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In the Hidden Money podcast, you'll learn how you can legally use the tax code to your financial advantage. There’s wealth inside the tax code. Taxes aren’t the enemy.
Most people hate taxes (and pay more than they should). But when you view taxes only as an evil expense, you miss out on legal ways to grow your wealth. Unlock the secrets to saving tax and building wealth with the Hidden Money Podcast! 🎧💰 Hosted by Mike Pine and Kevin Schneider.
Kevin Schneider: You can be a
full-time W-2 employee and also have
a trade or business on the side, so
long as you materially participate.
Mike Pine: I ended up renting
Cybertrucks a couple times on Turo.
I meet this guy, he's got a W-2 job
He bought four of them, $8,000 bucks each.
He paid $32,000.
He got to deduct all of
them as bonus depreciation.
Vehicle that weighed over 6,000
pounds qualified for 100% bonus.
And that was 115 times 4â¦
$460,000.
He doesn't pay any taxes.
Kevin Schneider: This is what we walk
you through is, how do I utilize the tax
code with my life to provide me income?
Mike Pine: Welcome to this episode
of the Hidden Money Podcast.
Kevin and I are excited to continue from
our last podcast, but this time we're
going to talk to people, talk to you, how
to reduce your taxes as a business owner.
Some of you might say, "Well,
wait, I don't own a business.
I'm a W2 taxpayer."
See last episode.
Um, but you can still own a business.
As a matter of fact, a lot of you,
whether you know it or not, probably
have a business, you're just not treating
it as such or getting the tax benefits.
Here's my fearless partner, Kevin- Yes
⦠who made some quite tasty old fashioneds.
Thank you very
Kevin Schneider: much.
Yeah.
Mine's smoked, yours not, you know?
Yeah.
I like a little spice.
Mike Pine: I like those best.
Yeah.
I don't like that
Kevin Schneider: But yeah, owning a
business doesn't have to be, like,
your day-to-day 2,000-hour-a-week
or 2,000-hour-a-year job.
You can be a full-time W2 employee and
also have a trade or business on the side,
so long as you materially participate.
We can get into a little bit of that.
But materially participate into
some sort of side hustle or side
business, there's probably a lot
of things you could do there.
For very e-easy reference, let's say, um,
you're, you work a nine-to-five W2 job,
but you wanna grind, you want more money.
What do you do?
You could probably pick up some Uber.
You could pick up some DoorDash orders.
You are starting a side hustle,
so now your car is eligible
for tax deduction 'cause you're
utilizing it to generate profit.
Your cell phone, you're utilizing your
GPS, you're using your app to pull orders.
Your cell phone bill, if you buy
a new iPhone, now that is funneled
through your trade or business.
This is very
Mike Pine: just- And then you
can- ⦠entry ⦠buy the Apple
Watch Ultra and the business pays
for it, and IRS covers a third
Kevin Schneider: Because what's
the, what's the definition
of kind of when I canâ¦
What-- How can I deduct a business?
What designates me deducting something
Mike Pine: or not?
An ordinary and necessary
business expense.
If you can make any reasonable argument
under penalties of perjury that this
helps your business, which it does,
keeps me on time, calendar, meetings,
all there- Yep ⦠um, you can deduct it.
You need internet.
You need a cell phone for a business.
IRS agrees 100% with that.
So I got some good stories, and these are
stories that people haven't thought of.
Like W2 taxpayer I met, he's
not a client, but a neighbor.
He engineer, W2, he's going to
retire in, like, eight years.
High W2, high taxes.
I said, "Hey, why don't
you start a business?"
He's like, "I don't have
time for a business."
"Well, what do you do for your time?"
And I learned 'cause he does woodworking,
and he makes for friends, and people
pay him for it, and I ended up paying
him for some woodworking, for cabinetry,
countertops, really cool molding.
Um, he even made a thing that
we could put our baby gate at
the top of the stairs for us.
Um, and it's really nice,
and people pay him for it.
And he's like, "Well,
that's just a hobby."
I said, "Dude-
Kevin Schneider: You're making money.
