for a littlebit, and I made it.
Every single step and every piece of paper anddocument that was filed on our behalf.
And I thought that would that's first time Iever had that, and I thought it was awesome.
And it really gave me a sense of where westood, not only this year, but what we can do
(41:28):
better in preparation for next year.
And then when we get to chat, meet, moveforward, I feel like that gives me kind of a
foundation to be able to ask questions, number1.
But 2, make some decisions that I probablywouldn't have otherwise been able to make.
So, 1, I wanna thank you for that.
And then, 2, this is the way I think that'scustomer service at its finest.
So I appreciate you doing that, and I wantpeople to know.
(41:51):
Absolutely.
And and kind of just to to wrap this portion upas well and and is is it's never too early to
start with an accountant.
Like and I I will argue TurboTax and all thoseare great, especially as you're starting out.
Right?
Because it's really not that complex.
But the sooner you start with somebody and andsomebody who wants to see you grow, like,
that's the key.
(42:12):
Like, they're gonna be encouraging you as asyour income goes up.
Hey.
Start looking at this.
Start looking at that.
And, like, that's that's where it really startsto pay off.
Like, yes.
It's it's you can be, you know, senior captain,international, all that, and then eventually,
it can be like, okay.
It's time for an account.
But when you have somebody on this journey withyou, it's it's next level.
(42:33):
Yeah.
You're spot on, Mike.
If they, if folks need to get ahold of you fortax questions, they can actually ask that tax,
legal, and financial advice directly to you,and you can give that.
How do they get a hold of you, and and what'sthe best, fastest way that you can reply?
So I got 3.
1 is LinkedIn.
I'm not very active on it yet.
(42:55):
I am starting to get a little more in there.
The second one is my website, jetstream.cpa.
So I know it's gonna be a little bit of acurveball, but I'm actually trying to focus
more on individuals or or small businesses andhelping them grow, but then also doing their
individual taxes as well.
That's like in the world of CPAs, like, there'saudits, there's financial reporting, there's
(43:21):
tax.
And for me, I've always loved the actualaccounting aspect of things, so I really wanna,
like, push into that more.
That's not to say I still won't work with withindividuals, on their taxes, but it's just
something to keep in mind.
And then, last is on my website, JuststreamCPA.
One thing that I've I've I've noticed is, like,there is a a lot of people out there who listen
(43:42):
to your podcast, who listen to passive incomepilots, who listen to these podcasts, and have
the ability to connect with others, but maybeit's not as frequent as it should be.
Right?
And so one thing I I'm launching is calledJetstream Alpha.
And so that's gonna be a community where it'snot just focused on, you know, the high income
(44:05):
earners and these crazy tax strategies.
But let's say you're just starting off andyou're like, hey.
What's the best way to pay this debt off?
Hey.
How does your budget look?
Like, I wanna go from from beginning up tothese advanced tax strategies and and have a
community of individuals who have been on allsides of it and help each other out and, you
know, bring on guest speakers that knowspecifically and are able to interact, on a on
(44:30):
a better basis, like, just with the actualindividuals.
And so that's something that's in the works.
If you go to my website, the Jetstream CPA,there is a Jetstream alpha link, and it's a
little more information regarding that.
But, that's not to take away from the podcast.
I mean, the whole reason I even had this ideawas because the podcasts are so good.
Like, I wanna connect with other people whohave listened to this and, like, nerd out about
(44:54):
this stuff.
So
Yeah.
Right?
And there's a lot in the pilot community.
Yeah.
Well, that's how you can get a hold of Mike,and you better do it quickly because he's gonna
run out of space.
Yeah.
That is that is
a fact.
He's done that right now, but it could grow.
It should grow.
But here's one thing I've noticed as well isthat, like, I I want for me, the relationship
is so important.
(45:14):
Like, I wanna be able to whoever I'm workingwith, I want to know their lives, like and,
like, be able to, like, you know, what's knowwhat's going on.
Like, not to take away from the bigger firms,but, like, if if you go on to a firm because
you like this individual, but you find out thatyou're actually working with another person
throughout the year, it's it's just not thatsame relationship.
So there's a reason I I I like to to cap thingsis because I especially now with with the
(45:40):
growing use of, like, like, these how do Iexplain it?
It's like, there's there's a lot ofdisconnection for, like, that real human
personal, interaction that's not there anymore,and I really wanna keep that.
So that's kinda where
That's what we believe in, and that's why we'rethat that's the probably the number that was
the number one reason why you sparked myinterest and why we start not only a
(46:02):
relationship professionally, but also, youknow, chatting about other stuff too.
So, Mike, thanks again.
I want you to go, everybody out there, checkcheck his website out at a minimum,
jetstream.cpa jetstream.cpa.
And, and then get ahold of him if you, if he'sif you got more questions to answered because
he he's the guy.
So, as always, if you need, Matt or I or youwanna just reach out and chit chat, hit us up
(46:29):
at hey, guys, the pilot network dot com.
As always, keep the shiny side up and thegreasy side down.
Fly
safe.
Hey, network.
Another episode of the Pilot Network podcastcoming back at you.
I'm your host, Adam.
Thank you so much for joining us on this end ofthe year closeout with Pilot Network
Podcasting.
2024 was very interesting of a year, especiallyfor me with my tax situation.
This was a new one.
I had a lot going on.
(00:38):
I switched accountants for the 3rd time in 3years because I was not happy with the last 2.
And I finally found somebody who got me, whogot what I did, not only in aviation, but in
real estate, having the pilot network, as abusiness, man, it was challenging for me to
figure out who to go to.
And, somebody just reached out, found me.
(01:01):
So, I did some due diligence, someinterviewing.
He came up to TPNX and I said, Oh yeah, this isthe guy.
He gets it.
Mike Ray from jet stream dot cpa.
Amazing human being.
