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Teaching Tax Flow: The Podcast
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Teaching Tax Flow: The Podcast

Author: Chris Picciurro and John Tripolsky

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Welcome to “Teaching Tax Flow: The Podcast”, the show that’s all about demystifying taxes and helping you keep more of your hard-earned income in your pocket.

Hosted by tax experts from the Teaching Tax Flow team, this unfiltered (but clean) podcast is designed to empower you with the knowledge and tools you need to confidently navigate the world of taxes. We’ll cover everything from understanding tax laws and regulations to maximizing deductions and credits.

In each episode, we’ll break down a specific tax-related topic in a clear and accessible way, providing practical tips and strategies you can use to optimize your tax situation. We’ll also answer listener questions, share the mic with amazing guests, and share real-world examples to help illustrate key concepts.

Whether you’re a freelancer, small business owner, real estate investor, or just looking to understand your taxes better, this podcast is for you. So tune in, take notes, and start building your confidence in taxes today.

Produced and hosted by Teaching Tax Flow.
www.TeachingTaxFlow.com
93 Episodes
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This episode of the Teaching Tax Flow podcast dives deep into the complexities of car and truck deductions for businesses. Joined by a seasoned tax professional, the discussion centers on the eligibility and nuances of vehicle expense deductions, explaining what they are and what they aren't. In a detailed conversation with tax expert Shawn Flattery, listeners will learn who can claim vehicle expense deductions and the criteria involved. The episode explores the distinctions between standard mileage and actual expense deductions, the nuances of the 6000-pound vehicle rule, and the considerations between buying vs. leasing business vehicles. Through practical examples and a touch of humor, Shawn simplifies the complexities of tax laws, helping business owners make informed decisions that could lead to significant tax savings.Key Takeaways:Eligibility Criteria: Only business owners can deduct vehicle expenses, and the vehicle must be used at least 50% of the time for business purposes.Standard Mileage vs. Actual Expense: Understand the difference between standard mileage rate deductions and actual vehicle expense deductions, and when to use each method.6000-Pound Rule: Learn about the significant tax advantages for vehicles with a gross vehicle weight rating of over 6000 pounds and how this can affect your deductions.Buy vs. Lease Considerations: Get insights into the tax implications of buying versus leasing a business vehicle and which option might offer better tax benefits.Tax Credits for EVs: Discover the specific tax considerations for electric vehicles, including the impact of the $7,500 credit on depreciation limits.Notable Quotes:"If you're using the vehicle for 50% or more for business, then we can start talking about depreciating and taking actual costs." - Shawn Flattery"It's really the date that it becomes available for business use is the magic day and year. Thus, that depreciation starts and you can start taking those deductions." - Shawn Flattery"A vehicle more than 6000 pounds...expands out how much depreciation you can take in the year." - Shawn FlatteryEpisode Sponsor:Strategic Associates, LLCRoger Roundywww.linkedin.com/in/roger-roundy-86887b23 (00:04) - Understanding Car and Truck Deductions for Business Owners (04:34) - Tax Benefits of Business Vehicle Depreciation and Expense Deductions (14:27) - Tax Benefits of Vehicles Over 6000 Pounds (19:59) - Buy Versus Lease: Tax Benefits and Considerations (28:08) - Understanding Vehicle Tax Deductions and Misconceptions
In this episode of the Teaching Tax Flow podcast, hosts John and Chris delve into Chris's top three tax-free income strategies. John and Chris provide invaluable insights on how to legally and ethically minimize taxes over one's lifetime, offering listeners actionable advice on educational savings, Roth accounts, and advanced whole life insurance planning.The conversation kicks off with an immersive discussion on the benefits of 529 plans, how they offer tax-free growth for educational expenses beyond just college, and their newfound flexibility. As Chris elaborates, the emphasis shifts to the importance of incorporating Roth accounts into one's financial planning. He details the advantages of Roth IRAs and 401ks, especially highlighting the potential for tax-free growth and withdrawals. Finally, the episode rounds off with an in-depth look at advanced whole life insurance strategies, emphasizing their role in both providing life insurance protection and enabling tax-free income. Throughout the episode, Chris blends anecdotes with professional advice, making complex tax strategies accessible to all listeners.Key Takeaways:529 Plans: These educational savings plans offer tax-free growth and withdrawals if used for qualified educational expenses, making them a versatile tool for future education funding.Roth Accounts: Roth IRAs and 401ks provide significant tax advantages, with contributions growing tax-free and distributions being tax-free if certain conditions are met.Advanced Whole Life Insurance Planning: Also known as infinite banking, this strategy uses whole life insurance policies to build a tax-free cash value accessible during one's lifetime.Tax Planning Importance: Effective tax planning can drastically reduce future tax liabilities. Chris underscores the necessity of adopting a forward-thinking approach to taxation.Combining Strategies: Utilizing a mix of different tax-free income strategies tailored to individual circumstances can amplify financial stability and tax efficiency.Notable Quotes:"Tax-free income and growth." – Chris Picciurro"A 529 plan is no longer just a college savings plan; it's an educational savings plan that can include K-12 tuition and trade schools." – Chris Picciurro"With Roth accounts, you forgo the tax break today for potentially much larger tax-free growth and distributions in the future." – Chris Picciurro"Strategies should be used in tandem. There are a lot of tax strategies that complement each other for effective planning." – Chris Picciurro"Advanced whole life insurance planning is especially important in your younger years to build a financial war chest and provide life insurance protection." – Chris PicciurroEpisode Sponsor:The Mortgage Shop (00:04) - Top Three Tax-Free Income Strategies (03:52) - Navigating the American Girl Doll Store Experience (06:57) - Top Tax-Free Income and Growth Strategies (09:55) - Parenting Strategies and Adoption Considerations (10:50) - Understanding Roth Accounts and Their Tax Benefits (16:31) - The Importance of Planning and Understanding Tax Strategies (19:08) - Tax Implications of Selling Your Primary Residence Early (20:45) - Authentic Conversations and Unscripted Insights (21:53) - The Importance of Planning and Unexpected Construction Challenges (23:50) - The Unique Approach of Tax Professionals Versus AI (25:22) - Advanced Whole Life Insurance Planning and Tax Strategies