Mike Pine: Yes.
You're charging.
He's like, "Well, I, I don't
know if I'm making money or not."
"Well, why don't you try to make money?
Do you realize what you did for me was
way worth more than what I paid you?"
He's like, "Really?"
I'm like, "Yeah.
Um, but don't charge me more.
Charge the next guy more."
He's like, "Okay."
But anyways, that was a business.
Do you know how much money
he had spent on his machinery
and equipment for woodworking?
It's crazy.
Oh, yeah.
Hundreds of thousands of dollars.
Yeah.
And he bought those in the last
eight years, and he paid for them.
Guess what?
He started a trade or business,
and he loved it, by the way.
And he started doing a lot more stuff.
His wife was a little annoyed with me
until he retired because now he's working
Kevin Schneider: two
Mike Pine: jobs.
He loved it.
Zero taxes for two years,
depreciating that equipment.
That's a trade or business.
That is a trade.
He didn't think he had
time for a business.
He didn't have a business.
How many more things like that out
there have you heard about or are you
possibly doing that's a trade or business?
Fishing.
Got a friend, fishes.
Usually, he's taking other
people out fishing 'cause
he don't like to fish alone.
He's fish guiding.
Charge for it.
Charge a fair market rate for it.
You got a business.
That fishing boat you bought
Kevin Schneider: Producing- The gas, the
insurance, the dock fee, the everything.
Yeah.
The life jackets.
All of it is tax
Mike Pine: deductible The lures,
Kevin Schneider: the fishing
Mike Pine: reels Yeah Fishing reels and
Kevin Schneider: poles.
Why not?
Yeah, yeah, I mean, it's
ordinary and necessary to operate
Mike Pine: that- Yeah ⦠business.
Kevin Schneider: In real estates and off-
and, and another one as well, because
a lot of W2 earners, what they do is,
let's say I make 500 grand as a W2.
Well, I, I kick off into my
401, which we talked about last
Mike Pine: time.
But still- Little teaser, Kevin
does not make 500,000 as a W2.
I know his taxes.
I've seen his taxes, and I've seen his W2.
I do not.
But you have, you, you have
Kevin Schneider: big hopes in which-
One, one day you'll give me a raise.
But let's say that W2 earner, they, they
contribute and invest in their retirement,
but they still have disposable income
sitting in their checking account.
So now they're like,
"What do I do with this?"
A lot of people just open
up a brokerage account.
So when you open a brokerage
account though, and you buy
1,000 shares of Apple, you're not
getting a tax deduction for that.
You're just, you just
have a cost basis on that.
So you take your 100,000 out of your
checking account, put it into a brokerage
account with the hopes that it goes up.
But the market's fickle right now.
But you hope it goes up, but
your contribution and investment
is not a tax deduction.
What if you wanted to
get into real estate?
There's ways to utilize short-term
real estate, which we have
done podcasts on over and over.
So please, if you're a first-time
listener, go search under our, uh,
playlist and go to the short-term
rental pod- uh, playlist.
Mike Pine: How many people rent Airbnbs?
How many people like to stay
Kevin Schneider: in Airbnbs?
They're super popular.
Why not?
And then if you own one, guess what?
You have a trade or business.
That Airbnb building that you
buy is a trade or business.
So the depreciation, just like the
fishing boat, just like the DoorDasher,
you have an asset that we can now utilize
to offset your other active income,
Mike Pine: or your W2.
I'm going for one more out there,
but then if you could please do your
tax 101 on material participation.
I guess that'd be like 201.
Yeah.
Um, Turo.
So I almost did this, but my wife
was just not going to buy for it.
She said no multiple
Kevin Schneider: times
The
Mike Pine: The Cybertruck.
When the Cybertruck came out, yes.
I wanted a
Kevin Schneider: Cybertruck,
so- You wanted to deduct
Mike Pine: that Cybertruck.
And, and I could have, but,
you know, the wife's the boss.
Mm-hmm.
I, I'm not-- Yeah.
There's no sore spot about that at all.
I mean, I could have had a Cybertruck.
