1 00:00:00,120 --> 00:00:02,680 Speaker 1: Welcome to How the Money. I'm Joel and I and 2 00:00:02,759 --> 00:00:05,880 Speaker 1: Matt and today we're discussing how to not mess up 3 00:00:05,920 --> 00:00:28,240 Speaker 1: your taxes with Keith Schroeder. Hey, Joe, guess what, man, 4 00:00:28,480 --> 00:00:31,160 Speaker 1: Everybody has to file their taxes, So this is gonna 5 00:00:31,160 --> 00:00:33,559 Speaker 1: be a really valuable episode and I'm excited to dive 6 00:00:33,600 --> 00:00:35,960 Speaker 1: into this one. We're talking with Keith Schroeder and he 7 00:00:36,040 --> 00:00:39,040 Speaker 1: has a varied history of working hard. He grew up 8 00:00:39,040 --> 00:00:41,760 Speaker 1: in the backwoods of Wisconsin on a family farm fixing 9 00:00:41,800 --> 00:00:45,720 Speaker 1: silo and loaders. We've all been there. But his passionate 10 00:00:45,720 --> 00:00:49,040 Speaker 1: distaste for that work that led him to file tax 11 00:00:49,080 --> 00:00:51,360 Speaker 1: returns on the side, and that part time work led 12 00:00:51,440 --> 00:00:54,960 Speaker 1: Keith to be able to retire at age two. So 13 00:00:55,120 --> 00:00:57,000 Speaker 1: you know, we're definitely gonna be talking more about that. 14 00:00:57,320 --> 00:01:00,360 Speaker 1: And his tax preparation business exploded into a hole on 15 00:01:00,400 --> 00:01:03,040 Speaker 1: accounting firm where at his business he was serving over 16 00:01:03,120 --> 00:01:06,040 Speaker 1: two thousand clients. He started his own blog in six 17 00:01:06,200 --> 00:01:09,760 Speaker 1: and called the Wealthy Accountants to inspire folks to to 18 00:01:09,840 --> 00:01:12,800 Speaker 1: live their life well and also help them not screw 19 00:01:12,880 --> 00:01:15,440 Speaker 1: up their taxes. So, Keith, thanks so much for joining 20 00:01:15,480 --> 00:01:17,880 Speaker 1: us on the show today. I'm glad to be here, Keith, 21 00:01:17,920 --> 00:01:21,000 Speaker 1: We're so glad to have you. And every episode Matt 22 00:01:21,040 --> 00:01:22,880 Speaker 1: and I drink a craft beer on the show. It's 23 00:01:22,880 --> 00:01:24,560 Speaker 1: something that we're super into. Today on the show, we're 24 00:01:24,600 --> 00:01:28,240 Speaker 1: drinking a beer called Wild Leap Alpha Abstraction Volume nine, 25 00:01:28,720 --> 00:01:31,800 Speaker 1: and so we have to ask you, there's seriously, there 26 00:01:31,800 --> 00:01:33,560 Speaker 1: are nine volumes of this. It sounds like a very 27 00:01:33,560 --> 00:01:36,880 Speaker 1: technical beer. Yeah, So, Keith, will we drink a beer 28 00:01:36,880 --> 00:01:38,880 Speaker 1: to remind us of what's important to us while at 29 00:01:38,920 --> 00:01:41,319 Speaker 1: the same time we're trying to save well for the future. 30 00:01:41,360 --> 00:01:43,960 Speaker 1: What's your craft beer equivalent? What do you like to splore? 31 00:01:44,040 --> 00:01:46,200 Speaker 1: John Well, I was gonna tell you, guys, I got 32 00:01:46,240 --> 00:01:50,040 Speaker 1: myself a case of Schlitz and becase I'm lasking, I 33 00:01:50,080 --> 00:01:53,520 Speaker 1: didn't think that would be appropriate. So I guess I 34 00:01:53,560 --> 00:01:56,040 Speaker 1: have too. I have two vices. But the real truth 35 00:01:56,160 --> 00:01:58,080 Speaker 1: is is that there's two things I like to spend 36 00:01:58,080 --> 00:02:01,560 Speaker 1: money on that some people don't was frugal or they 37 00:02:01,640 --> 00:02:04,240 Speaker 1: might consider frivolous. And the first one is gonna be 38 00:02:04,840 --> 00:02:06,880 Speaker 1: books is and I think if people read my blog 39 00:02:06,920 --> 00:02:10,040 Speaker 1: they realize pretty quickly I'm pretty voracious at the reading. 40 00:02:10,400 --> 00:02:12,440 Speaker 1: I like owning the books, holding it in my hand. 41 00:02:12,440 --> 00:02:14,560 Speaker 1: I like marking them up, and I know you can 42 00:02:14,600 --> 00:02:17,240 Speaker 1: get kindle and you can you can you can mark 43 00:02:17,320 --> 00:02:20,119 Speaker 1: things up that way as well too. I certainly used 44 00:02:20,120 --> 00:02:22,840 Speaker 1: the library. I wrote a blog post, you know, called 45 00:02:23,160 --> 00:02:26,920 Speaker 1: Library Millionaire a couple of years back. So I think 46 00:02:26,960 --> 00:02:32,480 Speaker 1: that that books are something I spend probably three thousand 47 00:02:32,520 --> 00:02:35,400 Speaker 1: dollars a year maybe in books something of that nature. 48 00:02:35,880 --> 00:02:38,440 Speaker 1: The other frivolous thing that I have is while I 49 00:02:38,440 --> 00:02:41,240 Speaker 1: don't spend a lot of money on things like cars 50 00:02:41,400 --> 00:02:43,440 Speaker 1: things like that, so I buy cars that are a 51 00:02:43,480 --> 00:02:45,360 Speaker 1: little bit older or a bank repo, and then I 52 00:02:45,440 --> 00:02:49,120 Speaker 1: run them forever. I don't skimp on my house. So 53 00:02:49,400 --> 00:02:52,520 Speaker 1: I got a pretty nice home. I's an old farmhouse 54 00:02:52,520 --> 00:02:54,920 Speaker 1: that's been remodeled, but I got a hot tub in it, 55 00:02:54,919 --> 00:02:57,560 Speaker 1: in a jacuzzi and you know, steam room. So I 56 00:02:57,560 --> 00:03:01,959 Speaker 1: mean I'm talking. I'm frugal, but not that frugal. I 57 00:03:01,960 --> 00:03:04,480 Speaker 1: would say, man, a hot tub for those Wisconsin winners though, 58 00:03:04,520 --> 00:03:06,760 Speaker 1: that sounds pretty night. Oh my gosh. Okay, let's we're 59 00:03:06,760 --> 00:03:08,840 Speaker 1: gonna go ahead and dive into your story something. So first, 60 00:03:08,840 --> 00:03:11,399 Speaker 1: like what growing up on a farm in a small town, 61 00:03:11,440 --> 00:03:14,239 Speaker 1: what did that teach you? Well, you know, the world 62 00:03:14,320 --> 00:03:19,440 Speaker 1: is a little bit different in rural communities. Sometimes you'll 63 00:03:19,440 --> 00:03:22,200 Speaker 1: see bloggers out there or even on podcasts and they'll say, well, 64 00:03:22,480 --> 00:03:25,160 Speaker 1: you know, we have this frugality. And I keep on 65 00:03:25,200 --> 00:03:28,480 Speaker 1: thinking to myself, what people say today is frugal does 66 00:03:28,520 --> 00:03:30,680 Speaker 1: not even compare to some of the things that I 67 00:03:30,720 --> 00:03:33,839 Speaker 1: hear even today. Now give you an example, Uh, both 68 00:03:33,880 --> 00:03:36,120 Speaker 1: three months ago on that church and one of the 69 00:03:36,120 --> 00:03:37,840 Speaker 1: people I know is a little bit older than me, 70 00:03:37,880 --> 00:03:40,920 Speaker 1: and he comes over and he says, yeah, you know, uh, 71 00:03:41,440 --> 00:03:43,040 Speaker 1: life is pretty good, and he's been, you know, talking 72 00:03:43,040 --> 00:03:45,000 Speaker 1: about being frugal. And I'm saying, yeah, I do this 73 00:03:45,040 --> 00:03:47,120 Speaker 1: blog and all this, and he goes, yeah, you know, 74 00:03:47,240 --> 00:03:49,680 Speaker 1: my father in law, he he used to always teach 75 00:03:49,760 --> 00:03:51,480 Speaker 1: us that too. He said, you you get a dollar, 76 00:03:51,560 --> 00:03:54,440 Speaker 1: you say fifty of that, and you try to save 77 00:03:54,480 --> 00:03:56,240 Speaker 1: a little bit more, but you gotta save at least fifty. 78 00:03:56,920 --> 00:03:59,840 Speaker 1: These guys are so frugal that there's just you any 79 00:04:00,040 --> 00:04:04,360 Speaker 1: anything anybody does is just so frivolous compared to this 80 00:04:05,120 --> 00:04:10,640 Speaker 1: mindset of frugality, to almost the point of painful suffering. 81 00:04:11,400 --> 00:04:15,000 Speaker 1: But here's the thing that I also learned that I 82 00:04:15,040 --> 00:04:17,680 Speaker 1: think a couple of things that I learned from my grandparents. 83 00:04:17,720 --> 00:04:20,720 Speaker 1: My grandmother used to ease say to us, and we 84 00:04:20,720 --> 00:04:22,800 Speaker 1: would joke back as well as she'd say to us 85 00:04:23,080 --> 00:04:25,400 Speaker 1: things about the Great Depression which they grew up in. 86 00:04:26,200 --> 00:04:28,719 Speaker 1: She would say things like, you know, during the Great Depression, 87 00:04:28,800 --> 00:04:30,720 Speaker 1: we would have one egg per week, and in our 88 00:04:30,760 --> 00:04:33,240 Speaker 1: family was farmers, and the man in the house got 89 00:04:33,279 --> 00:04:35,240 Speaker 1: that because he needed the energy. We sold all the 90 00:04:35,240 --> 00:04:36,839 Speaker 1: rest of the eggs because we needed to have the 91 00:04:36,880 --> 00:04:40,160 Speaker 1: money to pay, you know, keep the farm. And she said, 92 00:04:40,200 --> 00:04:42,200 Speaker 1: you know, back then we ate large sandwiches and you 93 00:04:42,320 --> 00:04:45,839 Speaker 1: liked it. And my uncle Kevin myself, we would laugh 94 00:04:45,880 --> 00:04:47,480 Speaker 1: a little bit and say, yeah, but today we got 95 00:04:47,480 --> 00:04:50,440 Speaker 1: butter flavor Chrisco. So it was. It was funny in 96 00:04:50,520 --> 00:04:53,159 Speaker 1: one hand, but she was dead serious. One of the 97 00:04:53,200 --> 00:04:56,159 Speaker 1: things I repeat in the blog, and it's one of 98 00:04:56,200 --> 00:04:58,600 Speaker 1: the most I think the most important lesson I've ever 99 00:04:58,680 --> 00:05:02,640 Speaker 1: learned about money is for my grandfather, which has passed 100 00:05:02,640 --> 00:05:05,200 Speaker 1: away many years ago now. He always had a phrase 101 00:05:05,200 --> 00:05:07,560 Speaker 1: he said, never take off of the pile. And what 102 00:05:07,640 --> 00:05:10,240 Speaker 1: he meant by that is, don't kill the goose that 103 00:05:10,320 --> 00:05:12,640 Speaker 1: lays the golden egg. And the goose is is the 104 00:05:12,680 --> 00:05:15,320 Speaker 1: corpus of your money. So if you you get some 105 00:05:15,400 --> 00:05:17,680 Speaker 1: money and you're you're frugal, you save some money, you 106 00:05:17,760 --> 00:05:21,440 Speaker 1: put it aside, and you invest it. You can spend 107 00:05:21,440 --> 00:05:24,960 Speaker 1: the dividends, you can spend the interest, but you cannot 108 00:05:25,240 --> 00:05:29,760 Speaker 1: dip into that original money. I've always been very cautious 109 00:05:29,800 --> 00:05:32,839 Speaker 1: about dipping into it, especially if it was for any 110 00:05:32,880 --> 00:05:36,640 Speaker 1: kind of personal consumption. Now the difference today that I 111 00:05:36,680 --> 00:05:39,599 Speaker 1: would look at is that there would be reasons I 112 00:05:39,640 --> 00:05:43,640 Speaker 1: would consider taking from the stack, and some of those 113 00:05:43,640 --> 00:05:46,080 Speaker 1: would be if there's a medical issue with a family 114 00:05:46,120 --> 00:05:49,839 Speaker 1: member or myself. It is the ethical thing to do 115 00:05:50,560 --> 00:05:53,960 Speaker 1: that most people might consider it inappropriate. So the same 116 00:05:54,000 --> 00:05:58,400 Speaker 1: thing happens with finances. If you have you save some money. 117 00:05:58,520 --> 00:06:01,240 Speaker 1: I'm fine with people spending their dividends and interest, but 118 00:06:01,360 --> 00:06:04,599 Speaker 1: if you dig into that corpus, into this digging off 119 00:06:04,640 --> 00:06:08,760 Speaker 1: the pile, so to speak, then next month there's going 120 00:06:08,800 --> 00:06:11,800 Speaker 1: to be less interest and less dividends because you've diminished. 