In this enlightening episode of the Teaching Tax Flow podcast, hosts John and Chris delve into the history of U.S. taxes, providing a timely reflection given the Independence Day holiday. Episode 90 offers a fascinating journey through the evolution of the U.S. tax system, from its early introduction during the Civil War era to the complexities of the current Tax Cuts and Jobs Act (TCJA) of 2017. The conversation also touches upon the future of tax policies with looming elections, making it a must-listen for anyone keen on understanding how past and present tax laws impact future strategies.The hosts begin by setting the historical stage, explaining how the U.S. Constitution granted Congress the power to levy taxes and highlighting the Revenue Act of 1861, which introduced the first federal income tax to finance the Civil War. They discuss the evolution of the tax system through significant events such as the Revenue Act of 1913, which established a graduated income tax, and the high tax rates during World War I. Key legislative acts under Presidents Reagan, Obama, and Trump are explored, emphasizing how each administration's tax policies reflected their broader economic philosophies.Key Takeaways:First Federal Income Tax: Introduced by the Revenue Act of 1861 to finance the Civil War, with a 3% tax rate on income over $800.Evolution to Graduated Tax System: The Revenue Act of 1913 marked a shift to a graduated income tax system, introducing tax rates from 1% to 7%.Significant Tax Reforms: Major tax reforms under Presidents Reagan (1986), Obama, and Trump (2017) significantly altered tax rates and structures, reflecting their economic visions.Modern Tax Environment: The TCJA of 2017 reduced corporate tax rates from 35% to 21%, simplified personal taxes, and introduced the Qualified Business Income Deduction.Future Tax Planning: With the TCJA set to sunset in 2026 and upcoming elections, understanding current tax laws and planning accordingly is crucial.Notable Quotes:"Taxes are on sale right now under the Tax Cuts and Jobs Act of 2017." – Chris Picciurro"The U.S. tax system is very complicated; many people from foreign countries look at our tax system and just shake their heads." – Chris Picciurro"We have to understand that tax agencies are your involuntary business partner." – Chris Picciurro"By the way, if anybody knows their CPA, some of them are very, very cut and dry. Chris is not. He's very modern." – John Tripolsky"We are truly at a crossroads with the tail end of the TCJA and the upcoming presidential election." – Chris PiccurrioEpisode Sponsor:Integrated Investment Groupwww.integratedig.com (00:04) - The History and Purpose of US Taxes (01:55) - A Lighthearted Discussion on History, Hot Dogs, and Independence Day (05:20) - The Evolution and Impact of US Tax Laws (09:04) - The Evolution of Federal Income Tax Rates in the United States (12:30) - Tax Laws, Consumer Behavior, and Al Capone's Infamous Tax Evasion (14:34) - The Evolution of Tax Policies from Bush to Biden (18:56) - The Evolution of the US Federal Tax Code from 1913 to 2010 (20:43) - Understanding Tax Rates and Strategies for Legal Tax Reduction (23:10) - Humorous and Bizarre Tax Facts from Various States (26:06) - Educational Insights on Tax, Investment, and Legal Advice
About the Guest:Bill Allen is a retired Navy pilot turned real estate investment mogul. With a background as a Navy test pilot, Bill transitioned into real estate, starting with hands-on house flipping and later expanding into large-scale apartment syndications and passive investing. He is the founder of Flip Hacking Live and has a notable presence in the real estate community through teaching and mentoring. Bill’s accomplishments include scaling his real estate operations to hundreds of transactions annually and dedicating efforts to educate the next generation through initiatives like Teenage Tycoon.Episode Summary:In this episode of the Teaching Tax Flow podcast, we discuss the synergy between real estate investing and tax benefits. This episode features special guest Bill Allen, a former Navy pilot who transitioned into a successful career in real estate investing. Bill shares his journey from military service to becoming a prominent figure in real estate, revealing the strategic advantages and personal transformations that come with real estate investments.Real estate investing offers numerous tax advantages and Bill Allen emphasizes the importance of understanding both active and passive investing strategies. Key topics include how these strategies help in legally minimizing taxes, overcoming common hurdles for new investors, and the significant influence of mentorship. Additionally, Bill talks about his innovative program, Teenage Tycoon, which aims to instill financial literacy and entrepreneurial skills in children, advocating for early education in real estate and investment for long-term benefits.Key Takeaways:Active vs. Passive Real Estate Investing: Understanding the difference between these two approaches helps investors choose paths aligned with their financial goals and lifestyle.Tax Advantages: Real estate investments offer various tax benefits, including deductions and depreciation, which can help reduce taxable income significantly over time.Importance of Mindset and Mentorship: Successful investing requires the right mindset and often the guidance of experienced mentors to navigate the complexities and mitigate risks.Generational Wealth Building: Programs like Teenage Tycoon focus on equipping younger generations with financial and investment acumen early on, paving the way for future success.Practical First Steps: New investors often face challenges like financing and market research, but proper education and realistic expectations can make the journey smoother and more rewarding.Notable Quotes:"The tax code is written for business owners and real estate investors. You can use real estate to not pay taxes legally and ethically." – Bill Allen"In real estate, there are different paths: active and passive. Choose the one that aligns with your life and goals." – Bill Allen"Kids don't know what they can't do. They dive in and learn