Kevin Schneider: It could have been.
Mike Pine: Anyways.
Could have saved you 30 grand.
I ended up renting Cybertrucks
a couple times on Turo.
I meet this guy, he's got a W2 job,
but he drives his-- And I asked
for delivery 'cause I didn't know
how to do it, drive a Tesla, and I
needed him to show me and all that.
Um, he delivers it, and we start talking,
and I was like, "Well, what do you do?"
He goes, he has a big
job, full-time job, W2.
I was like, "Okay, and you're, you--
How did you get the Cybertruck?"
At his job, 'cause I don'tâ¦
Anyways, "How'd you get it?"
He's like, "Well, I mean, I
only had to pay $8,000 down.
The rest is onâ¦"
At that time, I think it was like a 0.9%
note.
Like, "That's cool.
Do you make any money at this?"
He's like, "Oh my gosh."
How much did you pay?
I, it was only, it was like
400 bucks a night, a day, and
I'd rent it for four days.
Um, but he has that rented out.
He has four of them.
Rents them out about 22 days a month.
He said, "After I pay the note, after
I pay all my expenses, after I pay
for the electricity, the Tesla's
e-electricity charge and maintenance,
I'm netting about $4,000 per Cybertruck."
How much does the Cybertruck cost you?
It was
Kevin Schneider: the beast mode.
Like, it's so
Mike Pine: cool.
$115,000.
He was delivering them.
He was cleaning them.
He was paying
Kevin Schneider: the bills
Mike Pine: As you'll explain,
material participation.
He bought four of them, 8,000 bucks each.
He paid $32,000.
He got to deduct all of
them as bonus depreciation.
Vehicle that weighed over 6,000
pounds qualified for b- 100% bonus,
and that was 115 times 4 $460,000.
He also bought some other
Model X's and Y's and stuff.
Where does he- He, he doesn't
pay any taxes ⦠store them?
Like, what do you do with all those cars?
He has a big backyard-
Okay ⦠is what he told me.
Yeah.
But he could've re-
rented a storage for you.
Get a storage unit, yeah.
Yeah.
I mean, but Turo was paying it all.
But he had a business, and he usedâ¦
So anyways, that 32,000 he had to
pay for those Cybertrucks, he got
like $140,000 tax benefit that year.
It covered all of the ownership.
The, it covered all the down payments,
and it's cash flowing positive, and
he's got depreciation offset all
the income it's making, plus his W2
Kevin Schneider: job.
Mike Pine: That was cool.
I like that.
And, and I
Kevin Schneider: could have done
that.
You could have.
It's a lot of w- I mean, it's work,
Mike Pine: but
at the same time- That's, that's
why Becca said no, 'cause she
knew I'd be at the firm working my
Kevin Schneider: tail off.
Did they come home at night and deliver a
Mike Pine: a dadgum
Cybertruck, come back- No,
she would've had to deliver it and
clean it So that's why she said no, and
that's why I couldn't argue with her.
With three children, so
she's- You could fit three
Kevin Schneider: kids and a Cybertruck.
Yeah.
But I like that tax plan, but a
part of me doesn't just becauseâ¦
Well, I, I guess I can get o- if
I'm cash flowing that much, I don't
care if my asset is burned to the
ground with people driving it.
I mean, a car, i- if you put that
many miles on it, that Cybertruck
is not gonna resell at all.
No.
So it's not a value.
It, the value of the Cybertruck's
not going up, it's going down.
Mike Pine: netting almost 50,000 a year.
So all he needed to do was, was
Kevin Schneider: run it- Two years?
two
Mike Pine: two years and
it's completely paid for, so.
Look at
Kevin Schneider: doing math together.
Wow.
We can do that sometimes.
Yeah.
Mike Pine: a- Yeah, public math.
On camera math ⦠certified
public accountant.
Look at us go.
Technically it was
Kevin Schneider: 96,000.
But that being said-
Mike Pine: years.
Kevin Schneider: God.
Mike Pine: Yes.
But I'm a good tax strategist.
You're a good nerd.
