WEBVTT 00:00:06.030 --> 00:00:09.250 Hi, everyone. This is the How to Lower Your Tax 00:00:09.250 --> 00:00:12.429 Bill podcast. I'm your host, Terrence Hutchins. 00:00:12.949 --> 00:00:15.410 I'm a financial and tax advisor in the Dallas 00:00:15.410 --> 00:00:18.190 Fort Worth area. And the goal of this podcast 00:00:18.190 --> 00:00:20.809 is to help you listeners get educated on different 00:00:20.809 --> 00:00:23.589 tax strategies that you can implement to improve 00:00:23.589 --> 00:00:26.750 your tax situation immediately. Each episode 00:00:26.750 --> 00:00:29.769 will break down useful tax tips you can use to 00:00:29.769 --> 00:00:32.369 save money, no matter what your personal or business 00:00:32.369 --> 00:00:35.350 income situation. Because our motto is, keep 00:00:35.350 --> 00:00:38.549 more of what you earn. So let's get into today's 00:00:38.549 --> 00:00:46.310 episode. Welcome back to another episode of How 00:00:46.310 --> 00:00:48.590 to Lower Your Tax Bill. I am your host, Terrence 00:00:48.590 --> 00:00:51.409 Hutchins, and I am once again with my now co 00:00:51.409 --> 00:00:54.289 -host, Tamiya Kelly. Say hi, Tamiya, to the people. 00:00:54.549 --> 00:00:56.869 Hey, y 'all. Hey, good people. What's up? I'm 00:00:56.869 --> 00:01:00.060 back. So we are in the midst of tax filing season. 00:01:00.320 --> 00:01:02.640 So the deadline is fast approaching. So hopefully 00:01:02.640 --> 00:01:06.159 you guys are following on time to avoid unnecessary 00:01:06.159 --> 00:01:09.439 penalties and interest from the IRS. And today 00:01:09.439 --> 00:01:11.799 we're going to go over some common misconceptions 00:01:11.799 --> 00:01:15.140 that people have as it relates to tax deductions, 00:01:15.480 --> 00:01:17.620 bad advice that they take that may not be bad 00:01:17.620 --> 00:01:19.739 advice, but it may not be in context of their 00:01:19.739 --> 00:01:22.450 situation. And then just giving you some thoughts 00:01:22.450 --> 00:01:26.250 on strategies to help you implement as you are 00:01:26.250 --> 00:01:29.069 making tax decisions. And many times it's you're 00:01:29.069 --> 00:01:31.250 making a life decision that has a tax consequence 00:01:31.250 --> 00:01:33.709 and you not really factoring in that tax consequence 00:01:33.709 --> 00:01:36.549 until after the fact. So things that you might 00:01:36.549 --> 00:01:39.469 need to stop and pause to be aware of so that 00:01:39.469 --> 00:01:41.590 you'll make better decisions. And as we say, 00:01:41.590 --> 00:01:44.810 keep more of what you earn. And so I thought 00:01:44.810 --> 00:01:47.010 about this social media video and the guy was 00:01:47.010 --> 00:01:50.019 talking and it was a basically a comedy sketch, 00:01:50.079 --> 00:01:52.379 if you call it that. And he was simply was just 00:01:52.379 --> 00:01:53.900 saying, oh, you could just write it off. Oh, 00:01:53.939 --> 00:01:55.280 that's fine. We could just write it off. We could 00:01:55.280 --> 00:01:57.859 just write it off. All right. And you hear that 00:01:57.859 --> 00:02:00.859 dialogue from people as far as, oh, I can, you 00:02:00.859 --> 00:02:02.680 know, that's fine. No, you could write off on 00:02:02.680 --> 00:02:05.280 your taxes. And so to me, tell me a little bit 00:02:05.280 --> 00:02:07.359 about what your thoughts were before you kind 00:02:07.359 --> 00:02:09.719 of got into the profession on, you know, what 00:02:09.719 --> 00:02:11.639 is a write off and how did that impact you when 00:02:11.639 --> 00:02:13.900 you are going to file? OK, so Terrence, as I 00:02:13.900 --> 00:02:16.240 always like to say, I was blind and now I see. 00:02:16.469 --> 00:02:21.229 And I too was a person to just say write it off. 00:02:21.409 --> 00:02:24.069 But in my defense, the reason why I was like 00:02:24.069 --> 00:02:25.930 that is because I've been in insurance for over 00:02:25.930 --> 00:02:28.889 20 years and I would have customers who were 00:02:28.889 --> 00:02:32.810 wealthy and they would wait until the last quarter 00:02:32.810 --> 00:02:36.090 of the year to start making these purchases and 00:02:36.090 --> 00:02:38.389 doing all these things. And I heard write it 00:02:38.389 --> 00:02:41.500 off a lot. I did not know, Terrence. Why do you 00:02:41.500 --> 00:02:43.099 always put me on blasts like this? I didn't know 00:02:43.099 --> 00:02:46.039 people. I did not know. Okay. And so I thought 00:02:46.039 --> 00:02:48.199 you could write stuff off. I thought you could 00:02:48.199 --> 00:02:51.319 write everything off. So, I mean, that was my 00:02:51.319 --> 00:02:54.300 take to write it off. Keep the receipt. Keep 00:02:54.300 --> 00:02:57.300 the receipt. Just, you know, put it in your shoe 00:02:57.300 --> 00:03:00.919 box and give it to your tax person at the beginning 00:03:00.919 --> 00:03:04.360 of the year. It is funny you say that because 00:03:04.360 --> 00:03:06.520 you know when I first started in the financial 00:03:06.520 --> 00:03:09.020 industry and I didn't really have a tax background 00:03:09.020 --> 00:03:12.400 I would hear about other advisors who were you 00:03:12.400 --> 00:03:14.639 know pretty well off and they would say oh yeah 00:03:14.639 --> 00:03:16.759 you know I buy a car at the end of the year right 00:03:16.759 --> 00:03:20.659 so I can not pay taxes and on the surface I was 00:03:20.659 --> 00:03:23.599 like oh man that sounds really smart but as I've 00:03:23.599 --> 00:03:26.500 gotten more education it's a matter of well was 00:03:26.500 --> 00:03:29.439 that really a good decision or did you just buy 00:03:29.439 --> 00:03:31.509 something that you may not have needed to pay 00:03:31.509 --> 00:03:33.030 for taxes you should have planned for ahead of 00:03:33.030 --> 00:03:37.710 time. Probably the latter. No, not to sound cynical. 00:03:38.009 --> 00:03:40.569 And not that there isn't space to do those things. 00:03:40.949 --> 00:03:43.569 But the moniker you always hear is don't let 00:03:43.569 --> 00:03:48.289 the tax tail wag the dog. And as it comes to 00:03:48.289 --> 00:03:50.610 your personal or even business decisions, let 00:03:50.610 --> 00:03:52.789 it be a good personal or business decision first. 00:03:52.969 --> 00:03:56.310 And then hopefully the tax consequence is positive. 