by doing, which is why they’re so receptive to financial education." – Bill Allen"Real estate does not discriminate; your background does not matter. With the right knowledge and effort, anyone can succeed." – Bill Allen"Understanding how to leverage real estate investments can fundamentally change your financial trajectory." – Bill AllenResources:Investment Portal: 7 Figure MultifamilyEpisode SponsorSunsets & Dinkswww.teachingtaxflow.com/pickleballCODE: TTF15 (00:04) - Why Real Estate Investing Is Popular in the Tax World (04:24) - From Navy Pilot to Real Estate Mogul (11:18) - Risk Tolerance and Decision-Making in High-Risk Professions (12:58) - Teaching Financial Literacy to Kids and Changing Family Futures (17:16) - Empowering Kids and Parents Through Financial Literacy and Mentorship (23:13) - Active vs. Passive Paths in Real Estate Investing (25:42) - Tax Advantages of Active and Passive Real Estate Investing (28:14) - The Benefits and Risks of Investing in Apartment Syndications (29:54) - The Benefits of Passive Income Through Apartment Investing (31:03) - Benefits and Strategies of Active and Passive Real Estate Investing (32:35) - Investing in Real Estate Syndications for Passive Income (34:32) - Fun Facts, Favorite Cereals, and Dream Dinner Guests (39:45) - Real Estate Investing: Breaking Barriers and Finding Success
In the intriguing episode of the Teaching Tax Flow podcast, John and Chris delve headfirst into an important financial debate: "Should you use your savings to pay down or pay off your mortgage?". This episode navigates through various financial strategies, tax considerations, and personal factors that can influence this decision, aiming to provide clarity to listeners who find themselves pondering this financial dilemma.The discussion kicks off with an analysis of current interest rate trends and their impact on mortgage payments. Chris outlines four primary financial considerations when deciding whether to pay off a mortgage: comparing interest rates, opportunity cost, liquidity, and the psychological comfort of being debt-free. Tax implications come next, focusing on the mortgage interest deduction and its influence on net effective mortgage rates. The duo also explores the pitfalls of neglecting these considerations, such as unexpected tax liabilities and future lending limitations. Chris emphasizes the necessity of maintaining a liquid cash reserve and consulting with financial professionals before making such decisions.Key Takeaways:Interest Rate Comparison: Evaluate the interest rate on your mortgage versus the rate of return on your savings or investments.Opportunity Cost: Consider what other financial opportunities you may forgo by using savings to pay off the mortgage.Liquidity Concerns: Maintain sufficient liquid reserves to cover at least three to six months of living expenses.Tax Considerations: Understand the effects of mortgage interest deductions and potential tax implications from capital gains or pre-tax withdrawals.Psychological Factors: The peace of mind from being debt-free can be a significant factor for many individuals.Notable Quotes:"No decision is a decision." - Chris Picciurro"If I've got a mortgage with a balance of $200,000 and $250,000 sitting in my bank account, should I use that cash to pay off the mortgage?" - Chris Picciurro"It's not just about the numbers; it's also about how being debt-free makes you feel." - Chris Picciurro"You must consult a financial advisor before making a comprehensive decision like this." - Chris Picciurro"Tax flow and cash flow are not the same things; always consider the after-tax implications of your decisions." - Chris PicciurroEpisode Sponsor:Strategic Associates, LLCRoger Roundywww.linkedin.com/in/roger-roundy-86887b23 (00:04) - Should You Use Savings to Pay Down Your Mortgage (02:43) - Podcast Origins, Travel Stories, and Financial Strategies (04:43) - Financial and Tax Considerations of Paying Off Your Mortgage (09:17) - No Decision Is Still a Decision in Everyday Choices (10:10) - Financial Considerations for Paying Off a Mortgage (15:26) - Tax Implications of Using Savings to Pay Off Mortgages (18:25) - Factors to Consider Before Paying Off Your Mortgage (22:38) - Teaching Tax Law and Building Your Board of Directors
In this episode of the Teaching Tax Flow Podcast, hosts Chris and John are joined by guest, Jim Cunningham, and jump deep into the intricacies of selling a business. With a focus on empowering listeners to minimize tax liabilities while navigating significant legal considerations, this episode is a must-listen for business owners considering a transition. Brought to you by Legacy Lock, the episode provides a roadmap to understanding essential components of business sales, including asset vs. stock sales, the timing of business transitions, and the legal and tax advantages of different transaction structures.The conversation kicks off with the importance of planning when selling a business and dives into the differences between asset and stock sales. Jim emphasizes how critical it is to prepare well in advance by consulting with financial and legal advisors. The episode also explores the pros and cons of seller financing, the impact of goodwill and enterprise value, and strategic considerations for both buyers and sellers to ensure a smooth transition. With real-world anecdotes and expert advice, this episode provides actionable insights for turning business transitions into lucrative opportunities.Key Takeaways:Importance of Early Planning: Engaging with tax advisors and legal professionals well before the planned sale can significantly enhance the value and smoothness of a transition.Asset vs. Stock Sale: Asset sales are generally preferred for liability reasons, but specific business conditions may necessitate stock sales.Seller Financing: Offering seller financing can spread the capital gain tax burden over time, making it an attractive option for sellers who don’t need immediate cash.Determining Enterprise Value: Goodwill and the ability to generate earnings are crucial to establishing a business’s enterprise value.Post-Sale Involvement: Structuring deals with earnouts and consulting roles can help ease the transition and ensure continued business success.Episode Sponsor:Legacy Lock (www.teachingtaxflow.com/legacy)DISCOUNT CODE: Magic1495 (00:00) - Chapter 1 (00:04) - Tax and Legal Considerations When Selling a Business (04:23) - Strategies for Business Transition and Asset Sales (14:14) - Asset Versus Stock Sales in Business Transactions (21:39) - Legal and Financial Tips for Selling or Buying a Business (31:05) - Building Your Personal Board of Directors for Business Success
