Just 2 Minutes - Interviews by Kamil Sarji

37 - Tax Strategies That Maximize Real Estate Profits with Dan Tucker

• Kamil Sarji • Episode 37

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Uncover the best tax strategies to maximize your real estate business profits with Dan Tucker from Tucker Lucas & Associates. Learn how to choose the optimal business structure, leverage deductions, and minimize tax liabilities effectively. From navigating self-employment taxes to retroactively adjusting for S-corp advantages, Dan shares practical tips every agent needs to know. Don’t miss this opportunity to transform your financial approach and keep more of what you earn!

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So I've gotten people's QuickBooks files that thought they were a disaster, but when I get in there, it actually made sense and I could use it. I've had other people say I'm really good at QuickBooks. I tie out everything out and then I go and they have like negative cash or something crazy that way out of whack. Travel Travel is considered like. Uh mileage and nope. So like if you're going to conferences or things like that taking flights That's thing, you know Those are all deductible expenses as long as they're related to to what you do to earning money And what happens with the s corp is that you know, say you have a hundred thousand dollars of profit As a Schedule C, you would pay self employment tax on the 100, 000, which is 15, 000 plus. As a S Corp, if we did it retroactively, you would turn that same 100, 000 of self employment income into 100, 000 of business income, um, and there's no self employment tax on business income. Welcome, everybody. I'm Kamil Sargi, your host of Just Two Minutes. And today I have Dan here. Dan, you want to tell us about yourself? How you doing? I am, uh, my name is Dan Tucker. I own a tax and accounting firm in Johnston, work with small businesses, um, on bookkeeping, tax preparation, tax planning, you know, any type of financial needs for the small businesses. I'm excited to have Dan here today because we're going to talk about real estate and how He helps real estate agents set up their business. And also I'm wearing the Johnson and Wales, uh, socks today. Cause I went to Johnson and Wales and so did Dan. No, sorry. That was a roadie ram. Oh, you all right? Yeah. Okay. Sorry guys. So I'm wearing the sock, these socks to represent Johnson and Wales. I went to Johnson and Wales. My daughter goes there. J. Woo. Wildcats. Wildcats. Yeah. Brody. Brody. Brody for me, though. It's weird because my son goes to URI. Yeah. My daughter goes to Johnson Wales. Yeah. So it's kind of like, you know, like we're brother and sister. Close. All right. So Dan, you're here today. Not just to talk about real estate, but really for the just two minutes. Questions. All right. Let's hear them. All right. So my timer over here. Two minutes. Are you ready for these questions? Yeah, let's do it. Okay. And go. So, when did you go to URI, not Johnson Wales? I went to URI to play baseball, basically. And then, you know, secondary, I got an education. But realized quickly that that was really, The primary because I, uh, even baseball was not a career choice that I was able to pursue. Yeah. But yeah, that was mostly, it was, you know, athletic related at the time. Okay. Uh, but I mean, if Johnson Wales was the only school that offered it, would you go there? Sure. I actually looked at Johnson Wales to be honest. Yeah. But I did not end up attending. Yeah. Also, another question is how come, like, They came up with they took the letter s right? Yep, and then they put like two lines And now that's the dollar. Yeah. Why, why'd they do that? I really have absolutely no clue why they, why or who made the dollar sign. Yeah. I'm assuming something to do with the letter S. Like, something that starts with S. Like, I don't know. Um, It could be, yeah. What's your favorite chips? Favorite chip? I'm very plain, so I want my chip to taste like a chip, so I would probably just say like a regular plain or ridged potato chip. But yeah, like I don't want my chips to be McDonald's cheeseburger, ever, you know. If I want to taste a McDonald's cheeseburger, I'd go for a McDonald's cheeseburger, not a chip that tastes like a bar a chip. So like barbecue chips are not for me, those kind of things, no. Okay. It's kind of plain. If I put you in the kitchen. And give you everything to make a dish. What's, what's your favorite, like, what's your best dish that you can make? Oh, that I would make personally? There's not much. I would probably heat up a chicken patty and make a pasta side. Yeah. I married well for that. Oh man. Alright. That's great. Oh goodness. What'd you think of the questions? Great. Yeah. You like that setup? Sure. That I did with the socks? Yeah, you did that on purpose. Yeah. Yeah. I knew you went to Johnson. That's who you are. Yeah. No, talk about it.. Oh, man. Okay, cool. So Dan, you are an accountant. You help people. Accounting, you help me personally, you help gold door. So. There's different ways for people, real estate agents to set up their business. There's like sole proprietor, there's a S Corp LLC, all this stuff. So what, if you met with a, an agent, like how do you figure out what, um, so