00:03:56.409 --> 00:03:59.430 Or hey, how can we lessen the tax negative consequence 00:03:59.430 --> 00:04:02.020 of it? or how can we enhance the tax positive 00:04:02.020 --> 00:04:04.120 consequence of it so that ultimately it makes 00:04:04.120 --> 00:04:06.439 it even a better decision outside of what was 00:04:06.439 --> 00:04:09.680 the immediate tax impact. Okay. A few things 00:04:09.680 --> 00:04:12.340 that I wanted to get into that people talk about 00:04:12.340 --> 00:04:15.159 just writing it off. All right. And I've heard 00:04:15.159 --> 00:04:18.579 this a lot after the tax and jobs fit act. So 00:04:18.579 --> 00:04:21.019 prior to 2018, you had a much lower standard 00:04:21.019 --> 00:04:23.060 of deduction. So there was a lot more things 00:04:23.060 --> 00:04:26.060 that could have been written off just because 00:04:26.060 --> 00:04:29.550 the amount that the government tax you on automatically 00:04:29.550 --> 00:04:31.550 was just going to be higher. Now the standard 00:04:31.550 --> 00:04:33.850 deduction is so much higher to where some of 00:04:33.850 --> 00:04:36.170 the things that you might pay for now don't really 00:04:36.170 --> 00:04:38.050 count towards your taxes because Iris has already 00:04:38.050 --> 00:04:39.920 given you credit for that stuff. as we've talked 00:04:39.920 --> 00:04:42.939 about on the fact that the yeah the last episode 00:04:42.939 --> 00:04:45.199 you're right because that standard deduction 00:04:45.199 --> 00:04:48.120 is so high and I think a lot of people when you 00:04:48.120 --> 00:04:51.220 think about writing things off you really want 00:04:51.220 --> 00:04:54.019 to consider those standard deductions because 00:04:54.019 --> 00:04:55.680 it is so high that some of these things that 00:04:55.680 --> 00:04:58.600 you want to write off may not tip you over into 00:04:58.600 --> 00:05:01.660 that being able to itemize bucket right exactly 00:05:01.660 --> 00:05:03.980 because it's not enough so some of the things 00:05:03.980 --> 00:05:05.800 that Terrence mentioned earlier you really got 00:05:05.800 --> 00:05:08.420 to know what you're trying to deduct and what 00:05:08.420 --> 00:05:10.339 you're trying to write off because you may just 00:05:10.339 --> 00:05:12.860 stay under the standard deductions and not make 00:05:12.860 --> 00:05:16.339 it to the the schedule life for sure. So a few 00:05:16.339 --> 00:05:18.300 things that I hear consistently and you can let 00:05:18.300 --> 00:05:20.680 me know kind of what your perspective was is 00:05:20.680 --> 00:05:22.660 with W2 employees that work from home. So this 00:05:22.660 --> 00:05:25.240 is especially you know with COVID obviously everything 00:05:25.240 --> 00:05:27.519 shut down and everyone was working from home 00:05:27.519 --> 00:05:30.120 that was working for the most part and they were 00:05:30.120 --> 00:05:31.680 thinking hey you know what now that I work from 00:05:31.680 --> 00:05:34.720 home I got a desk I'm using up more utilities. 00:05:35.149 --> 00:05:37.769 I should better get a tax benefit for this. And 00:05:37.769 --> 00:05:40.949 prior to 2018, there was an avenue to potentially 00:05:40.949 --> 00:05:44.029 get that. It was called a miscellaneous itemized 00:05:44.029 --> 00:05:47.050 deduction. And so when you work from home, that 00:05:47.050 --> 00:05:50.350 was considered a business expense as an employee. 00:05:50.670 --> 00:05:53.209 And so your employer has the option to say, hey, 00:05:53.269 --> 00:05:55.310 if in order for you to do your job and you have 00:05:55.310 --> 00:05:58.050 to incur costs out of your own pocket to do your 00:05:58.050 --> 00:06:00.850 job, we have the ability to reimburse you for 00:06:00.850 --> 00:06:03.430 those expenses. If we don't reimburse you, then 00:06:03.430 --> 00:06:05.550 they're going to be considered unreimbursed. 00:06:05.990 --> 00:06:08.709 At that point, you can then potentially write 00:06:08.709 --> 00:06:11.189 them off on your tax return. And so prior to 00:06:11.189 --> 00:06:13.970 2018, there was a 2 % threshold. So let's say 00:06:13.970 --> 00:06:17.149 you made $100 ,000, 2 % was $2 ,000. So if you 00:06:17.149 --> 00:06:19.730 had expenses over that threshold, then you can 00:06:19.730 --> 00:06:22.649 deduct those as an itemized deduction. However, 00:06:22.970 --> 00:06:26.490 after 2018, that went away outside of basically 00:06:26.490 --> 00:06:29.470 gambling losses. And so a lot of people thought 00:06:29.470 --> 00:06:31.310 they could write that stuff off, but they can't 00:06:31.310 --> 00:06:35.069 anymore. And then I even have people where they 00:06:35.069 --> 00:06:37.509 think, oh, if I write it and, you know, some 00:06:37.509 --> 00:06:39.649 people were doing home improvements, right? I'm 00:06:39.649 --> 00:06:42.519 gonna do a home improvement. And because it goes 00:06:42.519 --> 00:06:44.720 into the value of my house, I'm gonna use that. 00:06:44.860 --> 00:06:47.000 And I'm thinking, well, the IRS doesn't care 00:06:47.000 --> 00:06:48.759 about your swimming pool. They like the fact 00:06:48.759 --> 00:06:50.860 that you're investing in the economy and you're 00:06:50.860 --> 00:06:52.680 helping employ people and you're spending money, 00:06:52.939 --> 00:06:54.220 but they don't care about your swimming pool. 00:06:54.319 --> 00:06:56.100 And then I gave you a tax exemption for it. Unless 00:06:56.100 --> 00:06:58.220 there's a medical reason, like your doctor said, 00:06:59.060 --> 00:07:00.699 hey, for your health, you need a swimming pool 00:07:00.699 --> 00:07:03.399 in the backyard. Right. So let me go back though. 00:07:03.600 --> 00:07:05.939 I remember... I'm not going to say the insurance 00:07:05.939 --> 00:07:08.120 company name, but in the state of California, 00:07:08.300 --> 00:07:11.379 California is a very funny state to be in, by 00:07:11.379 --> 00:07:14.319 the way. But in the state of California, no shade 00:07:14.319 --> 00:07:16.160 to anybody living in California. They just have 00:07:16.160 --> 00:07:19.300 different laws. OK. But in the state of California, 00:07:19.459 --> 00:07:23.360 doing 2020, it was a couple of insurance carriers 00:07:23.360 --> 00:07:27.079 who employed people during that time. And their 00:07:27.079 --> 00:07:29.779 employees, their remote workers were purchasing. 