Takes being a nerd.
Yeah.
Um, let, let me just throw
a disclaimer out there.
We have a lot of clients doing
Turo and they're not making money.
So you gotta, you gotta do your
Kevin Schneider: And it's
short-term real estate too.
Yeah.
Short-- I mean, short-term
real estate, you'reâ¦
You got market conditions too.
Real estate's generally a safer
investment because it's secured
by appreciating property, but not
everything's appreciating, and
interest rates are going all over the
Mike Pine: place, so
And insurance.
Mm-hmm.
Insurance is going up.
Yeah.
Has gone up a ton in the last few years.
So I mean, like that's
a great point to make.
If you're gonna go into business for
tax savings- Make it a hobby ⦠unless
it's something you already are doing
just for fun, do your due diligence.
It, it, it's not a good tax plan
to go buy a Cybertruck and lose
your, your tail off, or go buy a
short-term rental and lose money,
Kevin Schneider: um, just to save taxes.
It's not a good plan.
Cause here's something, you
know, like I, I have a lot of
retro video games in my house.
Yeah.
Like I probably have 200, 250 of them
in my game room, like on a shelf.
I just have all these games, right?
You're weirder than that.
I am.
But I've, I've never written them off.
It's a pers- it's a hobby, right?
I don't make money off of it.
I just, I collect them, I play them,
I teach the, my kids about them
and stuff because it's very cool.
Turn that into a business.
Right.
And so that, that just dawned on me.
I'm like- Just now?
Yes, because how do I make a prof-- I
mean, it's in my house, so I'm like,
"Okay, I can start a YouTube channel.
Everyone's
Mike Pine: doing that,
but I gotta have some sort
of business model.
Do your girls have so many people over,
just have more slumber arcade parties.
I can- $10 per head, they
can play arcade all night.
Deal.
Kevin Schneider: We pay a lot more
than that going to the arcades around
here.
So stay tuned because I'm gonna deploy
Mike Pine: that.
I did tell the story
Kevin Schneider: about Ty and
her- You can advertise it here.
Okay.
There you go.
Yeah.
I'll shout out my next
YouTube channel here, too.
I did tell the story about Ty doing
that with her birthday parties.
Mm-hmm.
You know, um, and I'll tell that story
real quick is because my wife had aâ¦
She's very artistic, and she
just loves serving people.
So she wants-- she wanted to get a bunch
of like-- She wanted a turnkey birthday
par- Like, if you said, "Hey, I wa- Iâ¦
My girl's turning seven, and I
need seven sleeping bags themed
in this, like, woodland theme."
We were so blessed to only have boys.
Yeah.
So she w- she would actually
have-- We had-- We bought,
that year, she bought an iPad.
She bought, like, 10 air mattresses,
10 TPs, um, supplies, robes, a-
everything because the girls,
they wanna do their nails.
And so we're like, "Okay,
we, we got you hooked up.
We got robes.
We got nail polish.
We gotâ¦
It's turnkey.
You just tell us what you want."
And she shows up, delivers it, sets it
up, puts the balloons up, makes it look
gorgeous, and she would get paid for that.
But we test ran the business
model at my daughter's birthday.
So we bought seven, 10 air
mattress, whatever it was.
We set up our living room, made
it look gorgeous, but it was for a
business that we were trying out, and
all the moms that came by are like,
"Wow, your living room looks so good."
And we're like, "Cool."
That was our test market.
We deducted everything on my girl's
birthday party because now the
next week she started advertising
in the school saying, "Hey, if
you want, look at these pictures.
Do you want this for your kid?
I'm showing up," me, "showing
up, putting the air mattresses
down," and all this kind of stuff.
And so it was a trader business.
We wrote off her iPad, her
Mike Pine: make money Oh, yeah.
The big problem with that
though is using time that you
could've been spending on a firm
Kevin Schneider: You got
to support the spouse too.
That's true.
But it was, it was fun.
It was, it wasâ¦
It-- But that's just something
that we did that we were-- my wife
was passionate about, and we found
a way to make it tax-deductible.
