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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: What is a red flag?
What we typically call a red flag, it's
areas in the tax code or areas on a
tax form that taxpayers cheat the most.
You're talking meals and
entertainment, travel, miscellaneous.
These big categories that the
IRS, if you get pulled for audit,
they're going to show, "Hey, prove
your travel, prove your meals."
'Cause that's the area
that people cheat the most.
Do we veer away from red
flag type tax planning?
No.
They're red flags 'cause people cheat.
We're not cheating.
Don't be scared of red flags.
I think that's something, we hear often
is, "We don't want to file it because
it's going to draw too much attention."
Who cares?
We're going to do it smartly, but at
the end of the day, it's going to be
safe, and it's going to be done right.
Don't leave money on the table
because you're at risk of audit.
Welcome back to Hidden Money Podcast.
Today, we are gonna be business
focused, and if you're just the W2
earner out there, don't tune us out
because a big part of tax planning
could be you starting a business, and
some of this stuff could apply to you.
So as a reminder, you're just
about a little under 30 days away
from your business tax filing
deadline if you extended, so
that's partnerships and S corps.
If you are a business owner and
you extended your tax return,
September 15th, that is your
deadline to file, uh, to be on time.
Uh, so yeah, we wanna really focus
on you, the business owner, because a
lot of people think about tax planning
as an individual thing, and it is.
A lot of tax planning is done at the
individual level because ultimately
that's where the majority of tax,
if not all your tax, is probably
paid unless you're a C corp.
So individual tax planning is
important, but we also don't wanna
forget about the first layer that
w- is always done is your business.
What are you doing inside your
business to tax plan before it
goes down to your individual?
Mike Pine: This gets-- I, I mean,
this is key and important, and I
see this so underappreciated or
underutilized for one big reason.
People who have a business are busy.
People who have a business are
focused on growing their business.
It is the truth, right?
You say, "You know, that's
what you get, partner."
I know.
You, you could have still
been a, a senior manager.
Um, they're busy.
They're focused on it.
They have to focus on it.
No one else is focused on the business
growth and the business improvement
as much as the business owner is,
and they see taxes as ancillary, or
they see taxes as something their
strategist is working with, um, you
know, during their two times a meeting
about their ten forty, 'cause that's
where they pay a lot of their taxes.
Most small businesses are correctly
set up as a, um, pass-through,
meaning that business doesn't
pay taxes, and they think, "Okay.
Well, since the business doesn't pay
taxes, let's do all the tax planning
and the strategy," if they are thinking
strategy, "on my personal return."
Um, that's not where-- I mean,
they're missing a big opportunity,
and we see this over and over again.
So we want to talk about some
of the top underlooked items,
um, in business tax planning.
The first one is you should be
tax planning in your business as
well as on your personal return.
But before we get into that, I
would like to point out to everyone
in the audience, Kevin Schneider
is wearing a sports jacket.
How about it?
I like
Kevin Schneider: it.
What
Mike Pine: What you think?
I mean, your shirt's missing a collar.
It's okay.
Is that, is that just a
T-shirt, an undershirt?
Yeah, it's just a T-shirt.
You're wearing an undershirt, no shirt
Kevin Schneider: Yeah ⦠no shirt.
Well, it's a, it's a nice whiteâ¦
It's not like a Fruit of the Loom shirt.
It's a nice white shirt, you know?
It's all right.
Okay.
And then I got the, you
know, there's a collar here.
But you,
Mike Pine: then I got, you know, there's
a collar here But you, you do look
Kevin Schneider: good.
I do.
I have a collar.
Mike Pine: We're- I just
don't- We're improving.
We're improving I'm getting there.
We'll get you a shirt with a collar.
Maybe we can get one of those like, you
know, like those priest collars that
just you throw on the collar and add it.
Kevin Schneider: I can
get a tuxedo T-shirt.
One of those, one of
those is bound to stick
Mike Pine: bound to stick.
All right.
So back to business taxes.
Kevin Schneider: Dot
fashion advice from me.
Mike Pine: Yeah.
I don't know.
There might be a way.
This is hard to make
clothing tax deductible.
Um, but we need to figure out a way
so you can buy some nicer clothes.
Kevin Schneider: we've deducted
clothing in our business before,
um, when we did Revo T-shirts, we
do Revo polos or whatever 'Cause
that's marketing ⦠marketing stuff.
So if, you know, typically withâ¦
Not to get on too much of a tangent,
but I always say with clothing,
if you can wear it to dinner,
you're probably not writing it off.
General rule.
Now, we always preach if facts and
circumstances are different for everybody.