00:07:30.199 --> 00:07:32.879 All these these stand -up debts ergo all these 00:07:32.879 --> 00:07:35.959 different things and the employer did not reimburse 00:07:35.959 --> 00:07:39.180 them and they came together and actually sued 00:07:39.180 --> 00:07:42.360 their employer and they were required there in 00:07:42.360 --> 00:07:44.839 the state of california to reimburse them for 00:07:44.839 --> 00:07:48.500 those expenses so for you all who are the w -2 00:07:48.500 --> 00:07:52.139 employees and if you are purchasing things for 00:07:52.139 --> 00:07:55.519 your home office One I would say because I used 00:07:55.519 --> 00:07:57.579 to be a w -2 employee. I told you guys I once 00:07:57.579 --> 00:08:01.420 was blind, but now I see I would certainly say 00:08:01.420 --> 00:08:03.980 inquire with your manager, your people leader, 00:08:04.040 --> 00:08:06.720 whatever you want to call them to see what you 00:08:06.720 --> 00:08:10.579 can be reimbursed for so you don't get upset 00:08:10.579 --> 00:08:13.040 when you can't deduct it from your taxes because 00:08:13.040 --> 00:08:16.379 you're a W -2 employee and you're not a business 00:08:16.379 --> 00:08:20.420 owner. Got it. I think I would give you all that 00:08:20.420 --> 00:08:23.279 little tidbit of just check first before you 00:08:23.279 --> 00:08:26.000 spend the money that you don't have because that's 00:08:26.000 --> 00:08:27.720 another misconception of the write -off is that 00:08:27.720 --> 00:08:29.579 I'm going to spend it right now and I'm going 00:08:29.579 --> 00:08:32.379 to get it back. Right. You may not get it back. 00:08:32.559 --> 00:08:35.379 So just check and see what you can be reimbursed 00:08:35.379 --> 00:08:38.460 for. And then if you want to judge up your office, 00:08:38.519 --> 00:08:42.120 that's that's your own expense. Right. That's 00:08:42.120 --> 00:08:43.840 that's a very good point. I didn't know. I'm 00:08:43.840 --> 00:08:46.100 sure, you know, you can tell me offline the insurance 00:08:46.100 --> 00:08:48.679 company. Now, a few things we were talking about 00:08:48.679 --> 00:08:51.100 before was like with charitable contributions. 00:08:51.799 --> 00:08:55.000 And I had a client where they actually weren't 00:08:55.000 --> 00:08:56.600 my tax client. They were a financial client. 00:08:56.659 --> 00:08:59.000 And every year they would give away stuff and 00:08:59.000 --> 00:09:01.679 they would make donations. And I would have to 00:09:01.679 --> 00:09:03.799 get them to understand, yeah, you're going to 00:09:03.799 --> 00:09:07.279 give away money. But number one, the tax deduction 00:09:07.279 --> 00:09:09.360 that you're getting is only going to be at the 00:09:09.360 --> 00:09:11.899 top of your tax bracket. Right. So if you're 00:09:11.899 --> 00:09:14.820 a 12 or a 22 % tax bracket, that's basically 00:09:14.820 --> 00:09:17.580 just buying something on sale that's 12 or 22 00:09:17.580 --> 00:09:20.320 % off. And so it's like, well, if it's not a 00:09:20.320 --> 00:09:22.590 good purchase, Just because you gave me a 12 00:09:22.590 --> 00:09:25.269 % discount doesn't make it a good purchase, right? 00:09:25.509 --> 00:09:27.370 Like how much of a discount would I need to get 00:09:27.370 --> 00:09:29.929 to buy something that I don't need, right? It's 00:09:29.929 --> 00:09:31.730 kind of the math that I'd have to do in my head. 00:09:32.110 --> 00:09:33.990 Now, there might be something where, hey, if 00:09:33.990 --> 00:09:36.730 it's enough, it would make sense, right? But 00:09:36.730 --> 00:09:38.789 I would have to quantify that. And I think a 00:09:38.789 --> 00:09:41.490 lot of people, they don't quantify it. They just 00:09:41.490 --> 00:09:44.250 equate right off to, oh, this is a good decision 00:09:44.250 --> 00:09:46.450 without actually quantifying. Well, what is the 00:09:46.450 --> 00:09:50.389 actual value of this? Because even now, I work 00:09:50.389 --> 00:09:53.509 with a lot of business owners and sometimes accountants 00:09:53.509 --> 00:09:55.809 traditionally have looked at, hey, how can we 00:09:55.809 --> 00:09:58.850 lower your pain today? Like you go to the doctor, 00:09:59.269 --> 00:10:01.509 you came to me for a solution. Well, I'm gonna 00:10:01.509 --> 00:10:04.090 just give you some medicine to solve the issue 00:10:04.090 --> 00:10:06.190 that you're dealing with today versus, well, 00:10:06.269 --> 00:10:07.870 what are some lifestyle changes you can make? 00:10:08.000 --> 00:10:09.860 that will actually put you in a better position 00:10:09.860 --> 00:10:12.279 in the long run. And so sometimes it makes more 00:10:12.279 --> 00:10:15.039 sense not to actually get the deduction because 00:10:15.039 --> 00:10:17.779 the cash in hand might be more valuable to you. 00:10:17.799 --> 00:10:19.919 It can be used for something else that would 00:10:19.919 --> 00:10:22.320 be more beneficial. But getting back into the 00:10:22.320 --> 00:10:24.299 charitable contributions. So I'll let you take 00:10:24.299 --> 00:10:26.039 this as far as, you know, how you think about 00:10:26.039 --> 00:10:31.159 the whole goodwill thing. So for me and the people 00:10:31.159 --> 00:10:33.879 that I typically see, a lot of people give, you 00:10:33.879 --> 00:10:36.220 know, Church, they pay their tithes in offering. 00:10:36.299 --> 00:10:39.360 I pay my tithes in offering, right? Which is 00:10:39.360 --> 00:10:41.539 good. Pay your tithes, pay your offering. I would 00:10:41.539 --> 00:10:46.379 also say make sure your church house is at 501 00:10:46.379 --> 00:10:49.179 -C3. They have a tax designation that will allow 00:10:49.179 --> 00:10:52.960 you to even consider or try to consider using 00:10:52.960 --> 00:10:56.279 this on your taxes. I would also say for those 00:10:56.279 --> 00:10:59.590 who love to give to the Salvation Army and Love 00:10:59.590 --> 00:11:02.070 to drop off, you know, just different things. 00:11:02.350 --> 00:11:04.429 Here is what I'm saying. Listen to me. Listen 00:11:04.429 --> 00:11:07.169 to me, Linda. All right. So I had two I had two 00:11:07.169 --> 00:11:09.289 different customers this year, Terrence. The 00:11:09.289 --> 00:11:13.389 one was like, hey, I I gave like ten thousand 00:11:13.389 --> 00:11:15.590 dollars to the Salvation Army worth the staff. 00:11:15.669 --> 00:11:18.929 I was like, oh, good. Like, give me a receipt. 00:11:19.090 --> 00:11:21.149 I don't have no receipt. She was like, I just 00:11:21.149 --> 00:11:22.870 drove through the donation line and they gave 00:11:22.870 --> 00:11:26.289 me this letter. Oh, no, no, no, no, no. That 00:11:26.289 --> 00:11:29.710 doesn't count, people. That doesn't count. especially 00:11:29.710 --> 00:11:32.490 for the Salvation Army, they'll give you a form 00:11:32.490 --> 00:11:35.529 and then it's up to you to determine the value 00:11:35.529 --> 00:11:38.090 of the items that you gave. But here is the gag, 00:11:38.590 --> 00:11:40.529 is that when you go into the Salvation Army's 00:11:40.529 --> 00:11:43.549 website or the Goodwoods website, what they value 00:11:43.549 --> 00:11:45.690 those items is different than what you may value 00:11:45.690 --> 00:11:49.879 them. You want to make sure, one, that you actually 00:11:49.879 --> 00:11:52.779 get a tangible receipt based on the goods that 00:11:52.779 --> 00:11:56.139 you've given them. They will give you a receipt 00:11:56.139 --> 00:11:58.720 with an itemized list of the things that you 00:11:58.720 --> 00:12:01.139 gave. You have to do your due diligence. You 00:12:01.139 --> 00:12:04.039 can't just give your tax preparer a list of things 00:12:04.039 --> 00:12:07.000 and say, yeah, I gave it without any documentation. 