setting up an LLC gives you some separate. Protection for liability purposes, but in regards to the taxes, it's really their income kind of gives us an idea of what to do based on how much you're profiting. You know, there's situations where you want to turn yourself into an S corp so you can save some money on the self employment taxes. You know, when you're a sole LLC, you file your taxes on schedule C and you know, the income on that schedule C is subject to It's a self employment tax, which is the typical tax that people see taken out of their paychecks when they're getting a W 2. So it's the Social Security and Medicare taxes. So there's just ways to save some money there when your income gets into the 60, range. You know, it makes sense to make the switch at that point, really. You know, with the conversation about where you're projected to keep going to. Yeah, because I'm assuming there's so many different scenarios and things. To make that decision. Yeah. Yup. So, you know, there's other things that you can do in terms of retirement contributions where you can save some tax dollars, but that's really a separate issue because you know, if you're filing a schedule C, you make retiring contributions, you get deduction, you know, of your income, but it's, you're not reducing your self employment tax. You're not getting a deduction, you know, for your self employment income and that's the situation. You know, like I said, the income is the driving factor with, uh, a conversation about where you project to go and you know, what your plan is moving forward. Um, if you have one good year, it's not always necessarily the best idea to do it because there are, you know, additional costs in becoming an S corp and in registering with the state, but you know, it makes sense to absorb those costs when your income's high enough to grab enough tax savings to make it worth it. Okay. It. Someone starts off in real estate, does maybe one, two transactions the first year. Probably not. So they're, they're probably not going to need that type of tax planning, but you know, it's also a good idea to get ahead of what you need to be keeping. Track of at that point. So you can get into some good habits before you end up getting very busy where it's tougher to create those good habits. If you're already doing that before you really, you know, start crushing it or bringing in lots of money, it just makes that transition easier. And it gives you, you always have a, the knowledge of where you stand throughout the year. So it makes it easier to tax plan and do things like that as well. Okay. Yeah. As far as the agents, like, you know, very simple. Like we have. The income, we have the expenses, is there expenses that are only valid for the sole? Maybe we should talk about the difference of like the sole proprietor versus the, you talked about LLC. So in terms of collecting your That data and financial information, it doesn't really make a difference if you're an LLC or you're, uh, excuse me, an S Corp or just an LLC, so filing a Schedule C, the expenses really get shown the same way. So that's why, you know, I, like I said, it's a good idea to get, to get ahead of the game and start tracking those things correctly. So real estate agents, the big expenses is usually their auto. So you want to make sure you're tracking your mileage. You know, that includes any mileage going to open houses, showings. If you're taking continuing education classes, you know, all those things would fall under business mileage and you get a deduction based off of what that mileage is. Cell phone is another one that you can carve out. You have to have the business and personal use because there's always a Mick, but you can carve out the business use of your cell phone and take that as a direction to home office is another one as well. But yeah, there's different things to carve out that we make sure we're, we're getting all the deductions that we can get. So you're not paying, you know, too much tax on your tax return. So with a sole proprietor, that's just person would know. Yeah. So a sole proprietor would be anybody that just wanted to start a business or, you know, even a real estate agent to be specific that just starts in year one, they're really a sole proprietor unless they register an LLC, then they would still be in business for yourself. Okay. You would be a single member LLC at that point. But there's, you know, there's for federal purposes, there's no separate entity. It all goes on your personal return. And then, you know, the next step above that would be to register as an S corp and you have to file a selection, um, in order to do that. And they do allow you to go back three years. So if there's people that had some good years and were scared to do their tax And hadn't done them yet. There's form 2553 is the form you use to elect the S to make the S election. You can file that as long as there hasn't been any returns filed in the past, you know, in those, in that three year block, you can make the election to go back. Yeah. So there's some. Avenues to save people money that think they're stuck and, you know, we're scared to go and file their returns because they have a 1099 for 100, 000 or something like that. Yeah, yeah. Yep. The sole proprietor is necessary or can they just do it on their own? Yeah, so a sole proprietor would. 