121 00:06:11,960 --> 00:06:14,640 Speaker 1: You diminished the goose that lays the golden egg. That's 122 00:06:14,720 --> 00:06:17,599 Speaker 1: That's what I think is probably an important lesson that 123 00:06:17,640 --> 00:06:20,280 Speaker 1: if I can get everybody to get that, you can 124 00:06:20,320 --> 00:06:22,960 Speaker 1: never run up build it up and don't touch that 125 00:06:23,120 --> 00:06:25,359 Speaker 1: and uh and live off the rest that that money 126 00:06:25,360 --> 00:06:28,400 Speaker 1: is essentially turning out for you. Right. You know, whatever 127 00:06:28,480 --> 00:06:31,240 Speaker 1: whatever phrase or whatever story works for you, that that 128 00:06:31,320 --> 00:06:34,839 Speaker 1: gets you committed to this will serve the best. Now, 129 00:06:35,160 --> 00:06:37,000 Speaker 1: that doesn't mean that you would never touch it. So 130 00:06:37,080 --> 00:06:40,200 Speaker 1: for example, if you're saving and putting together an estake 131 00:06:40,279 --> 00:06:42,000 Speaker 1: so you can put a down payment out of house, 132 00:06:42,600 --> 00:06:44,800 Speaker 1: well that makes a lot of sense buying a car. 133 00:06:44,920 --> 00:06:46,800 Speaker 1: I mean, you're you're gonna say if the build up 134 00:06:46,800 --> 00:06:50,120 Speaker 1: for that, well, the problem that sometimes people have is 135 00:06:50,160 --> 00:06:52,960 Speaker 1: they'll say things like, well, if I can never take 136 00:06:53,000 --> 00:06:54,840 Speaker 1: off the stack, then I gotta borrow money. While I'm 137 00:06:54,839 --> 00:06:56,840 Speaker 1: not a big fan of that either. And I actually 138 00:06:56,960 --> 00:06:59,840 Speaker 1: I listen to your podcast where you guys talked about 139 00:07:00,200 --> 00:07:01,760 Speaker 1: you know, when is at the right time to have 140 00:07:01,839 --> 00:07:04,719 Speaker 1: debt and when when does it make sense? And I 141 00:07:04,760 --> 00:07:07,040 Speaker 1: agreed with what what you guys had come up with. 142 00:07:07,080 --> 00:07:09,840 Speaker 1: I think it was, you know, a very present that 143 00:07:10,280 --> 00:07:12,280 Speaker 1: people would say for things, you know, you didn't want 144 00:07:12,320 --> 00:07:14,080 Speaker 1: to have, things like paidy loans, which you thought was 145 00:07:14,120 --> 00:07:17,960 Speaker 1: the worst debt. And I would agree, And then ky loans, 146 00:07:17,960 --> 00:07:21,800 Speaker 1: I would also caution against that. I mean, and I understand. 147 00:07:21,840 --> 00:07:24,280 Speaker 1: I think you guys used an example where you got 148 00:07:24,280 --> 00:07:27,000 Speaker 1: a zero percent financing and it made sense and and 149 00:07:27,080 --> 00:07:30,000 Speaker 1: I'm okay with that too. But I see too many 150 00:07:30,040 --> 00:07:33,560 Speaker 1: people with bad debt. So taking off the stack is 151 00:07:33,640 --> 00:07:36,520 Speaker 1: okay because some some stacks are meant to be taken 152 00:07:36,560 --> 00:07:38,720 Speaker 1: off of. Because if you never take off the stack, 153 00:07:38,720 --> 00:07:40,400 Speaker 1: how you're gonna save enough money to buy a house 154 00:07:40,440 --> 00:07:43,840 Speaker 1: cash without taking off the stack. But I think I 155 00:07:43,880 --> 00:07:47,040 Speaker 1: think people understand what I mean. Yeah, for sure. Well, hey, Keith, 156 00:07:47,120 --> 00:07:49,040 Speaker 1: so how did you get started by the way keeping 157 00:07:49,080 --> 00:07:51,160 Speaker 1: the books at your dad's business? Going back to kind 158 00:07:51,160 --> 00:07:53,640 Speaker 1: of your history and how you got to where you are, Like, 159 00:07:53,720 --> 00:07:57,000 Speaker 1: were you always into numbers growing up? Not that I 160 00:07:57,040 --> 00:07:59,640 Speaker 1: knew of. Here's here's the true story of what happened. 161 00:07:59,840 --> 00:08:01,480 Speaker 1: I grew up on a farm and I and I 162 00:08:01,560 --> 00:08:03,720 Speaker 1: really believe that's what I was gonna do for a living. 163 00:08:04,040 --> 00:08:07,280 Speaker 1: Here it is two which June I graduated from high school, 164 00:08:07,280 --> 00:08:10,120 Speaker 1: and at November of that year, the family farm went 165 00:08:10,120 --> 00:08:12,400 Speaker 1: through a bankruptcy. That was the end of farming. What 166 00:08:12,520 --> 00:08:14,280 Speaker 1: I thought I was going to do for a living 167 00:08:14,320 --> 00:08:16,200 Speaker 1: was no longer going to happen. So I worked for 168 00:08:16,240 --> 00:08:18,440 Speaker 1: my dad. So I'm turning a wrench and doing that 169 00:08:18,520 --> 00:08:21,960 Speaker 1: kind of stuff. And my dad hated payroll, book keeping, accounting, everything, 170 00:08:22,400 --> 00:08:26,440 Speaker 1: So here you go, son, and I started doing that, 171 00:08:26,600 --> 00:08:29,280 Speaker 1: and then you know, and it was okay in a beat, 172 00:08:29,280 --> 00:08:31,880 Speaker 1: going outside in the wintertime and and and freezing my tails. 173 00:08:31,920 --> 00:08:34,400 Speaker 1: So yes, I would do some service work. But boy, 174 00:08:34,400 --> 00:08:35,800 Speaker 1: if I could stay in, you know, if it's middle 175 00:08:35,800 --> 00:08:38,120 Speaker 1: of January and I could sit in and do some bookkeeping, 176 00:08:38,160 --> 00:08:42,120 Speaker 1: and that was just that was just absolutely beautiful. I 177 00:08:42,120 --> 00:08:43,920 Speaker 1: guess the timing of that works out pretty well. You know, 178 00:08:44,040 --> 00:08:46,959 Speaker 1: like January first rolls around, it's really cool outside time 179 00:08:47,000 --> 00:08:49,920 Speaker 1: to start working on the taxes. Well, and the other thing. 180 00:08:50,200 --> 00:08:52,320 Speaker 1: The thing is then I wasn't even doing taxes that 181 00:08:52,440 --> 00:08:53,880 Speaker 1: much then. So what I was doing is I do 182 00:08:53,960 --> 00:08:56,080 Speaker 1: my own and you know, here it is, I'm eighteen 183 00:08:56,080 --> 00:08:57,920 Speaker 1: twenty years old. I didn't know what the heck I 184 00:08:58,000 --> 00:08:59,280 Speaker 1: was gonna do with my life. I mean, I'm a 185 00:08:59,360 --> 00:09:01,400 Speaker 1: kid at the time. I hired to know what the 186 00:09:01,400 --> 00:09:03,280 Speaker 1: heck I'm gonna do when I'm in my mid fifties. 187 00:09:03,679 --> 00:09:06,760 Speaker 1: And so I was eighteen, nineteen, twenty years old, I'm 188 00:09:06,800 --> 00:09:09,880 Speaker 1: working for my dad's company, and uh, some of the 189 00:09:09,920 --> 00:09:12,319 Speaker 1: other employees were like, hey, would you do my taxes? 190 00:09:12,360 --> 00:09:14,600 Speaker 1: And I'm like, yeah, you know, you know, slide me 191 00:09:14,640 --> 00:09:17,520 Speaker 1: twenty bucks or fifty bucks, and I understand fifty bucks 192 00:09:17,600 --> 00:09:19,200 Speaker 1: is a lot of money in nineteen eighty three and 193 00:09:19,240 --> 00:09:21,720 Speaker 1: eighty four and eighty five. Okay, you know you've written 194 00:09:21,720 --> 00:09:23,920 Speaker 1: about how you retired at age twenty two, right, Like, 195 00:09:23,960 --> 00:09:26,440 Speaker 1: how how in the world had that actually happened? You 196 00:09:26,480 --> 00:09:28,280 Speaker 1: mentioned some of the folks they're kind of in your 197 00:09:28,480 --> 00:09:30,760 Speaker 1: you know, in your local town, saving fifty cents of 198 00:09:30,800 --> 00:09:32,960 Speaker 1: every dollar that they make. I'm gonna guess it has 199 00:09:33,040 --> 00:09:35,440 Speaker 1: something to do with, you know, you having a high 200 00:09:35,480 --> 00:09:37,920 Speaker 1: savings rate, right. Yeah. I live out in the country 201 00:09:37,960 --> 00:09:39,439 Speaker 1: at the time. At the time, so I'm in the 202 00:09:39,440 --> 00:09:42,679 Speaker 1: middle of nowhere. There's nothing to spend money on. And 203 00:09:42,720 --> 00:09:45,360 Speaker 1: what I had done is growing up in the farm, 204 00:09:45,400 --> 00:09:46,920 Speaker 1: I made a little money. I didn't when I when 205 00:09:46,920 --> 00:09:48,520 Speaker 1: I graduated from high school, I had a couple of 206 00:09:48,520 --> 00:09:51,720 Speaker 1: thousand dollars to my name. I technically wasn't broke. I 207 00:09:51,760 --> 00:09:54,440 Speaker 1: mean that was my my grandparents and my my dad, 208 00:09:55,200 --> 00:09:57,520 Speaker 1: and that was bad. I was a little more fortunate. 209 00:09:57,600 --> 00:10:00,320 Speaker 1: I had something. But when I was in high st school, 210 00:10:00,400 --> 00:10:03,160 Speaker 1: I belonged to what was called the Fair Future Farmers 211 00:10:03,160 --> 00:10:06,240 Speaker 1: of America. Every year they had these sales. It's one 212 00:10:06,320 --> 00:10:08,080 Speaker 1: year that you know, they were selling light bulbs, and 213 00:10:08,080 --> 00:10:10,880 Speaker 1: then then in the spring they sell seeds. And my 214 00:10:10,960 --> 00:10:14,360 Speaker 1: freshman year of high school, I said, okay, I'm in 215 00:10:14,400 --> 00:10:17,280 Speaker 1: the f A. I'll sell light bulbs. And this is 216 00:10:17,320 --> 00:10:19,440 Speaker 1: back in the days when you had incandescence, so everybody 217 00:10:19,480 --> 00:10:22,480 Speaker 1: needed a lot of light bulbs. And I broke every 218 00:10:22,520 --> 00:10:27,199 Speaker 1: record by multitudes of order of number of light bulbs 219 00:10:27,240 --> 00:10:30,560 Speaker 1: sold that first year. And and then I was selling 220 00:10:30,559 --> 00:10:33,160 Speaker 1: the seeds, and I was doing that well. The school 221 00:10:33,160 --> 00:10:35,720 Speaker 1: loved the idea. They wanted me to sell more, and 222 00:10:35,760 --> 00:10:37,360 Speaker 1: I was thinking, no, no, no, no, no, guys, do 223 00:10:37,360 --> 00:10:41,080 Speaker 1: you understand. I found this other company called Especially Merchandise 224 00:10:41,160 --> 00:10:43,200 Speaker 1: in Corporation, which is still around, but it's not the 225 00:10:43,240 --> 00:10:45,880 Speaker 1: same as it was back then, and they imported all 226 00:10:45,920 --> 00:10:48,439 Speaker 1: this stuff that they had in this catalog and you 227 00:10:48,480 --> 00:10:51,480 Speaker 1: could buy it at wholesale. And I would buy certain 228 00:10:51,520 --> 00:10:53,480 Speaker 1: items that I thought I could resell and I would 229 00:10:53,480 --> 00:10:56,240 Speaker 1: either put it in retail stores or I'd get them 230 00:10:56,240 --> 00:10:58,920 Speaker 1: where they what you I can signment type things. So 231 00:10:59,000 --> 00:11:01,200 Speaker 1: I started doing that I started making a little bit 232 00:11:01,200 --> 00:11:04,760 Speaker 1: of money, and that helped out that I would do 233 00:11:04,840 --> 00:11:10,760 Speaker 1: some taxes. You gotta also remember that I had luck 234 00:11:10,920 --> 00:11:14,839 Speaker 1: and timing. People don't realize the history of this, and 235 00:11:15,200 --> 00:11:21,000 Speaker 1: you can look this up. In mid August of night two, 236 00:11:21,160 --> 00:11:24,240 Speaker 1: the year I graduated, the Dow Jones Industrial average was 237 00:11:24,280 --> 00:11:28,320 Speaker 1: around seven dred and eighty two. Now we've had we've 238 00:11:28,320 --> 00:11:30,679 Speaker 1: had multiple times with the Dow Jones is moved more 239 00:11:30,720 --> 00:11:33,080 Speaker 1: than that in a day. Back then, though, in mid 240 00:11:33,240 --> 00:11:39,280 Speaker 1: August of interest rates were like the economy was coming 241 00:11:39,280 --> 00:11:41,959 Speaker 1: out of a double differcession. I mean, things weren't really