Somebody that now I have to have full faith andconfidence in for the rest of my life because
he is such a, wonderful accountant that we'rekeeping him on for a long term.
(01:25):
Now okay.
That's all sales pitchy.
Right?
But I really, really, really like what he hasto say and what he taught me.
Okay?
Not only did he just do my taxes, but he taughtme about all the stuff that I have been, I
don't know, missing out on.
Anyways, I could go on and on, but you don'twanna hear from me.
You wanna hear about how you can save money onyour taxes.
(01:48):
Now the one thing I gotta say is do the wholethis is not financial advice.
If you need to if you need, financial advice,go and contact Mike at jet stream dot cpa.
He will get you through that.
So this podcast is meant as entertainment andinformation only for you out to go and do, your
(02:10):
due diligence.
So this is not meant as any financial tax orlegal advice.
Please contact your tax attorney or your CPA toget those things squared away.
Now that that's all done, let's listen to Mike.
Hope you enjoy.
Mike, welcome to the pilot network podcast.
(02:31):
Mike is a kind of a newfound friend.
Came up to t p n x.
We we we chatted, and next thing I know, he'smy accountant.
So thanks for joining us today, Mike.
We're gonna get right into it because we have awhole another podcast that's gonna come up much
later, don't we, about, your what you do, whatyour day job is as opposed to what, we're
talking about today.
(02:53):
Mike's a dispatcher, and we wanna get into theworld of dispatch at a later time.
But with the end of the year coming up, theholiday season, upon us, it's time to look
forward to what we all have to start doing onJanuary 1st, and that's get ready, get our
start putting our taxes in order.
Right, Mike?
That is correct.
So I figured we'd have Mike on to talkdirectly, to airline pile and, well, aviation,
(03:20):
folks in general, but it really hits on theairline pilot stuff hard.
And so for those of you out there who are, thisis gonna help a little bit.
And for those of you out there that are not,this will help, when you move and make them.
Now to caveat all that or to put a nice bigbanner, this is not tax, legal, or financial
advice from the pilot network, myself, Adam, orMike Ray.
(03:41):
What it is is just fun little tips and tricksthat, Mike knows.
And if you need that tax legal, or financialadvice, you need to get, get ahold of him
directly at jetstream.cba.
Did I do that right?
That's correct.
Oh, look at me, man.
I'm on fire today.
There you go, man.
If you have real questions and you wanna startlooking at this stuff in-depth, have a meeting
(04:04):
so you can actually prepare yourself in thefuture and not get your, tax, legal, or
financial advice from any podcast, which youshould never do, is you need
The only TikTok.
That's the only legal source.
Yeah.
That's the only TikTok's the only legal source.
Right?
Right?
We we kid.
Get out there and make these direct connectionsbecause it's a pilot network.
We talk about networking all the time, and thisis how we do that.
(04:25):
So I'm gonna let Mike go.
Let's let Mike, let's just get into the the thebasics here.
Let's start, you know, let's crawl then walk,and then we'll we'll start running towards the
head.
So what what's the first thing you wanna tellpeople out there as we approach the end of the
year that they can start doing to to mostefficiently make their time, valuable as they
get ready for the 2025, fiscal year?
(04:47):
Yeah.
So to start off, like, you know, the big itemsthat you're gonna hear so many other tax
professionals address, but it's because it's soimportant.
It's, you know, at the very least with your 401k is getting that match.
Right?
It's, like, it's free money.
So it's one of those where if you haven'talready done, I don't know, maybe you forgot or
(05:10):
maybe it was one of those things that you puton pause and never reactivated.
Like, double check.
Make sure that those 401 k withholdings are inplace and that you're getting that match
because that is, like, the easiest way to getsome extra free money.
Right?
So in terms of whether it's a traditional orRoth, that's gonna depend on on your your
airline or your company, but that's far andaway probably number 1.
(05:34):
I'm always gonna issue for that one.
Like so then next up or anything on that one?
I mean, it's pretty straightforward.
Right?
Yeah.
It's pretty straightforward.
Yeah.
So next up is going to be IRAs.
Again, another retirement account.
With the IRAs, you have it's a little morenuanced, but it's not terrible.
(05:55):
You have your traditional on your Roth, and youhave something called the backdoor Roth IRA.
And so a lot of this is gonna depend on yourincome, your filing status, and things like
that.
Right?
So, I'm a huge proponent of anything Roth.
And I know there's always gonna be argumentswith, like, well, you know, the traditional
makes more sense because, if you're in thehigher income, because you're not you know,
(06:20):
you're gonna be on a lower tax bracket later.
Right?
So the main two difference between thetraditional Roth is when you're paying your
taxes.
I like to, for me, personally, I guess, just anindividual, not even a tax for anything.
I like to take a step back and see, like, whatis the, like, easiest and, like, what's the,
like, most straightforward thing?
And for me, the Roth just is it's great in thesense of you don't once you put that money in,
(06:46):
you've paid tax, you don't have to worry aboutthat later on.
You don't have to worry about making theserequired minimum distributions that are gonna
be necessary on your on traditional IRAs.
Right?
And and so I don't know.
Like, for me, yes.
If you really are in a super high income, taxbracket and there's a you know, where that
planning really comes into play,
(07:08):
yeah.
Sit down.
Take a look at those numbers.
But I tend to lean on the side of, you know,just pay the piper now and don't you won't have
to worry about it later.
Like, the last thing I wanna do in retirementis be like, woah.
Let me make sure I'm not withdrawing too muchso I don't put myself in the next tax bracket
and things like that.
So, again, it's gonna vary based on theindividual, but something to keep in mind.
(07:35):
For most listeners, I'm you know, one thing Iknow about this podcast and this, a lot of the
people that listen to this, they also listen toother ones like Passive Income Pilots with Tate
and Ryan and, you know, pilot finance money.
I think it's Timothy Pope's one.