In Episode 86 of the Teaching Tax Flow podcast, hosts John and Chris delve into an essential topic for many families: 529 plans. The episode, cleverly titled "What's the 411 with 529 Plans," explores the ins and outs of these educational savings accounts, aiming to provide listeners with deep insights on how to leverage these plans to minimize tax burdens while saving for education. Sponsored by RepsTracker, the episode also shares an engaging dynamic between the hosts, spiced with personal anecdotes and up-to-date tax legislative changes.529 plans are powerful tools for tax-free growth and withdrawals for educational expenses, but their benefits extend beyond the traditional college savings scenarios. Chris and John explore how these plans can be used for K-12 tuition, apprenticeships, and even rolled over into Roth IRAs under certain conditions. With the Secure 2.0 Act bringing new changes in 2024, there's never been a better time to get to grips with these versatile instruments. This episode provides actionable strategies, historical context, and advice for parents, grandparents, and even neighbors wanting to contribute to a child's educational future.Key Takeaways:529 Plans Overview: These are state-sponsored accounts for saving toward educational expenses, offering tax-free growth and withdrawals for qualified expenses.Expanded Uses: Beyond college and university tuition, 529 plans can now be used for K-12 education, vocational schools, trade schools, community colleges, apprenticeships, and certain certified programs.Estate Planning Benefits: 529 plans can be an effective tool for estate planning, allowing significant contributions that grow tax-free and can potentially reduce estate tax liabilities.New Secure 2.0 Act Rule: Starting in 2024, leftover 529 funds can be rolled into a Roth IRA under certain conditions, giving more flexibility in managing unused educational funds.Financial Advice: Always consult with a tax professional and financial advisor to maximize the benefits of 529 plans and tailor them to your specific needs.Notable Quotes:Chris Picciurro: "Knowledge does us no good if we don't share it with the world."John Tripolsky: "Today's educational climate is broader, and how can 529 plans benefit you come tax time?"Chris Picciurro: "You can now use a distribution of up to $10,000 per year per beneficiary for K-12 schools."Chris Picciurro: "From a federal tax perspective, there's no deduction for contributions, but many states offer benefits."Chris Picciurro: "In 2024, if you have money left in a 529 plan, you can roll it into a Roth IRA."Resources:Teaching Tax Flow: teachingtaxflow.comDefeating Taxes Facebook Group: Join HereEpisode Sponsor:REPStrackerwww.repstracker.com/affiliate/teachingtaxflow (CODE: IFG)
In this episode of the Teaching Tax Flow podcast, we jump into the intricacies of 1031 exchanges, a topic vital for anyone looking to optimize their real estate investments.Focusing on the practical aspects of 1031 exchanges with guest, Scott Saunders, who provides a detailed explanation of the associated rules, from identification to replacement property guidelines. The conversation unearths valuable tips for investors at all stages, underscoring the potential of 1031 exchanges to enhance investment portfolios substantially. Key Takeaways:1031 exchanges allow for the deferral of taxes by swapping one investment property for another without the proceeds hitting the investor's bank account.Key rules for a successful 1031 exchange include not receiving cash from the sale and ensuring the exchange is set up before the property closure.Identifying replacement properties requires adhering to set time constraints: 45 days to identify and 180 days to complete the exchange.Like-kind properties are broadly defined in the context of 1031 exchanges, allowing for flexibility in investment property types.Partially deferred exchanges are an option, and investors can introduce outside cash to balance a decrease in mortgage value for a newer property.Notable Quotes:"A 1031 exchange at the most basic level is just this. I take a property that I've held for investment or used in my business. I transfer to a buyer and then I receive back other like kind property that I hold for investment or use in my business." - Scott Saunders"If you haven't looked at an exchange, you gotta at least look at it, deal with your tax advisor, number one, right. That's important. Get with a knowledgeable, qualified intermediary and at least see if it makes sense for you." - Scott Saunders"The misconception that is out there is I have to kind of go the same type ... And that's not true at all. Like kind property ... It's any type of property that you hold for investment." - Scott Saunders"That's why it's a great tool, because it allows you to start with something really small, roll it into something bigger and bigger and bigger. And 30 years down the road, you've got this substantial real estate portfolio that all started with a one little single family home." - Scott SaundersEpisode Sponsor:The Mortgage Shop
In this episode of the Teaching Tax Flow podcast, Chris Piccurrio and his co-host John Tripolsky delve into valuable tax strategies for low to mid-income households, specifically targeting those with an annual taxable income of around $100k and below. The conversation quickly gets to the meat of the episode: tax planning for average-income earners. With insight and enthusiasm, Chris outlines why tax strategy is not just for the affluent but is critical for households in the lower income brackets, where every dollar saved holds significant value. The episode promises to debunk myths surrounding tax planning accessibility and delivers concrete strategies that listeners can readily adopt.Key Takeaways:Health Savings Account (HSA) contributions are beneficial for low to mid-income earners as it offers a method to save for medical expenses in a tax-free manner.Strategic retirement plan distributions can be advantageous, especially if they can be done without incurring a 10% early distribution penalty.Utilizing Roth accounts for contributions and conversions is an effective approach to securing tax-free growth and distributions, making it ideal for individuals in the 10% to 12% marginal tax rate bracket.Tax planning is disproportionately more beneficial for low to mid-income households, as it significantly affects the percentage of their income compared to higher-income households.The misconception that tax planning is only for high earners is a barrier that Teaching Tax Flow aims to dismantle, educating listeners on how they, too, can minimize lifetime taxes legally and ethically.Notable Quotes:"Tax planning is so important for the...lower to middle-income taxable income households.""You pick your tax or the IRS does.""Roth contributions are part of my number three strategy for middle to lower income. The IRA contribution or traditional 401k really doesn't do you that much good.""Even if they didn't need the money, they should start taking money out of their 401K plan early.""It's very important for everyone to tax plan."Episode SponsorSunsets & Dinkswww.teachingtaxflow.com/pickleballCODE: TTF15