good. 242 00:11:42,280 --> 00:11:45,040 Speaker 1: It was even worse than the Rust belt. But now, uh, 243 00:11:45,080 --> 00:11:48,120 Speaker 1: Paul Wolker, the FED chairman at the time, said, Okay, 244 00:11:48,280 --> 00:11:50,520 Speaker 1: inflation is starting to come down. We're gonna lower interest 245 00:11:50,600 --> 00:11:53,000 Speaker 1: rates a little bit. And the stock market, the Dow 246 00:11:53,120 --> 00:11:56,040 Speaker 1: Jones went up thirty points for three days in a row, 247 00:11:56,080 --> 00:11:58,800 Speaker 1: three straight days, so ninety points. So you saw the 248 00:11:58,880 --> 00:12:03,480 Speaker 1: market go up twelve in three days. And that was 249 00:12:03,559 --> 00:12:07,240 Speaker 1: the beginning of the five year run, which was absolutely 250 00:12:07,320 --> 00:12:09,800 Speaker 1: the best run in market history up at that till 251 00:12:09,840 --> 00:12:12,959 Speaker 1: that time. That went all the way to seven when 252 00:12:12,960 --> 00:12:17,200 Speaker 1: it collapsed for a day and a half. So my 253 00:12:17,200 --> 00:12:21,600 Speaker 1: my early money really worked very well for me. Now 254 00:12:21,679 --> 00:12:23,920 Speaker 1: keep in mind, when I say I retired at twenty two, 255 00:12:24,760 --> 00:12:26,280 Speaker 1: it part of it was because I didn't want to 256 00:12:26,280 --> 00:12:28,120 Speaker 1: work for my dad. I'm doing a little bit of 257 00:12:28,160 --> 00:12:30,560 Speaker 1: taxes on the side. I owned my own home. And 258 00:12:30,600 --> 00:12:32,760 Speaker 1: when I say that, I say a tongue in cheek 259 00:12:32,800 --> 00:12:36,120 Speaker 1: because it was a mobile home. But it was a home. Darn, 260 00:12:36,720 --> 00:12:40,040 Speaker 1: the thing counts. It's still counts. And I was just 261 00:12:40,040 --> 00:12:42,080 Speaker 1: sitting around reading all day. And there's a there's a 262 00:12:42,120 --> 00:12:44,360 Speaker 1: cafe down the road from the mobile home park, and 263 00:12:44,400 --> 00:12:48,280 Speaker 1: I get coffee and have dinner or something, chat with 264 00:12:48,280 --> 00:12:50,679 Speaker 1: all the farmers. And I was living a good life. 265 00:12:50,679 --> 00:12:53,160 Speaker 1: And I had a couple of hundred thousand dollars. I 266 00:12:53,240 --> 00:12:54,800 Speaker 1: was retired, but I knew in the back of my 267 00:12:54,840 --> 00:12:57,160 Speaker 1: mind this wasn't gonna last me the rest of my life. 268 00:12:57,480 --> 00:12:59,640 Speaker 1: I knew the market wasn't gonna go straight up forever. 269 00:13:00,200 --> 00:13:02,560 Speaker 1: And uh, I was taking some college classes. I had 270 00:13:02,559 --> 00:13:06,040 Speaker 1: taken some accounting in business and economics and that sort 271 00:13:06,040 --> 00:13:08,040 Speaker 1: of thing, and you know, taking a couple of classes 272 00:13:08,040 --> 00:13:10,840 Speaker 1: here and there and enjoying that. And then I met 273 00:13:10,880 --> 00:13:14,400 Speaker 1: a lovely young lady that married the heck out of me. 274 00:13:14,480 --> 00:13:16,880 Speaker 1: So but just kind of funny because you know, I 275 00:13:17,120 --> 00:13:20,120 Speaker 1: did meet a really uh in a unique way, and 276 00:13:20,480 --> 00:13:22,640 Speaker 1: we met in a year later we got married. Well, 277 00:13:22,800 --> 00:13:25,080 Speaker 1: when we went through the process of getting married, you 278 00:13:25,080 --> 00:13:27,360 Speaker 1: meet the minister, and the minister was like, well what 279 00:13:27,360 --> 00:13:29,560 Speaker 1: do you do? And I'm like, well, I read books 280 00:13:29,600 --> 00:13:32,079 Speaker 1: all day, Well what do you do? And he goes, well, 281 00:13:32,080 --> 00:13:35,480 Speaker 1: we need a janitor. And I said well, and I thought, okay, 282 00:13:35,600 --> 00:13:38,120 Speaker 1: I'm I'm getting married. I should be a good husband. 283 00:13:38,160 --> 00:13:40,920 Speaker 1: I should probably have a job, and this two d 284 00:13:40,960 --> 00:13:43,800 Speaker 1: dollars ain't gonna last forever. Most likely there's there's real 285 00:13:43,920 --> 00:13:46,520 Speaker 1: risk with this two a lot of money in nineteen 286 00:13:46,640 --> 00:13:49,800 Speaker 1: eighty uh seven. So I met my wife in eighty seven, 287 00:13:50,000 --> 00:13:51,920 Speaker 1: the market crash and I'm married her an eight eight, 288 00:13:52,600 --> 00:13:54,880 Speaker 1: one year and six days later. So I said, okay, 289 00:13:54,880 --> 00:13:56,320 Speaker 1: I'll be a janitor. And I did that for like 290 00:13:56,400 --> 00:13:58,920 Speaker 1: fourteen months, and I realized really quickly it was the 291 00:13:58,920 --> 00:14:01,080 Speaker 1: only fourteen months of my life I worked for someone 292 00:14:01,120 --> 00:14:04,000 Speaker 1: else and boyd and I learned quickly I didn't like that. 293 00:14:04,360 --> 00:14:06,720 Speaker 1: I wanted to control of my life. I wanted to 294 00:14:06,720 --> 00:14:09,480 Speaker 1: do I wanted to experiment with my ideas because I'm 295 00:14:09,520 --> 00:14:12,319 Speaker 1: just always brimming with that. January thirty, I quit and 296 00:14:12,360 --> 00:14:14,840 Speaker 1: went full time into taxes for the eighty nine tax season. 297 00:14:15,280 --> 00:14:17,480 Speaker 1: And it was kind of timely because my dad had 298 00:14:17,520 --> 00:14:20,480 Speaker 1: an employee that he had picked up that was a 299 00:14:20,480 --> 00:14:22,840 Speaker 1: farmer and he had filed for like fifteen years. So 300 00:14:22,880 --> 00:14:24,280 Speaker 1: it was the only time in my career I had 301 00:14:24,280 --> 00:14:26,880 Speaker 1: to do in nineteen seventies tax returns. But you know, 302 00:14:27,040 --> 00:14:29,320 Speaker 1: it's great to start your tax season or start your 303 00:14:29,360 --> 00:14:32,800 Speaker 1: tax career as an accountant with a really nice client 304 00:14:32,840 --> 00:14:35,560 Speaker 1: that's gonna pay a good So I I started doing 305 00:14:35,600 --> 00:14:38,000 Speaker 1: that and I ended up getting only like forty eight 306 00:14:38,040 --> 00:14:40,560 Speaker 1: clients the first year, which was really bad because I 307 00:14:40,600 --> 00:14:43,120 Speaker 1: had like three thousand dollars of income. The next year, 308 00:14:43,120 --> 00:14:46,480 Speaker 1: I did about a hundred and fifty returns, but I 309 00:14:46,520 --> 00:14:49,040 Speaker 1: was reinvesting everything in so I was still losing a 310 00:14:49,040 --> 00:14:51,720 Speaker 1: little bit of money. The third year, I ended up 311 00:14:51,760 --> 00:14:54,400 Speaker 1: doing around fourner in fifty returns, so I was tripling 312 00:14:54,400 --> 00:14:57,080 Speaker 1: pretty quickly. I went from a bedroom in the house, 313 00:14:57,160 --> 00:14:59,920 Speaker 1: remodel my basement, and that third year, basically I was 314 00:15:00,000 --> 00:15:03,320 Speaker 1: reinvesting everything, but I had broken even, so those first 315 00:15:03,360 --> 00:15:05,280 Speaker 1: three years were the only three years of my career 316 00:15:05,360 --> 00:15:08,840 Speaker 1: where in taxes where I was really losing money. By 317 00:15:08,520 --> 00:15:10,880 Speaker 1: nine I ended up buying the office i'm in now, 318 00:15:10,960 --> 00:15:15,880 Speaker 1: which is a storefront. And then I just from ninety 319 00:15:15,920 --> 00:15:17,880 Speaker 1: five to two thousand I was in. I did a 320 00:15:17,920 --> 00:15:21,520 Speaker 1: couple of thousand returns fifteen twenty employees drove me nuts 321 00:15:21,520 --> 00:15:25,080 Speaker 1: and war me out, and I intentionally cut back and 322 00:15:25,080 --> 00:15:26,600 Speaker 1: and and of course I and the story, and the 323 00:15:26,600 --> 00:15:28,680 Speaker 1: story goes on in my blog, and I throw out 324 00:15:28,680 --> 00:15:31,200 Speaker 1: bits and pieces all the time. It's nice to have 325 00:15:31,320 --> 00:15:34,960 Speaker 1: a career like I'm doing. And you can say I 326 00:15:35,000 --> 00:15:38,000 Speaker 1: don't want to do so much now, and and you 327 00:15:38,040 --> 00:15:39,880 Speaker 1: know it's not always good for clients, but I can 328 00:15:39,880 --> 00:15:42,960 Speaker 1: always cut back, and then I can always add more later. 329 00:15:43,720 --> 00:15:47,120 Speaker 1: There's I've always tried different things, and it's been difficult 330 00:15:47,240 --> 00:15:51,840 Speaker 1: sometimes to find that correct mix of the right amount 331 00:15:51,840 --> 00:15:53,680 Speaker 1: of clients to the things I want to do. But 332 00:15:53,920 --> 00:15:56,200 Speaker 1: you know that that's the nice thing about being self employed. 333 00:15:56,280 --> 00:15:59,880 Speaker 1: You certainly can explore it and make the rules. Yeah, so, Keith, 334 00:16:00,320 --> 00:16:03,680 Speaker 1: you retired at twenty two. That's really cool and very abnormal. 335 00:16:04,120 --> 00:16:07,120 Speaker 1: And then I unretired a few years later, right exactly, 336 00:16:07,160 --> 00:16:09,920 Speaker 1: And so you kind of had this really interesting career arc. 337 00:16:10,240 --> 00:16:11,720 Speaker 1: If you can call it an arc. It's more like 338 00:16:12,120 --> 00:16:14,480 Speaker 1: ups and downs, like peaks and valleys, right, and you're 339 00:16:14,520 --> 00:16:16,120 Speaker 1: just kind of all over the place, which is cool. 340 00:16:16,160 --> 00:16:18,240 Speaker 1: Like you have you've kind of given yourself that ability 341 00:16:18,320 --> 00:16:21,320 Speaker 1: on the note of retirement contributing to a rath or 342 00:16:21,320 --> 00:16:23,640 Speaker 1: a traditional ira. Like. Now, let's kind of get into 343 00:16:23,760 --> 00:16:26,240 Speaker 1: some some tax stuff. Matt and I will usually talk 344 00:16:26,280 --> 00:16:28,440 Speaker 1: about the rath as being a better option for folks. 345 00:16:28,440 --> 00:16:30,880 Speaker 1: It's it's one of the and and those I ras 346 00:16:30,920 --> 00:16:32,400 Speaker 1: are one of the simplest steps you can take in 347 00:16:32,480 --> 00:16:35,200 Speaker 1: saving for your own retirement, right while also realizing those 348 00:16:35,240 --> 00:16:38,080 Speaker 1: tax benefits, these tax advantage to count. So, so which 349 00:16:38,320 --> 00:16:40,800 Speaker 1: of these do you prefer and why I'm going to 350 00:16:40,960 --> 00:16:43,800 Speaker 1: agree that the rath ira is the best way to go. 351 00:16:43,880 --> 00:16:46,440 Speaker 1: And if you and and and my argument was hs 352 00:16:46,440 --> 00:16:48,600 Speaker 1: A is the best because you get a tax deduction 353 00:16:48,640 --> 00:16:51,400 Speaker 1: and it gross tax free. The rath is next because 354 00:16:51,440 --> 00:16:55,000 Speaker 1: it gross tax free, and so on and so forth. Now, 355 00:16:55,720 --> 00:16:58,920 Speaker 1: the issue that I have, though, is that I will 356 00:16:58,920 --> 00:17:02,720 Speaker 1: shoot from the hip in any general setting saying roth 357 00:17:02,760 --> 00:17:06,800 Speaker 1: iras are always the best. However, that is not true. 358 00:17:07,359 --> 00:17:09,720 Speaker 1: I think the roth IRA is the best of ninety 359 00:17:09,800 --> 00:17:14,240 Speaker 1: nine the instances, the more time the money is in there, 360 00:17:14,240 --> 00:17:16,760 Speaker 1: the better. But I can give an example of somebody 361 00:17:16,800 --> 00:17:18,440 Speaker 1: a client and this is not a real client, but 362 00:17:18,480 --> 00:17:21,080 Speaker 1: I can make a fake client up in a situation 363 00:17:21,119 --> 00:17:24,520 Speaker 1: where I would advise against the ROW because would be 364 00:17:24,520 --> 00:17:26,840 Speaker 1: a bad idea. And here's the client. Client comes in. 365 00:17:26,880 --> 00:17:28,960 Speaker 1: He says, well, I'm working over at one of the 366 00:17:29,040 --> 00:17:31,600 Speaker 1: local mills and I'm making three under grand years an 367 00:17:31,600 --> 00:17:36,159 Speaker 1: executive maybe more and next year I'm retiring in December 368 00:17:36,240 --> 00:17:38,560 Speaker 1: thirty one. I have no retirement plan. To pay me 369 00:17:38,560 --> 00:17:40,199 Speaker 1: a lot but no retirement plan. Well what are a 370 00:17:40,200 --> 00:17:42,840 Speaker 1: bunch of guys? And uh, what do you think? And 371 00:17:42,880 --> 00:17:45,280 Speaker 1: I'd say, and he'd said, should I do a WROTH? 