 How do you beat the tax man? Nobody likes to pay taxes right? The IRS is coming down on you if you're in the United States. The Australian Taxation Organization is coming down on you if you're in Australia. I don't know what they're called in what it's called in Canada or the UK or Europe. Everybody hates paying taxes. And so today we're gonna figure out a way to reduce your tax burden or avoid your tax burden maybe. And these are gonna be little tax habits that you can implement mostly for the entrepreneur, mostly for business owners, but we're gonna be talking about some stuff as well if you are an employee and you have a job and how you can, you know, make maximize your tax strategy which is avoiding paying taxes as much as possible. We're gonna talk about some tax strategies for real estate if you're in the real estate. And yeah, because guess what? Nobody wants to pay taxes. Donald Trump, President Donald Trump doesn't want to pay taxes. That's why he probably doesn't want to show his tax returns because because he's not paying him. But we're gonna find out today whether actually he's super super smart with his tax strategies and not paying much much tax or whether he is being like a conniving secretive president where he's trying to hide something dodgy. So to help us navigate the world of taxes, I've brought in a new friend of mine, a gentleman by the name of Ron Fossum who I met in person just outside of Austin, Texas earlier this year when he and I were both speaking at an event, Ryan Moran's event about entrepreneurship. And I interviewed Ron using my iPhone camera and he gave me this amazing tax strategy called the Augusta rule, which we're gonna talk about in this episode. And I went off to my accountant and I said, the Augusta rule, the Augusta rule, can I use this? Can I use this? And my accountant has now confirmed that I can and this is gonna give me tax savings of about 40 grand, about $40,000 because of one piece of intel that Ron gave me. So Ron is an expert in this. He's a serial entrepreneur. He's passionate about taxes if anyone could be passionate about taxes. And he's actually, one of his businesses was nominated for the Nobel Peace Prize back in 2014. He's also a documentary maker. He's produced a documentary on the success coach Jack Canfield, which is coming out soon. But really he's, he really is a tax expert. And we're gonna find out some ways on how you can beat the tax man. Ron Fossum, how are you sir? Great to have you here. I am excellent. Thank you. Thank you very much. I'm excited to be here. Well, I already have a man crush on you because you've helped save me a whole bunch of money. So let me start off by just asking a very, very general question. And that is why are so many people confused about taxes? There's, well, first of all, it's the tax code in 19, it was a 1913, 1914, the whole code was like 400 pages. As of last year, it's 73,000 pages. So first of all, no one's read the whole thing. At a high school reading level, it would take us like 33 years to read the whole thing. And yet they we want to go to, you know, one person and get and think that they've read the whole thing. So that's part of it. The other part of it is the tax code's really written by congressmen and is enforced by the IRS and inevitably in there, the lawyers get involved and try to add some definitions and some of the definitions just don't make any sense to a layperson or an entrepreneur. And so it's very, very easy to get confused around what is why can one person take a deduction one way and why can't someone else have to take it differently. Yeah, it gets great. It's overwhelming, right? I mean, I can tell you right up until, let's say, two years ago when I started to really pay attention to tax, I was avoiding it. I'm like, I don't want to know. I don't want to know what the codes are. I have an accountant and I remember sitting in my accountant's office many years and he or she would be, you know, telling me how much tax I own to be in that be using these fancy terms about, you know, capital gains tax and earned income and all these kind of like causes and I would just glaze over. I'm like, I don't want to know this until I actually started to appreciate that it was super, super important that I understood at least some of this stuff. And now I take it super seriously. It's still overwhelming, but just little things like little things here and there is a difference between having to pay tens of thousands of dollars and not having to pay, right? Yeah. Yeah, absolutely. And there's super simple things like just in the definition of travel expenses, for example, I'll read it right out of the code. It says travel expenses defined for purpose. This is off IRS.gov. For tax purposes, travel expenses are the ordinary and necessary expenses of traveling away from home for your business professional job. And then that's pretty simple. I get that. It says an ordinary expense is one that is common and accepted in your trader business. Okay. The necessary expense is one that is helpful and appropriate for your business. When I think of necessary, I don't think of it as helpful and appropriate. The very next line is what confuses most taxpayers. It says an expense does not have to be required to be necessary. Well, I think of oxygen. Oxygen is required for me to stay alive. It's necessary