In this episode of the "Teaching Tax Flow" podcast, we jump into the critical subject of long-term care (LTC) planning. Bringing on board expertise and personal insights, guest Brooke Crane Acre explores what individuals need to consider while preparing for potential LTC needs. Brooke shares stories and advice to help listeners understand the significance and nuances of LTC.Two contrasting examples from Brooke's personal life paint a picture of what long-term care can look like and underline the individual nature of care needs. The discussion covers the evolution of LTC insurance, highlighting modern policies that provide more control and assurance to policyholders. Brooke discusses using qualified assets for LTC coverage, the importance of having a documented plan, and the emotional and financial benefits of in-home care.Key Takeaways:Long-term care planning is essential as we age, and it's optimal to start considering it around the age of 55.Modern LTC policies have evolved, allowing for more flexibility and assurance, ensuring it's not a "use it or lose it" scenario.Family involvement is crucial; individuals should communicate and document their care preferences and appoint responsible parties for decision-making.LTC insurance can be tailored to include inflation protection, ensuring the policy's value grows with time and cost of living increases.Planning ahead with LTC insurance means peace of mind for the future, potentially mitigating the burden on both the individual and their family.Notable Quotes:"What long-term care is, is support and services to help you meet your personal and medical needs as we all age." - Brooke Crane Acre"If you don't use it, you don't lose it. And that is what to me is very important when we're planning for long-term care, is that that money is always yours." - Brooke Crane Acre"It's a lot easier now to document that and to have someone say, okay, this is what mom wants, or this is what grandma wanted, or this is what my sister wanted, as opposed to not asking that person." - Brooke Crane AcreEpisode Sponsor:Legacy Lock (www.teachingtaxflow.com/legacy)DISCOUNT CODE: Magic1495
This episode sheds light on the intricacies of tax rules that rental property investors face. From the various deductions and tax benefits real estate investors can enjoy to the different forms of property ownership and their implications on tax filings, the episode is brimming with valuable guidance.Listeners get a rundown of how rental properties are taxed, the differences between gross and net income taxation, and the perks of owning rental properties. The conversation moves through the importance of reporting each property's details accurately and touches upon lesser-known tax-related aspects like qualified joint ventures and passive activity losses. Key Takeaways:Rental property owners pay tax on net income, not gross income, allowing deductions like mortgage interest, property taxes, repairs, and depreciation.Each rental property must be individually reported with the correct property type, rental days, personal use days, and physical address on tax forms such as Schedule E or Form 8825.Single-member LLCs and qualified joint ventures report on Schedule E of personal tax returns, while multi-member LLCs, partnerships, and S corporations must file Form 8825.The importance of the proper classification of each property during tax filings cannot be overstated, especially as it impacts lending decisions and IRS reporting.Depreciation is a significant deduction for rental property owners, offering a tax shield even as property values appreciate.Notable Quotes:"You want to properly report the fair market rental days, the personal use days, and the property type." - Chris Picciurro"Make sure you're getting the depreciation deduction and make sure that each property is not only identified as the correct type but the correct rental days." - Chris Picciurro"Remember, if you have a rental property, it's going to fall into three buckets." - Chris Picciurro"There are a couple of checkboxes that you have to be keenly aware of." - Chris Picciurro"Listen to the podcast on step up and basis. So if you are listening to this and you're a taxpayer and you're working in rental properties and you realize the property was inherited by someone, definitely think about the step up in basis." - Chris PicciurroEpisode Sponsor:REPStrackerwww.repstracker.com/affiliate/teachingtaxflow (CODE: IFG)
In this episode, hosts John and Chris dive into the often overlooked, yet insightful, Internal Revenue Service (IRS) Databook. The conversation opens with a spotlight on the importance of understanding IRS operations and statistics that can empower taxpayers to minimize their lifetime taxes legally and ethically. Discover key trends in electronic return filings and insights into IRS auditing practices that every taxpayer should be aware of.The episode unpacks the IRS's processing of 271 million tax returns and the significant shift towards electronic filing, with over three-quarters filed electronically. Chris and John highlight the three states with the highest federal tax payments, namely California, New York, and Texas, offering a glimpse into the geographical dispersion of tax contributions. They also dissect the IRS customer service complexities, emphasizing the challenges faced and the agency's efforts to improve response times.Key Takeaways:The IRS Databook provides a transparent look into IRS operations, shedding light on filing trends and enforcement actions.Over three-quarters of tax returns are now filed electronically, marking a significant shift in taxpayer behavior.California, New York, and Texas are the top contributors to federal tax revenue, indicating regional economic influences.The audit risk for individual taxpayers remains relatively low but increases significantly with higher income levels, especially for incomes over $1 million.Taxpayer Advocate Service is a resourceful component of the IRS aimed at helping taxpayers resolve issues efficiently.Notable Quotes:"We're gonna look at something, as I mentioned here in the intro, you probably didn't even know exists on this planet we call Earth." - John Tripolsky"Tax agencies are your involuntary business partner." - Chris Picciurro"If you owe a refund or have any type of correspondence or case going with IRS and you are found to be correct, they will pay you interest on that balance due." - Chris Picciurro"The audit risk for individual taxpayers is technically 0.44%, or one in 200." - Chris Picciurro"If you're getting audited, you're probably gonna get additional tax assessed." - Chris PicciurroReferenced Resource (IRS Data Book)https://www.irs.gov/pub/irs-pdf/p55b.pdfEpisode Sponsor Sunsets & Dinkswww.teachingtaxflow.com/pickleballCODE: TTF15