But, the your audience, for the most part, ispretty familiar with your traditional Roth, and
(07:56):
they may have most of them might know or mayhave heard of the backdoor Roth.
Right?
And that's one where backdoor Roth is gonna beone where, like, if you're making too much
money first, congratulations.
That's a great problem to have.
But, the backdoor Roth is a way of contributingafter tax money into a traditional IRA and then
(08:17):
converting it to a Roth.
So you've already paid tax on this money, andyou're moving it over to a Roth IRA, which will
grow and you can withdraw tax free.
And the one big thing that comes about the, theRoth IRA, people kinda get worried.
Right?
Like, well, is this legal?
Is this tax fraud?
Am Am I gonna get audited?
(08:38):
And the answer is no.
Like, this is a 100% legal.
Like, there's been IRS rulings on this.
Like, it is it's a great strategy.
And so, there's certain steps you have to do interms of getting that process rolling.
The one big thing I am gonna say regarding thatthat tends to be missed for the backdoor Roth
(09:03):
IRA, there's a specific form.
It's form 8606 that needs to be filed.
That's where working with an accountant willhelp is making sure all that is all tidied up
and good to go.
But, it is, it's the second tip in termsespecially for the higher higher income earners
is, you know, your 401 k match and then the,the IRAs and stuff like that.
(09:26):
So, those are the first two.
Any questions on those?
No.
So yeah.
No real questions.
I think the the idea here is for the and thethe I'm I'm hoping that most of the folks my
age and older have already taken care of allthat stuff.
They Yeah.
They know at least the they either are doing itor they know, like, I've never done the
backdoor Roth,
(09:47):
for other yet.
Yeah.
Not yet.
That we've
discussed, many times in person or in not onlyin person, but, in our, in our interactions as
I was getting my taxes ready to file.
Because I I'm looking at I have alternativeinvestments that I'm doing right now.
And to pay the taxes on what I've alreadycontributed to then roll over is, it's it's a
(10:12):
burden that I'm not ready to take on.
However, that doesn't mean I'm not going to doin the future.
And and that's the nice part is these arethings aside from the initial making sure that
you have the match, for those of you out therewho have that program and capability, for those
of you who have that, and then for those of youwho can still do Roth IRAs, or if you need to
(10:34):
set up an an IRA for yourself outside of that,I'd I'd I've never really figured out why you
do a traditional or a Roth.
I mean, I guess maybe you want a lower taxburden early, but I again, not really sure why
as opposed to have I like free money at the endbecause, compounding interest is a beautiful
thing and, to let it grow for especially someof you out there who are hearing this for 40
(10:57):
years, that's gonna make quite a difference.
So, and then that backdoor Roth, I think orbackdoor, the backdoor Roth conversion, stuff
like that.
Those are definitely the the crawling Mhmm.
Ways to get into this.
Yeah.
Now our next phase is, and I think one of thequestions I have is it is challenging for
(11:20):
somebody who gets into the airline industry,starts making a very good living to be able to
find ways to, you know, they're saving fortheir retirement.
And if that's all they're doing, they'reprobably gonna be okay.
Yeah.
But to lessen your tax burden legally, there isit starts to become a challenge.
(11:41):
Can we go into some of that stuff on some ofthe basics?
If there is something that if not, we can justmove on to the next kinda next question I have
on
my mind.
Absolutely.
And so, in terms of, like, you know, reducingthat tax liability today, I'm actually gonna
start with, one that might apply more to theindividuals that are just starting off in the
(12:02):
industry, and that's going to be the studentloan interest deduction.
So that one, I really like because even if youdo the standard deduction, which most of us are
gonna be doing especially early on, unless youhave, like, a lot of interest on a on a house,
then maybe you're itemizing.
But from what I've seen, most people are takingthat standard deduction early on.
(12:23):
Right?
The student loan interest deduction, it's a maxof of 2,500, and you can do it even if you're
taking the standard.
There are income, limits and phase outs.
But, essentially, what that ends up doing isit's it's it's a deduction on it's it's a
second deduction.
Right?
Those are rare when you're taking a standard.
(12:46):
And the reason I wanna bring it up now isbecause if you look at the past years, for a
lot of us, that have student loans, whetherfrom flight training or from the university,
whatever that happens to be, first, you know,you know, make sure it's a qualified, student
loan.
But if it's coming towards the end of the yearand you log in and you see, hey.
I've got some accrued interest there that'sreally it's not growing because of the federal
(13:08):
pause on it, but, you know, I have some money Iset aside that I can go ahead and pay on this
student loan.
That's gonna be an immediate tax benefit that'sgonna lower your tax bill.
And so that is one that I don't see talkedabout too much that has a a a real potential
there.
Especially, I would even argue, like again,there are income phase out limits.
(13:29):
I think I'm looking at it right now.
It's, 75,000 for single, a 155 for marriedfiling jointly.
Again, don't take my word on those numbers, forright now.
It's just from when I when I initially looked.
But but like I said, maybe you're wrapping up aCFI or starting 1st year FO or something like
(13:49):
that, and, like, you you're falling below thesenumbers and you're like, hey.
I I do have some this money that I was eithergonna keep saving or pay off, the student loan.
Like, that's an incentive to to pay that extrainterest off on your student loans even though
it's not required right now.
No.
That makes that makes great sense, like, to I'mbecause I'm a big believer in, you know, debt
(14:10):
debt free is a great way to live because it'svery it's stress free.
Yeah.
The
other thing that's kinda cool is, to to be ableto do that.
I remember when I paid off my my student loans.
It seems like forever going out.
But to be able to take that and, one, you get II'm sure I got a small tax break on that, as a
(14:32):
deduction because I I know I did it.
But then I was able to take that money andreinvest it somehow, put it towards something
else because I kinda looked at that, studentloan as an investment in myself and an
education going forward.
And I was like, well, now I'm I'm paying thatoff.