372 00:17:45,359 --> 00:17:48,199 Speaker 1: I'd say, absolutely not. Put it into a traditional retirement account? 373 00:17:48,720 --> 00:17:50,359 Speaker 1: And he goes why. I said, Well, what's your income 374 00:17:50,359 --> 00:17:52,800 Speaker 1: gonna be next year? Well? Nothing? Well that's great. You're 375 00:17:52,800 --> 00:17:55,159 Speaker 1: gonna take six thousand dollars or so and put it 376 00:17:55,160 --> 00:17:58,800 Speaker 1: into your traditional IRA. You're gonna get a tax deduction 377 00:17:58,880 --> 00:18:01,400 Speaker 1: at the top tax brackt to thirty seven percent now 378 00:18:01,840 --> 00:18:03,560 Speaker 1: and next year when you take it out, you pay 379 00:18:03,600 --> 00:18:06,119 Speaker 1: no tax. So I get the best of both worlds. 380 00:18:06,119 --> 00:18:08,800 Speaker 1: It's even better than a roth but it's a unique situation. 381 00:18:09,200 --> 00:18:16,560 Speaker 1: Now per cent of all the people are not going 382 00:18:16,600 --> 00:18:19,680 Speaker 1: to fall into one of those loopholes. So the rath 383 00:18:19,800 --> 00:18:23,879 Speaker 1: ire ray, if you just believe rath ire is always 384 00:18:23,960 --> 00:18:27,560 Speaker 1: better if it's allowed, I would I would agree with that. 385 00:18:27,600 --> 00:18:29,920 Speaker 1: I would fill my wrath up first, and then I 386 00:18:29,920 --> 00:18:32,720 Speaker 1: would go to my other traditional retirement to call on 387 00:18:32,800 --> 00:18:35,760 Speaker 1: second nice well good, because that's what Joe and I feel. 388 00:18:36,760 --> 00:18:39,040 Speaker 1: We agree with you. We're gonna talk something about like 389 00:18:39,080 --> 00:18:42,520 Speaker 1: the tax applications of your side hustle, whether you treat 390 00:18:42,520 --> 00:18:45,080 Speaker 1: that as a small business or a hobby. That's definitely 391 00:18:45,119 --> 00:18:46,760 Speaker 1: something you need to consider. So we're gonna talk more 392 00:18:46,760 --> 00:18:57,560 Speaker 1: about that right after the break. All Right, we're back. 393 00:18:57,560 --> 00:19:01,040 Speaker 1: We're talking with Keith Shroeder who writes at the Wealthy Accountant, 394 00:19:01,320 --> 00:19:03,600 Speaker 1: and we're talking about taxes and how not to screw 395 00:19:03,680 --> 00:19:06,840 Speaker 1: your taxes up. All right, Keith, let's talk about side hustles. 396 00:19:06,880 --> 00:19:09,520 Speaker 1: A lot of our listeners are making extra money on 397 00:19:09,560 --> 00:19:12,480 Speaker 1: the side. So from a tax perspective, why does it 398 00:19:12,560 --> 00:19:15,840 Speaker 1: make sense to consider a side hustle as a hobby 399 00:19:15,960 --> 00:19:19,040 Speaker 1: and not as a small business. So when you have 400 00:19:19,119 --> 00:19:21,440 Speaker 1: a side hustle, the thing that you have to think 401 00:19:21,440 --> 00:19:25,720 Speaker 1: about is what are the taxes are going to be 402 00:19:25,760 --> 00:19:27,680 Speaker 1: on this side hustle. So you say, well, I'm gonna 403 00:19:27,760 --> 00:19:30,720 Speaker 1: do some uber driving, or I'm gonna do some little 404 00:19:30,720 --> 00:19:32,520 Speaker 1: business or some dog walking, it does have to be 405 00:19:32,640 --> 00:19:35,920 Speaker 1: very big. If it is a self employed type business, 406 00:19:36,240 --> 00:19:38,840 Speaker 1: then you're gonna pay income tax at ordinary rates and 407 00:19:38,920 --> 00:19:42,160 Speaker 1: a self employment tax at fifteen point three percent. If 408 00:19:42,200 --> 00:19:45,159 Speaker 1: you're a hobby, you don't pay the fifteen point three percent. 409 00:19:46,280 --> 00:19:49,560 Speaker 1: Now that brings up an interesting topic. What's a hobby 410 00:19:49,680 --> 00:19:53,080 Speaker 1: and what's not? People get it backwards. They come into 411 00:19:53,080 --> 00:19:54,800 Speaker 1: my office and they sit down and they got this 412 00:19:55,280 --> 00:19:58,120 Speaker 1: so called business. They're doing ami or something, and they're 413 00:19:58,160 --> 00:20:00,440 Speaker 1: losing a gazillion dollars a year. They're doing race car 414 00:20:00,560 --> 00:20:03,040 Speaker 1: driving and losing you know, eighty thousand a year. And 415 00:20:03,080 --> 00:20:05,200 Speaker 1: they say, well, if I show a profit at least 416 00:20:05,200 --> 00:20:07,920 Speaker 1: two or five years, then I can be a business. 417 00:20:08,600 --> 00:20:11,160 Speaker 1: That is not what the rule says. The hobby rule 418 00:20:11,240 --> 00:20:14,680 Speaker 1: is just the opposite. The hobby rule says that if 419 00:20:14,720 --> 00:20:17,439 Speaker 1: you have a profit in three of any five years, 420 00:20:17,680 --> 00:20:20,160 Speaker 1: you're not a hobby. Even if you say you are. 421 00:20:20,280 --> 00:20:22,440 Speaker 1: You might be doing it for fun, but you are 422 00:20:22,480 --> 00:20:25,920 Speaker 1: now actually a business. So what you do in reality 423 00:20:26,000 --> 00:20:30,080 Speaker 1: is this real client. Client had a business or didn't 424 00:20:30,080 --> 00:20:32,880 Speaker 1: have a hobby where he made these really elegant candles. 425 00:20:32,880 --> 00:20:35,680 Speaker 1: I mean there were really something and you know, these 426 00:20:35,680 --> 00:20:37,880 Speaker 1: would sell for eight hundred dollars up and he would 427 00:20:37,880 --> 00:20:41,200 Speaker 1: give him away as gifts and that candle. So these 428 00:20:41,240 --> 00:20:43,720 Speaker 1: candles were huge, and they were just they had like 429 00:20:43,760 --> 00:20:46,120 Speaker 1: these great big money and the shells. I mean, these 430 00:20:46,119 --> 00:20:48,800 Speaker 1: are just incredible candles. Some of these candles went for, 431 00:20:48,960 --> 00:20:53,840 Speaker 1: you know, for thousands of dollars. So these candle that 432 00:20:53,960 --> 00:20:57,520 Speaker 1: these were candles of course, and and for obvious reasons, 433 00:20:57,520 --> 00:21:00,359 Speaker 1: he wasn't selling too much of this. So and you know, 434 00:21:00,520 --> 00:21:02,680 Speaker 1: I met the guy and he came in. He says, yeah, 435 00:21:02,680 --> 00:21:04,199 Speaker 1: you know, I got this guy that he wants to 436 00:21:04,200 --> 00:21:05,840 Speaker 1: buy a couple of these candles. He's gonna make a 437 00:21:05,880 --> 00:21:08,439 Speaker 1: quick three or four grand while his cost for wax 438 00:21:08,480 --> 00:21:10,320 Speaker 1: and things like that isn't all that much. It's really 439 00:21:10,359 --> 00:21:13,200 Speaker 1: just a lot of time. So when I sat down 440 00:21:13,200 --> 00:21:15,040 Speaker 1: with him, I said, well, what are the odds you're 441 00:21:15,040 --> 00:21:16,639 Speaker 1: gonna sell some more of these next year of the 442 00:21:16,720 --> 00:21:18,639 Speaker 1: year after he says, well, I've been doing it for 443 00:21:18,680 --> 00:21:20,320 Speaker 1: a long time and this is this is the first 444 00:21:20,320 --> 00:21:22,720 Speaker 1: time I've done any real selling of him. I said, 445 00:21:22,760 --> 00:21:24,520 Speaker 1: you know, I think you're a hobby. And what I'm 446 00:21:24,520 --> 00:21:26,760 Speaker 1: gonna do is, I'm gonna file a form telling the 447 00:21:26,800 --> 00:21:29,159 Speaker 1: I R S. I'm gonna treat you as a hobby, 448 00:21:29,280 --> 00:21:33,280 Speaker 1: and if I don't actually make a profit three of 449 00:21:33,320 --> 00:21:36,880 Speaker 1: the next five years, including the year we're doing, then 450 00:21:37,280 --> 00:21:39,200 Speaker 1: the I R S will say, fine, you're a hobby. 451 00:21:39,240 --> 00:21:42,480 Speaker 1: There's there's no deduction under the current tax system with 452 00:21:42,560 --> 00:21:45,679 Speaker 1: the Tax Cuts and Jobs Act for expenses, but you 453 00:21:45,680 --> 00:21:48,879 Speaker 1: pay no fifteen point three percent self employment tax. But 454 00:21:48,920 --> 00:21:50,720 Speaker 1: if you don't make a profit for three out of 455 00:21:50,760 --> 00:21:53,640 Speaker 1: five years, then what they're going to do is they're 456 00:21:53,640 --> 00:21:55,680 Speaker 1: gonna say, no problem. But if you do have three, 457 00:21:55,720 --> 00:21:57,320 Speaker 1: you know, all of a sudden, the guy does great 458 00:21:57,320 --> 00:22:00,320 Speaker 1: and he sells more thousand dollar candles. Well, the good 459 00:22:00,320 --> 00:22:02,320 Speaker 1: news is he has the money. The bad news is 460 00:22:02,359 --> 00:22:04,639 Speaker 1: he has to pay self employment tax. You end up 461 00:22:04,640 --> 00:22:07,080 Speaker 1: going back and amending those returns. You pay the tax, 462 00:22:07,080 --> 00:22:08,879 Speaker 1: but there is no penalty. So what you do is 463 00:22:08,880 --> 00:22:11,840 Speaker 1: you avoid the penalty and you avoid the issue of 464 00:22:11,840 --> 00:22:14,000 Speaker 1: of the i R s knocking on your door saying no, no, no, 465 00:22:14,040 --> 00:22:16,160 Speaker 1: you don't have a hobby anymore. You have a business 466 00:22:16,440 --> 00:22:18,840 Speaker 1: and you should know better. Gotch al right, So I've 467 00:22:18,840 --> 00:22:20,720 Speaker 1: been an example for you. So say somebody is actually 468 00:22:20,800 --> 00:22:23,240 Speaker 1: driving for Uber. They're taking it seriously, and you know, 469 00:22:23,320 --> 00:22:25,600 Speaker 1: let's let's say they're making between like twenty and thirty 470 00:22:25,600 --> 00:22:28,960 Speaker 1: thousand dollars a year. For somebody in that situation, do 471 00:22:29,040 --> 00:22:31,399 Speaker 1: they do they count that income as hobby income or 472 00:22:31,440 --> 00:22:33,720 Speaker 1: is that an actual small boy wouldn't consider it hobby 473 00:22:34,080 --> 00:22:37,080 Speaker 1: because now he's taking actions that are a little bit different. 474 00:22:37,280 --> 00:22:39,280 Speaker 1: The guy that's making a couple of thousand bucks, he's 475 00:22:39,280 --> 00:22:41,679 Speaker 1: doing it for, you know, a little man money on 476 00:22:41,680 --> 00:22:43,720 Speaker 1: the side, and he's playing around with it. Somebody's making 477 00:22:43,720 --> 00:22:47,120 Speaker 1: twenty grand. They're getting serious out there. The other part 478 00:22:47,160 --> 00:22:49,320 Speaker 1: of the equation for a hobby is how do you 479 00:22:49,359 --> 00:22:52,440 Speaker 1: make a living? Maybe you're retired, maybe you're doing another job, 480 00:22:52,480 --> 00:22:55,520 Speaker 1: maybe you have another business. I'm gonna argue doing Uber 481 00:22:55,560 --> 00:22:58,399 Speaker 1: on the side is one thing. Doing thirty thousand a 482 00:22:58,440 --> 00:23:00,200 Speaker 1: profit a year on it, you're not doing a whole 483 00:23:00,200 --> 00:23:02,480 Speaker 1: lot else. You're doing a lot of miles and doing 484 00:23:02,480 --> 00:23:05,679 Speaker 1: a lot of hauling for people. So I would be 485 00:23:05,760 --> 00:23:09,240 Speaker 1: hired pressed in my opinion to call that a hobby. 