In this episode of the Teaching Tax Flow podcast, we welcome Will Lopez of Gusto to unearth the critical significance of payroll beyond its traditional perception. The conversation dives deep into the transformative power of modern payroll services provided by Gusto, as well as how efficient payroll processing can be leveraged for strategic tax planning and business growth. Explore how shifting from an arduous, compliance-heavy task to a streamlined, culture-centric system can make all the difference.This podcast episode delves into the importance of choosing a payroll solution that offers more than just transactional processing, with Will highlighting the culture and community aspects they weave into their payroll services. Will Lopez sheds light on income shifting as a tax planning technique and how proper classification of employees and contractors can save businesses from trouble. Furthermore, the discussion touches upon leveraging payroll to offer employee benefits, enhance retention, and position oneself as an appealing employer in today's competitive job market.Key Takeaways:Payroll is more than just a financial transaction; it's an opportunity to reflect and build company culture and employee well-being.Proper classification of workers as either employees or contractors is critical for legal compliance and tax benefits.Income shifting and tax strategies like S corporations can save businesses significant money, with payroll processing playing an integral role.A modern and comprehensive payroll system like Gusto provides additional value through benefits, HR, and effective onboarding processes.Implementing strategic payroll processing through a cloud-based system can safeguard against compliance issues and facilitate growth.Notable Quotes:"Payroll really is a reflection of society, in my opinion." - Will Lopez"The economy flows through payroll. Communities are actually upheld through payroll." - Will Lopez"The only thing that's really happened with payroll, it's gone from like rock hammer chisel to desktop to the cloud." - Will Lopez"Running a business, you wanna save money, but if you're running a team as well, you wanna give yourself or make yourself look good as an employer, especially if you're growing a team." - Will Lopez"Compensation is only a small piece of somebody's consideration of staying at your company." - Will LopezResources:Check it out for yourself >> www.teachingtaxflow.com/payrollEpisode Sponsor:The Mortgage Shop
Episode Summary:In this episode of the Teaching Tax Flow podcast, Chris Picciurro steps into the spotlight as he sheds light on his day-to-day life as a tax professional. The conversation takes an intimate turn as Chris shares his journey from an entrepreneurial paperboy to becoming a knowledge powerhouse in the realm of taxes. This episode delves into the intricacies of a tax professional's world, juxtaposed with the fun banter between the hosts, making the subject accessible to listeners from all walks of life.Chris breaks down his professional activities into three core areas: tax compliance work, advisory services, and practice management. He emphasizes the importance of not just looking backward, akin to a review mirror but also planning forward akin to looking through a windshield, a practice modern tax professionals are increasingly embracing. From sharing how he gravitated toward the tax profession to discussing the future of accounting, this episode is rich with insights into the complexities and transformations within the tax industry.Key Takeaways:The life of a tax professional extends beyond the tax season and involves a mix of compliance, advisory, and practice management.Chris, having over 20 years of experience, has seen a major shift in his practice from compliance-heavy work to advisory services.Modern tax practices are increasingly becoming virtual, emphasizing the importance of adapting to new technologies.Chris discusses the industry's talent gap, advocating for the profession to attract new generations into the field.The conversation also touches on the personal elements of Chris's life, such as his enthusiasm for pickleball.Notable Quotes:"I'm more of an entrepreneur that got into running an accounting or CPA practice than a traditional.""It's only a problem until there's a process.""It's a great profession if you know someone that's interested in learning about it.""We're virtual on the private side. We're a virtual practice.""We have to make this profession more attractive."Episode Sponsor:Strategic Associates, LLCRoger Roundywww.linkedin.com/in/roger-roundy-86887b23
Let's embark on a journey through the world of retirement accounts tailored for the modern entrepreneur in this episode of the Teaching Tax Flow podcast. We jump right into how to best create a robust financial future, while cleverly navigating through various retirement plans.In the multi-faceted discussion, Chris tactfully breaks down retirement account options, from the basic traditional IRA to the ultra-advanced defined benefit plan. Emphasizing the necessity of planning and foresight, the podcast provides a rare glimpse into the intricacies of tax-advantaged savings for self-driven business minds. With each retirement solution dissected, the episode carves out a clear understanding, empowering entrepreneurs to make informed decisions for their long-term prosperity.Key Takeaways:Traditional and Roth IRAs serve as basic retirement account options, allowing individual contributions up to certain limits based on age and income.SEP IRAs offer an advanced option for self-employed individuals or entrepreneurs without employees, enabling higher contribution limits and tax deductions.SIMPLE and Solo 401(k) plans serve as viable options for small business owners and sole proprietors, providing opportunities for substantial retirement savings.Safe Harbor 401(k) plans cater to businesses with employees and ensure fair treatment across compensation levels with mandatory employer contributions.Defined Benefit Plans stand at the apex of complexity, suitable for those able to contribute a significant amount annually and seeking maximal tax deductions.Notable Quotes:"For entrepreneurs, we don't have a set it and forget it option." - Chris Picciurro"A traditional IRA is a great starter account. It's not designed specifically for entrepreneurs, yet it's utilized by many entrepreneurs when they get started." - Chris Picciurro"SEP IRA is a great weapon, especially for people that don't have employees that are just getting the ball rolling." - Chris Picciurro"The Solo K or solo Roth 401(k) could be a great weapon for them [entrepreneurs]. It allows you to take a loan against your solo 401(k) for up to $50,000 tax-free." - Chris Picciurro"If you're in the situation where you have at least $100,000 or more to contribute to retirement, then the defined benefit plan might be a good option for you." - Chris PicciurroEpisode Sponsor (Chris is very excited about this!)www.teachingtaxflow.com/pickleballCODE: TTF15