1099. Yeah. So the only difference really is, is a single member LLC is registered with the state where a sole proprietor, you know, is just. Doing business, you know, as they go, there's no other difference outside of that. Okay, so tell me more about the electronic EIN number. Okay, yep, so you can What's it used to like, what's it used to? Yeah, so an EIN is basically a social security number for a business. So instead of So a sole proprietor can get an EIN. Yeah. So instead of having to use your social to file different forms, you get this EIN number from the IRS and that's the number that you use on your form. So if you're a single member, excuse me, if you're a sole proprietor, When you go to the IRS website to register for an EIN, you just select one of the choices is that you're a sole proprietor. The other choices are LLC or you can be a corporation, you can be a non profit. There's a list of different, you know, reasons why you need the EIN and you select it at that point. Yep. Okay. So, and you do need a separate EIN if you were previously registered as a sole proprietor and you end up for whatever reason, income tax purposes or liability purposes, if you register an LLC subsequent to that, you need to go ahead and get a new EIN as well. But yeah, each EIN is unique to that entity type. How much is it to get an EIN? It's free. You just go on the IRS website, irs. gov. There's a little toggle button to get an EIN and it takes maybe five or 10 minutes to go and get. I wonder why they make it free. I don't know. Oh, so they can tax you. Yeah. It all comes down to tax. They just want to track it all. Yeah. They want to track it. Nice. Okay. With the EIN, uh, you're, you can open up. Bank accounts. Yep. Yeah. So typically the bank is going to need you to have some type of documentation for the business to open a business bank account. So they'll need, they usually ask for the EIN letter or they'll go right to the state website to see that you're registered with the secretary of state. So you need those things in order to open a business bank account. You can open a bank account in your own name with a DBA. Without doing that. But if you want it in the business name, you need correct documentation for them to do that. Okay. What about w nine? So w nine is, um, so it would be for if you have contractors working for you, they would have to fill that out. So you could issue a 10 99 to them at the end of the year. So I guess in, you know, it would be more for the broker issuing it to the agents. But I guess technically, if an agent had Okay. An assistant helping them out or something like that. And they were paying somebody checks to help them out. If you pay any unincorporated person or an unincorporated business over 600 in a calendar year, you're required to issue them a 10, 99, 600, 600. Sorry. Sorry. Yeah. Nope. Nope. Nope. Damn. Where's that job? Yeah. Right. I don't know where that one is either. Yeah. Yeah. Okay. I have agents here who they want me to pay them directly. So I need, you know, the 10 nights to fill out that form. I also have agents who want me to pay their corporation or LLC directly. So they give me a W 9. Same thing. So W 9 either an individual or business would, you know, would fill those out. Nice. As far as, uh, you're talking about. Auto, like having, paying for your mileage and all that. What's the, cause real estate agents, we drive a lot. We drive all over the place. Yes. So what's the, is it benefit or is it smart to. Buy under the corporation or is it, um, so it depends on where you are in your development. So, you know, to start off, you're not gonna, you're probably not necessary to buy, uh, you know, the vehicle through the LLC because at the end of the day, you're going to pick up your business mileage anyway, as part of the return, but once you register with the LLC, you end up paying. Commercial rates on insurance and things like that. So until you really need to, it's going to increase your costs for things unnecessarily, because we're still going to deduct it at the end of the day. Anyway, but you know, once your business is healthy and you're, you know, it makes sense for you to turn into the S Corp and put yourself on payroll and you know, you're making some good money, you know, then you can go ahead and LLC. Okay. To buy things under the business. Is that EIN what they look for as far as credit? Yup. So they're going to look, but they're, they're going to pull your Personal credit as well, because, you know, they typically sometimes, or, you know, on occasion, you have to sign personally for them to depending on how much history they can, they, the history, credit history that the business has. Yeah. Okay. Interesting. So as far as buying the car or owning it and doing the mileage and all that is two separate, you know, it's completely depends on what you. Assess like how they exactly. Yup. Yup. You know, if there's other people in your business that are going to be using the vehicle too, then you definitely want to get it, you know, purchased with the business registered with the business. But if it's just you driving to open houses and things like that, it's probably, you know, it's just going to cost you a