486 00:23:09,320 --> 00:23:12,640 Speaker 1: So Keith, when the time comes to count that revenue 487 00:23:12,680 --> 00:23:15,680 Speaker 1: as actual business income, there are lots of different options 488 00:23:15,720 --> 00:23:19,120 Speaker 1: for businesses and how they want to structure that business, right, 489 00:23:19,200 --> 00:23:22,040 Speaker 1: So could you kind of quickly talk about the benefits 490 00:23:22,080 --> 00:23:25,600 Speaker 1: of being a sole proprietor a partnership in LLC or 491 00:23:25,640 --> 00:23:28,920 Speaker 1: an scorp and then kind of how you decide as 492 00:23:28,960 --> 00:23:31,280 Speaker 1: a business as you're kind of growing, like how you 493 00:23:31,320 --> 00:23:35,000 Speaker 1: should be incorporated, choosing an entity for your business. The 494 00:23:35,080 --> 00:23:37,040 Speaker 1: default is going to be when you start all your 495 00:23:37,080 --> 00:23:38,800 Speaker 1: if you're just one person, you're gonna be a sole 496 00:23:38,840 --> 00:23:41,439 Speaker 1: proprietor if there's more than one, then it's gonna you're 497 00:23:41,440 --> 00:23:44,040 Speaker 1: gonna default to a partnership. I have no problem with 498 00:23:44,040 --> 00:23:48,280 Speaker 1: people being an LLC. An LLC for tax purposes, if 499 00:23:48,280 --> 00:23:51,320 Speaker 1: you don't do anything, will be what's called a disregarded entity. 500 00:23:51,640 --> 00:23:53,840 Speaker 1: And what that means is for legal purposes, you have 501 00:23:53,880 --> 00:23:56,359 Speaker 1: an LLC. But when it comes to doing your tax as, 502 00:23:56,400 --> 00:23:58,760 Speaker 1: we act as if it does not exist. Now, if 503 00:23:58,800 --> 00:24:02,000 Speaker 1: your businesses first start out and there's no revenue in profits, 504 00:24:02,400 --> 00:24:04,320 Speaker 1: then you certainly don't want to put the car in 505 00:24:04,359 --> 00:24:07,160 Speaker 1: front of the horse. Why build es corps and LLCs 506 00:24:07,160 --> 00:24:10,280 Speaker 1: to be treated as S corps or C corporations, because 507 00:24:10,760 --> 00:24:12,920 Speaker 1: that's just spending a lot of money and it makes 508 00:24:12,960 --> 00:24:15,160 Speaker 1: the accountant rich. But even I don't want the money 509 00:24:15,160 --> 00:24:17,960 Speaker 1: because it's just busy working. I'm busy enough. A good 510 00:24:18,040 --> 00:24:20,119 Speaker 1: rule of thumb that I use in my office is 511 00:24:20,160 --> 00:24:22,119 Speaker 1: when people start out, I say, you know, you can 512 00:24:22,119 --> 00:24:24,120 Speaker 1: get an LLC, will do it as a soul prop 513 00:24:24,600 --> 00:24:28,439 Speaker 1: The law allows me, under the tax code to have 514 00:24:28,760 --> 00:24:32,560 Speaker 1: a look back period. So, for example, if you have 515 00:24:32,600 --> 00:24:35,320 Speaker 1: an LLC, I want to know when you start making 516 00:24:35,320 --> 00:24:38,840 Speaker 1: money where you're gonna have a profit of at least 517 00:24:38,920 --> 00:24:42,640 Speaker 1: thirty thou see if your profits under thirty tho dollars, Yes, 518 00:24:42,640 --> 00:24:45,600 Speaker 1: it's gonna be a sole proprietorship even if it's an LLC, 519 00:24:45,760 --> 00:24:48,119 Speaker 1: and I'm okay with that. The taxes are there, they 520 00:24:48,119 --> 00:24:50,679 Speaker 1: get a little bit painful, but they're not real bad yet. 521 00:24:51,119 --> 00:24:53,240 Speaker 1: Once it goes about thirty thousand dollars, I have some 522 00:24:53,320 --> 00:24:56,280 Speaker 1: alternative choices, which now I have wiggle room where I 523 00:24:56,280 --> 00:24:59,080 Speaker 1: can save some money. The nice thing about an LLC 524 00:24:59,320 --> 00:25:02,560 Speaker 1: is I can may that election up the ninety days late, 525 00:25:02,920 --> 00:25:04,800 Speaker 1: so I can say I can look back and say, 526 00:25:04,800 --> 00:25:06,840 Speaker 1: you know what I've been. I started my business. I 527 00:25:06,880 --> 00:25:10,120 Speaker 1: wasn't making money in January, I got to August, wasn't 528 00:25:10,160 --> 00:25:13,199 Speaker 1: making money. In November. I cleared a big deal. I 529 00:25:13,240 --> 00:25:17,200 Speaker 1: made a quick eighty grand wonderful. We're gonna quick elect 530 00:25:17,240 --> 00:25:20,280 Speaker 1: to treat your LLC as an S corporation. We'll do 531 00:25:20,320 --> 00:25:22,320 Speaker 1: a split year if we want, or we can, you know, 532 00:25:22,440 --> 00:25:24,600 Speaker 1: probably a split year, so your your beginning of the 533 00:25:24,680 --> 00:25:26,919 Speaker 1: year is going to be on schedule C not much income, 534 00:25:26,960 --> 00:25:29,320 Speaker 1: not much profits, and you know, not much revenue. Then 535 00:25:29,359 --> 00:25:32,800 Speaker 1: we got eighty thousand dollars. We're gonna take that LLC 536 00:25:33,000 --> 00:25:35,240 Speaker 1: elect to be treated as a corporation. That we're gonna 537 00:25:35,359 --> 00:25:38,920 Speaker 1: elect to be treated as an S corporation. That's one. 538 00:25:39,080 --> 00:25:40,840 Speaker 1: There used to be two forms. It's one step. Now 539 00:25:40,880 --> 00:25:44,040 Speaker 1: you just find three and the I R. S says 540 00:25:44,040 --> 00:25:47,280 Speaker 1: you're golden. Then you have to pay yourself a reasonable compensation. 541 00:25:48,200 --> 00:25:50,240 Speaker 1: That that's all over the map. We're gonna argue in 542 00:25:50,240 --> 00:25:53,320 Speaker 1: this case, let's say he made it's eighty thousand dollar deal, 543 00:25:54,000 --> 00:25:58,280 Speaker 1: and let's say that reasonable compensation is forty dollars about 544 00:25:58,280 --> 00:26:00,720 Speaker 1: half of it, which is pretty and by the way, 545 00:26:00,720 --> 00:26:05,320 Speaker 1: you know, anywhere from thirty five to seventy percent is 546 00:26:05,440 --> 00:26:07,920 Speaker 1: where it usually falls. Though that's not all it's true. 547 00:26:08,119 --> 00:26:10,320 Speaker 1: So what does that mean? Well, if he made eighty 548 00:26:10,320 --> 00:26:12,400 Speaker 1: thousand dollars and it goes on Schedule C, he's gonna 549 00:26:12,400 --> 00:26:14,760 Speaker 1: pay ordinary income tax, he's gonna pay another fifteen point 550 00:26:14,760 --> 00:26:18,960 Speaker 1: three percent. So um, eighty thousand dollars times fifteen point 551 00:26:18,960 --> 00:26:22,000 Speaker 1: three percent, and that's twelve thousand, two hundred forty dollars. 552 00:26:22,760 --> 00:26:25,560 Speaker 1: If he has an a selection. The way I would 553 00:26:25,600 --> 00:26:28,080 Speaker 1: do it and and go to Conton's will all agree 554 00:26:28,080 --> 00:26:30,440 Speaker 1: with this is he's going to get a forty thou 555 00:26:30,640 --> 00:26:33,160 Speaker 1: dollar paycheck, which is going to have fight attacks same 556 00:26:33,200 --> 00:26:35,960 Speaker 1: thing as self employment tax. The other forty thousand is 557 00:26:35,960 --> 00:26:37,920 Speaker 1: going to flow through from that corporation on a K 558 00:26:38,080 --> 00:26:41,600 Speaker 1: one to his personal return subject to ordinary income tax, 559 00:26:41,640 --> 00:26:45,240 Speaker 1: but not the fifteen point three percent self employment tax. 560 00:26:45,480 --> 00:26:48,480 Speaker 1: So forty thousand dollars times the fifteen point three percent, 561 00:26:48,640 --> 00:26:52,000 Speaker 1: he's gonna save approximately six thousand, one hundred twenty dollars. Now, 562 00:26:52,000 --> 00:26:55,480 Speaker 1: there's a few calculations in the tax return that will 563 00:26:55,560 --> 00:26:58,600 Speaker 1: reduce that a little bit, so let's just say, for argument, 564 00:26:59,240 --> 00:27:03,080 Speaker 1: the guy's gonna says he's gonna drop another five hundred 565 00:27:03,080 --> 00:27:06,159 Speaker 1: bucks to get the tax return prepared that escort, and 566 00:27:06,200 --> 00:27:08,760 Speaker 1: then maybe he pays another five hundred for a payroll service, 567 00:27:09,119 --> 00:27:13,640 Speaker 1: so he's gonna be ahead, you know, basically every year 568 00:27:13,720 --> 00:27:17,240 Speaker 1: under that scenario. The big question I always have for 569 00:27:17,320 --> 00:27:20,200 Speaker 1: them is how consistent will this be? So you made 570 00:27:20,200 --> 00:27:22,399 Speaker 1: a quick eighty, I'm happy with that, but there's some 571 00:27:22,520 --> 00:27:24,879 Speaker 1: rules with this. If you're going to keep on making 572 00:27:26,280 --> 00:27:29,040 Speaker 1: a year or more, I'm happy with that. But you 573 00:27:29,040 --> 00:27:30,680 Speaker 1: don't want to be showing a loss in an s 574 00:27:30,760 --> 00:27:33,400 Speaker 1: corporation and paying yourself a wage, because then the way 575 00:27:33,440 --> 00:27:35,800 Speaker 1: I saved you money works in the reverse action, so 576 00:27:35,840 --> 00:27:38,679 Speaker 1: we don't want to do that. You can unselect or 577 00:27:38,840 --> 00:27:42,840 Speaker 1: terminate that selection anytime you want as an LLC. The 578 00:27:43,000 --> 00:27:46,320 Speaker 1: catch is if you want to go back to the escorp, 579 00:27:46,400 --> 00:27:49,359 Speaker 1: you have to wait at least five years, which means 580 00:27:49,560 --> 00:27:51,920 Speaker 1: you can't. You can flop back and forth a little bit, 581 00:27:52,200 --> 00:27:55,680 Speaker 1: but first of all, it gets messy, and second of all, 582 00:27:56,080 --> 00:27:59,080 Speaker 1: you can't flop back and forth at your whim that 583 00:27:59,280 --> 00:28:01,560 Speaker 1: easily the first the first ones a game. Okay, you 584 00:28:01,560 --> 00:28:03,879 Speaker 1: can choose what you want and then because they oops, 585 00:28:03,920 --> 00:28:05,280 Speaker 1: I didn't want to do that. I want to change 586 00:28:05,280 --> 00:28:07,960 Speaker 1: my mind. You can do that anytime you want. But 587 00:28:08,080 --> 00:28:10,000 Speaker 1: once you get to that point, you can't say, well, 588 00:28:10,040 --> 00:28:11,399 Speaker 1: I want to go back to what it was the 589 00:28:11,440 --> 00:28:14,240 Speaker 1: grass was greener over there, gotta wait five years. So 590 00:28:14,320 --> 00:28:17,159 Speaker 1: a little bit of planning and a little bit of 591 00:28:17,200 --> 00:28:20,040 Speaker 1: crystal wall involved in it as well. Yeah, Keith, Well 592 00:28:20,160 --> 00:28:23,240 Speaker 1: we've covered some great stuff about business taxes, but let's 593 00:28:23,320 --> 00:28:26,080 Speaker 1: definitely get into kind of how people should think about 594 00:28:26,119 --> 00:28:28,040 Speaker 1: filing their own personal taxes and kind of some of 595 00:28:28,080 --> 00:28:31,160 Speaker 1: the specifics they need to know on that, in particular 596 00:28:31,160 --> 00:28:34,080 Speaker 1: because of the way the tax code is structured currently. 