In this episode of the Teaching Tax Flow podcast, the hosts dive into the intricate world of short-term rental (STR) investments and the associated tax loopholes. Guest expert Arda Bircan brings his wealth of knowledge and real-world experience to the table, providing listeners with a unique perspective on how to leverage STRs for financial gain and tax efficiency. The podcast explores everything from identifying profitable markets and properties to understanding the impacts of tax regulations related to STRs.The discussion primarily centers on the lucrative nature of STRs as an investment option, particularly when combined with a strategic approach to tax planning. Arda Bircan highlights his methodical process for selecting and managing STRs, emphasizing the importance of location, property size, and amenities in driving revenue. Additionally, the intricacies of the STR loophole are unpacked, alongside its implications for high-income earners and the potential for non-passive loss deductions. Listeners are guided through the thresholds for determining a property's qualification as an STR and the concept of material participation.Key Takeaways:Real Estate Strategy: Investing in larger short-term rental properties, such as four or five-bedroom houses, can yield higher revenues due to less competition and the ability to command higher average daily rates.Market Analysis: Certain markets like Asheville, North Carolina; Montana; and Maine are identified as less saturated and potentially lucrative for STR investments.Key Relationships: Establishing strong relationships with local cleaners and handymen are critical for maintaining high standards and ensuring operational success in the STR business.Investment Support: Many investors lack the in-depth knowledge required for effective STR investing, highlighting the importance of consulting with real estate CPAs and investment experts like Arda Burkan.Regulatory Dual Assurance: It's crucial to meticulously confirm the legal status of STR operations with both city officials and, if applicable, homeowner associations to avoid costly misunderstandings.Notable Quotes:"I strongly recommend purchasing a single-family home, a larger property, preferably at least four, preferably five bedrooms, due to the fact that you can generate more revenue from that particular property compared to two or three bedrooms.""...finding the highest profitable short term rental property and then buying it the right way, using it for non-passive losses, and leveraging advanced tax strategies are not straightforward issues.""Being successful in real estate investing largely comes down to the property that is chosen.""The single most important relationship that you need to build as a short-term rental investor is finding top-notch cleaners."Resources: www.strtax.guruEpisode #25: The Value of Tax ExtensionsEpisode Sponsor: The Mortgage Shop
In this episode of the Teaching Tax Flow podcast, hosted by Chris Picciurro and John Tripolsky, they dive into the nuances of parental tax strategies. With a focus on empowering parents to legally and ethically minimize the taxes they will pay over their lifetimes, episode 76 is a must-listen for parents eager to optimize their tax planning. The hosts meticulously break down complex tax strategies that capitalize on the benefits of parenthood, offering a wealth of knowledge for the layman and experienced tax professionals alike.In this episode, Chris and John outline three pivotal tax strategies designed to benefit both parents and children. Starting with the benefits of contributing to a Roth IRA for your children, they delineate how such contributions can grow tax-free, providing a nest egg for future needs. The hosts move on to discussing 529 plans, emphasizing their tax advantages and flexibility for educational expenses. As they explore nuances like gift tax exclusions and the implications of gifting assets, the potential tax savings for family estates come into focus. Through these discussions, the podcast ensures listeners are equipped with the tools they need to undertake informed tax planning.Key Takeaways:Contributing to a child's Roth IRA can secure future tax-free income and growth, provided the child has earned income.Investments in a 529 plan grow tax-deferred and can be used tax-free for a beneficiary's educational expenses, with added benefits like potential larger contributions.Parents and grandparents can gift up to $18,000 per year to a child without incurring gift taxes, which can also facilitate income shift and estate planning.Notable Quotes:"Roth contributions could be very powerful." - Chris Picciurro"The [529] expansion of what we consider an educational cost could include technology." - Chris Picciurro"It's easier for laws to pass to tax people that have passed away than people that are living." - Chris Picciurro"Not too many people are running around with that amount that they're concerned about hitting that estate tax exemption." - Chris Picciurro"Unfortunately, just financial and tax education and literacy is just not taught as much as it should be." - Chris PicciurroNEW LinkedIn Group - "Tax Planning Community"www.linkedin.com/groups/13008440Episode Sponsor:Integrated Investment Groupwww.integratedig.com