couple of extra dollars and it's not benefiting you that much. There's nothing really different about it. Yeah. Cause again, we're still taking the deduction on your return. So you're still getting whatever. Business use of the car that you're using. So my car is clean, you know, on the outside, like who's, but what if I slap picture of myself on the car made it ugly? No, uh, it made it, you know, advertising. Yeah, of course. What's up with that? So, yeah. So if you're using your vehicle a hundred percent for business, then you can deduct a hundred percent of the cost, you know, maintain and use that vehicle. Yup. So if you're advertising on your vehicle with the, you know. Picture yourself. If that's going to bring you some more business, you go get them. Okay. You, you said you have to drive your car a hundred percent business related. So you don't have to, but in order to get a, you know, in order to take a hundred percent of your cost to run the vehicle, you have to use it a hundred percent for business. What percentage of the car has to be advertisement? The whole thing. Okay. Yeah. Interesting. So, cause I see that a lot and I wonder like, cause sometimes, I mean, you can't. Garrett, like, okay, use this vehicle a hundred percent for business if it's not wrapped, but, oh, shoot, someone got injured a family member. I have to go pick him up, bring him to the hospital. Now it's like, all right, so like 98 percent used. Yep. Can I get that silly? So if you, it depends on how silly you want to get. So if you want to be that, minute details, then yeah, you know, at the end of the day, if you were to get audited, the IRS looks for mileage logs to proof of your business mileage. So the mileage log is supposed to include the purpose of the trip, uh, the beginning and starting points and how many miles, you know, we're driven on the trip. If you keep track of things for, I believe it's three months, the IRS will let you extrapolate that over a year and use that as evidence too. But, you know, if it won't make sense for someone that is driving, you know, so many miles one month, more than next month, if you, you know, doing those things, you're probably better off trying to track that stuff. So, you know, exactly how many miles you're driving. Yeah. As far as like home home office, what. Doesn't, what's not part of that? So the home office can be two different ways. You can take the simplified method, which takes the square footage of the home office to multiply by five. And that's your deduction. Or you can multiply by five to, to what? So the, I believe it's. 300 square feet, the deduction. Oh, there's an amount. There's an amount. There's a set amount per square foot that you get. Oh, wow. Just like mileage every year. They change for the home office. Yup. Okay. They don't change that every year. No, no. And that's just the simplified method. The other method is. To carve out your actual expenses, if it's rent or mortgage taxes, utilities, and you take the percentage of the home office. So if the home office is one room of your house and it makes up 10 percent of your house, you know, calculate all those taxes and the interest and utilities, and you get 10 percent of those as a deduction. Interesting. You know, if it, sometimes it doesn't usually create that much different of a deduction, but it's really situation by situation. Yeah. Okay. I mean, can they, if they have a garage that they want to build out as their office expenses to, yeah, so actually that is sometimes can be a good idea for you because you can actually pay rent. To yourself for that garage, and you can save on self employment tax. So there's clients that will rent out their own garage from themselves, and you rent it out for a thousand dollars a month. And you still have to report that 12, 000 as rental income, but you're reducing your self employment income. So in that situation, you're saving self employment tax on, you know, the 12, 000 of rent that you paid. Wow. I love it. So people like they come into your office and they're like, So I have this garage and then boom, boom, let's turn it into an office. You're like, okay, how can we make that happen? Yeah, that's amazing. Yeah, that's cool. It's, I mean, that's why, that's why you do it. That's why I have to use my account. That's, that's really good. So if the garage, if you need to bring contractors in to build it out, is that it? So all that costs would go to right off against the business, any build out type of things that are to the foundation of the building, they have to get depreciated. So you don't take them in all in one year, it'd be a commercial building. So it's 39 years. You have life of the asset basically, so you can deduct it over 39 years. So it's not a giant deduction every year, but it still helps. Can reduce your tax. Okay. As far as like any other crazy expenses that you've seen, what's, uh, What's other crazy types of expenses for real estate agents? I don't know that I have any good real estate agent deductions. It's very basic. Cause yeah, it's, it's, it's, you know, the mileage, the auto is usually the biggest deduction for you guys, but yeah, I don't have any crazy deduction stories. Okay. If they were to hire. Like you were saying an admin, do they have to like, and they want