So what it all boils down to is
material participation, though,
whether it's, uh, Turo, whether it's
an Airbnb, whether it's, um, a lemonade
stand, I don't care what it is.
We're going back to our buckets.
You have active and passive income.
If you're a high business earning,
um, income, that's active, that you're
managing your own business, you're
active, so you need active income, right?
So you need to materially participate
in the Airbnb because when you
buy real estate, it defaults to
passive, but material participation
Mike Pine: moves it from passive to
Kevin Schneider: active.
Material-
Mike Pine: a short-term rental
Kevin Schneider: If it's
a short-term rental.
If it's a short-term rental.
Long-term rental is different rules.
But in the short-term rental, if you
materially participate, which material
participation is a seven-part test, you
only have to pass one of the seven parts.
Generally, it's 500 hours of managing,
100 hours of managing plus more time
than anyone else, or substantially
all the time is done by you, the
owner, and then the other four
tests are done pretty much after the
property's already been in service.
So the first three tests is what I kind
of look at for new business owners.
So if you materially participate
in the, you know, arcade or
Mike Pine: Turo,
Kevin Schneider: fishing, if
you hit those standard hours,
that is not a passive activity.
That's an active trade or business.
Now that boat is
deducting against your W2.
Theâ¦
You know, this is what we walk you
through is, how do I utilize the
tax code with my life to offset--
To provide
me income?
Isn't it awesome?
Yeah.
And as a business owner, you're
opening the door to a lot of
things, not just investing.
In your business, you should
be paying your children.
You should be investing with 401.
You should be doing, um, a
gusta rule, if at all possible.
I had a client do over
$100,000 gusta rule.
Mike Pine: I've told that
Kevin Schneider: story several times.
That's hard to do, but he- It
is ⦠the facts and stuff.
The facts l-landed to where I--
he paid himself $100,000 out
of the business, and it wasn't
taxable income to him personally.
He got a hundred grand tax
deduction, and I eliminated it on
his personal via the gusta rule.
Mm-hmm.
You should be doing those things,
and you can drastically change your
cash flow picture and your business,
it mat-mismatching against the tax.
Mike Pine: Yes.
So you said you could pay your kids.
Isn't that just taking money
out of your business, which is
Kevin Schneider: a deduction, but
making it taxable to your kids?
Well, if it is taxable to your
children, which it probably isn't.
Mike Pine: Tell us about
Kevin Schneider: That's the point.
But if it is taxable to
your children, I can almost
Mike Pine: guarantee your
children are in a lower tax
Kevin Schneider: bracket than you.
If they're not subject to the kiddie tax.
Mike Pine: but- But that's on
invest- passive investment income.
Here's something very cool.
They can make up to $13,000 a year,
goes up every year due to inflation,
before they have to pay any tax.
You pay them as a W-2.
If they're under 18,
they're not subject to
Kevin Schneider: FICA taxes.
They can
Mike Pine: be exempt.
Um- Pay them 1,000 bucks a month.
You gotta pay them reasonable, fair market
value for whatever they're doing, but
you could pay them 1,000 bucks a month.
Um, you should put your girls to work
in the bus- in the arcade business.
So you're not taking time
out, put the girls to work.
They can work.
You pay them.
And here's another cool thing about
that, and this is not tax saving,
but this is great financial planning.
Um, your kids are allowed to put
into a retirement account up to 6,000
bucks a year into a Roth or a regular.
I would say do regular if they're not
paying t- I mean, do Roth if they're
not paying tax, um, because they have
to have earned income to put in Roth.
So you got a 12-year-old, two, uh,
11-year-old and a 13-year-old girl
that are running your arcade business.
Suddenly they can make this money,
put $6,000 each into a Roth retirement
account that grows tax-free for the next
Kevin Schneider: 50 some odd years.
Mm-hmm.
And then they take it out
tax-free.
Yeah.
And I'll-- I, I have a lot of Airbnb
owners too, that their kids are out
there sweeping, they're cleaning,
they're, they're doing legit work.