If you run a fashion podcast or a
fashion business, I would assumeâ¦
I'd actually had a client I
was consulting with last year.
She designs, she actually has a boutique
fashion company, and she develops
these color palettes by, um, season.
So in the summer, she comes out with
a summer palette that are summer
colors and everything, and she goes,
"Every meeting I do, I design my own
clothes and I go to fashion shows,
I go to all those pop-up shops.
I wear my stuff.
I'm wearing, I'm always
marketing my stuff."
So I was like, "Your facts
and circumstances are
way different than mine."
So I take a position with
her like, "Yeah, deduct your
Mike Pine: clothing."
Did this client
Kevin Schneider: us?
Yeah.
And you met
Mike Pine: Yeah.
And you met with her on Zoom?
Yeah.
So she saw how you dress?
Yeah.
And she still
Kevin Schneider: okay.
It's waist up on Zoom.
It's fine.
You're kidding.
Mike Pine: You can't
even waste stuff on Zoom.
Kevin Schneider: She's hiring
me not for my fashion advice.
I would go to
Mike Pine: her.
Maybe we can hire her
for your fashion advice.
I know.
Maybe.
Okay.
Kevin Schneider: But anyway,
that's a small, silly example.
I would say one of the top things, and
I'm working on this actually with an
own, a family member of mine, is when
you own a business, and we, we do this
strategy ourselves, so we're preaching
to the choir here, but our, our spouses,
our wives are a big part of our business.
And we discussed how travel, a few
episodes maybe a month ago, we discussed
how, uh, traveling with our spouse was
tax deductible because they're officers
in our company and every big business
decision we land on between you and
I, our spouses have to approve 'cause
it's their butts on the line just
Mike Pine: like ours.
Well, let's be honest.
Your wife and my wife run the business.
We just ask for permission
and eventually get it.
Yes.
Kevin Schneider: Um, but they are owed
compensation, and now we don't pay our,
our spouses a W-2 out of the company.
There's not earned revenue there
because that's not tax efficient.
Instead, we
Mike Pine: do
have a- Well, technically we do
pay them W-2 We just defer it.
Kevin Schneider: it.
Yes.
Which is where I'm getting.
Okay.
So we don't pay them like a, a, a salary
ongoing and paying, um, taxes on that.
What we do is we've set up,
they're a part of our 401plan.
So all you business owners out there,
you can put your spouse, if they're
an officer and they're involved in
the business to some degree, you can
put them on your 401and contribute.
You can max out our 401.
We max out our 401, and then we max
out our spouses through the business.
And so we are doubling up
our 401in our business.
Mike Pine: 401, and then we max out our
spouses through the business, and so we
are doubling up our 401in our business.
Mm-hmm.
And that's- And they're not
paying any income tax on it.
They're getting paid the maximum
401amount that's coming out.
But they are, they are paying some FICA
on it, but it's, it's, it's well worth it.
And they're, they're able to earnâ¦
Just pretend, I doubt this is gonna
be the case, most likely it's not, but
just pretend Social Security's around.
When, when we retire and when they
reach retirement age, they'll have
Social Security credits from it, too.
So it's not a-- It's, it's a great deal.
Um, now you and I differ.
So my wife is a deferred 401.
I am contributing to a Roth
Kevin Schneider: 401.
Best
Mike Pine: both worlds.
Um, yeah.
So we get, we get to deduct
at least one of our 401s.
Yeah.
Yeah, so.
Kevin Schneider: 401s.
Yeah.
Yeah, so.
You'll be, you'll be
laughing in about 20 years.
I'm
Mike Pine: Laughing now No, my wife
will be laughing in 20 years when I'm
dead and gone and, uh, she's using my
Roth 401that's tax-free- That's right
and keeping hers in there
for the kids to deal
Kevin Schneider: with later.
There you go.
Mike Pine: There you go.
That'll be funny.
All right.
Um, what are-- There's
so many areas we can go.
Like, so our producer, our marketing
director said we need to, like, limit
this to top three areas or whatever.
Um, and that's so hard for me because
there's a lot more than top three areas.
There's hundreds of areas that most people
overlook in, in tax planning for business.
So I'm just gonna-- Let's just think
of, on the fly, what are some big ones?
I think one big one I al- well, I don't
always see, but man, when I have new
client consults who own a business, um,
especially pass-through entity business,
which is ninety-five percent of our
small business clients and the small
businesses in the country, I ask, "Hey,
have you been planning and strategizing
your QBI deduction with your CPA?"
They're, "What?"
Kevin Schneider: Mm-hmm.
Mike Pine: Like, a lot of small
businesses don't pay a lot of employees.
They just pay themselves, right?