00:12:07.039 --> 00:12:10.039 So you need documentation. I would also say to 00:12:10.039 --> 00:12:12.840 you type pairs, get that documentation from your 00:12:12.840 --> 00:12:14.899 church house as well. Right. They should be able 00:12:14.899 --> 00:12:18.519 to give you some type of list, too. But no, for 00:12:18.519 --> 00:12:20.980 you all that like to get to the goodwill, I can't 00:12:20.980 --> 00:12:24.600 just throw a blanket number on your tax return. 00:12:25.080 --> 00:12:28.279 We need documentation so much so that they require 00:12:28.480 --> 00:12:30.379 I forget the form number, Terrence will tell 00:12:30.379 --> 00:12:34.080 me, but so much so that we require a form to 00:12:34.080 --> 00:12:36.759 fill out a detailed list of the things that you 00:12:36.759 --> 00:12:39.919 gave, when the non -cash items, when it's over 00:12:39.919 --> 00:12:43.559 $500 for sure. Right. That's an 82, 83 for those 00:12:43.559 --> 00:12:47.039 who are taking notes out there. Now, what about, 00:12:47.039 --> 00:12:49.379 what about sister Johnson? You know, she got 00:12:49.379 --> 00:12:51.539 a, she got a root canal, but she don't have the 00:12:51.539 --> 00:12:53.580 money to pay for it. And so she said I'd go fund 00:12:53.580 --> 00:12:56.620 me to help her. She's a need. You know, what 00:12:56.620 --> 00:12:59.159 if you give money to Sister Johnson? Oh, we're 00:12:59.159 --> 00:13:00.960 going to lift it up in prayers and we're going 00:13:00.960 --> 00:13:03.460 to give it to her. But that's not a charitable 00:13:03.460 --> 00:13:06.100 contribution. I know I know y 'all upset because 00:13:06.100 --> 00:13:10.379 a lot of y 'all give to those go fund me. Right. 00:13:10.679 --> 00:13:13.759 And y 'all listen, listen, listen, Linda, listen. 00:13:14.740 --> 00:13:18.059 Guess what? The funeral expenses to that y 'all 00:13:18.059 --> 00:13:21.259 donate to that's not considered a charitable 00:13:21.259 --> 00:13:24.860 donation because it's not a charitable organization. 00:13:25.179 --> 00:13:29.779 okay so please sir ma 'am find a way possibly 00:13:29.779 --> 00:13:33.440 donate through your church so that your church 00:13:33.440 --> 00:13:37.259 can give but yeah that go fund me it's it's giving 00:13:37.259 --> 00:13:40.379 no it's a no from me we can't we can't include 00:13:40.379 --> 00:13:44.799 it so so it's hope dashing hopes and dreams out 00:13:44.799 --> 00:13:50.379 there one one tip at a time um Unless I'm just 00:13:50.379 --> 00:13:53.080 trying to help us for 2025, we can still get 00:13:53.080 --> 00:13:55.159 right. It's only April. We can still get right 00:13:55.159 --> 00:13:59.000 and do different for 2025 tax year. So there's 00:13:59.000 --> 00:14:02.200 a few other things that I see often. I get questions 00:14:02.200 --> 00:14:05.480 often about that. I have to clear it with people 00:14:05.480 --> 00:14:09.620 that could be sometimes when they look at making 00:14:09.620 --> 00:14:12.419 write -offs for their mortgage. I have a recent 00:14:12.419 --> 00:14:14.960 client who at the end of the year, he was closing 00:14:14.960 --> 00:14:18.080 on the house and he was told, hey, if you go 00:14:18.080 --> 00:14:20.000 ahead and pay these points on your mortgage, 00:14:20.379 --> 00:14:22.299 you better take advantage of this tax deduction. 00:14:22.960 --> 00:14:24.980 Well, we didn't have a conversation ahead of 00:14:24.980 --> 00:14:26.399 time because I would have told him, hey, go ahead 00:14:26.399 --> 00:14:28.919 and close in January versus December because 00:14:28.919 --> 00:14:31.320 the value of those points will then be counted. 00:14:31.440 --> 00:14:33.960 Plus you'll have a full year's of interest on 00:14:33.960 --> 00:14:35.980 your mortgage. And then that would just be more 00:14:35.980 --> 00:14:38.399 beneficial instead of you like barely squeaking 00:14:38.399 --> 00:14:41.000 over the standard deduction limit. So even if 00:14:41.000 --> 00:14:42.720 he takes a standard deduction, let's just say 00:14:42.720 --> 00:14:45.360 that without doing anything, he would have got 00:14:45.360 --> 00:14:47.879 $30 ,000 of tax deductions with a standard deduction. 00:14:48.509 --> 00:14:50.409 versus if he had barely squeaked over and he 00:14:50.409 --> 00:14:53.769 only got 31 ,000. Well, that would effectively 00:14:53.769 --> 00:14:55.909 only be a thousand dollar benefit for maybe the 00:14:55.909 --> 00:14:58.389 10 ,000 he paid out of pocket versus, hey, next 00:14:58.389 --> 00:15:00.830 year you'll actually get the full 10 ,000. So 00:15:00.830 --> 00:15:03.250 that's your $9 ,000 at your tax bracket would 00:15:03.250 --> 00:15:05.990 be the savings. And another thing that I get 00:15:05.990 --> 00:15:08.250 is people when they first get married, they'll 00:15:08.250 --> 00:15:12.070 fall separately. And 99 % of the time, it does 00:15:12.070 --> 00:15:14.669 not make sense to fall separate unless you're 00:15:14.669 --> 00:15:16.389 part of doing something janky, which you probably 00:15:16.389 --> 00:15:17.899 should have worked out. prior to getting married, 00:15:18.240 --> 00:15:20.759 but that's a whole nother podcast. If you don't 00:15:20.759 --> 00:15:24.700 feel comfortable filing jointly, then you probably 00:15:24.700 --> 00:15:28.139 need to assess just the financial plan y 'all 00:15:28.139 --> 00:15:31.059 have together. Because you're costing yourself 00:15:31.059 --> 00:15:33.919 money filing separately in those situations and 00:15:33.919 --> 00:15:36.919 other things that people do. So let's talk through 00:15:36.919 --> 00:15:38.600 a little bit about kind of some of the end of 00:15:38.600 --> 00:15:41.480 year stuff that I see people do that may or may 00:15:41.480 --> 00:15:43.340 not make sense, but you have to assess it and 00:15:43.340 --> 00:15:46.429 get it at a dollar value. So like your HSA or 00:15:46.429 --> 00:15:48.809 IRA account, so this podcast will post right 00:15:48.809 --> 00:15:51.129 before the tax deadline. That's something that 00:15:51.129 --> 00:15:55.750 you can actually do is fund an IRA or an HSA 00:15:55.750 --> 00:15:58.809 up until the tax deadline, which is the 15th 00:15:58.809 --> 00:16:01.230 of April, most years. Now, before you get into 00:16:01.230 --> 00:16:05.029 the HSA, I want to tie that back to, you were 00:16:05.029 --> 00:16:07.370 talking about the home, buying a home and everything. 