597 00:28:34,119 --> 00:28:35,960 Speaker 1: And we'll get to some of those questions right after 598 00:28:36,040 --> 00:28:46,920 Speaker 1: the break. All right, Joel, we're back from the break 599 00:28:46,960 --> 00:28:50,800 Speaker 1: and we're talking with Keith Schroeder about taxes. Keith, we've 600 00:28:50,800 --> 00:28:53,040 Speaker 1: been talking about business taxes and let's kind of dive 601 00:28:53,040 --> 00:28:55,520 Speaker 1: into personal taxes. Now. I've got a quick question for 602 00:28:55,600 --> 00:29:00,040 Speaker 1: you regarding filing status. So obviously, single individuals they're in 603 00:29:00,120 --> 00:29:03,560 Speaker 1: a file uh an individual return. But how can married 604 00:29:03,600 --> 00:29:06,840 Speaker 1: couples make the best decision for the filing status that 605 00:29:06,920 --> 00:29:09,800 Speaker 1: they choose is there are there some considerations that they 606 00:29:09,800 --> 00:29:13,000 Speaker 1: need to keep in mind under the current tax code, 607 00:29:13,400 --> 00:29:16,360 Speaker 1: including with most states, I do not see many people 608 00:29:16,480 --> 00:29:22,040 Speaker 1: benefiting from doing a married filing separate situation mostly, And 609 00:29:22,320 --> 00:29:24,320 Speaker 1: one of the areas where it would come up for 610 00:29:24,640 --> 00:29:27,800 Speaker 1: filing separately would be because of Schedule A. I mean, 611 00:29:27,840 --> 00:29:32,760 Speaker 1: if you had disproportionate incomes based upon certain expenses. You 612 00:29:32,800 --> 00:29:37,400 Speaker 1: mentioned the tax law change, in which definitely it changed 613 00:29:37,400 --> 00:29:39,360 Speaker 1: things up, you know, in a lot of ways, and 614 00:29:39,480 --> 00:29:41,320 Speaker 1: it changed the way that we file our taxes, in 615 00:29:41,320 --> 00:29:44,400 Speaker 1: the way that we think about how how we get 616 00:29:44,400 --> 00:29:45,880 Speaker 1: the best bang for our buck right, and how we 617 00:29:45,880 --> 00:29:49,600 Speaker 1: can pay the least amount of taxes as legally possible. 618 00:29:49,800 --> 00:29:52,120 Speaker 1: And so now a vast majority of Americans are better 619 00:29:52,160 --> 00:29:55,880 Speaker 1: off taking the standard deduction. But like considering those changes 620 00:29:56,000 --> 00:29:58,600 Speaker 1: and how that affects how we file, what are the 621 00:29:58,640 --> 00:30:01,880 Speaker 1: best ways for us to optimize are taxes in this 622 00:30:01,960 --> 00:30:05,240 Speaker 1: kind of new issue day and age, Well, it's it's 623 00:30:05,280 --> 00:30:08,959 Speaker 1: getting harder to plan accordingly because one we we do 624 00:30:09,080 --> 00:30:15,120 Speaker 1: know that the personal or the individual tax changes we're temporary. However, 625 00:30:15,160 --> 00:30:17,480 Speaker 1: if anybody believes they're gonna be unchanged between now and 626 00:30:18,680 --> 00:30:20,520 Speaker 1: I also have some land I'd like to sell them 627 00:30:20,560 --> 00:30:23,280 Speaker 1: in Montana that's ocean front. You know, it's just not 628 00:30:23,280 --> 00:30:27,200 Speaker 1: gonna happen. The thing that you can do is you 629 00:30:27,200 --> 00:30:30,000 Speaker 1: can use the current tax law as it stands to 630 00:30:30,040 --> 00:30:32,920 Speaker 1: make decisions. So it depends on what you're trying to 631 00:30:32,960 --> 00:30:35,720 Speaker 1: do in your life. The tax code now is or 632 00:30:35,800 --> 00:30:38,600 Speaker 1: the tax rates are low. When as I camp accountant 633 00:30:38,640 --> 00:30:40,880 Speaker 1: and I was talking to people, I posed the question, 634 00:30:40,920 --> 00:30:43,360 Speaker 1: I said, which direction our tax is going to go 635 00:30:43,360 --> 00:30:45,600 Speaker 1: in the future, and and and everybody kind of looked 636 00:30:45,640 --> 00:30:47,680 Speaker 1: at me, hoping i'd give the answer, and the answers 637 00:30:47,680 --> 00:30:50,360 Speaker 1: they're going up. And I preface that by saying, just 638 00:30:50,400 --> 00:30:52,520 Speaker 1: because I say taxes are going up, doesn't mean I 639 00:30:52,600 --> 00:30:54,760 Speaker 1: want them to. I'm telling you what they're going to do. 640 00:30:55,280 --> 00:30:57,520 Speaker 1: And here's what the answer to that is. And when 641 00:30:57,520 --> 00:31:01,360 Speaker 1: you've had a great economy for the longest expansion in 642 00:31:01,520 --> 00:31:04,680 Speaker 1: US history, and we're running a deficit which is four 643 00:31:05,600 --> 00:31:08,920 Speaker 1: of of g d P, you have to ask yourself 644 00:31:09,360 --> 00:31:12,520 Speaker 1: that is insane. For one thing, one in every twenty 645 00:31:12,560 --> 00:31:17,240 Speaker 1: dollars in the economy in the last twelve months was 646 00:31:17,320 --> 00:31:21,160 Speaker 1: federal government spending put on their credit card with your 647 00:31:21,240 --> 00:31:25,440 Speaker 1: name because hey, we're gonna pay for it eventually. The 648 00:31:25,520 --> 00:31:28,120 Speaker 1: answer is is that we have to prepare for that. 649 00:31:28,560 --> 00:31:31,280 Speaker 1: If you can accelerate income, I'd rather pay tax at 650 00:31:31,280 --> 00:31:33,280 Speaker 1: today's rates than what they're gonna be in ten years 651 00:31:33,320 --> 00:31:36,920 Speaker 1: or five years. I would rather find things that I 652 00:31:36,920 --> 00:31:39,480 Speaker 1: could invest that will give me some tax free money anyway. 653 00:31:39,520 --> 00:31:42,280 Speaker 1: So for example, real estate, you can have things like 654 00:31:42,360 --> 00:31:45,200 Speaker 1: cost segregation studies, which I preach a lot because a 655 00:31:45,240 --> 00:31:47,520 Speaker 1: lot more people could benefit from them than use them. 656 00:31:47,880 --> 00:31:51,000 Speaker 1: You could also do things like opportunity funds. So if 657 00:31:51,000 --> 00:31:55,040 Speaker 1: you sell real estate, I don't think that a light 658 00:31:55,120 --> 00:31:58,600 Speaker 1: kind exchange is the first shoot from the hip response. 659 00:31:59,000 --> 00:32:01,640 Speaker 1: You might wish to pay taxes at today's rates for 660 00:32:01,680 --> 00:32:04,720 Speaker 1: a long term, long term capital gain rant. So for example, 661 00:32:04,840 --> 00:32:07,560 Speaker 1: somebody comes in and they say, well, I'm I'm partially retired. 662 00:32:07,560 --> 00:32:10,600 Speaker 1: I make thirty grand year. I sold my rental property 663 00:32:10,600 --> 00:32:12,360 Speaker 1: and we sold that we made a fifty thou now 664 00:32:12,400 --> 00:32:15,040 Speaker 1: a long term capital gain. Why would you want to 665 00:32:15,040 --> 00:32:17,680 Speaker 1: do a light kind exchange? Pushing that into the future 666 00:32:17,680 --> 00:32:21,480 Speaker 1: work would be significantly higher. Would seem rather foolish to me. 667 00:32:21,760 --> 00:32:24,960 Speaker 1: The answers are not always clear, so you have to 668 00:32:25,000 --> 00:32:28,720 Speaker 1: have that conversation with the qualified and experienced tax pro 669 00:32:29,000 --> 00:32:32,120 Speaker 1: and they can help you make a good decision based 670 00:32:32,160 --> 00:32:34,640 Speaker 1: upon future facts that we don't necessarily have a clear 671 00:32:34,680 --> 00:32:38,040 Speaker 1: crystal ball on. Even if you don't have that person 672 00:32:38,120 --> 00:32:40,880 Speaker 1: do your taxes. So I consult with people, and most 673 00:32:40,920 --> 00:32:42,880 Speaker 1: of my consulting clients I just don't have time to 674 00:32:42,960 --> 00:32:45,600 Speaker 1: do the tax return. So you don't have to be 675 00:32:45,640 --> 00:32:48,280 Speaker 1: their client for anything other than consulting. And I have 676 00:32:48,320 --> 00:32:49,800 Speaker 1: clients to come back to or three times a year 677 00:32:49,840 --> 00:32:52,040 Speaker 1: just for consulting, and I don't do their taxes. Yeah, okay, 678 00:32:52,080 --> 00:32:54,840 Speaker 1: let's let's talk about actually like doing your taxes right. Like, 679 00:32:54,960 --> 00:32:56,920 Speaker 1: you have a list on your site of some of 680 00:32:56,960 --> 00:32:59,320 Speaker 1: the different things that you recommend. It's a pretty short 681 00:32:59,360 --> 00:33:01,160 Speaker 1: list as well. One of the things you have on there. 682 00:33:01,160 --> 00:33:03,480 Speaker 1: One of your recommendations is to take the d I 683 00:33:03,640 --> 00:33:06,080 Speaker 1: Y approach when it comes to doing your taxes. So 684 00:33:06,400 --> 00:33:08,800 Speaker 1: my question then is who should be actually doing their 685 00:33:08,840 --> 00:33:11,120 Speaker 1: own taxes and what do you think they need to 686 00:33:11,160 --> 00:33:13,680 Speaker 1: know before getting started? You know, are there some resources 687 00:33:13,680 --> 00:33:16,280 Speaker 1: out there for them? For for a lot of people, 688 00:33:16,320 --> 00:33:19,800 Speaker 1: their tax return is so simple you you don't need 689 00:33:19,840 --> 00:33:22,600 Speaker 1: a tax prepare that is, you know, professional tax prepare, 690 00:33:22,920 --> 00:33:25,440 Speaker 1: nor do you need consulting. I mean you've got a 691 00:33:25,440 --> 00:33:28,120 Speaker 1: couple to W twos and your rent, you know what's 692 00:33:28,160 --> 00:33:31,040 Speaker 1: to talk about. Here's some items that would come up 693 00:33:31,080 --> 00:33:33,840 Speaker 1: that I would want to have a tax prepare if 694 00:33:33,840 --> 00:33:37,200 Speaker 1: you have a small business today of any size. The 695 00:33:37,320 --> 00:33:43,040 Speaker 1: Qualified Business Income Deduction CUBID is about the most horrendous 696 00:33:43,040 --> 00:33:47,560 Speaker 1: and complex tax Provisional eleven O eleven in the Tax 697 00:33:47,560 --> 00:33:51,400 Speaker 1: Cuts and Jobs Act one. It's the insertion of on 698 00:33:52,320 --> 00:33:55,040 Speaker 1: into the into the tax code. Is about two and 699 00:33:55,080 --> 00:33:59,160 Speaker 1: fifty words with the most complex. You know, we've we've 700 00:33:59,160 --> 00:34:04,080 Speaker 1: had several five hundred page regulations listed from the I 701 00:34:04,200 --> 00:34:06,960 Speaker 1: R S and they still aren't done. That's how complex 702 00:34:07,040 --> 00:34:09,880 Speaker 1: is two U fifty words is. It's just that insane. 703 00:34:10,280 --> 00:34:12,040 Speaker 1: And I know that a lot of this will be 704 00:34:12,160 --> 00:34:14,239 Speaker 1: ending ending up in tax courts, so the courts can 705 00:34:14,239 --> 00:34:16,480 Speaker 1: litigate it for us. Wonderful news is if they don't, 706 00:34:16,520 --> 00:34:18,560 Speaker 1: if they if they don't do anything in five we 707 00:34:18,640 --> 00:34:21,919 Speaker 1: go back to seventeen UH tax laws. So it's really 708 00:34:22,000 --> 00:34:24,360 Speaker 1: kind of insane if we if we don't make some 709 00:34:24,440 --> 00:34:27,399 Speaker 1: of this permanent. But if you're dealing with an opportunity 710 00:34:27,440 --> 00:34:30,000 Speaker 1: fund the year that that happens. You certainly would like 711 00:34:30,080 --> 00:34:32,360 Speaker 1: to have an accountant if you have a business that 712 00:34:32,400 --> 00:34:36,080 Speaker 1: has or rental real estate. This CUBIAN If you're not 713 00:34:36,120 --> 00:34:38,120 Speaker 1: a professional, I don't think you have enough time to 714 00:34:38,200 --> 00:34:40,200 Speaker 1: learn it. And you don't have it's gonna be hard 715 00:34:40,280 --> 00:34:42,960 Speaker 1: to have the skill sets to do that without the 716 00:34:43,000 --> 00:34:46,160 Speaker 1: pro so and and if you're uncomfortable with anything, you 717 00:34:46,200 --> 00:34:49,480 Speaker 1: need a pro If it's if you're comfortable doing some stuff. Man, 718 00:34:49,600 --> 00:34:51,120 Speaker 1: it used to be if you had rentals or a 719 00:34:51,160 --> 00:34:54,360 Speaker 1: small schedule. See no big deal. But the rules today 720 00:34:54,600 --> 00:34:56,440 Speaker 1: and I'm gonna get this wrong because I'm doing this 721 00:34:56,520 --> 00:34:59,160 Speaker 1: off of memory because it's just coming up. But the 722 00:34:59,280 --> 00:35:01,960 Speaker 1: rule is is that if you do a tax return, 723 00:35:02,600 --> 00:35:05,920 Speaker 1: there's certain penalties that take place, like willful intent. You 724 00:35:05,960 --> 00:35:08,319 Speaker 1: can be off by as much as twenty and some 725 00:35:08,400 --> 00:35:12,040 Speaker 1: things before they kick in because well you do you 726 00:35:12,040 --> 00:35:14,680 Speaker 1: know it's it's it's easy to maybe miss something and 727 00:35:14,760 --> 00:35:17,200 Speaker 1: the I R S gets it. If you take CUBID 728 00:35:17,320 --> 00:35:20,560 Speaker 1: on your tax return, this qualified business income deduction at 729 00:35:20,600 --> 00:35:24,080 Speaker 1: any level that moves to five percent. That basically means 730 00:35:24,120 --> 00:35:26,760 Speaker 1: every tax return and by the way, every tax return 731 00:35:26,880 --> 00:35:30,600 Speaker 1: except for the simplest of returns have five percent errors. 