You have an S corp, they pay themselves,
or you have a limited part- whatever.
So I see over and over, when we ask for
clients, prospective clients, said, "Let
me see your tax returns from last year."
And you look at 'em, and they make
eight hundred thousand dollars in
taxable income, but they only get
like a six thousand dollar QBI
deduction, or twelve thousand dollar.
QBI, this is a Section 199A.
It was cr- originally created in
the Tax Cut and Jobs Act of 2017.
It's now been made permanent in
the One Big Beautiful Bill Act.
Kevin Schneider: It's still
Mike Pine: for me to say it like
that, but for a lot of reasons.
But it's now permanent.
It allows small businesses to deduct
twenty percent of their taxable
income as a phantom deduction.
And the point is, is, you know, C
corporations, big companies, Apple, if
they actually reported US taxable income,
they, they only pay twenty-one percent.
But a business owner, the majority
of business owners in this country,
those who employ more than, I think
two-thirds of the employees of, of
people on payroll in the country, they
pay thirty-seven percent tax, federal.
Not to mention state, if they're
in one of those states, you
know, that charge income tax.
And if your state does, you can save
some state taxes, move to Texas.
It's a great state, great economy,
um, great place to do business.
But they pay thirty-seven percent.
Big companies like Apple
paying twenty-one percent.
That is not fair.
So the QBI deduction came out
for small businesses to try
to put it closer to parity.
It's still not a parity.
Small businesses still pay
more than the big companies.
Um, I wish we could change that.
Make me king for a day, I would.
Okay.
But QBI deduction.
Now, talk to us about the mechanics of
QBI and why so many people who don't
strategize with it are limited and
Kevin Schneider: don't
get to take it all.
'Cause there is a degree of math here.
So we can't, we don't often do
a lot of math on the podcast.
I don't do math on stage.
Uh, you'll make errors.
But for the big part of what QBI is, and
this isn't true across the whole spectrum
of QBI, but generally speaking in QBI
deduction, you take your net income of
your business, you multiply that by 20%.
So let's say your business makes $100,000.
You are owed a 20% deduction,
$20,000, right off.
Then that's not cash out the door.
It's just, like you said,
it's what we call phantom.
It's just an additional deduction
coming to you of $20,000,
Mike Pine: making your taxable eighty.
Pause time.
That's a tax deduction you
get without spending money.
So it's a beautiful deduction,
and this is one big reason
why we're bringing it up now.
You should
Kevin Schneider: taking
this deduction, but-
Yeah.
So if you want to take that full twenty
percent deduction, typically you have to
pay double your QBI deduction in wages.
So that means you have to have US domestic
wages of at least forty thousand dollars.
So that would mean your business
actually made a hundred and forty
thousand, but you paid forty in wages
to get your income to a hundred.
Your QBI deduction is twenty, and
double of twenty is forty, so you
get the full twenty thousand dollars.
If you only paid twenty thousand dollars
of wages on a twenty thousand QBI, you
would only get a ten thousand dollar QBI.
It would be cut in half.
So a lot of what we do, especially
with small businesses, is the bit
like you mentioned, if you're an
S corporation, you're probably
the only employee on there.
Um, or you might have some other
employees, but you can always
Mike Pine: bonus yourself out.
Or you're paying contractors,
which we see a lot of times with
all our pool company clients.
Kevin Schneider: Or pay
Mike Pine: Which are not
included in this calculation.
Right.
So contractor pay doesn't count
towards the QBI limitation deduction.
Um, so i-in a real-world example,
and we see this all the time,
I'm going to use a bigger number.
I'm gonna, I'm gonna do
a factor of ten here.
Instead of a hundred thousand net income,
let's say you make a million net income.
But you got-- Y-you, you're paying
yourself a reasonable salary in your
S corp of what you should-- what
anyone else would get paid there doing
the job if they weren't the owner.
So you're paying a hundred thousand
dollars, and you're the only W-2.
Everyone else is a contractor for you.
So a million dollars taxable income,
you ought to be able to take a twen- two
hundred thousand dollar tax deduction,
but you're only paying yourself a hundred
thousand dollars, so you only get to
take a fifty thousand dollar deduction.
Um, people say, "Hey, wait.
S corp, I always heard," and
this was true until two-- 2017.
"I always heard I should pay myself
as little as I can reasonably argue
is a reasonable compensation, so
I save in Social Security a-and
Medicare and FICA tax, right?"
Yeah.
Well, that would be true
if the QBI wasn't around.
And I get-- I'm astounded by how many
people who are working with CPAs,
new prospective clients that have
businesses that are in this situation,
and I bring up the question when I
see that they were limited, "No, I
never discussed this with my CPA.