to hire them as an employee? Yep. Do they have to switch their sole proprietor? They don't, they don't, they don't. So they can do that as well. So, so you can be a sole proprietor or a single member LLC and run a payroll for other people. You just can't run a payroll for yourself unless you're an escort. So if you want an assistant, they're going to be an employee. You can go ahead and get a payroll company or try to do the payroll yourself or work with an accountant and you can run a payroll for that person. Do you get, you can go and get the EIN like we talked about on the IRS website. You got to register the state to run payroll, employer account, and then register with the IRS for the EFPTS, which is the federal deposit system. But yeah, you, you can run a payroll for employees, just not yourself as a single member LLC or a sole property. Okay. How about suits? Suits buying suits. And so no, actually suits don't really fall into a deductible item. So because they have multi purpose use, like you can wear your suit to a wedding or out to dinner, you can't take those things as a deduction. It would have to be specific uniform. You can get away with doing gold door. Apparel would be deductible because it's advertising. We got that way. There you go. Gold door apparel. Go get your gold door apparel. Wow. But yeah, suits like that. So, you know, for example, myself, if I wore a suit to work. I'm using it for work, but because I can wear it to a wedding or dinner, it's not anything that's deductible. Nurses, scrubs, things like that would be deductible because it's a uniform and you're only wearing it for business purposes. Steel toe work boots for laborers or things like that are all a hundred percent deductible, but warm weather gear is a gray area. Probably would fall under not deductible too. Wow. So dress shirts with embroidery, gold or realty. We could fit those in the box. Not a regular dress dress shirt. Okay. How about like dry cleaning? It's all personal expense. Okay. Cause I mean, you could, unless you're dry cleaning dirty. Yup. Well, if you're dry cleaning your scrubs, that's one thing, but yeah, dry cleaning a suit is, yeah, it wouldn't fit in the box because how do you tell like, Oh no, I got it dirty at work. It wasn't when I was at this party. Right. Yeah. They don't care anyway. Yeah. I'm trying to think of like. Shoes that are You know, but we can't really, it's not Nike. I think you can design, you can customize. You can, you can go door. You could, could it depends on how aggressive your account wants to be when you present them that expense. Oh man. So we talked about expenses. I think we covered that. Yup. Right. Let's talk about income. Income. Okay. Income. So with income, again, you look at that as, I mean, mostly like as far as a broker, I'm paying them as a 10 99 or paying them to their business. So If they're like, how do they choose if they're going to, I think we, we talked about what type of entity they're going to be. Yeah. Yeah. So it depends on, you know, first we start with whatever your 10 99 is for, cause that's going to be your gross receipts, your top line. And then we need to, Carve out and figure out what your deductions are for the things that we talked about, the auto and the, you know, cell phone, any type of continuing education, classes, advertising, business cards, all those types of things, signage for the homes. I don't know if the agents are responsible for that themselves, but whatever staging for things like for the open houses, all those things. Come off. We come up with whatever your net profit is. Um, net income. And then at that point, if it's 20, 30 grand, we're probably just going to leave you as a sole prop and file the schedule. See, and you pay a little bit of tax. It's probably nothing crazy, but when you get into the 50, range, we'll start having the conversation about, Hey, you might want to become an escort. We can save you some self employment tax. You know, what's your year going to look like moving forward into next year and after. If you're already at 000, it's almost a no brainer at that point to do it. And what happens with the S Corp is that, you know, say you have 100, 000 of profit as a Schedule C, you would pay self employment tax on the 100, 000, which is 15, 000 plus. As S Corp, if we Did it retroactively you would turn that same 100, 000 of self employment income into 100, 000 of business income And there's no self employment tax on business income. So, you know right off the bat there you'd be saving 15, 000 but the caveat is once you're an S Corp, you have to pay yourself reasonable compensation Which means that you have to run a payroll for yourself and that can vary Depending on how much profit you make. But we want to play with that number to make sure we don't run too much through payroll, because if you turn yourself into an S Corp and then pay yourself all your profits through payroll, you just defeated the purpose of creating the S Corp. So it's got to be a steady amount of money. So big picture, like it doesn't necessarily have to be steady as in I'm making X a week or X a month. But if we look at. Year as you know, the tax return or tax filing periods. Therefore, you know, the January through December timeframe. So we're more concerned