And let's say a kid's 16, you can
funnel 12 grand a year for the
past two years, that's 24 grand.
Mm-hmm.
You could do that.
I mean, you just bought
your 16-year-old a car.
By the time they're 16, you bought them a
pretty decent car at 20 grand that- They
bought ⦠that they buy with the wages
you paid them, but you could pay them out
of the business, get your tax deduction,
and it goes to your child tax-free.
Then you buy a car.
You can fund their college.
You can do whatever you want with that
money once it's in that other account.
Mike Pine: It's deducted
Kevin Schneider: And it's deducted.
And it's deducted, so
you get a tax deduction
Mike Pine: for buying
your 16-year-old a car.
So start thinking about
how much that is.
You can set up a qualified tuition
assistance plan for your employees.
So wait a second, your kids
are going to private school.
Um, mine go to private hybrid school.
They're not old enough yet to
work, not responsible enough.
I won't do that to our firm yet.
Um, but suddenly now your
business is paying their qualified
tuition reimbursement plan.
I think it's 5,650,
something like that a year.
Um, and it's going straight to tuition,
and your business got to deduct it.
There's so many cool things
you can do with that.
You can match their Trump accounts, like
businesses are allowed to deduct this,
an employee's Trump account, which we're
not going to go into great detail on.
But there's so many ways that you can
lower your taxes with a business, and
it's not just for obvious business owners,
it's for W2 people who have a side hustle.
A lot of you think your hobbies are
just a hobby, and there is a hobby loss,
and we'll talk about that in a second.
That can be Kevin's 301.
Um, there is a hobby loss that you got
to be careful of, but a lot of hobbies
actually do qualify as businesses,
and I think a lot of people just
decide not to consider it a business
because that would ruin their fun.
Kevin Schneider: It's, it's
not ruined if other people
are paying you for your hobby.
Right.
I mean, if there, if there's a
profit motive, like maybe you
collect baseball cards or you
collect coins or maybe vintage cars.
I don't know.
Maybe you just love classic cars.
How can I turn that into a profit motive?
I could rent my classic cars.
I can s- I can start, um, an online eBay
card store if I wanted to sell some cards,
or I wanted to do a YouTube channel and
try to get ad revenue because my cards
are so unique that I think people would
tune in and I could pull ad revenue.
Now I'm deducting some cards.
All the people onâ¦
Like, all the kids want to
Mike Pine: be social
media influencers, right?
Like-
Kevin Schneider: that's like the thing.
Or, or a video gamer or
Mike Pine: YouTube gamers
Kevin Schneider: YouTube gamer.
Right.
And make full-time money on it.
Well, those YouTubers,
they're deducting the cameras.
They're deducting their computers.
They're deducting their games.
They're deducting everything thatâ¦
Because it's helping them generate money.
So look at some of your hobbies and
say, "Okay, what if I just pivoted
my facts a little bit and tried to
actually make this a legit profit motive?
And I'm still doing something I love,
so it doesn't feel like, quote-unquote,
'work,' but when I come home at night,
I'm tinkering with my classic cars anyway.
What if I filmed it and just made
it interesting content around it and
try to get some revenue off of it?"
Yeah.
You know, then maybe I
could depreciate that car.
Mike Pine: Maybe I can Turo it.
Maybe, you know, whatever.
Maybe I still can get a Cybertruck.
Will you have your wife talk to my wife?
Ask- Not this year.
We need it.
We got this-- We got-- Maybe.
I don't know.
We'll see how the year goes.
I might need aâ¦
I still need a Cybertruck.
Have your wife talk to my wife, please.
It's possible.
Yeah.
There's still hope.
Um, with hobby losses, though,
they have this rule that the IRS
assumes if your business doesn't--
If it's a normal business, not a
Kevin Schneider: farm or
Mike Pine: ranch, if it doesn't
make profit- Thirty percent
three out of five years,
Kevin Schneider: then
Mike Pine: it's not a
business, it's a hobby.
Kevin Schneider: So
Mike Pine: I get to tell this story again.
When I was in college, in
accounting school, um, I started
a tax preparation business.