He never brought it up with me.
She never brought it up."
You need to bring it up.
And it's not just w- we, we stayed with
simplicity on the wage calculation.
There's also a percentage of, um,
if you have a big capital-intensive
business, like a lot of equipment,
you can get it up there without wages.
Like a service business.
Yeah.
Like a service trader business.
Kevin Schneider: issues.
Yeah.
Right.
But the thought would be, if I bonus
myself out, let's say I paid myself,
let's say I'm owed a two hundred
thousand dollar deduction and my
salary was two hundred thousand.
I'm not double my QBI
deduction, so it's cut in half.
Well, what if I bonus myself out
another, and this is kind of where the
circular reference comes in, if I bonus
myself another two hundred through
payroll, I'm gonna hit my Medicare cap.
So now I'm only gonna be paying two point
nine percent on anything above a hundred
and eighty-six thousand, which means I'm
paying not as much in employment taxes
as I would be saving in QBI deduction.
Your QBI deduction's at thirty-seven
percent deduction, but if I paid myself
more salary, I'm gonna pay payroll
Mike Pine: tax on that 3.9%.
3 point- 3.8,
I'm sorry
And 15%
Kevin Schneider: point three up to the
first one eighty or whatever it is, and
then three point, two point nine percent.
So at that point, you are paying
additional payroll tax up front, but
when we prepare your personal tax
return, you're gonna be saving much more
at the thirty-seven percent bracket.
So yes, we're gonna play the game smartly.
We're gonna pay a little
bit more to Medicare.
We're gonna pay a little bit more to
Social Security intentionally, but in
return, we're gonna be saving a lot more
federal taxes when it comes down to it.
Mike Pine: Yeah, so in Kevin's example
though, if you were already paying
yourself $200,000 and you wanted a
$200,000 deduction, you've already
exceeded the max Social Security cap.
So you really are only
paying an additional 3.8%,
but you're getting an extra $100,000
in deduction if you do this right.
An extra $100,000 in deduction at 37%.
So if you just do the math, and I can
do-- I think I can do this on the stage.
$100,000 times 37% is $37,000.
I think you're great.
But you're paying 3.8%
more on $100,000.
Actually, on $200,000.
So you're paying-
Kevin Schneider: 76
70â¦
Is
Mike Pine: Seventy-six.
Seventyâ¦
Is that right?
Yeah, $7,600 more in tax to get
your income up to $400,000, or your
payroll, but you're saving thirty-eight
Kevin Schneider: 37,000.
Yeah.
Yeah,
Mike Pine: Yeah, thirty-seven.
Sorry.
So you can do it.
I was going thirty-eight.
Yeah.
Mostly.
So that, I mean, that's the deal and,
and so many people don't do this.
Kevin Schneider: a
little off.
Yeah.
Mike Pine: of our-
Kevin Schneider: Mostly.
So that, I mean, that's the deal and,
and so many people don't do this.
Um- We try to
do that with all of our
self-employed c- clients who areâ¦
They can fluctuate those, those salaries
quickly, and it's not gonna, you knowâ¦
We don't advise spending much money
out of the business and, "Hey, I'm
gonna bonus my employees 100 grand.
What do you want?"
There's still a leadership,
there's still a, a business
aspect to bonusing employees.
We're talking let's bonus yourself,
your, pay yourself more, pay
a little bit more tax, payroll
tax, to save more federal tax.
Mike Pine: Now, we don't necessarily
follow our own advice there because
our team rocks, and we need to
bonus them to keep them here.
So you and I don't have to increase our
Kevin Schneider: salary Our
QBI is fine
Mike Pine: guys are- We just
Kevin Schneider: pay a lot- I think
half of our overhead goes to W-2.
We're always fine.
Mike Pine: W- I think it was
56% when you included everyâ¦
Yeah, but- Yeah ⦠that's,
that's why we have the
Kevin Schneider: Apply
at revotaxpayer.com.
Mike Pine: revotaxpayer.com.
Yes.
Did you hear that?
Apply at revotaxpayer.com
if you are a tax strategist.
All right, another issue-- And
by the way, just one caveat, our
whole discussion there on QBI
really focus on S corporations.
If you are a partnership or
an LLC, you don't pay yourself
payroll, so, um, it's different.
All right, another big
one, home office deduction.
It's a red flag.
Don't do it.
Or it's not really that important.
Why should I do it?
Truth is, you file a home office
deduction form, that is a red
flag 'cause IRS has caught people
cheating there over and over again.
Doesn't mean you shouldn't take
the deduction, just means you
should be able to, uh, prove
that it's a reasonable deduction.