where you are for that timeframe, but if it makes sense to do the S corp, we run the payroll kind of as you're making your money, if that makes sense, you, you know, monthly or quarterly is sufficient. To run a payroll for yourself at that point, because at that point you're running the payroll because you're an S corp owner and you have to do it. It's not like you're having employees that you need to pay week to week, because if you're doing it right, you're still should have profit left over. That is still your money you take as profit distributions too. So when you're an S corp, the way you pull money from the business is through payroll and profit distributions as well. Okay, and C Corp, uh, C Corp is its own separate entity. So in order to get money out of the C Corp, you would have to pay payroll. Or dividends, which is a whole, whole, that might be a whole separate episode. Okay. So it's complicated. Yes. So if, if an agent already started receiving money to themselves for the year, it's easy for you to switch them over to whatever category they need to be in. Yeah. Yup. Yup. Yeah. So like, again, like I said, the S corp, it gives you, you have the ability to go back three years, three years. So yeah, if there's someone that came in and still needs to do their, you know, 23 tax return, you know, there's still things that we can do going backwards to make it. So they don't get crushed as much as they could, you know, in a different scenario, because again, we wouldn't even be changing how much their income isn't at that point. We would just be changing the nature of their income and what line it goes on the tax return, which can save you a significant tax dollars sometimes. What do you think agents mostly forget about? Like declaring as far as like expenses, um, kind of thing that it's obvious to see. Yeah. So I would say carving out the cell phone. Um, people don't always think of auto is usually a big thing. Internet, you know, people, yeah. So that home internet would fall under the home office too, if you were taking a home office, so it all goes together. Yeah, yeah, yeah. So as far as like mileage, how do people. What's the best way to track that? Oh, there's apps that are out there that you can download. Some people just use Excel and you know, you, you, some people still, I have people that I get handwritten notes from at this point, but it all, you know, it's all personal preference and everyone's brain works differently. So however your brain works, that's how you should compile that, that, that information. Yeah. Wow. So you mentioned Excel. And other ways that people are tracking, if someone bought QuickBooks and has all their stuff in there versus someone with everything in Excel, like here's all my expenses or versus someone has QuickBooks, they put all that stuff in there. Which one do you prefer or which one is more of pain? It really depends because either one could be super clean or all over the place. So I've gotten people's QuickBooks files that thought they were a disaster. But when I get in there, it actually made sense. And I could use it. I've had other people say, I'm really good at QuickBooks. I tie out everything out. And then I go and they have like negative cash or something crazy that way out of whack. Same thing for Excel. If you're. Tracking everything in Excel and I can tie out your sheets to bank statements and it all flows and makes sense. You know, it's, it's easy to work with. Someone could give me an Excel that is just a hodgepodge of numbers and it doesn't make sense. And then I have to go and either ask them to redo it or, you know, do the legwork and summarize it all, you know, myself. Yeah, I think Excel is probably the easiest way if I were to do it. I would use Excel. Especially for the mileage. Yep. Yep. Mileage and credit card and download it as an Excel file and just put it in and just categorize it that way. Yep. Most of the accounting softwares at this point have download features and they memorize transactions and things like that. So, you know, sometimes you got to do a little bit of legwork in the first few months to get everything set up. But there's, you know, there's ways to create efficiencies for yourself. Using the accounting software. But like I said, Excel works wonders too with the formulas. And then I work with Excel files, QuickBooks files, you know, different types of accounting softwares. Yeah. Yeah. I love Excel, but I'm not that kid who has all their expenses and everything in there for the business. Mm-hmm. I have to use QuickBooks and I've been using it for. A few years. Sure. And, uh, I mean, you've seen me with QuickBooks. Why is it so complicated? Yeah, there's just a lot of moving parts. I mean, they, from a distance, you look at QuickBooks and you're like, all right, this seems easy because it downloads everything. You start using it. You're like, wow, reconcile, like all these different things. Oh my God. Yeah. There's some quirks to it to download the transactions. Sometimes it will double up on things, but like I said, if you get a good base and get it set up correctly ahead of time, or when you start before you're, you're doing, you know, hundreds or thousands of transactions, you can get the, you know, you can get everything in place where