732 00:35:30,640 --> 00:35:33,239 Speaker 1: And what I mean by that is you can have 733 00:35:33,880 --> 00:35:38,800 Speaker 1: a small misunderstanding of what you put on your return, 734 00:35:38,840 --> 00:35:41,920 Speaker 1: because there's small mistakes that happen even with professionals, and 735 00:35:42,000 --> 00:35:46,160 Speaker 1: that would then open that entire return up to significantly 736 00:35:46,400 --> 00:35:52,080 Speaker 1: larger penalties. That means that you not only want an accountant, 737 00:35:52,120 --> 00:35:55,920 Speaker 1: but you better hope that the guy or a woman 738 00:35:56,000 --> 00:35:59,080 Speaker 1: doing those taxes has got the experience so that they 739 00:35:59,160 --> 00:36:02,359 Speaker 1: understand the stuff and has the continuing education well that 740 00:36:02,360 --> 00:36:05,560 Speaker 1: that presents this next question, Keith, So, for someone who 741 00:36:05,640 --> 00:36:07,879 Speaker 1: does feel more comfortable or is in one of those 742 00:36:07,920 --> 00:36:10,040 Speaker 1: situations where they do have rental real estate, or they 743 00:36:10,040 --> 00:36:12,359 Speaker 1: have a small business and they do need to hire 744 00:36:12,400 --> 00:36:14,360 Speaker 1: someone to help them with tax prep and filing, Like, 745 00:36:14,560 --> 00:36:18,719 Speaker 1: how would you recommend folks go about finding someone that 746 00:36:18,920 --> 00:36:21,719 Speaker 1: is qualified and is going to do a great job 747 00:36:21,760 --> 00:36:24,960 Speaker 1: for them and help them find these areas that they 748 00:36:25,000 --> 00:36:27,799 Speaker 1: can save on their taxes and ways to file that 749 00:36:27,840 --> 00:36:29,560 Speaker 1: are going to be best for their situation, Like, how 750 00:36:29,560 --> 00:36:32,040 Speaker 1: do they go about finding that right person to help them? 751 00:36:32,080 --> 00:36:34,960 Speaker 1: A good way to do this in your local community 752 00:36:35,000 --> 00:36:37,359 Speaker 1: is talk to the people that are doing what you're doing. 753 00:36:37,400 --> 00:36:39,360 Speaker 1: So let's say you have a small business, you probably 754 00:36:39,360 --> 00:36:42,160 Speaker 1: talk with other small business owners, ask them who they're using. 755 00:36:42,520 --> 00:36:45,400 Speaker 1: If you have rental real estate these income properties, go 756 00:36:45,440 --> 00:36:48,800 Speaker 1: to an apartment association. Maybe talk to them and don't 757 00:36:48,880 --> 00:36:52,319 Speaker 1: just talk the one that them. You're hiring them, just 758 00:36:52,360 --> 00:36:55,239 Speaker 1: like if you're hiring an employee. Keep in mind they're 759 00:36:55,280 --> 00:36:57,760 Speaker 1: not the five hundred or seven hundred or eight hundred 760 00:36:57,760 --> 00:37:00,760 Speaker 1: dollar fee you pay them. They're playing with your entire 761 00:37:00,920 --> 00:37:04,040 Speaker 1: income for a year. So if you're making a hundred grand, 762 00:37:04,440 --> 00:37:08,040 Speaker 1: you better trust this individual to be playing and reconciling 763 00:37:08,120 --> 00:37:11,520 Speaker 1: basically your account for tax purposes of the entire hundred 764 00:37:11,520 --> 00:37:16,120 Speaker 1: thousand dollars. Penalties can be quite significant. And even if 765 00:37:16,160 --> 00:37:18,759 Speaker 1: they do it wrong and you overpay your taxes. So 766 00:37:18,800 --> 00:37:21,560 Speaker 1: there's so in an audit you wouldn't get hurt. The 767 00:37:21,600 --> 00:37:23,799 Speaker 1: odds are you don't get audited, so you're getting hurt 768 00:37:23,840 --> 00:37:27,080 Speaker 1: and don't even know it. So you want an experienced, 769 00:37:27,280 --> 00:37:31,479 Speaker 1: qualified professional, and you also want to have compatibility. I've 770 00:37:31,480 --> 00:37:34,840 Speaker 1: had a few clients over thirty plus years of doing 771 00:37:34,880 --> 00:37:38,560 Speaker 1: taxes where there's just some people that sometimes we even 772 00:37:38,600 --> 00:37:41,239 Speaker 1: shook hands politely and walk the other way and just 773 00:37:41,280 --> 00:37:43,360 Speaker 1: saying I don't know what it is about you. But 774 00:37:43,440 --> 00:37:45,839 Speaker 1: I just we we just don't see eye to eye, 775 00:37:45,880 --> 00:37:48,279 Speaker 1: and I just you. The hair in my back of 776 00:37:48,280 --> 00:37:50,680 Speaker 1: my neck goes up when I see and and and 777 00:37:50,440 --> 00:37:52,440 Speaker 1: and and we both and both of us usually feeling 778 00:37:52,480 --> 00:37:55,080 Speaker 1: it's it's just not working. So we just move on. 779 00:37:55,719 --> 00:37:58,080 Speaker 1: Make sure there's that compatibility, because you're gonna be You're 780 00:37:58,080 --> 00:38:01,400 Speaker 1: gonna be talking to this individual about personal things. The 781 00:38:01,400 --> 00:38:03,680 Speaker 1: first thing they're going to ask his name, address, social 782 00:38:03,719 --> 00:38:06,279 Speaker 1: Security number, are you married, do you have kids? Do 783 00:38:06,360 --> 00:38:08,920 Speaker 1: you gamble? Did you do this? Did you do that? Well? 784 00:38:09,000 --> 00:38:10,440 Speaker 1: Keith all on that. No, I mean, are there some 785 00:38:10,520 --> 00:38:13,440 Speaker 1: specific things to look out for? Right, so say you are, like, 786 00:38:13,480 --> 00:38:15,560 Speaker 1: you know, you've heard about this guy, You've heard about 787 00:38:15,560 --> 00:38:17,759 Speaker 1: this this lady around the corner that also does a 788 00:38:17,800 --> 00:38:19,960 Speaker 1: lot of tax returns for folks who you know, say 789 00:38:20,040 --> 00:38:22,480 Speaker 1: have a small business. Right, are there like certain red 790 00:38:22,480 --> 00:38:24,719 Speaker 1: flags that we should look out for that will sort 791 00:38:24,719 --> 00:38:26,399 Speaker 1: of give us a warning? And you know that gives 792 00:38:26,440 --> 00:38:28,759 Speaker 1: us that heads up if they do not give you 793 00:38:28,840 --> 00:38:33,880 Speaker 1: a copy of your return, if they start pushing things 794 00:38:33,880 --> 00:38:37,880 Speaker 1: like these refun anticipation loans, I would hope that they 795 00:38:37,880 --> 00:38:40,640 Speaker 1: would be they would either have letters after their name 796 00:38:40,719 --> 00:38:43,279 Speaker 1: or they be you know, the IRIS has these registrations now, 797 00:38:43,680 --> 00:38:47,759 Speaker 1: so at least there's some kind of assurance that there 798 00:38:47,840 --> 00:38:51,200 Speaker 1: was some kind of background with it. If you're committing 799 00:38:51,920 --> 00:38:54,960 Speaker 1: financial crimes, you're not going to stay an enrolled agent, 800 00:38:55,000 --> 00:38:57,239 Speaker 1: which is what I am, or a CPA for very long. 801 00:38:57,640 --> 00:39:00,440 Speaker 1: But part of it is sometimes you can just feel 802 00:39:00,440 --> 00:39:04,280 Speaker 1: it if they're trying to do things that seem really 803 00:39:04,320 --> 00:39:07,359 Speaker 1: out there. If they promise you a refund, I would 804 00:39:07,360 --> 00:39:10,240 Speaker 1: just walk the other way. For one thing. Treasury to Treasury, 805 00:39:10,239 --> 00:39:12,520 Speaker 1: circular to thirty says that's an illegal act. And and 806 00:39:12,719 --> 00:39:15,839 Speaker 1: everybody now, not just enrolled agents and c pas are 807 00:39:15,880 --> 00:39:18,080 Speaker 1: governed by two thirty. You cannot go out there and 808 00:39:18,080 --> 00:39:24,400 Speaker 1: guarantee refunds. You also the refund there. Your fee should 809 00:39:24,480 --> 00:39:29,880 Speaker 1: not be based upon the refund. And every accountant that 810 00:39:30,040 --> 00:39:36,080 Speaker 1: has any qualification what'so whetherever, whether they're whether they're licensed 811 00:39:36,160 --> 00:39:39,520 Speaker 1: or not, because there's some unlicensed people that are incredibly 812 00:39:39,560 --> 00:39:42,440 Speaker 1: good as well. So if they do not have an 813 00:39:42,520 --> 00:39:46,000 Speaker 1: engagement letter. Mine in my office is getting longer and 814 00:39:46,080 --> 00:39:50,440 Speaker 1: a little more extensive, but I clearly outline what I'm 815 00:39:50,520 --> 00:39:53,839 Speaker 1: charging you, what I'm doing for you, what you can 816 00:39:53,920 --> 00:39:57,720 Speaker 1: expect and to hire me. You sign in advance because 817 00:39:57,960 --> 00:40:00,880 Speaker 1: you sign the engagement letters saying I'm hiring you to 818 00:40:00,960 --> 00:40:04,160 Speaker 1: handle this year's taxes. So they can do it out 819 00:40:04,160 --> 00:40:07,600 Speaker 1: of the house and they can be professional. It's really 820 00:40:07,719 --> 00:40:10,760 Speaker 1: kind of hard, now, be careful. I mean, there's there's 821 00:40:10,800 --> 00:40:13,840 Speaker 1: the there's the Dirty Dozen on the IRIS website. You 822 00:40:13,920 --> 00:40:16,319 Speaker 1: might might want to read some of that because they'll 823 00:40:16,360 --> 00:40:19,640 Speaker 1: talk about some preparers that do some squirrely things. They 824 00:40:19,680 --> 00:40:22,120 Speaker 1: should have security in place. So that's one of your 825 00:40:22,200 --> 00:40:27,040 Speaker 1: questions when you vet this potential accountant and you say, okay, 826 00:40:27,040 --> 00:40:29,120 Speaker 1: what kind of security do you have in place? Well, 827 00:40:29,160 --> 00:40:31,320 Speaker 1: we have firewalls here, we have an I T company 828 00:40:31,320 --> 00:40:33,680 Speaker 1: that backs up third party off site twenty four hours 829 00:40:34,440 --> 00:40:40,480 Speaker 1: of monitoring. We have a litany of resources that we 830 00:40:40,520 --> 00:40:44,000 Speaker 1: expend in my company to protect client data. And the 831 00:40:44,040 --> 00:40:46,640 Speaker 1: reason why is because the accountants are prime targets. The 832 00:40:46,680 --> 00:40:49,319 Speaker 1: guys doing it out of the house may not have 833 00:40:49,480 --> 00:40:53,080 Speaker 1: those security measures. So if they're good, that's okay. But 834 00:40:53,200 --> 00:40:55,720 Speaker 1: if they have a computer that's not a business computer 835 00:40:55,800 --> 00:40:57,880 Speaker 1: and there you know the kids are using it to 836 00:40:57,920 --> 00:41:00,360 Speaker 1: play games and doing all these crazy things and getting 837 00:41:00,360 --> 00:41:02,680 Speaker 1: some of these what do you call these apps and 838 00:41:02,719 --> 00:41:06,319 Speaker 1: these games that have malware in them you can find 839 00:41:06,360 --> 00:41:10,560 Speaker 1: your data being subjected to being breached. Uh. The I 840 00:41:10,680 --> 00:41:12,440 Speaker 1: R S is getting tough in that with these guys 841 00:41:12,440 --> 00:41:14,440 Speaker 1: as well too. But man, I mean at first you've 842 00:41:14,440 --> 00:41:16,719 Speaker 1: got to be a victim, so I would rather not 843 00:41:16,760 --> 00:41:18,680 Speaker 1: be a victim. You usually can feel it and make 844 00:41:18,719 --> 00:41:21,640 Speaker 1: sure they act professionally. Got it. Yeah, those are some 845 00:41:21,680 --> 00:41:24,160 Speaker 1: good thoughts, Keith. This has been a great conversation man. 846 00:41:24,200 --> 00:41:26,840 Speaker 1: I think you've given some great advice to help folks 847 00:41:26,960 --> 00:41:30,359 Speaker 1: and file their individual or familial tax returns or their 848 00:41:30,400 --> 00:41:32,960 Speaker 1: business tax returns, and just great to hear your story. Man. 849 00:41:33,000 --> 00:41:35,359 Speaker 1: So hey, how can our listeners find out more about you? 850 00:41:35,600 --> 00:41:38,480 Speaker 1: The Wealthy Accountant blog is weekly or sometimes a couple 851 00:41:38,520 --> 00:41:42,200 Speaker 1: of times a week. I put out some ideas on taxes. 