I might as well just put that money towardssomething else that's going to pay off for me
in the long term and not just go out and, youknow, spend it on whatever.
(14:55):
Have fun.
Blah blah blah.
Hey.
That's always good.
I like doing that too.
But, you now you have that option.
And I totally agree with the idea of if you canget a larger deduction because you put more of
a chunk of something at, like, a student loan,and you're able to wipe that out and be able to
receive a little bit more of a break for that,there that's a win win, and it and it's a very
(15:19):
hard argument to make.
Why not do that in, in that in that time frame?
Absolutely.
So I think and that that definitely goes to alot of our younger, listeners out there or
listeners younger age wise, but younger in theaviation.
Yeah.
Exactly.
Because it's it's the the there's nuance there.
Right?
Uh-huh.
So okay.
So now now I feel like we're starting to walkjust a little bit because we're starting to
(15:41):
okay.
Nah.
That's a little bit of in the weeds.
So I am a, I'm a I'm a new FO or not even I'mI'm brand maybe I'm a new FO.
Look Yeah.
But I'm getting out of the military.
Dude, I don't know.
I just filled up my tax stuff.
Mhmm.
Let it go for however long I was in themilitary.
And now I'm starting off with this new job.
Mhmm.
(16:02):
I have no idea how I should be filing.
I've got a wife and 2 kids.
You know, I I I got paid x amount of dollarsevery month.
I had my housing was paid for.
I got all this stuff tax free from thegovernment.
Mhmm.
And, it was awesome, and I had this minimum,salary.
Well, now I'm, an airline pilot, and none ofthat stuff except for my per diem.
(16:25):
And everything else is has some sort of tax,piece to it that I don't necessarily understand
from before.
Yeah.
How should I start to be looking at that maybeif I'm going to be starting a new job here?
Or if I just did, it's the end of the year.
How should I fill out that tax work?
Again, this is not tax legal or financialadvice from the pilot network or myself or
(16:46):
Mike.
You have to contact Mike at jet stream dot CPAif you want more.
But, like, if I were to do this, you're talkingto me directly.
I mean, I new job.
What what would be a a good starting point so Ican, you know, then tweak my numbers and base
stuff off of that afterwards?
So a good starting point is if if you have anaccountant, it's it's and I'm gonna talk about
(17:09):
this more later on, but it's it's periodiccheck ins.
And those check ins include providing yourlatest pay stub because then, you can do this
yourself as well as go online, look for one ofthose income tax calculators.
You show, what you wanna look for on on yourpay stub is your federal income tax wages.
Like, there's the gross wages, then there's thetaxable wages.
(17:31):
So you might have certain deductions thatreduce that.
And so you plug those numbers in, and you cansee kind of more or less, like, what you're
gonna be owing in taxes.
And so if you if right off the bat, you seeyou're getting a large refund, it's like, okay.
Maybe I don't have to withhold so much.
Or maybe it's one of those things where, you'rein the negatives, like you're gonna be owing.
It's like, okay.
(17:51):
I gotta bump these contributions, thesewithholdings up.
So that's something that I would I highlyencourage, like, throughout the year.
I'm not saying you have to do it every week orevery paycheck, but maybe maybe once a quarter,
maybe at the halfway point.
That's probably step 1 because that'sultimately the amount that's being withheld is
(18:12):
ultimately what's applied to, for the taxreturns.
So checking on that, and then in terms ofminimizing the actual taxes owed, it's it's
it's a lot of these strategies, especially forfor somebody who is either coming out of the
military or just getting out of, becoming aCFI, it's, it's taking advantage of a lot of
(18:35):
the work, benefits.
Right?
Again, even your health insurance, and which isis what I'm gonna be talking about next is
actually the if you have let's say you have theoption of doing an HSA through a high
deductible, program at work or you have a PPO.
Let's say you're, you know, relatively healthy,like, you know, really don't go to the doctor
(19:00):
often.
I would argue genuinely consider the HSA slashhigh deductible health plan because that HSA
has, like, a triple tax benefit.
It's like the best of, like, you know, 4 o onek's, IRAs.
I mean, the 4 zero one k because you might geta match.
But besides that, like, the HSA, the triple taxbenefit is that money goes in tax deferred.
(19:24):
So, like like, if you're putting a $100 in,round numbers, that's a $100 less in taxes that
you're paying up front.
The money grows tax free.
And then whenever you take that money out forqualified medical expenses, it's not taxable.
So it's a triple tax benefit there.
Now the key with the HSA and and one that isreally game changer is, let's say, you do have
(19:51):
medical expenses come up.
I would personally argue, try to pay that outof your own pocket and let the HSA continue to
grow.
And when I say grow, it's because the HSA is anaccount that you can invest in stocks and
bonds.
And especially if you have a a self directed,which kinda wanna I'll bring come back to that
(20:11):
later in terms of IRAs, but self directed, HSAsand IRAs, like, then you can start investing in
everything, in real estate, in crypto, and thiscontinues to grow tax free.
And so let's say medical expenses come up overthe next 5 years.
You save those receipts.
Right?
Because later on, when you wanna take moneyout, now you have these medical receipts that
(20:36):
you can be like, I'm taking it out based onthis.
You're able to take that money out tax free.
The the key is to let it grow as much aspossible.
Right?
Like, keep letting it grow and, like but it issuch a powerful account.
And I know for, especially military, thatreally isn't an option, the high deductible.
Like so once you're coming into the world ofairlines or charters or whatever it is, that if
(21:02):
that's an option and you feel, let's say it'snot even tax or legal, financial, or health
advice at this point.
Right?
Like, all 4 of them.
This is not.
But if you're at a spot where you're like, youknow, I feel comfortable with, like, with my my
health situation.
I'm okay doing that.
Absolutely do that.
Like, that is one that, like, dig into it alittle more.
Do do your research.
(21:22):
Talk with a with a professional.