it's, it's coming over clean from the download to, you know, But yeah, it's, it can be complicated when you get into, uh, you know, invoicing and receiving payments, running your receivables or payables through QuickBooks. Some people try to get a little too fancy and they end up having to answer things multiple times because they're setting up it as a payable or a receivable. Wow. So, Oh man. Yeah. I just wish that they made it simpler. I mean, they tried, right? They try, they try. So, but like, you know, I bet it wouldn't be simple for me to go and try and sell a house either, right? So that's why I'll teach you though. There we go. I'll teach you. I don't know who it would be harder for you to teach me to sell a house or me to teach. How many times have you told me? That's what I mean. I wouldn't be a one shot stop if I came to you to learn, you know, learn the real estate business. Yeah. Yeah, it would be multiple, you know, yeah, there's a lot to learn. Yeah, same thing. So the tax code is ever changing. So yeah, there's a lot to it. But that's why, that's why we barter services. And there's, you know, all different people in the world to help each other out. Right. Yeah. Yeah. Anything else that I missed that you think, uh, That I should have mentioned? No, I think, you know, just like I said, getting ahead of your tracking of, you know, income and expenses makes things easier for you. You know, you can do it going backwards. But if I asked you, you know, what you spent money on last month or six months ago, it's going to be a lot easier to recall what, you know, what the money was that you spent on last month. So if, if you. Hold off on summarizing things for yourself, people end up forgetting about, you know, things that they did or money that they spend. So it's just when you have the fresh mind, it's, you're less likely to miss things like that. And at the end of the day, you want to pay the right amount of tax. You don't want to pay the government too much money because they get, they got enough besides from like expenses and Excel spreadsheet. So there's like. That's great that you put all your stuff in a spreadsheet, but now you have to categorize them so that they go in the right spots. Yup. Uh, before we talk about categorizing, does it really matter? Can it just be like stuff to help my business run? Yup. So, so. At the end of the day, not really, you know, if you have a business expense and it's, uh, an office expense or if it's a utility, at the end of the day, it counts the same, you know, on your tax return. Yeah, what's the profit? Yeah, exactly. If it's in the wrong category, at the end of the day, there's not anything that would change because it doesn't change what your bottom line is. Okay. It's more, you know, if it's a business expense or personal expense, those things, obviously you're going to change the bottom line, but. Okay. So if I mess up and put the wrong category. You're fine. Yeah, I might catch it and fix it before I file your return anyway, and you just might never know, but either way, it wouldn't matter. Yeah. As long as I'm putting the income right, the correctly and oh my gosh. Okay. That really did a lot of. There we go. Stress. Yeah. But as far as categories, uh, there's marketing travel, travel, travel is considered like a mileage and nope. So like, if you're going to conferences or things like that, taking flights, that's the, you know, those are all deductible expenses as long as they're related to, to what you do to, to earning money. So really any expense that you incur. That you can, you know, relate back to generating revenue for you. That's what a business expenses at, you know, at it's in its simplest form. Yep. Okay. So Tony Robbins and like Dominican Republic or, you know, if Tony Robbins is going to do a seminar in the Dominican Republic, he's writing off his flight. Yeah. Oh, you too. Yeah. You too. Yes. If you're going to a summit. I mean, it's motivational, like sales. Yeah. It's related. Yeah. Yup. So the way that works too is, you know, you can mix vacations into that too. So if you were to go to his conference, your flights would be deductible. You know, while you were meals, while you were there at the conference would be deductible. If you stayed extra days to, you know, see the Island or whatever. Those excursions and things like that would not be deductible. Um, so you would have to carve those things out. But, you know, you can, you can get the cost in the hotel. Um, is there a limit on how much I can eat? It has to be, um, reasonable. Yes. Okay. Yeah, so they don't, if you have extravagant expenses, the government would, you know, the IRS would throw those out if they were, you know, if they were told it. And if you got like a maybe business opportunity and you took people out to eat on the trip, that's covered. That's, that would be a deductible business expense. Yep. Nice. Okay. Yep. Uh, what if you're not traveling? And you're having a meeting with a client who just, you closed a deal, a big deal. That's so meals and meals would be 50 percent deductible. Entertainment is no longer deductible under the current tax law. So they made a change. Um, before if you had, you know, season tickets to sporting events, things like that, golf memberships used to be able