And there's a lot of stuff
that's a reasonable deduction.
But if you are an S corp or you
are in a partnership, this doesn't
apply to disregarded entities,
an LLC, single-member LLC,
it's a disregarded entity, but
applies to partnerships, S corps.
If you set up a accountable expense
reimbursement plan with your business
and yourself, you have to document it.
It's got to be created.
This is just the documentation
internally unless IRS asks to prove it.
You don't file it with anyone.
You can now reimburse your employee, who's
you, or your general partner, who's you,
you can reimburse them for their home
office expenses called office expense,
and you get to deduct everything someone
could take in a home office, but you get
to deduct it as office expense without
filing the red flag form, and it's
100% legit, and you should be doing it.
Um, and
Kevin Schneider: there's a lot
of stuff that goes into that.
Oh, yeah.
Yeah.
And let's, let me define, like
not, I can't define it, but
let's just what is a red flag?
'Cause that's something that we,
uh, before we get into the nuts and
bolts of more home, home office,
'cause it's, it's really powerful.
Red flags are excuse me.
What we typically call a red flag, it's
areas in the tax code or areas on a
tax form that taxpayers cheat the most.
You're talking meals and
entertainment, travel- miscellaneous.
Just these big categories that the IRS,
if they, if, if you get pulled for audit,
they're going to show, "Hey, prove your
travel, prove your meals," 'cause that's
the area that people cheat the most.
Do we veer away from red
flag type tax planning?
No.
They're red flags 'cause people cheat.
We're not cheating.
If we do everything legitimately, document
accountable expense reimbursement plans in
place, all these small details matter, and
if you put those things in place, I don't
care if it, half the country's cheating
on this form, I'm still filling it out,
'cause if you get audited, I'm just
going to slide across the table to prove.
So don't be scared of red flags.
I think that's something, uh,
we hear often is, "We don't want
to file it because it's going
to draw too much attention."
Who cares?
I don't, I-- Like, we're going to
do it smartly, but at the end of
the day, it's going to be safe,
and it's going to be done right.
And that's what I'm more important.
You know, don't leave money on the
table because you're at risk of audit.
Audits should not be s-- You shouldn't
be scared of them if you're doing
everything the way you should be and
doing everything on the up and up.
You shouldn't be scared of audits.
Audits could be stressful, but
they could be time-consuming,
agreed with you there, but
Mike Pine: at the same time,
I'm not veering away from them.
I'm not scared of them.
But we still try to mitigate the
likelihood of being audited, and that's
the whole reason we do the accountable
expense reimbursement plan to deduct the
home office on your business return as
office expense versus filing the home
Kevin Schneider: as office expense
versus filing the home office
deduction- Oh, yeah ⦠form on
Mike Pine: personal return.
We don't, we don't want to
shine a spotlight on it, so-
But we definitely document
Kevin Schneider: guy.
We document it.
They still audit.
Yeah.
They do?
There's so many small things
now that you're talking.
There's so manyâ¦
When we go through a preparation
of a tax return, there's so many
things that we know how to prepare
and pr- just presentation wise in
front of the federal government to
limit your exposure for audit risk.
Yeah.
And just, just having a smart
preparer can limit your risk, too.
But going back to your home
office, sorry, I just wanted
to kind of see, set the stage
Mike Pine: a little bit of
Kevin Schneider: these red flag things.
You're already going down this cage.
Um, so a home office, you
are owed that deduction.
Now, and I had, I had this conversation
with a client just yesterday.
I had a, a call with him, and I was
trying to remember, maybe you remember,
when did the unreimbursed employee
Mike Pine: expenses get taken out?
Tax
Kevin Schneider: I got a
job that Was that 2017?
I couldn't remember if
it was Obama or Trump.
Jesus.
It was Trump.
Trump.
So
Mike Pine: what happened is if
you were- It was worth it, man.
It was
Kevin Schneider: was
Mike Pine: Tax Cut Jobs Act rocked
Kevin Schneider: Obama and everybody.
It was.
I got a job that wrong.
If you were an employee, if you're
a W2 earner, you used to be able to
deduct your home office expenses,
your personal mileage that was
unreimbursed by your W2 employer.
You used to be able to deduct that.
You no longer can.
So home office used to be a lot more
powerful for everybody, especially
now in this post-COVID environment
where everyone can work from home.
Home office expense would be huge
for ev- not everybody, but a lot
more people than it was prior COVID.
But as it is now, only business owners
can really benefit from the home office.
But all it is is taking a simple
calculation of your square footage
of your home, and square footage
could look differently for everybody.
It has to be a dedicated workspace.
But, uh, you take the square
footage of that in comparison to
your home, and you get that ratio.