00:16:07.549 --> 00:16:09.590 One of the other things that some people think 00:16:09.590 --> 00:16:12.429 they can write off is the out of pocket medical. 00:16:12.600 --> 00:16:16.500 And I mentioned the HSA because some of our, 00:16:16.899 --> 00:16:20.440 if you are a W -2 employee, you could have an 00:16:20.440 --> 00:16:25.379 employee or contributed HSA. And so for those 00:16:25.379 --> 00:16:28.220 who want to just write off the medical, it has 00:16:28.220 --> 00:16:33.440 to be an unreimbursed expense, meaning it's outside 00:16:33.440 --> 00:16:36.779 of what your employer has contributed. Like say 00:16:36.779 --> 00:16:40.840 if you have 2000 in your HSA, little debit card 00:16:40.840 --> 00:16:45.639 situation, and you spend out of pocket cash money, 00:16:45.740 --> 00:16:49.259 not tied to anything that your employer is giving 00:16:49.259 --> 00:16:52.620 you, then we could possibly look at that, right? 00:16:52.740 --> 00:16:57.259 We could possibly look at your medication and 00:16:57.259 --> 00:16:59.200 just different things. And going back to the 00:16:59.200 --> 00:17:01.679 example that Terrence mentioned about the pool, 00:17:02.240 --> 00:17:05.140 right? Putting a pool in for medical purposes. 00:17:05.720 --> 00:17:07.740 So it's a lot of things to tie in, but you got 00:17:07.740 --> 00:17:10.829 to know the little nuances there. Especially 00:17:10.829 --> 00:17:13.349 the unreimbursed piece. You don't get to double 00:17:13.349 --> 00:17:16.490 dip You don't get to have this HSA benefit and 00:17:16.490 --> 00:17:18.990 also try to say this is out of pocket because 00:17:18.990 --> 00:17:21.930 technically it's not so Just wanted to plug that 00:17:21.930 --> 00:17:26.329 in take it away with the HSA So to the so those 00:17:26.329 --> 00:17:28.589 are very good points because the IRS doesn't 00:17:28.589 --> 00:17:31.049 let you double dip really on anything. Okay? 00:17:31.809 --> 00:17:33.529 Now if you're a minister, they let you double 00:17:33.529 --> 00:17:35.509 dip I guess when it comes to your housing allowance 00:17:35.509 --> 00:17:38.049 and then stuff you can write off outside of that. 00:17:38.049 --> 00:17:39.609 So that might be something we can go through 00:17:39.609 --> 00:17:43.089 more in depth for our clergy people out there. 00:17:43.410 --> 00:17:46.250 But with the HSA, you can contribute to it, but 00:17:46.250 --> 00:17:48.549 you need to be aware that if I do put money in 00:17:48.549 --> 00:17:51.109 this HSA account, what is the actual tax value 00:17:51.109 --> 00:17:53.930 of it? So if I put, you know, $4 ,000 in, I need 00:17:53.930 --> 00:17:56.789 to calculate at my tax bracket because if that 00:17:56.789 --> 00:17:58.970 $4 ,000, what if I don't have a medical expense 00:17:58.970 --> 00:18:01.529 and I need the money? I'm gonna pay a 20 % penalty 00:18:01.529 --> 00:18:03.650 to get it out if it's not for medical expense. 00:18:03.980 --> 00:18:06.339 So if I don't have a lot of liquidity, even though, 00:18:06.339 --> 00:18:08.259 yes, I don't want to pay the IRS, but I might 00:18:08.259 --> 00:18:11.339 be better off just paying the IRS $3 ,000 and 00:18:11.339 --> 00:18:13.980 keeping the $3 ,000 extra that would have gone 00:18:13.980 --> 00:18:17.039 to the HSA potentially. But also just specific 00:18:17.039 --> 00:18:20.180 to the HSA, if you have an HSA at your employer, 00:18:20.380 --> 00:18:23.000 it would be better to just do it from your payroll 00:18:23.000 --> 00:18:26.319 deduction because it is a federal deduction when 00:18:26.319 --> 00:18:28.819 you put it on your tax return. But if you do 00:18:28.819 --> 00:18:30.980 it through your employer, you actually will also 00:18:30.980 --> 00:18:34.019 save on Social Security and Medicare taxes. So 00:18:34.019 --> 00:18:37.619 you'll get an extra 7 .65 % tax benefit from 00:18:37.619 --> 00:18:40.759 doing it in the HSA account. With an IRA, you 00:18:40.759 --> 00:18:42.559 can't, some employers allow you to do the deduction 00:18:42.559 --> 00:18:45.720 from there, but same concept. If that money is 00:18:45.720 --> 00:18:47.460 going to be tied up until you're 59 and a half, 00:18:47.920 --> 00:18:49.880 then you want to be aware that, okay, I can put 00:18:49.880 --> 00:18:52.480 it in here today, but if I need it prior to 59 00:18:52.480 --> 00:18:55.299 and a half, without an exception, I'm going to 00:18:55.299 --> 00:18:57.259 pay an extra 10 % to get it back. So I'm going 00:18:57.259 --> 00:18:59.420 to get a tax benefit, putting it in, but I'm 00:18:59.420 --> 00:19:00.880 going to have to pay an extra 10 % getting it 00:19:00.880 --> 00:19:03.029 out. So those are things that are important to 00:19:03.029 --> 00:19:06.930 understand. And then lastly, the whole car situation. 00:19:07.630 --> 00:19:10.410 I say, OK, yes, let's take your car. Now, for 00:19:10.410 --> 00:19:12.789 people out there who say they use their car 100 00:19:12.789 --> 00:19:15.589 % for business, I would push back on that quite 00:19:15.589 --> 00:19:19.230 a bit relative to, you know, I'm imagining you 00:19:19.230 --> 00:19:21.930 went to the store one time. That wasn't a business 00:19:21.930 --> 00:19:25.630 trip. Any car you buy, especially the Model X, 00:19:25.950 --> 00:19:27.690 that's the one they wanted to get or at least 00:19:27.690 --> 00:19:31.170 they used to prior to Doge. But they wanted to 00:19:31.170 --> 00:19:34.230 get that Model X because it was over 6 ,000 pounds. 00:19:34.289 --> 00:19:37.430 I could take the bonus appreciation. But I would 00:19:37.430 --> 00:19:40.589 say, hey, just remember that $12 a month you're 00:19:40.589 --> 00:19:42.279 paying in car payment. You are going to get a 00:19:42.279 --> 00:19:44.220 benefit from that primarily in the first year. 00:19:44.339 --> 00:19:46.619 After that, the value of that tax section is 00:19:46.619 --> 00:19:48.579 going to diminish. So you need to have a plan 00:19:48.579 --> 00:19:51.000 and say, OK, if I do get this big tax write off, 00:19:51.220 --> 00:19:52.700 how am I going to take advantage of this money? 00:19:53.140 --> 00:19:55.819 Because the IRS will recapture that in the future 00:19:55.819 --> 00:19:59.119 or the value of it will decline and I'm still 00:19:59.119 --> 00:20:00.660 going to have a payment. So even though I'm paying 00:20:00.660 --> 00:20:03.460 $200 a month, the tax benefit may only be $4 00:20:03.460 --> 00:20:06.680 ,000 in that next few years or $5 ,000 or whatever 00:20:06.680 --> 00:20:08.720 it might be. So you're saying, hey, the payment 00:20:08.720 --> 00:20:11.450 I have isn't going to match. the tax benefit 00:20:11.450 --> 00:20:14.970 after the first year. And then I'm left with 00:20:14.970 --> 00:20:17.390 this high payment with very little tax benefit. 