to write off, which you no longer can. If you go to a sporting event with a client. It's not the tickets aren't deductible, but if you're there and spend, you know, a hundred bucks on food and beverage, that's 50 percent deductible. So you can still carve out the meals at the entertainment when they're 50%, but the entertainment is no longer deductible. Okay. No longer fully deductible. Like it used to be correct. You think this, uh, administration's going to change that? Something will change, um, overall because the tax laws expire at the end of the Oh, um, so. From the changes that were made in 2018, they were 2018 through 25. So they expire at the end of 25 and we're going to have probably something new and different, you know, for next year, won't probably find out till the end of the year, they're going to tell us that they can't go home for Christmas until they finalize the bill and. They're gonna, you know, any rumors of what it could be? Uh, not anything at this point. It's so early. It's whatever they say now is definitely not going to be what the end result is. Um, but yeah, they're gonna go back and forth right to the final hour. Um, so they end up conceding things and we will have whatever the final bill is probably in December at some point. Okay. So business meeting with fellow agents, uh, 50%. Correct. Uh, what if I take everybody out for a team meeting at a, uh, hall? Uh, so that would be 50 percent as well. Okay. What scenario would it be? 100% So, it would have to be a 100 percent deductible, so meals, excuse me, meals while you're traveling are 100 percent deductible. Okay, that's the only, yeah. Okay, so 50 percent whether I take one. So, yeah, I believe you can do like a company party. If you're doing dinners and things like that, that would be 50%, but if you did like a Christmas party or a holiday party, we could deduct that. Okay, holiday party and I bought cookies. Yeah, yeah. Okay. Sure. Or had, uh, Subway bring little, okay, but not sit down at a restaurant. Sure, it would have to be, it'd have to be like a holiday party. Yeah, not like, uh, not going out to a restaurant. Okay. Sales meeting once a month. Sales meeting once a month. Yeah, that's 100. Yeah. Cool. Wow. Goodness. You don't get stressed out with this stuff? No. No. I'm already stressed out. Yeah. This is like a lot of. Yeah. You have to keep up with all these rules and. And try to be creative. And I've seen the spreadsheets that you've had. Like, you're like, okay, this is one scenario. This is another scenario. See how this is better. And I'm like, yeah, I don't stress about much of my life. So. Can I see our initial guy? Yeah. Yup. Yeah. So, before we end, I just want to ask you, because everybody's curious about this. Alright. When's the best time during tax, tax season? Yeah. That the accountant is not As busy, not as busy. I mean, you're busy the whole time. I know you like, so January is eases into it. Cause you know, not everyone has tax forms out yet, but now I'm kind of getting prepared, some 10 99 start coming in, things like that. Some of the businesses that I do bookkeeping for try to get ahead there, but no, the best time is after tax season. But probably not April 16th, because I'm not going to answer my phone that day. Take the day off. Yeah, I'll probably take that day off. Good. But right after that, once May hits, yeah, that's probably a good time to. May, okay. Yeah. Okay. Yeah. And then you have the corp, corporate, uh, tax. So there's the, yeah. So, so, uh, the March 15th is a deadline for partnerships as corporations. April 15th is the deadline for personal returns and C corps. If you extend the business returns or the individuals, it's a six month extension. So there's another deadline for me in September and October. Not as crazy as the March and April deadlines, but yeah, if the returns that are on extension, uh, are due in September and October. And the extension is a extension of time to file, not an extension of time to pay. So if there's tax due, it's due by April 15th. So you have to predict how much you owe. Sometimes. Yeah. And sometimes you have an idea or you try to cover what you think it's going to be. And, you know, hopefully you're close, but you can be as close as whatever estimates that you get from the client at that point. Yeah. Awesome. So Dan, how do real estate agents and others find you? Tucker Lucas. com is the email address. My info is on there. You can shoot me an email, give me a call. We'll be happy to help talk you through whatever situations you get or you have, um, and make sure that we are a good fit for each other. And if we are, we move forward. If not, I, uh, Can probably help you out with who you should be working with if it's not me. So very honest down to earth person. And, uh, if it's a good fit, it is, if not, I'll let you know and give you an idea of who would be a good fit for you. So. Awesome. Cool. Yeah. Thank you very much. Alright, thanks. Thanks for stopping by. Thank you. See you soon. Appreciate it. My has got a squad. We all own this zone in-house help. So they ain't doing it alone. They focus on clients. Negotiating win while the back ends. Handman, that's how we spend a hand them business. Watch 'em all climb.

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