But, like, you're so that's such a huge taxbenefit there that, is another one that's not
really talked about too much.
Yeah.
I
think I've seen it more lately, but yeah.
Another, another piece of that that's veryinteresting is, my company, so most airlines
(21:42):
have profit sharing of some of some level.
Mhmm.
And when, you get your profit sharing check, alot of times you can either, pension it, I.
E.
Put it in your 401 k.
Mhmm.
Or you can match day.
And, if you have a high deductible plan like wedo, we have a, I think, a mid deductible plan
It's pretty high.
(22:04):
But, you can pretty much max out your HSA Mhmm.
With with with your profit sharing check, whichbasically means it's done for the year or 2 on
top of it.
And you're that's just extra money that youdidn't even know.
I mean, you There you go.
Fees.
So that's another really great way to justknock it out, be done, and then have that money
in the future.
(22:25):
And I I can't I, this year was a kind of a highexpense year for us, with the daughter going
through surgery and some other stuff like thatgoing on.
So all those receipts are saved for futureexpenditures down the road to be able to pull
out of the HSA and use that money to pay off,what was our expense earlier on.
So And here's
the other point that you I I wanna bring up aswell with with the with the, health insurance
(22:49):
is that every year when your open enrollmentcomes around, you can change.
You don't lose your HSA just because youswitched to a different plan.
So, like, if you have a bunch of surgeriescoming up next, like, year where it's, you
know, it's not like it needs to be done today.
But, like, let's say, you know, next year, Ihave a feeling we're gonna be doing a lot of
dental work.
We're gonna be doing a lot of business andthat.
Go ahead and switch the plan for next year.
(23:10):
You don't get to contribute to the HSA, butthen your deductibles and your out of pockets
are lower.
And so then you kind of hit that hard.
And then the year after that, you come back tothe HSA.
And so, that's one strategy there as well.
It's it's kind of a little bit of planning.
Like, obviously, you can't plan too much for,like
Emergencies, but you can't like, if you're ifyou're if you're getting a knee replacement
(23:33):
Mhmm.
And you know that you're getting it in Februaryof 2025, well Yeah.
You're enrollment season right now, so youmight as well shift your plan a little bit
because you you were planning to do it anyways.
Again, not health legal tax or financialadviser.
There you go.
Adam Yuan and the pilot network or basicallyanybody involved with this show.
It's just a bunch of dudes talking about moneyand, how to save a little bit for themselves so
(23:55):
they can retire, when they want.
Exactly.
So okay.
So we've got a little bit about how we're nowmaximizing and how
I wanna throw one more thing about these.
The,
so for we had we talked high deductible HSA.
If you have, like, a PPO or something likethat, the other the one there is the FSA.
That one is good, especially because in thisscenario that we were talking about, we're
(24:16):
like, well, we know we have these expensescoming up.
Start start, padding that up as well becausethat is a tax deductible account.
So, you know, I I tend to max out my so I don'thave the option for a high deductible where I'm
at currently.
But because of certain health things, like, Iknow that I'm gonna need this money, and so
I'll max that out, and that lowers my taxableincome.
(24:38):
But if you're somebody but here's the thingwith the FSA is that it's a use it or lose it.
So if you're somebody who puts a few thousandin there and never goes to the doctor or
whatever, you have that potential to lose it.
Like, you can buy certain things at the end ofthe year through h FSA funds.
But my rule of thumb is, like, pad it up if youknow you're gonna be having some big medical
(24:59):
expenses.
Yeah.
Great point.
So for guys and gals in my position who havelittle kids, you know that if you put a $1,000
in there for the year, you're gonna use it.
Oh, yeah.
Because you have little kids.
You're gonna be going to the doctor.
And each doctor visit is somewhere between $75a150 depending on where you're at and what
you're doing.
(25:21):
And that's in that's in my neck of the woods.
It's a lot more in other places.
I'm I'm quite certain.
But those are some bay the so this is kind ofcovering some basics.
So Yeah.
We're walking through the woods in our on ourtax journey here.
Now getting to that Sorry.
No.
It's alright.
And this is where, this is where things get Imean, there is some PhD level stuff that we're
(25:45):
not gonna even look into.
I mean, I'm currently looking at a a highlevel, tax plan to best put some of my real
estate work into Mhmm.
The way we do business network and all thatstuff.
And and when I have an idea of how to actuallyput this together correctly, I'm going to
(26:05):
approach Mike with the ideas and the plan thatI have because to me, as I have heard many
times, some of this stuff sounds, you know,illegal.
I mean, the first time I heard of a megabackdoor Roth, I was like, that's now I'm much
further along than that kid was who knew that.
So now I know that some of the stuff is notillegal and not only not illegal, it's
(26:26):
actually, accomplished by lots of differentpeople that are out there.
And upheld in court.
Like, the IRS literally says, yeah.
You can do this.
And so you have a ruling that says, yeah.
Go for it.
Yeah.
So so if we're getting into the run phase now,we're starting to move to that next level.
I want to best maximize what I'm doing as maybeI have I've got my airline job.
(26:49):
I've been doing it for a decade or so.
I'm, you know, I'm a captain or international.
Whatever.
I'm making really good money.
Yeah.
I'm not we'll use my example.
My spouse is is currently, not employed outsidethe house.
Mhmm.
I have a, I'm I'm I've got I get a k nine fromthe pilot network as a business owner, which we
(27:09):
know, we've seen doesn't, actually generatemuch, in value to the bottom line.
For me personally, yeah, you can't sayanything, but I can.
But it is it is a business that I do spendpersonal funds on to make sure things work.
Lights stay on the house.
That kind I have my own I have my own booth, myoffice, stuff like that.
Mhmm.
(27:29):
And then also, I have real estate interestboth, active properties that I that I own as
well as being in, shameless plug for TurbanCapital, and Tate and Ryan's, wonderful
business that they're putting together.