Then you're deducting your portion
that, of that business use ratio
against all your household expenses.
Not all of them.
But your property tax, your
mortgage interest, if you're
Mike Pine: in an
Kevin Schneider: your rent.
I have- Your cleaning fees.
Your cleaning fees.
If, if you have clients over in your
home office as a business owner,
I'm probably deducting landscaping.
I'm deducting other things 'cause
it makes reasonable sense for me
to have a presentable property
for my clients to come in and
buy a tax plan from me or trust
Mike Pine: me.
I need to have my life together for
several reasons.
We, we have a pool builder client
that built a pool right next toâ¦
In, in his, instead of a pool
house, it's his home office.
And he built that to work there, and
that's where he works most of the
time, and he has clients or prospective
clients come out all the time, meet
him at the office to see his pool.
His entire pool was tax deductible.
His pool cleaning fees were tax
Kevin Schneider: deductible.
His pool maintenance
Mike Pine: was tax deductible.
Mine, not so much.
Kevin Schneider: Man, that's why I
know we're good partners, 'cause I
have a good buddy that's a, a pool guy.
He's been my friend for
15 years at this point.
He renovated his personal backyard,
but he has different tiles.
He has a fire pit with different tiles.
He's got his pool.
He's got a she- all these things,
but he has a pool company, and weâ¦
It's his showroom.
Mm-hmm.
He legitimately has clients come to his
house, and he's like, "Here's a fire pit.
Here's what you could do with it.
Here's
Mike Pine: an exa-" And I
wrote off a good chunk of
Kevin Schneider: backyard.
Mike Pine: Man, that is 100% defendable.
Oh, yeah.
Kevin Schneider: Come on.
So home office.
So if you're a business owner and
you use any portion of your house
as business, I have people house
inventory in garages, and allâ¦
Your fact set could look who knows what.
Yeah.
Speak to
Mike Pine: somebody because you're
probably leaving money on the table there.
Yeah,
and, and when Ken was mentioning
the percentage of square feet, that
goes towards indirect expenses.
Indirect expenses are expenses
that apply both to your
normal house and the business.
But all direct expenses are 100%
deductible on your home office.
So the internet that you need, the,
the, the fiber you need instead
of cable because you can't have
a Zoom that drops in the middle
Kevin Schneider: of a call or something
like that, that's 100% deductible.
Or a desk.
If you need to buy a new desk
Mike Pine: new desk
Kevin Schneider: your home
office, that's directly
Mike Pine: associated to the business
That's where I was going with that.
I happen to have a really
bad back, apparently.
Not sure why.
It's-- most of it's genetic.
But literally, you have five
lumbar discs, and all of mine
are either bulging, ruptured,
Kevin Schneider: or slipping and bulging.
And-
And you're gonna go
Mike Pine: You're going
on a boat next week.
It's a sh-- there's a big difference.
This is a cruise on a ship that's
bigger than an aircraft carrier.
It's, it's a big old Royal
Caribbean cruise ship.
So, um, the difference, I, I keep
having to explain that to you.
No, I get it.
It's not a boat, it's a ship.
A ship.
A ship with, with a go-kart track.
I mean, it's, it's a ship.
Sorry, you made me lose
my train of thought.
Anyways, the back is getting bad, and it
hurts to sit for a long period of time.
My job, I gotta sit for
a long period of time.
So it turns out, and it was actually
one of my, one of my back physicians
sent me to this place called-- Well,
they're not sponsored, so I'm not
gonna say their name, but a place, a
very expensive place that's focused on
furniture for people with bad backs.
And turns out you can get this chair
that's designed specifically for
your back, for your ergonomics, for
your issues, that works well, and
it only costs five thousand dollars
for an office chair, desk chair.
But it was absolutely
Kevin Schneider: necessary
for me to be able to
Mike Pine: that.
That's a direct expense, five
Kevin Schneider: 500, that
Mike Pine: five hundred.
Five hundred?
Five thousand.
Sorry.
I paid five thousand, you
paid four ninety-five.
A thousand, four hundred andâ¦
But no, no, five thousand dollars,
and that's tax deductible 'cause
that is a hundred percent home
office deduction, and that's fair.
Um, defendable.
Yeah.
So those are direct expenses,
computers, printers.
Although we don't use
printers that much anymore.
I do have a scanner at my
home office, though, 'cause
occasionally people give me paper.
I wish they'd stop.
Really?
Yes.
They need to stop that.
I'm not gonna name names.
See, I still do taxes
for friends and family
Kevin Schneider: and they, for the past,
I've been doing their taxes for 25 years.