852 00:41:42,239 --> 00:41:45,600 Speaker 1: I'll talk about personal finance. I'll talk about just living 853 00:41:45,640 --> 00:41:47,520 Speaker 1: a good life. What you know? What? What what does? 854 00:41:47,640 --> 00:41:50,560 Speaker 1: What is the meaning of having a good life? Okay, 855 00:41:50,600 --> 00:41:52,680 Speaker 1: thanks so much, man. We really appreciate you coming on 856 00:41:52,760 --> 00:41:54,920 Speaker 1: and talking to us about tax law. There's just so 857 00:41:55,000 --> 00:41:57,839 Speaker 1: much to consider and hopefully our listeners were able to 858 00:41:58,040 --> 00:42:00,680 Speaker 1: glean some of that knowledge and hopefully not screwing up 859 00:42:00,719 --> 00:42:03,040 Speaker 1: their taxes. So thanks, thanks again. Well, it was a 860 00:42:03,040 --> 00:42:06,360 Speaker 1: great pleasure joeling that to be here, and uh have 861 00:42:06,400 --> 00:42:09,520 Speaker 1: a great holiday season. Thanks Keith, Matt that was an 862 00:42:09,520 --> 00:42:12,120 Speaker 1: interesting conversation. And I gotta tell you, talking to Keith, 863 00:42:12,160 --> 00:42:15,200 Speaker 1: it just makes me realize how complicated our tax system is. 864 00:42:15,640 --> 00:42:18,080 Speaker 1: And there's so much about taxes that I do not 865 00:42:18,160 --> 00:42:21,080 Speaker 1: know right right, Yeah, me too, And I mean even 866 00:42:21,200 --> 00:42:23,840 Speaker 1: for someone like him who's constantly taking classes and stuff. 867 00:42:23,840 --> 00:42:26,000 Speaker 1: I mean, there's so much to know. So it is 868 00:42:26,080 --> 00:42:27,759 Speaker 1: nice to know that there are people out there that 869 00:42:27,880 --> 00:42:31,320 Speaker 1: have expertise. So that brings me to my big takeaway. 870 00:42:31,520 --> 00:42:33,000 Speaker 1: I'll let you share yours in just a second, but 871 00:42:33,080 --> 00:42:35,759 Speaker 1: my big takeaway from this episode was basically that if 872 00:42:35,800 --> 00:42:37,839 Speaker 1: if it's simple, if you have a simple return, if 873 00:42:37,880 --> 00:42:40,040 Speaker 1: you don't have much complicated going on while filing your 874 00:42:40,040 --> 00:42:42,799 Speaker 1: own taxes is just the best way to go. And 875 00:42:42,840 --> 00:42:45,719 Speaker 1: if it's not well vet and enrolled agent or a 876 00:42:45,760 --> 00:42:48,359 Speaker 1: c p A who does tax to find someone that 877 00:42:48,400 --> 00:42:52,440 Speaker 1: you feel comfortable with and that can handle your specific situation. 878 00:42:52,719 --> 00:42:56,200 Speaker 1: That requires kind of personalized attention from someone who knows 879 00:42:56,200 --> 00:42:58,080 Speaker 1: what they're doing. And I wanted to say too, when 880 00:42:58,080 --> 00:43:00,480 Speaker 1: it comes to filing taxes on your own, there there 881 00:43:00,480 --> 00:43:03,759 Speaker 1: are a few places to go free places where you 882 00:43:03,800 --> 00:43:05,760 Speaker 1: can file your taxes and it doesn't cost any money. 883 00:43:05,960 --> 00:43:08,560 Speaker 1: So a couple of those our Credit Karma, Turbo Tax 884 00:43:08,560 --> 00:43:10,600 Speaker 1: has a free file product, and then i r S 885 00:43:10,640 --> 00:43:13,160 Speaker 1: Free File. I r S dot Gov has a list 886 00:43:13,160 --> 00:43:16,439 Speaker 1: of companies that will let you free file your taxes. Uh, 887 00:43:16,600 --> 00:43:19,160 Speaker 1: there's an income level that you have to qualify for 888 00:43:19,200 --> 00:43:21,359 Speaker 1: in order to to file under i r S Free File, 889 00:43:21,640 --> 00:43:23,799 Speaker 1: But those are kind of great places to go if 890 00:43:23,840 --> 00:43:27,120 Speaker 1: you do have like a less complicated, pretty simple return, 891 00:43:27,400 --> 00:43:30,160 Speaker 1: shouldn't take you long, do it for free, make it snappy, 892 00:43:30,239 --> 00:43:31,920 Speaker 1: get it done nice dude. Yeah, I like that. That's 893 00:43:31,920 --> 00:43:34,759 Speaker 1: a good reminder that if your taxes aren't that complicated, 894 00:43:35,040 --> 00:43:36,640 Speaker 1: you don't have to make it complicated. I mean, that 895 00:43:36,680 --> 00:43:38,960 Speaker 1: was the whole point of the standard deduction and having 896 00:43:39,320 --> 00:43:41,080 Speaker 1: you know, the new form literally just being on that 897 00:43:41,120 --> 00:43:44,000 Speaker 1: one postcard size return. So yeah, that's a great reminder. 898 00:43:44,160 --> 00:43:46,560 Speaker 1: My big takeaway has to do with the side hustle. Right. 899 00:43:46,560 --> 00:43:49,600 Speaker 1: We talked about that earlier on and it was good 900 00:43:49,640 --> 00:43:51,480 Speaker 1: to hear that if you have a side hustle that 901 00:43:51,600 --> 00:43:53,759 Speaker 1: it is probably going to be more beneficial for you 902 00:43:53,800 --> 00:43:56,200 Speaker 1: to treat that like a hobby and less like a 903 00:43:56,239 --> 00:43:59,160 Speaker 1: business when it comes to your taxes specifically, you know, 904 00:43:59,200 --> 00:44:01,640 Speaker 1: if you're making a few thousand dollars right, like, maybe 905 00:44:01,680 --> 00:44:04,000 Speaker 1: five grand on the side with a specific you know 906 00:44:04,040 --> 00:44:06,279 Speaker 1: what you call a side gig or side hustle, you 907 00:44:06,320 --> 00:44:09,680 Speaker 1: don't need to over complicate things by incorporating your business. 908 00:44:09,920 --> 00:44:11,480 Speaker 1: You mentioned not letting the car get in front of 909 00:44:11,520 --> 00:44:13,719 Speaker 1: the horse. I think that's a great way to visualize it. 910 00:44:13,880 --> 00:44:16,920 Speaker 1: Let the business, let the horse pull the cart, right 911 00:44:17,000 --> 00:44:19,520 Speaker 1: and with the cart being the structure and sort of 912 00:44:19,520 --> 00:44:21,279 Speaker 1: all the formalities that you need to go through when 913 00:44:21,280 --> 00:44:23,800 Speaker 1: it comes to making sure that you're you're doing things properly. 914 00:44:24,040 --> 00:44:25,879 Speaker 1: But you know what, if you're not earning that much money, 915 00:44:26,000 --> 00:44:28,880 Speaker 1: keep things simple and you can completely avoid that self 916 00:44:28,880 --> 00:44:31,480 Speaker 1: employment tax and save yourself from sending the government that 917 00:44:31,480 --> 00:44:34,359 Speaker 1: additional money. Yeah, all right, So I had one final takeaway. 918 00:44:34,640 --> 00:44:36,600 Speaker 1: I didn't realize there was that much money to be 919 00:44:36,640 --> 00:44:39,879 Speaker 1: made in candle making, So that might be my next 920 00:44:39,920 --> 00:44:41,840 Speaker 1: side hobby. Dude, I would love to see what a 921 00:44:41,840 --> 00:44:44,840 Speaker 1: one thousand dollar candle looks like. It's gotta be amazing, 922 00:44:45,000 --> 00:44:49,440 Speaker 1: is it huge? Is it just beautiful? Huge? Aid or Nate? Alright, 923 00:44:49,440 --> 00:44:51,600 Speaker 1: I would hope. So yeah, I'm like, well, candles, he 924 00:44:51,640 --> 00:44:54,759 Speaker 1: I think he mentioned multiply multi thousand dollar candles. So 925 00:44:55,239 --> 00:44:57,400 Speaker 1: I feel like I have to look into like ornate 926 00:44:57,400 --> 00:44:59,360 Speaker 1: candle making because that's just something that's never been on 927 00:44:59,360 --> 00:45:01,600 Speaker 1: my radar before. Yeah, you gotta look into that new hobby. 928 00:45:02,200 --> 00:45:03,680 Speaker 1: I mean, I want to also get your thoughts on 929 00:45:03,719 --> 00:45:05,600 Speaker 1: the beer that we had on the show today. Today 930 00:45:05,640 --> 00:45:08,880 Speaker 1: we drank Wild Leap off of Abstraction Volume nine, and 931 00:45:08,920 --> 00:45:11,279 Speaker 1: this is kind of in their series of I p 932 00:45:11,480 --> 00:45:13,480 Speaker 1: a s right there doing these interesting juicy style I 933 00:45:13,520 --> 00:45:14,839 Speaker 1: p s. What do you think of this one? Yeah, 934 00:45:14,960 --> 00:45:17,120 Speaker 1: juicy all the way, man, This is this drink like 935 00:45:17,200 --> 00:45:20,319 Speaker 1: a like a fruit juice beer. To me, There's there's 936 00:45:20,440 --> 00:45:22,160 Speaker 1: some hot flavors going on, but there was not a 937 00:45:22,160 --> 00:45:23,799 Speaker 1: whole lot of that hot bite that we've come to 938 00:45:23,840 --> 00:45:26,600 Speaker 1: expect from more hazy I p a s. But because 939 00:45:26,640 --> 00:45:28,840 Speaker 1: of that, that did make this beer really easy to drink. 940 00:45:28,960 --> 00:45:31,440 Speaker 1: And uh yeah, I really enjoyed sharing this one with you, dude. Yeah, man, 941 00:45:31,520 --> 00:45:34,680 Speaker 1: juicy all the way. I agree, super tasty. Another good 942 00:45:34,719 --> 00:45:36,719 Speaker 1: one from Wild Leap there, Yeah, We actually had one 943 00:45:36,760 --> 00:45:38,560 Speaker 1: of their regular I p A s I guess a 944 00:45:38,600 --> 00:45:41,279 Speaker 1: few weeks back. Now, yeah, the Chance I p A said, 945 00:45:41,320 --> 00:45:43,080 Speaker 1: this is sort of like the you know, the big 946 00:45:43,120 --> 00:45:45,439 Speaker 1: brother to Chance. Yes, so they're making great beers. Glad 947 00:45:45,480 --> 00:45:47,200 Speaker 1: we got to have this one on the show today, Buddy. 948 00:45:47,360 --> 00:45:49,840 Speaker 1: That's gonna do it for this episode. For links to 949 00:45:49,880 --> 00:45:52,120 Speaker 1: some of the things that Keith mentioned on the show today, 950 00:45:52,360 --> 00:45:54,200 Speaker 1: some of those I R S forms and some of 951 00:45:54,200 --> 00:45:56,600 Speaker 1: the places where you can fire taxes, well just go 952 00:45:56,680 --> 00:45:58,759 Speaker 1: to how to money dot com and you can find 953 00:45:58,840 --> 00:46:00,840 Speaker 1: our show notes there. That's right, buddy. So that's going 954 00:46:00,920 --> 00:46:03,080 Speaker 1: to be it for this episode. Dude. Until next time, 955 00:46:03,320 --> 00:46:04,799 Speaker 1: Best Friends Out, Friends Out,