I did them for $25 a piece, except
veterans, I did them for $10 a piece,
Kevin Schneider: or
people in the military.
Sorry, people who were
actively serving, 10 bucks
Mike Pine: a
piece.
Uh- You did the tax-
Kevin Schneider: return for $10?
Mike Pine: It was in the late-- It was
in the 1990s, man, and I was living
in a trailer in, in Bozeman, Montana.
Um, and there were a lot of CPAs
around, so I had to come in discount.
And I didn't know-- I'm a college student.
I'm not a CPA.
I'm not.
And they didn't have PT, PTINs back then.
So I was doing them, and I
was doing it on really cheap
software, but I was getting paid.
So I deducted my tax textbooks.
I deducted my computer.
I deducted my paper, my printer.
I deducted my cell phone.
Back then, before then, you weren't
supposed to unless you document it.
I documented it.
I deducted my home office deduction.
I deducted a whole lot of stuff.
I wasn't making money.
Um,
Kevin Schneider: kinda
Mike Pine: like I-- like our
firm was until you made partner.
Yes.
I-- Kevin's the one who
knows how to make money.
I just know how to save taxes.
But my fourth year I did that in a row,
and this f- by this point, I'm a grad
student, I got an IRS audit notice, and
they claimed my Schedule C was a hobby.
And they said, "You've made losses four
Kevin Schneider: years in a row.
You're supposed to make
income three out of five.
It's a hobby."
You're
Mike Pine: The first- Or
I'm just a bad businessman.
I don't know.
The first audit I got to
fight, and I loved it.
It was your own.
So, and I won it.
Um, so the point was, is wait a
second, I have a profit motive.
I am trying to make money here.
I just can't get enough
Kevin Schneider: business yet.
I mean,
Mike Pine: I got stiff competition.
Um, and the IRS is like,
"Yeah, but you can't.
You, you still haven't made any money."
And the
Kevin Schneider: ultimate
argument was, is who the heck
Mike Pine: prepares tax
Kevin Schneider: returns for fun?
Mike Pine: And I won.
That's a legit argument against a
hobby.
Well, the aud- the actual agent, he
Kevin Schneider: wouldn't buy it, so I
had to do a supervisor conference, and I
Mike Pine: I won with the
Kevin Schneider: supervisor.
You're like, "You think
I do this for fun?"
Seriously.
Like, this isâ¦
I get up in the morning, I go to
work, and I come home at 9:00.
I'm like, "Man, I'm, that
was a rough day at work.
You know what I'm gonna do?
Crank out some tax returns."
Mike Pine: And that's where I got the
Kevin Schneider: fun.
'Cause I beat the IRS, and,
Mike Pine: uh- I
Kevin Schneider: bet
Mike Pine: you kind of- I've been addicted
Kevin Schneider: you would tax
plan probably on your free time.
You don't?
No.
But I, I think you
Mike Pine: would.
You
Kevin Schneider: wouldn't prepare a
Mike Pine: tax return on your free time,
Kevin Schneider: but I think you would-
I used to prepare on my free time.
I bet if someone- Now, because I can't.
I bet, I bet though, if you met
someone at the grocery store and you
overheard them pay- talking about
taxes, you would light up, walk over
there, and talk to them for, like,
Mike Pine: You don't do that?
Kinda maybe.
I do.
I-- We just had our-- the contractors
over at the house finishing up
our bathroom, and we talked tax
planning for, like, an hour.
I mean, it hurts to see people paying
more taxes than they should pay, so.
Yeah.
Are, are you-- Is that
supposed to be, like, a dig?
No, it's just- Is that something
you're, like, down on me?
I mean, that justâ¦
Who wouldn't tax plan if theyâ¦
Kevin Schneider: Who
wouldn't if you could?
Mike Pine: It's true.
It's good stuff.
That's how you, that's
how you design, man.
Thank God for that.
That's why- And thank
God I have three sons and
Kevin Schneider: no daughters
Mike Pine: after hearing how much
money and time you have to spend on a-
Kevin Schneider: Oh, yeah.