00:20:17.470 --> 00:20:19.849 And I've ended up paying money on I'm in a paying 00:20:19.849 --> 00:20:22.069 taxes on money. That's going to look like profit, 00:20:22.130 --> 00:20:23.950 especially if you're a business owner. And so 00:20:23.950 --> 00:20:26.410 that's the concept I'll address on a future episode 00:20:26.410 --> 00:20:28.869 as far as cash flow and taxes and how you might 00:20:28.869 --> 00:20:30.809 plan ahead for that. But that's something to 00:20:30.809 --> 00:20:33.569 certainly keep aware of from that vantage point. 00:20:33.990 --> 00:20:37.309 So a couple of things before we wrap up, I want 00:20:37.309 --> 00:20:40.099 to go over maybe some missed opportunities. Tamia, 00:20:40.240 --> 00:20:43.119 you work in insurance, you said. So what was 00:20:43.119 --> 00:20:45.099 the first thing people always told you when it 00:20:45.099 --> 00:20:46.579 comes to your 401k, as far as what you should 00:20:46.579 --> 00:20:49.019 do? What was kind of the common advice? Do you 00:20:49.019 --> 00:20:52.900 remember? They said you need to get the full 00:20:52.900 --> 00:20:56.059 employer match. They would say, like, if your 00:20:56.059 --> 00:20:59.500 employer is matching dollar for dollar up to 00:20:59.500 --> 00:21:04.579 6%, up to 3%, whatever it is, you need to match 00:21:04.579 --> 00:21:08.420 it. You need to take full advantage of it, especially 00:21:09.029 --> 00:21:13.410 since it's a pre -tax. Got it. For sure. And 00:21:13.410 --> 00:21:16.089 so, you know, you basically get the benefit of 00:21:16.089 --> 00:21:18.009 getting a tax exemption, plus you get the extra 00:21:18.009 --> 00:21:20.269 money from your employer. But I have seen people 00:21:20.269 --> 00:21:23.329 where, you know, I look at their W -2s and their 00:21:23.329 --> 00:21:27.349 code D says like $800. I'm looking at their box 00:21:27.349 --> 00:21:30.089 one wages and I'm like, well, you know, or box 00:21:30.089 --> 00:21:31.630 five, I guess you could say to be more accurate. 00:21:32.009 --> 00:21:34.390 Hey, if you bump this up, especially if you work 00:21:34.390 --> 00:21:36.170 at a big company, they're probably giving you 00:21:36.170 --> 00:21:38.470 four, three and a half to five percent or six 00:21:38.470 --> 00:21:41.289 percent max. So if you're putting in less than 00:21:41.289 --> 00:21:44.089 that, then not only are you missing out on the 00:21:44.089 --> 00:21:45.809 tax benefit, but you're also missing out on the 00:21:45.809 --> 00:21:48.509 match. And then to add insult to injury, if you're 00:21:48.509 --> 00:21:51.589 getting a tax refund, that was literally free 00:21:51.589 --> 00:21:53.690 money that you were basically, hey, I'm going 00:21:53.690 --> 00:21:56.190 to overpay the IRS. I'm a wait for them to give 00:21:56.190 --> 00:21:58.440 me the money back. when I could have just given 00:21:58.440 --> 00:22:00.779 it to my employer to put it into my retirement, 00:22:01.039 --> 00:22:03.960 got an extra tax benefit and had the company 00:22:03.960 --> 00:22:06.140 match it. So you could literally have doubled 00:22:06.140 --> 00:22:08.720 your return plus got a tax benefit with a little 00:22:08.720 --> 00:22:10.720 bit of planning if you pay attention to those 00:22:10.720 --> 00:22:13.039 kind of things. So I would say that's the key 00:22:13.039 --> 00:22:14.839 word though, Terrence, is the planning piece, 00:22:15.039 --> 00:22:18.059 right? Again, people, I didn't know all the things. 00:22:18.119 --> 00:22:20.450 And so I actually was one of the people. when 00:22:20.450 --> 00:22:23.329 I first heard 401k because I've been working 00:22:23.329 --> 00:22:26.390 for many many years a lady never tells her age 00:22:26.390 --> 00:22:29.529 but I've been working for a long time and when 00:22:29.529 --> 00:22:33.170 the whole world 401k when it populated in my 00:22:33.170 --> 00:22:36.049 mind in my world it was like I need all my money 00:22:36.049 --> 00:22:38.450 I need all of my money coming back to me so I 00:22:38.450 --> 00:22:40.910 was like I'm gonna give you $20 a month right 00:22:40.910 --> 00:22:44.009 right not really truly understanding everything 00:22:44.009 --> 00:22:46.769 that you just explained right so if you all don't 00:22:46.769 --> 00:22:49.839 hear anything else people it is a benefit not 00:22:49.839 --> 00:22:52.519 just in focusing on your refund at the beginning 00:22:52.519 --> 00:22:54.119 of the year, like we talked about in the last 00:22:54.119 --> 00:22:58.599 podcast, but also understanding your dollar, 00:22:59.119 --> 00:23:01.539 understanding how to make it work, understanding 00:23:01.539 --> 00:23:05.859 how taxes work, understanding it. Because to 00:23:05.859 --> 00:23:09.359 his point, if I was to donate the full amount... 00:23:09.529 --> 00:23:12.009 not donate, but give the full amount, maximize 00:23:12.009 --> 00:23:14.809 employee match, I will see other benefits on 00:23:14.809 --> 00:23:17.390 my tax return. But if I'm just going to, we're 00:23:17.390 --> 00:23:18.950 not going to name names, but if I'm doing it 00:23:18.950 --> 00:23:21.809 myself, right, doing the tax return myself online 00:23:21.809 --> 00:23:26.289 or going to these chains or whatever, I'm not 00:23:26.289 --> 00:23:28.589 getting the education or the planning that I 00:23:28.589 --> 00:23:31.869 need to make those decisions to better prepare 00:23:31.869 --> 00:23:35.269 me to really truly understand it. So I say all 00:23:35.269 --> 00:23:38.609 that to say people is tax planning is important. 00:23:38.670 --> 00:23:42.049 Don't just focus on your refund, but focus on 00:23:42.049 --> 00:23:45.369 what tax implications your decisions are making 00:23:45.369 --> 00:23:49.329 for you. For sure. So I'm going to give you guys 00:23:49.329 --> 00:23:52.450 a few things that I think are common missteps 00:23:52.450 --> 00:23:54.250 people make. And you can kind of give me your 00:23:54.250 --> 00:23:56.529 thoughts as well to me as we close out here. 00:23:56.710 --> 00:24:00.549 But a few things like I get people who say, all 00:24:00.549 --> 00:24:02.069 right, you know, I want to start a business. 00:24:02.150 --> 00:24:05.509 I need an LLC. Well, yes, the LLC doesn't have 00:24:05.509 --> 00:24:07.390 anything to do with your taxes, is what I have 00:24:07.390 --> 00:24:09.470 to normally instruct people. Those are two separate 00:24:09.470 --> 00:24:12.250 things. You set your LLC up at the state. You 00:24:12.250 --> 00:24:14.029 file your taxes with the federal government. 