In this episode of the Teaching Tax Flow podcast, hosts Chris and John dive deeply into the intricacies of 1099 forms with the help of guest expert Kaitlyn Rummel from EH Business Services. Kaitlyn brings her experience to the table, discussing how 1099 forms work, their significance in tax documentation, and strategic tips for businesses to manage them efficiently.Opening with an introduction to the topic, Kaitlyn sheds light on different types of 1099 forms, emphasizing the infamous 1099-NEC. With a focus on how businesses can minimize tax burdens legally and ethically, the episode uncovers best practices, common misconceptions, and the dos and don'ts of 1099s. The conversation explores the close interplay between professional bookkeeping and foolproof tax planning, presenting guidance that listeners can implement immediately.Key Takeaways:1099-NEC forms are essential for businesses to report non-employee compensation, and they must be filed by January 31 each year.Businesses should collect a W-9 form from contractors before commencing financial transactions to facilitate accurate 1099 documentation.Payments made via credit card do not require a 1099-NEC because they are reported on a 1099-K by the card processor.Penalties for not filing 1099s can range from minor fees to substantial charges, depending on the delay and the nature of non-compliance.Keeping organized records and leveraging bookkeeping software like QuickBooks can significantly ease the process of issuing 1099s.Notable Quotes:"It's better to have [a W-9] and then find out that you don't need it." - Kaitlyn Rummel"Just because you have a contractor doesn't always mean that you will file a 1099 for them." - Kaitlyn Rummel"Quickbooks will automatically take out those transactions made with a credit card and just give you the transactions that count towards the 1099." - Kaitlyn RummelEpisode Sponsor:REPStrackerwww.repstracker.com/affiliate/teachingtaxflow (CODE: IFG)EH Business Serviceswww.ehbusiness.net
In this episode, Chris & John cover the beneficial sphere of tax advantages that come with homeownership. This conversation is a must-listen for current and prospective homeowners aiming to understand the financial and tax implications of owning a primary residence. The duo unpacks several key benefits, providing listeners with actionable tax tips that could lead to significant savings.Throughout the episode, Chris and John highlight the immediate tax deductions available through mortgage interest and property taxes, emphasizing the importance of itemizing deductions for maximizing returns. They also explore lesser-known incentives, such as energy-efficient home improvement credits and the significant capital gains exclusion for primary residences, revealing strategies that can support a homeowner’s financial growth. For homeowners pondering the value of renting out their property, the Augusta rule offers an attractive tax loophole, allowing income from rental properties to be tax-free under certain conditions. The episode serves as a concise guide for navigating the intersection of homeownership and tax planning, providing enriching content for financially savvy listeners.Key Takeaways:Homeownership offers tax deductions on mortgage interest, property taxes, and mortgage points if you itemize your deductions.Energy-efficient home improvements can lead to federal tax credits, potentially adding value to the home while offering tax savings.The Section 121 exclusion allows homeowners to exclude up to $250,000 (single filer) or $500,000 (married filing jointly) of capital gains from the sale of a primary residence.The Augusta rule enables homeowners to rent out their property for up to 14 days per year and excludes the rental income from taxes.Tax benefits are designed to encourage homeownership and contribute to community stability and economic growth.Notable Quotes:"Homeownership does create property tax revenue. It creates more sense of community. So there's a lot of value to a community where you have a high percentage of homeownership." - Chris Picciurro"If you own a primary residence and you sell it, most likely you're going to get a full or partial exclusion from any capital gain." - Chris Picciurro"If you're renting a property, the rent you pay is a personal expense. There's no deduction for that. That's just the way it is. But if you own a property and you itemize your tax deductions, your mortgage interest, your property taxes, and any mortgage points paid are deductible." - Chris Picciurro"Imagine someone lives in Boise, Idaho. They get elected to the House of Representatives. They go live in Washington, DC, buy a house there, live there for two years, do their term, they don't get reelected. They sell their home in Washington. Guess what? Conveniently, they won't pay a capital gain on that because they lived there for those two years." - Chris Picciurro"Rent your house out for up to 14 days and absolutely exclude all of that rental income from tax." - Chris PicciurroResources:Join the Teaching Tax Law community for personalized tax advice and updates: teachingtaxlow.comConnect with our guest Chris Picciurro and the podcast team through the Defeating Taxes private Facebook group: defeatingtaxes.comEpisode Sponsor:Legacy Lock (www.teachingtaxflow.com/legacy)DISCOUNT CODE: Magic1495
In the pursuit of legally reducing lifetime tax payments, this episode unveils the strategic advantages of understanding step-up in basis and how it applies to various inherited assets. Chris succinctly breaks down the essence of cost basis and its implications for capital gains tax. His expertise shines through as he presents everyday scenarios, articulating a clear picture of the benefits and intricacies involved. Key Takeaways:A 'step-up in basis' significantly reduces capital gains tax on inherited assets by adjusting the asset's cost basis to its market value at the time of inheritance.Inherited assets are automatically treated as long-term capital gains, beneficial for lower tax rates, regardless of how long the asset was held prior to sale.Beneficiaries should not rely on old brokerage statements for cost basis and must ensure their inherited assets' cost basis is updated correctly.In community property states, surviving spouses may benefit from a "double step up in basis," further reducing potential tax liabilities.Consulting with a tax professional is crucial when dealing with inherited property to ensure proper tax treatment and maximization of available deductions.Notable Quotes:"It's much better to inherit assets than to receive them as a gift.""Any inherited assets are automatically considered long-term capital gains, which we know are the lower rates.""Make sure that you, what we call, review your depreciation schedules or realistically have your tax professional review your depreciation schedules because you might not know what the heck you're looking at.""A lot of the things we talk about here on the podcast is really based around tax planning and strategy."Resources:Defeating Taxes Facebook Group: Search "Defeating Taxes" on Facebook to find and join the private group discussed in the episode.Dive into the full episode for an in-depth exploration of 'step up in basis' and gain valuable insights into how it can benefit your tax strategy. Stay tuned for more episodes from "Teaching Tax Flow" to continue enhancing your tax knowledge and uncover constructive financial tips.Episode Sponsor: The Mortgage Shop
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