Yeah.
I'm
doing real estate syndications, which I getcanine and tax benefits from there.
So if we're at that level or we're beyond thatlevel, now the people who are beyond that on
(27:53):
500 rental properties, this podcast, they don't
need it.
Yeah.
They've they're way beyond that anyways.
But if we're starting to move to that one
Yeah.
Now where are we going?
Now what are we looking at?
You've touched upon 2 items that kind of, like,talk about, I guess, your advanced stage.
That's going to be a small business side hustlekind of concept there.
(28:15):
And then rentals, specifically short termrentals.
Right?
So those are gonna be the 2 kind of big playerswhere once you really wanna start hammering
away, this is where you go.
With a small business, there let's say you'reyou've been wanting to start a small business
and you're ready to go.
(28:36):
When it comes to, like, set setting up these, asmall business, the one thing the IRS initially
is gonna check is it's a hobby loss rule.
So if if you're generating more than 2 years oflosses within a 5 year period, they're gonna be
like, this is a hobby.
This isn't an actual business for profit.
Like, you're not able to take deductions onthis.
(28:57):
Mhmm.
And and there's the key.
Take deductions.
So if you're starting a business and you'redumping all this money into it, like and
they're legitimate business expenses, there'ssome startup costs that I think is capped at,
like, 5,000 that won't right.
But let's say you open the doors, you're readyto go, and you start taking all these expenses.
You can take those expenses on on schedule cagainst your w two income as long as you're
(29:20):
active and it's like an active business.
But, like so let's say you have $10,000 and,like, gear 1, it's a $10,000 loss because it's
just been nothing but throwing expenses andgetting this thing up and running.
You can take those losses against your w twobecause it's you're an active participant.
You're still within the hobby loss rules.
(29:40):
And and so yeah.
Like, obviously, double check accountant, makesure that's good, but that's one strategy.
The other one is, the short term rentals.
And, again, there are other individuals that dosuch a great job.
I mean, like, as you were take talking aboutTate and Ryan at passive income, those guys,
the speakers they talk, they bring in, theytalk about this stuff.
(30:03):
It's just an excellent
Yeah.
Yeah.
This is this the I'm gonna tell people go thereafter.
This is a primer for the basics.
If you want you go.
That's like you're starting to work on your PhDand your master's program.
Yes.
This is freshman 101 stuff.
Exactly.
Think of this as orientation where it's likeyou're you're learning about what what this
even is.
Right?
Yeah.
Right.
This what this is is that, like, let's saylet's say you have some money.
(30:25):
If you've been wanting to buy a rental and,like, you're looking at getting your 1st rental
and, you know what, you find this one andyou're like, actually, this would be really
good as, like, an Airbnb, a short term rental.
Right?
There are ways of setting this up, this rentalup, and, you know, if the average stay is under
a certain amount of days, it's and you'reactively participating.
(30:48):
There's a there's a bunch of rules associatedwith it, but it's it's not terribly difficult
to do.
Then you can do what's called a costsegregation on this property, and then you can
start taking these deductions against your wtwo income.
And so you can generate these crazy losseslegally by doing these short term rentals.
Again, super high level.
(31:09):
I mean, it's a lot more intricate, but, I kindawant you know, plant the seed.
Right?
Yeah.
Of course.
If you're looking at at doing something to kindof, reduce your taxable income, but also also
increase another source of income, the shortterm rental strategies are are where it's at.
Yeah.
So I've done a little bit of the short termrental stuff and kinda got out of that business
(31:31):
because of just a a host of reasons.
Not to say I wouldn't go back into it.
For those of you who are really interested andwanna get down to the weeds, I highly suggest,
shameless plug.
We do not have any, relationship with them.
I wish we did.
Biggerpockets.com.
You go and you can learn a ton.
They have great podcasts about it.
They have great written material, and they getdeep into the week.
(31:53):
I mean, they have books about how you do shortterm rentals, arbitrage on long term to short
term.
I mean, there's all sorts of stuff that you canlearn.
But I will say to you, if you're planning ongoing into it and you think that you're gonna
invest, you know, 25 to 30 grand in a shortterm rental, and then you're gonna be able to
hire a manager and walk away from it right offthe bat, Plan on losing 25 to 30 grand and
(32:17):
never seeing it again because, that doesn'talways work.
In fact, it doesn't work very often.
So I would I would hope that you'd get wannaget your hands dirty and figure it out
yourself.
The first few times that you do any of thisstuff that Mike and I are talking about is, you
should be doing with the op with the with theintent of turning it to a if not a business, at
(32:38):
least a small, income generator for you in thefuture.
But don't go into it with a, hey.
I'm gonna start a short term rental, and I'mgonna start a business, separately, and I'm
gonna lose all this money, and then I'm gonnamake a bunch back in taxes.
Yeah.
Then I'm gonna close.
That is not going to work for you, and that hasno future, for you or anybody you're,
(33:00):
the Yeah.
And it it comes back down to, like, yeah.
We wanna save on taxes, but what ultimately dowe wanna do?
We wanna make the most money possible legally.
And so, like, if you're if you're saving $25 intaxes, but it costs you $50,
that's a horrible You're losing losing 25.
Yeah.
That's a horrible strategy.
So
Instead, make make a $100 and pay $25 in taxes.
(33:22):
There you go.
And and we could go on the again, this is aprimer.
This is Yeah.
Quotation.
We could go into, how to kill it with just,capital gains, and that's it.
I mean, you know, the old story Warren Buffettmakes pays less taxes than the secretary, all
that kind of stuff and which we don't know ifthat I doubt that's actually true.
But if it is, there's a lot of different stuffout there that can really get you,
(33:46):
knowledgeable on this quickly, as well as andthis is more of an encouragement to go out
there and see what you can do to best improveyour financial situation because a a pilot who
is stressed about money is not capable ofperforming at their at their highest level.