00:24:14.829 --> 00:24:16.430 So the federal government doesn't necessarily 00:24:16.430 --> 00:24:19.690 care that you have an LLC. An LLC does give you 00:24:19.690 --> 00:24:22.390 the ability to have different tax options, but 00:24:22.390 --> 00:24:24.470 having it alone does not impact whether you can 00:24:24.470 --> 00:24:26.250 write something off or not, or it doesn't give 00:24:26.250 --> 00:24:29.130 you extra tax benefits for having an LLC. So 00:24:29.130 --> 00:24:30.970 you might see that from the influencers out there 00:24:30.970 --> 00:24:34.509 that they give you that. Meals and travel, okay, 00:24:34.769 --> 00:24:37.289 just because you and your wife talk about business 00:24:37.289 --> 00:24:39.109 and you own a business and y 'all talk about 00:24:39.109 --> 00:24:41.309 business doesn't make that meal specifically 00:24:41.309 --> 00:24:45.589 a deduction. Are you sure? So there are ways 00:24:45.589 --> 00:24:48.789 to properly document the things that you have 00:24:48.789 --> 00:24:50.890 that do have a business purpose. So it's like, 00:24:51.069 --> 00:24:53.890 hey, have a board meeting, have an agenda, have 00:24:53.890 --> 00:24:56.670 it have the effect of an actual business meeting. 00:24:56.710 --> 00:24:59.569 If you want to get, if you want to audit proof 00:24:59.569 --> 00:25:02.599 what you're doing. Okay. I get people that claim 00:25:02.599 --> 00:25:04.680 me their mama, they claim me the kid, they claim 00:25:04.680 --> 00:25:07.299 me the uncle, the brother, okay? Number one, 00:25:07.319 --> 00:25:09.839 this person, if they work, if they're an adult 00:25:09.839 --> 00:25:12.880 over the age of 24, or they're not your kid, 00:25:13.099 --> 00:25:15.480 if they work a job, chances are you probably 00:25:15.480 --> 00:25:17.339 not gonna be able to claim them. So you have 00:25:17.339 --> 00:25:19.519 to say, hey, do they make more than $5 ,000? 00:25:19.559 --> 00:25:21.200 If they do, you're not gonna be able to claim 00:25:21.200 --> 00:25:24.000 them. Secondly, if you provide more, or else 00:25:24.000 --> 00:25:26.140 they're disabled, I should say, but if you don't 00:25:26.140 --> 00:25:28.920 provide more than 50 % of their support, then 00:25:28.920 --> 00:25:30.420 you're not gonna be able to claim them either, 00:25:30.680 --> 00:25:33.539 okay? And so that's something that you need to 00:25:33.539 --> 00:25:35.579 be aware of. And the benefit, it's really only 00:25:35.579 --> 00:25:39.000 $500 if you look at it. And I would say this, 00:25:39.119 --> 00:25:42.319 the days are gone, people, when you can just 00:25:42.319 --> 00:25:45.299 get somebody's kid and put them on your tax return. 00:25:45.440 --> 00:25:49.160 Those days are gone. I hope that you are utilizing 00:25:49.160 --> 00:25:52.180 a tax preparer that is doing their due diligence. 00:25:52.279 --> 00:25:54.819 There are some questions that you have to answer. 00:25:55.279 --> 00:25:58.500 That you mark off and so if your refund your 00:25:58.500 --> 00:26:01.299 return gets rejected or they take your refund 00:26:01.299 --> 00:26:03.660 or whatever Don't look at your tax preparer. 00:26:03.660 --> 00:26:07.259 Look at yourself ma 'am. Sir. Did you try to 00:26:07.259 --> 00:26:10.220 claim somebody else? But on a very serious note, 00:26:10.259 --> 00:26:13.599 that's we we can't do that Let's let's not that 00:26:13.599 --> 00:26:15.980 was a big thing and the irs really cracked down 00:26:15.980 --> 00:26:19.259 on that And so if you are divorced you all need 00:26:19.259 --> 00:26:22.000 to figure that out. Who's gonna claim? The kids 00:26:22.000 --> 00:26:25.240 had a previous scenario like that. You need to 00:26:25.240 --> 00:26:28.660 make sure you have it written This person this 00:26:28.660 --> 00:26:30.920 spouse is going to claim this ex -spouse is going 00:26:30.920 --> 00:26:33.920 to claim so All of those need things needs to 00:26:33.920 --> 00:26:36.500 be hashed out when you get ready to file your 00:26:36.500 --> 00:26:40.579 return as it relates to your kids Your dependents 00:26:40.579 --> 00:26:43.160 or you know, even kids that you have adopted 00:26:43.160 --> 00:26:45.420 I mean, yeah all of those things need to be hashed 00:26:45.420 --> 00:26:47.819 out Especially with that because people won't 00:26:47.819 --> 00:26:50.730 think they're gonna get rich from those child 00:26:50.730 --> 00:26:53.730 tax credits, you're not. But make sure that you're 00:26:53.730 --> 00:26:56.269 independent. It's funny. It's not a first come, 00:26:56.390 --> 00:26:59.789 first served thing. Right? And I've had clients 00:26:59.789 --> 00:27:02.009 where they're siblings because they both tip 00:27:02.009 --> 00:27:04.089 in for mom and one of them claiming the other 00:27:04.089 --> 00:27:06.930 one doesn't. I'm like, y 'all had this big family 00:27:06.930 --> 00:27:11.730 drag out over $500. Not that that's... That may 00:27:11.730 --> 00:27:13.130 be a significant amount of money for some people, 00:27:13.130 --> 00:27:15.089 but it's not worth your relationship with your 00:27:15.089 --> 00:27:18.650 sibling over $500, right? Especially when there's 00:27:18.650 --> 00:27:21.670 other things that can impact. If you're not the 00:27:21.670 --> 00:27:23.829 person who's claiming the dependent, there are 00:27:23.829 --> 00:27:26.289 other things that your tax preparer can help 00:27:26.289 --> 00:27:29.109 you in terms of decreasing your tax liability. 00:27:29.690 --> 00:27:32.009 Everything we just mentioned before, it's about 00:27:32.009 --> 00:27:35.430 your tax planning. Right. A couple of other things 00:27:35.430 --> 00:27:38.369 I see, specifically with states that don't have... 00:27:38.430 --> 00:27:41.369 that don't have state income taxes, like in Texas 00:27:41.369 --> 00:27:45.289 where I am, people don't claim the safe harbor 00:27:45.289 --> 00:27:49.049 for a sales tax. If you're single, the IRS will 00:27:49.049 --> 00:27:51.890 give you, I think it's about $1 ,600 just for 00:27:51.890 --> 00:27:54.349 that. So if you automize your deductions, I see 00:27:54.349 --> 00:27:56.089 that on people's returns all the time. They don't 00:27:56.089 --> 00:27:58.930 take that standard amount. Or if they have multiple 00:27:58.930 --> 00:28:00.990 people in their house, it could be three, $4 00:28:00.990 --> 00:28:03.309 ,000. Well, hey, the government is giving you 00:28:03.309 --> 00:28:05.450 this with no documentation required, and you 00:28:05.450 --> 00:28:07.369 just didn't take it because you went to TurboTax. 