It's
Mike Pine: Still the same song and
Kevin Schneider: dance.
I don't set them up on the portal.
I'm just like, "Give me
your stuff, scan, scan."
I, I get it.
Yeah.
Anyways,
Mike Pine: Give me your stuff, scan, scan.
I get it Yeah.
So anyways, moving on.
I don't wanna tellâ¦
And that's actually some paid clients,
so w- I'm just not gonna go there.
There have been clients for 20 years,
Kevin Schneider: Exa- there
Mike Pine: force them.
I mean, you try to convince
them, "Use the portal."
If
Kevin Schneider: you go ⦠I'm
not gonna force them.
Yeah.
I'll try to convince them, use the portal.
If you've been a client
for 20 years, you got some,
Mike Pine: you've
Kevin Schneider: got
Mike Pine: been a client for 20 years,
you got some, you got some leverage.
You got some grades, yeah.
We'll, we'll get you
Kevin Schneider: get you some.
We'll, we'll take care of you.
Mike Pine: Another big one.
Oh, wow, we're running out of time.
Another big one, I guess our last one
that I see overlooked all the time
by business owners, um, because I
think it's a pain, business mileage.
I think we just saw the, the excerpt that
came out from the IRS, um, procedure or
what the ruling or whatever that, rev-
was it rev- Rev Proc that came out.
Kevin Schneider: Um,
Mike Pine: new increased
business mileage rate.
Isn't it like 77 cents now?
Yeah,
Kevin Schneider: it's creeping high.
Mike Pine: creeping up.
It's like 77 cents
Kevin Schneider: a mile.
Mike Pine: So-
Kevin Schneider: prices and repair
costs for everything, but yeah,
it's, it should be going up.
Mike Pine: It should be going
up, but that's significant.
But I have so many prospective
clients I speak with, even some
existing clients that just refuse
to, to, to work with me on this.
They say, "Look, I was told
I have to keep a mileage log.
I got to write odometer readings, what
the business purpose is, where I'm going,
um, and that just takes too much time."
Used to be that way, and
it did take a lot of time.
Of course, I did it, but
it did take a lot of time.
Now they have got apps all over the
place that automatically record every
time you drive your vehicle and it
uses machine AI and you go in and you
just tell it, "Hey, this, this place,
when I go there, that's for work.
This place was personal."
Um, and it tracks it.
And it doesn't matter if I only use
my-- If I use my personal car 2% for
business use during the year and I
use my business car 80% for business
use, I got to track mileage on that.
That's a big old deduction,
especially if you are driving.
I mean, let's say you drive a
thousand miles for business in
one year and you don't track that.
If you don't track it and you get
audited, you're going to get in trouble.
But just have an app.
If you track it,
Kevin Schneider: miles in one year, that's
Mike Pine: $770 of a deduction, man.
Sitting out there
Kevin Schneider: doing something.
For real.
That you're already doing.
Yeah.
You're earning it.
And, um, you know, like you
mentioned, apps are so good.
Like iPhone right now, I don't know,
I updated my iPhone, and it has a new
motion, um, motion car mode or something.
You can go into your, your settings.
Mm-hmm.
And it puts these dots on your phone.
Itâ¦
Like iPhone knows when you're in a car.
Yeah.
So as soon as you get in a car,
you can put this setting on.
It helps with motion sickness
when you're looking at a phone
and you're, you're moving.
But these dots kind of move with
your phone, with the vehicle, so
it keeps you from being car sick.
These apps do the same th- It
knows when you're in a car.
You don't have to track mileage.
It's just tracking it passively in the
background, just doing it for noâ¦
Like without
Mike Pine: you even knowing.
And then you just have to swipe business,
personal, business, business, personal.
You just swipe.
We live in Texas.
Um, we're in the South.
The big complaint I hear a lot of times
from prospective clients or even existing
clients, "Put the app on your phone."
I don't want Big Brother watching me.
Yeah, we are.
I don't want Big Brother watching
me either, but I can't stop it.
It's happening everywhere.
We're filmed everywhere.
Like, seriously, how many times
have you talked to someone about
something you're interested in
looking at, a trip, um, a product?
You go to your search engine, I
don't care if it's Google, Yahoo,
you name it, Grok, whatever.
You go to your search
engine, you start typing.
You type in one letter.
Boom.
The exact thing you were talking
about two days ago pops up.
Yeah.
Big Brother's watching.
Kevin Schneider: you don't think the
Mike Pine: NSA, the CIA, or
heck, the KGB, or I don'tâ¦
They're not called KGB now.
FSB.
What are they called?
Seriously, they're all watching us.
Mossad, they know it.
You can't hide it.