And this is a good way to do it.
And by the way, for those of you who are new tothis industry, whether it's military or
(34:09):
airlines or other, this industry has a greathistory of smacking you in the face right when
things are at their best.
So
That is why I got my CPA license.
I'm not even kidding you.
It was one of those where, like I said, I'm I'man active dispatcher.
And, I got married, and I you know, in the backof my head, I'm like, what if something happens
and, like, you know, like, I need to get a job?
(34:31):
And it's like, I went the accounting routebecause it's like, I want that backup, and, you
know, I ended up really, really enjoying thethe field.
And, but my heart is in dispatch.
Yeah.
No.
I both our hearts are in aviation.
We'll talk about that at a month at a late wewanted to get this out before the end of the
year so people can absolutely have a leak.
(34:53):
There is a couple things I do wanna especiallyfor pilots because Alright.
It's very specific.
The one thing is when it comes to your yourdomicile, like, where you live and where you're
based, one thing I do kinda wanna plant a seed,obviously, this is like, don't let this be the
sole determiner.
But let's say you live in a no income taxstate.
(35:14):
Let's say you live in Florida.
And let's say you're you're coming up onbidding and you have the option between
Nashville and Atlanta.
Something to consider is at, Nashville,Tennessee has no state income tax as well.
So now you have Florida and Nashville where youdon't have to worry about filing any state
income tax on either one of those and you've noreturns, you're you're fine.
(35:36):
But let's say you bid Atlanta.
Now you have to worry about Atlanta stateincome tax even though you live in Florida and
you know?
So when it comes to, like, that kind of stuffwhere it's bidding based on, like, where you
live and where you work and or, like,preferences.
It's something to keep in the back of yourhead.
Again, not not a sole sole driver.
(35:56):
But the other part is also let's say you livein a state with income tax, let's say,
Wisconsin, and you have a choice between acouple different states.
Some Some states have what's calledreciprocity.
So, like, let's say, it's Wisconsin and thenyou're based out of Chicago or something like
that.
Right?
Well, those 2 states I'd have to double checkand make sure, but those 2 states have
(36:19):
reciprocity.
So now you don't have to file a Wisconsin andan Illinois state tax return.
Because of that reciprocity, they they justlike, hey.
Wherever you live, just allocate it to wherethat is and that's that.
So you only have to file that one state taxreturn.
Something to keep in mind.
It's something to check.
Right?
Like, if if your company is withholding forboth states, isn't that it's like, hey.
(36:39):
That's a red flag.
Right?
Or, you know, maybe they're not withholding atall for your states, and they should.
That's a red flag.
So kinda go in there and make sure thatwithholdings are are being done correctly.
Yeah.
And, Mike, you're spot on, dude.
Like, check paychecks.
Doesn't matter where you work.
Take a look.
Good luck.
Even the big companies out there, they stillmake mistakes, especially when you have 17,000
(37:01):
or 15,000 or whatever pilots.
Yeah.
Sometimes they make mistakes, and it's notbecause they're, malicious.
It's just the sheer numbers of of money andpilots they have.
It it's challenging.
And it there is there anything else you wannathrow out there specifically pilot stuff?
So it was gonna be just kinda keeping an eyeon, the state stuff.
(37:23):
That tends to be, the one to keep in mind is isthe state.
And and that'll be new for some folks that aremaking their first jump to an airline.
Or if they're not a military person, butthey've just they've lived in the same state
forever.
They like, it lived in Florida and they justworked in Florida and nowhere else.
Mhmm.
And they get job at, United, and now they'rethey're based in New Jersey.
(37:45):
I mean, you gotta check that because Yeah.
I I don't know the rules.
I have no clue.
But if you don't check it, that's gonna thatcould be what bites you at the end of the year,
and you may have a larger bill than youthought.
Or you've been giving an interest free loan tothe state in New Jersey for a year and you
didn't know that.
The other part there is especially for themilitary, community where it's like, let's say
(38:05):
you're about to, you know, about to move to anew state and, like, eve and work for this
airline.
Like, double check your your military stuffbecause they might still be withholding based
on when you signed up.
And if you don't live in Indiana anymore, likeand you're you're living somewhere else where
it doesn't tax on on certain, reserve pay orsomething like that, like, that's something to
keep in mind as well.
(38:25):
Right?
Yeah.
Another thing, guard reserve stuff.
There's a lot we could get into there.
Yeah.
Talk to your accountant and also just a littleside note that came directly from me, that
happened to me is, make sure that you know whatyou're, what you're, contributing to your 401 k
(38:47):
and your TSP.
Mhmm.
Because if you give let's say you max out inthe airline and then you're also maxing out
your TSP, which congratulations, you're a greatsaver.
Yeah.
You that's not how that works.
You don't get max on both ends.
It would be awesome if you could do it, but youcan't.
And you will end up basically giving a, you youI I don't think you're gonna be penalized, but
(39:10):
it happened to me once where I got a big checkat the, when the mistake was found.
Yeah.
And here I am going, oh, man.
I had extra money sitting around that I couldhave invested elsewhere that I didn't.
And that actually, when they sent that check tome, it was all tax deferred money that I ended
up having to submit a, amended tax returnbecause that was never included in my taxable
(39:37):
wages.
So, big mistake on my part, and I was a kid,and I was dumb.
So I figured it out.
I didn't figure it out.
I had somebody who told me, like, dude, youneed to do that.
I'm like, great.
So, again, not tax legal financial advice fromMike Ray or Adam Ewing or the pilot network.
Talk to your accountant.
Mike is a great one.
I plan on actually getting the other mic wherewe do our end of the year, and we're gonna
(40:00):
start doing, more routine visits because I Ineed it.
And I think everybody does when you find a goodtax person out there.
Now this is advice.
When you find a good tax person, a goodaccountant, somebody that you like to chat with
and get along with who knows their stuff, youhang on to them for dear life.