00:28:07.559 --> 00:28:10.380 So it's like, yeah, your return was 50 bucks, 00:28:10.400 --> 00:28:12.839 but if you cost yourself 400, then that math 00:28:12.839 --> 00:28:16.519 didn't work out great for you. Also, some non 00:28:16.519 --> 00:28:19.259 -refundable tax credits, like the EV credit or 00:28:19.259 --> 00:28:22.619 the solar panels. One, with the EV credit, you 00:28:22.619 --> 00:28:25.019 have to look at your income. And then a used 00:28:25.019 --> 00:28:27.519 EV, the amount of car can't be more than $12 00:28:27.519 --> 00:28:29.779 ,000, $5 ,000. So if you go to the dealership 00:28:29.779 --> 00:28:32.200 and they're selling you a $30 ,000 EV that's 00:28:32.200 --> 00:28:33.720 used, and they're like, oh, you can get a tax 00:28:33.720 --> 00:28:36.930 credit. Well, Yes, you could if the car was below 00:28:36.930 --> 00:28:39.410 the threshold. Or, hey, you could write this 00:28:39.410 --> 00:28:40.910 off, or you could get a tax credit. Well, they 00:28:40.910 --> 00:28:43.109 just say write off for everything. But you can 00:28:43.109 --> 00:28:45.190 get a tax credit if your income is below the 00:28:45.190 --> 00:28:47.930 threshold. And so if you're not aware of that, 00:28:48.109 --> 00:28:49.750 then don't necessarily listen to people who are 00:28:49.750 --> 00:28:51.230 giving you tax advice that may not know your 00:28:51.230 --> 00:28:54.369 situation. Or I have a client where they're older 00:28:54.369 --> 00:28:56.390 and so they don't really pay a whole lot of taxes 00:28:56.390 --> 00:28:58.730 every year, but they bought these solar panels 00:28:58.730 --> 00:29:00.609 thinking they were about to get this 30 % credit 00:29:00.609 --> 00:29:03.819 for the panels. And yes, they're able to get 00:29:03.819 --> 00:29:05.440 the credit, but their tax liability for the year 00:29:05.440 --> 00:29:09.660 might be $2 ,000. Well, if you got this $30 ,000 00:29:09.660 --> 00:29:11.779 tax credit or $20 ,000 tax credit, it's going 00:29:11.779 --> 00:29:14.700 to take 10 or 15 years to actually get it. And 00:29:14.700 --> 00:29:16.519 so you may not have bought those solar panels 00:29:16.519 --> 00:29:19.079 if you had those of diligence and realized what 00:29:19.079 --> 00:29:21.460 is the actual impact of this on my situation? 00:29:21.460 --> 00:29:23.740 And how is that going to make this purchase more 00:29:23.740 --> 00:29:26.380 worthwhile? So as I say, basically what I hear 00:29:26.380 --> 00:29:29.119 you saying is make sure the math is math. Exactly. 00:29:29.400 --> 00:29:32.119 And listen, you know, I don't give medical advice. 00:29:32.240 --> 00:29:34.160 I don't give dental advice, right? Outside of 00:29:34.160 --> 00:29:36.220 my personal experience, I can share with you 00:29:36.220 --> 00:29:39.579 my personal experience. and how it impacted me 00:29:39.579 --> 00:29:41.420 personally, but I can't give you advice on the 00:29:41.420 --> 00:29:43.660 stuff that I don't do or I'm not an expert at. 00:29:44.180 --> 00:29:45.920 And oftentimes people will listen to people they 00:29:45.920 --> 00:29:48.259 trust versus people that have more expertise 00:29:48.259 --> 00:29:52.940 in those areas. And so just be aware that the 00:29:52.940 --> 00:29:55.220 information you get may not always be, it may 00:29:55.220 --> 00:29:58.200 not even be inaccurate, but it may not be applicable 00:29:58.200 --> 00:30:01.039 to you in the scenario that it was given in. 00:30:01.319 --> 00:30:03.220 So make sure that, okay, if I hear something, 00:30:03.299 --> 00:30:05.940 I got to get the right context behind it. So 00:30:05.940 --> 00:30:07.779 that ultimately I can apply it to my situation 00:30:07.779 --> 00:30:10.339 and put me in a better spot versus me having 00:30:10.339 --> 00:30:13.579 this expectation Then I get disappointed after 00:30:13.579 --> 00:30:15.319 the fact because I didn't do my due diligence 00:30:15.319 --> 00:30:19.099 on the front end Right context is king people 00:30:19.099 --> 00:30:21.759 context is king make sure it's applicable So 00:30:21.759 --> 00:30:23.519 the next time you hear someone say just write 00:30:23.519 --> 00:30:26.559 it off I want you to pause before you make that 00:30:26.559 --> 00:30:28.599 purchase first We need to make sure that you 00:30:28.599 --> 00:30:32.279 can afford it, right? And then we need to make 00:30:32.279 --> 00:30:34.380 sure it's something that's applicable to you 00:30:34.380 --> 00:30:37.180 your situation that you can actually quote unquote 00:30:37.180 --> 00:30:40.579 write off or take a tax deduction or. So if you 00:30:40.579 --> 00:30:42.880 have any questions, you can send those to questions 00:30:42.880 --> 00:30:47.500 at L O G O S F G dot com. And we will answer 00:30:47.500 --> 00:30:49.539 some of those questions on a future episodes, 00:30:49.759 --> 00:30:52.339 especially post tax season as far as OK, what 00:30:52.339 --> 00:30:54.920 are some things you can do like mid year or what? 00:30:55.240 --> 00:30:57.839 What are some things that may occur that you 00:30:57.839 --> 00:31:00.279 need to check? Because oftentimes people come 00:31:00.279 --> 00:31:02.750 to me with stuff that happened. And then I'm 00:31:02.750 --> 00:31:04.630 having to try to figure out what do we do with 00:31:04.630 --> 00:31:08.529 this after the fact? Or I want to do a 1031 exchange, 00:31:08.609 --> 00:31:11.009 but I already sold the property. Well, that doesn't 00:31:11.009 --> 00:31:12.950 really work. So what are some things that might 00:31:12.950 --> 00:31:14.609 be on your horizon that you need to plan ahead 00:31:14.609 --> 00:31:17.250 for? And those are things we can kind of give 00:31:17.250 --> 00:31:19.589 you tips around. All right, so any parting thoughts 00:31:19.589 --> 00:31:22.609 for our people before we wrap up, Tanya? No, 00:31:22.609 --> 00:31:26.170 just make sure the math math's people. It's not 00:31:26.170 --> 00:31:29.069 math thing out here in these tax streets So just 00:31:29.069 --> 00:31:32.109 make sure it's math thing. That's all I got contacts 00:31:32.109 --> 00:31:35.430 is king and make sure you have good tax planning 00:31:35.430 --> 00:31:38.069 Remember the tax year starts January 1st to December 00:31:38.069 --> 00:31:42.690 31st Not January 1st to April 15th. That's a 00:31:42.690 --> 00:31:44.910 whole year thing tax planning. It's real people. 00:31:44.910 --> 00:31:48.569 It will save you two years Amen Well, cool. So 00:31:48.569 --> 00:31:50.289 as we always say, keep more of what you earn 00:31:50.289 --> 00:31:51.769 and we'll talk to you guys next week.