So
Kevin Schneider: I mean,
unless you get rid of all your
Mike Pine: devices and go live
in a cave, um- You, you're,
you're- Big Brother's watching
Kevin Schneider: you.
Mike Pine: don't pay extra
tax because you're scared of
Kevin Schneider: He's already watching
Mike Pine: He's already watching
Kevin Schneider: These
algorithms, they're so good.
Like, when you're shown an ad, it knows
when you're scrolling quickly, and if
you stop for, like, a second, it'll
Mike Pine: go, "Mike stopped
Kevin Schneider: one second on this ad.
Mike Pine: on this ad.
Show him more."
And
then- I hate that
it gets you
more and more, and that's why-
Is that why I keep seeing
Kevin Schneider: Cybertruck ads?
Probably.
Ooh.
Quit saying the name.
You gotta cover your mic.
Stop it, Elon Musk.
But another good thing with the mileage
is, so you can't deduct commuting,
and we'll kind of wrap this up.
We're getting long-winded here.
But when you, when you commute to a job,
whether you're a business owner or you're
an employee, you can't deduct that.
But for me personally-
Business owner you can't.
You're an employee
Mike Pine: you can't.
Well, commuting, you can't commute-
Oh, to
Kevin Schneider: normal daily
commute ⦠to your normal daily commute.
Even as a business owner,
you can't deduct it.
Well, what is a daily commute?
Yeah.
So my, for me, my fact set is I live about
45 minutes from our office currently.
So my actual home office is,
I work from home a little bit
more than I work in the office.
I'm in the office probably two
days, maybe three days some weeks.
I'm working from home at least
three to four days a week.
So my actual home, my, my main workspace
is my home office, so when I drive to my
business, that's not a commute for me.
That is actual business
mileage at that point.
So now that we're moving offices,
I need to buy a car that'sâ¦
I just tax planned for myself.
We bought an office, and
I'm gonna be movingâ¦
My house is closer, so I'm gonna be in the
Mike Pine: office more
next year, so I need to buy
a different vehicle.
As long as you're spending
more time working from home.
But
Kevin Schneider: But in reality- Next year
⦠all business owners- We're always sit at
home ⦠yeah, 'cause we're working- Yeah
until 10 o'clock at night sometimes.
So anyway, but that's justâ¦
You'reâ¦
Just speak to somebody.
Going back to our very first
point, being proactive.
A lot of people just aren't
proactive with their planners.
Tell us this information.
It'sâ¦
We don't have client privilege
like an attorney, but just the
more we know, the more we can
kind of develop a defense for your
Mike Pine: position for you.
Kevin Schneider: So thanks for
joining us on this episode, and
please like, comment, subscribe to
this video, subscribe to our channel.
Check us out on all the social platforms.
Uh, and our actual website
is revotaxpayer.com.
We actually have some hidden
money content on revotaxpayer.com
now.
So go there if you want
some more, um, information.
Go to YouTube and check
out our past videos.
But we justâ¦
We really wanna just create
content to bring value to you.
We, we want more clients, yes.
But at the end of the day, we really
wanna change your thoughts and how
you view the tax code, and so that you
can find that hidden money for your
Mike Pine: situation and
just grow your own wealth.
Stop giving it to the government.
So-
I'm just gonna add to that real quick.
I'm sorry.
I know we, we are way over time on
this episode, but if you know anyone
that's paying too much in tax or
probably paying too much in tax,
share us, share these videos with you.
And look, the amount of
people that listen to this, we
Kevin Schneider: can't handle
Mike Pine: many clients.
So even if you're not a client of
ours, we want you to stop overpaying
your taxes, and we want the rest of
Kevin Schneider: the country to do it too.
So please share our videos or YouTube or
Mike Pine: podcast
Kevin Schneider: Or Instagram or
Mike Pine: How many--
There's so many platforms.
We're at, we're on so many platforms.
I, we have to ask our marketing team.
Kevin Schneider: I don't know
Mike Pine: Thanks for being here
Thank you for listening to this episode.
Revo Taxpayer Advocacy LLC is not licensed
or registered as a CPA firm with the
Texas State Board of Public Accountancy.
I'm a CPA, Kevin's a CPA.
We have a lot of CPAs on staff that are
licensed and held to the same standards.
However, when we decided to be
revolutionary and change our
name to Revell Taxpayer Advocacy,
the state board would not allow
that and let us remain licensed.
They say we have to have one
of our names in the firm for
us to be licensed as a firm.
And guess what?
It's not us that's important.
It's revolutionizing the way you feel
about taxes and saving you money.
We are advocates for you, so we were
willing to drop our firm license even
though we're still individually licensed.