I've had to move on from 2 differentaccountants, both nice guys.
(40:23):
One, I felt didn't know what they were doingwith the real estate stuff, and the other one,
I felt like didn't really understand theaviation piece as well as they could have and
didn't understand the business stuff.
And when I was doing that, I felt like I wasalways paying a little bit more.
And we found some things, this year that wereincorrect, from last year, and we corrected
them.
And I appreciated that immensely.
(40:45):
And, Mike, also one of the things that and thisis, yeah, this is totally a plug for you.
One of my wife and I really liked was we didn'thave a meeting at the end when the taxes were
ready to file because we knew we were gonnahave a hard time finding a time.
You actually sat down and created an 11 minutevideo, which you sped up just a little bit
(41:06):
because you knew you didn't want anybody to sitthere and go through the pain.
Yeah.
I I wouldn't even watch this video for a littlebit, and I made it.
Every single step and every piece of paper anddocument that was filed on our behalf.
And I thought that would that's first time Iever had that, and I thought it was awesome.
And it really gave me a sense of where westood, not only this year, but what we can do
(41:28):
better in preparation for next year.
And then when we get to chat, meet, moveforward, I feel like that gives me kind of a
foundation to be able to ask questions, number1.
But 2, make some decisions that I probablywouldn't have otherwise been able to make.
So, 1, I wanna thank you for that.
And then, 2, this is the way I think that'scustomer service at its finest.
So I appreciate you doing that, and I wantpeople to know.
(41:51):
Absolutely.
And and kind of just to to wrap this portion upas well and and is is it's never too early to
start with an accountant.
Like and I I will argue TurboTax and all thoseare great, especially as you're starting out.
Right?
Because it's really not that complex.
But the sooner you start with somebody and andsomebody who wants to see you grow, like,
that's the key.
(42:12):
Like, they're gonna be encouraging you as asyour income goes up.
Hey.
Start looking at this.
Start looking at that.
And, like, that's that's where it really startsto pay off.
Like, yes.
It's it's you can be, you know, senior captain,international, all that, and then eventually,
it can be like, okay.
It's time for an account.
But when you have somebody on this journey withyou, it's it's next level.
(42:33):
Yeah.
You're spot on, Mike.
If they, if folks need to get ahold of you fortax questions, they can actually ask that tax,
legal, and financial advice directly to you,and you can give that.
How do they get a hold of you, and and what'sthe best, fastest way that you can reply?
So I got 3.
1 is LinkedIn.
I'm not very active on it yet.
(42:55):
I am starting to get a little more in there.
The second one is my website, jetstream.cpa.
So I know it's gonna be a little bit of acurveball, but I'm actually trying to focus
more on individuals or or small businesses andhelping them grow, but then also doing their
individual taxes as well.
That's like in the world of CPAs, like, there'saudits, there's financial reporting, there's
(43:21):
tax.
And for me, I've always loved the actualaccounting aspect of things, so I really wanna,
like, push into that more.
That's not to say I still won't work with withindividuals, on their taxes, but it's just
something to keep in mind.
And then, last is on my website, JuststreamCPA.
One thing that I've I've I've noticed is, like,there is a a lot of people out there who listen
(43:42):
to your podcast, who listen to passive incomepilots, who listen to these podcasts, and have
the ability to connect with others, but maybeit's not as frequent as it should be.
Right?
And so one thing I I'm launching is calledJetstream Alpha.
And so that's gonna be a community where it'snot just focused on, you know, the high income
(44:05):
earners and these crazy tax strategies.
But let's say you're just starting off andyou're like, hey.
What's the best way to pay this debt off?
Hey.
How does your budget look?
Like, I wanna go from from beginning up tothese advanced tax strategies and and have a
community of individuals who have been on allsides of it and help each other out and, you
know, bring on guest speakers that knowspecifically and are able to interact, on a on
(44:30):
a better basis, like, just with the actualindividuals.
And so that's something that's in the works.
If you go to my website, the Jetstream CPA,there is a Jetstream alpha link, and it's a
little more information regarding that.
But, that's not to take away from the podcast.
I mean, the whole reason I even had this ideawas because the podcasts are so good.
Like, I wanna connect with other people whohave listened to this and, like, nerd out about
(44:54):
this stuff.
So
Yeah.
Right?
And there's a lot in the pilot community.
Yeah.
Well, that's how you can get a hold of Mike,and you better do it quickly because he's gonna
run out of space.
Yeah.
That is that is
a fact.
He's done that right now, but it could grow.
It should grow.
But here's one thing I've noticed as well isthat, like, I I want for me, the relationship
is so important.
(45:14):
Like, I wanna be able to whoever I'm workingwith, I want to know their lives, like and,
like, be able to, like, you know, what's knowwhat's going on.
Like, not to take away from the bigger firms,but, like, if if you go on to a firm because
you like this individual, but you find out thatyou're actually working with another person
throughout the year, it's it's just not thatsame relationship.
So there's a reason I I I like to to cap thingsis because I especially now with with the
(45:40):
growing use of, like, like, these how do Iexplain it?
It's like, there's there's a lot ofdisconnection for, like, that real human
personal, interaction that's not there anymore,and I really wanna keep that.
So that's kinda where
That's what we believe in, and that's why we'rethat that's the probably the number that was
the number one reason why you sparked myinterest and why we start not only a
(46:02):
relationship professionally, but also, youknow, chatting about other stuff too.
So, Mike, thanks again.
I want you to go, everybody out there, checkcheck his website out at a minimum,
jetstream.cpa jetstream.cpa.
And, and then get ahold of him if you, if he'sif you got more questions to answered because
he he's the guy.
So, as always, if you need, Matt or I or youwanna just reach out and chit chat, hit us up
(46:29):
at hey, guys, the pilot network dot com.
As always, keep the shiny side up and thegreasy side down.
Fly
safe.
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