Slumber party.
Yeah.
Mike Pine: God.
Kevin Schneider: Oh, yeah.
Just
Mike Pine: waitâ¦
Yeah, I mean, if I can figure
out how to- You know what I do?
Uh-uh.
I give them a box of aluminum foil.
"Go take this out and
make boats in the pool."
They're out
Kevin Schneider: doing it
all night, and they love it.
Huh.
For $5.
Yeah.
So my, my kids now, they're at
the age where phones are a thing.
Mm-hmm.
Then makeup.
I mean, they're entering
middle school, right?
Well, my oldest is in middle
school, so she's already into
makeup, clothing, and then itâ¦
She plays softball, too, so it's like
bats, a composite softball bat, 500 bucks.
One bat, it'll last you
one season, 500 bucks.
Wow.
Mike Pine: So if I can develop a business
to start writing off their stuff-
Let's think about this for
a second ⦠it's crazy.
I mean, first of all, she's a
very smart girl, your oldest.
Mm-hmm.
She's beautiful.
Mm-hmm.
Modeling, Instagramming, influencer,
Kevin Schneider: Around softball?
Softball
Mike Pine: influencer.
Heck yeah.
Like, yes.
Yeah.
Selling, I'm not gonna
say her name- You, you-
but selling her name or
her, her YouTube name,
Kevin Schneider: on
T-shirts and baseball bats.
Or softball bats, sorry.
Yeah.
I don't know.
That seems like a lot of work for me.
True.
But it, that, that could,
going right into this
Mike Pine: conversation, that couldâ¦
That would
Kevin Schneider: be legit.
Mike Pine: if I leaned into it.
I could, could do that.
Maybe we can have, like, one of our- I
wanna write off everything ⦠we need to
get an intern at the firm that could do
all the work for that, because we can't
afford you to lose your time on that.
That
Kevin Schneider: would be a lot of
time.
'Cause that- She'd actually
make a really good influencer.
So would your younger
one.
Yeah.
Mike Pine: Yeah.
'Cause
Kevin Schneider: now I think you
and I both have the bug where we
look around at everything in my
house, everything I spend money on,
I'm like, "Can this be deducted?"
Yeah.
I want to write off everything.
I do, too.
Within, likeâ¦
Obviously, I don't, but I want to
write off literally everything that I
spend money on, and I'm, like, trying
to make a defense for almost allâ¦
It's, it's, like, drives me nuts
sometimes, but not anymore so much.
I think when I first started, when I
partnered, I was like, "Ooh, this isâ¦
Now I'm a business
Mike Pine: owner.
I can start writing stuff off."
So I was like, bing,
Kevin Schneider: you know,
like, what can I do here, here?
But I think it's like- Now, now I
Mike Pine: you realize you
gotta be legitimate too.
It has to be legit-
Kevin Schneider: pro-
for p- you know, for the
Mike Pine: business.
'Cause it wouldn't look good if either
Kevin Schneider: of us got
audited and we lost, so
we don't- No.
No, no.
So
Mike Pine: we won't lose.
Kevin Schneider: Yeah.
Well, that, that was aâ¦
Hopefully you enjoyed that conversation.
I had fun.
I think the old fashion's add to,
uh, the conversation for me anyway.
So after recording these things, I
think a good old fashion is good.
So thanks for joining us and
listening to us talk about business
taxes and how to save them.
And if you have any questions or if
any of this hits you to where you're
like, "Man, I think I might have
something with this thing that I like.
How do I turn this into a for-profit
motive and a, a for-profit business?"
We could probably utilize it for
your taxes, so reach out to us.
Go to revotaxpayer.com,
schedule a consultation with us.
But please like, comment, subscribe,
share this video with your crazy classic
car collector, your, your fisherman
Mike Pine: friend that has a boat.
There's probably a way to deduct it.
Share this with them.
And if- We'll see you next time
and if you have any ideas on how Kevin
can take more deductions with his
daughter's softball or those arcade games,
we'd love to see them in the comments.
Please.
Thanks for being here.