for me to stay alive. Those are very similar words. But under the code, one does not mean the other. Where some of this confusion goes was when is it, when does this code apply to me and when does it not apply to me? Can I do this? Can I have a business meeting in the Caribbean or on a cruise ship or something like that? And that's why so many different, so much different advice is out there of yes, you can, no, you can't. And now accountants, a lot of the time, don't know about the IRS code either, right? Like a lot of the times our general CPA who we trust to do our taxes at the end of the year, if we're hiring someone, a lot of times they don't even know what's going on. Oh, it's, it's crazy. So here's, here's kind of the evolution. Because you run across entrepreneurs that have all kinds of different structures in place. So you can go, you have to do it yourself or at, you know, Turbo tax at $99 a year or something. You go by the used to be the CD, I think it's a download now. But it goes from Turbo tax to bookkeeper. And the bookkeeper at least kind of customizes it to you a little bit more. Then there's an accountant, there's a certified public account or CPA. There's a tax preparer, tax planner and then a tax attorney and a tax attorney can be $500 to $5,000 an hour. And so clearly, there's a full range of expertise in there. And most people try to get by with one of those. Rarely do they have two of them or a team to really understand what is applicable. And so it's very common. We need accountants. I love CPAs, they do a job, but they're really good at accounting for what has already happened or they're said another way. They're historians. They're not really forward thinking. So James comes in next next year and says, let's look at last year and now, you know, forward project me into the future. Financial planners do this. We expect it. It's common, right? Me a plan, a financial plan for next year. But in the tax world, we want that from our accountants. And it's just not the industry that they're built for. Yes, I've learned very quickly, there's a difference between an accountant bookkeeper and then a tax advisor or tax attorney. So an accountant will generally just do your books and look at what you've earned and what you need to pay and all that kind of stuff. But then you have someone who's more specialized like a tax expert, or a consultant who will actually look at it more in depth is up to speed on the latest tax codes, and then is able to then look at your income and your tax liability and move things around or suggest strategies, which again, like I said, is committed difference between having to pay tens of thousands of dollars or not. So very important that that we we know this and me personally, I have, I've subsequently since I've learned this, I've now engaged the services of people who, you know, look at what my accountant has compiled, but then gives me like a bigger kind of strategy, a strategic look at it and picks holes through it, and or finds little places where I can get breaks there. And real quick, just so it's not overly complicated, we just told everyone the code 77,000 or 73,000 pages, there's really only four things, everything that you can do is going to fall under four categories. And it's usually either income shifting. So you're going to change the structure of your entity or shift some income to lower brackets because it's taxed differently. There's the timing of when you take a deduction, the actual code or a product or a service that you can add. So those four things income shifting timing code and product. Those four things is how every tax strategy can be used to reduce your taxes. Let me just go over those again, income shifting over the other three. Yep. Timing. So the timing of when you take a deduction can help. Code. It's already written in the code and it says exactly what it is. So the IRS is saying, Hey, here's a tax tip for you on there on IRS.gov. It actually says tax tip, big bold print. And then they give you a hint of where it would apply. And then there's products and services that that help. Okay, most people know that some forms of life insurance can create some tax free income while you're alive or tax free death benefit. That kind of stuff. Okay, great. So if you're listening to this and you're chomping at the bit and you really want to just get us get us. Sorry, you really want Ron and I to get into some tax strategies for you. It's coming. Just hang on another minute or so and we'll get there. And and just so you know what's coming, we're going to be talking about some tax strategies for if you own a business, if you are a w two employee, if you're self employed. And also if you're international, and you're wondering about if you have to pay American taxes as well, we're going to go over that. But just before we get into that. Is there a mistake that many Americans do on a regular basis, Ron, is there one simple mistake that that that people are making that the biggest mistake you see people make. So then we can avoid doing that. It could be something as simple as how we're doing a simple investment. So if most Americans have a 401k through their employer, and then they're going out and buying a stock, well, you could buy the stock without the 401k, and you're going to be in a capital gains bracket, which is a 15 or 20% bracket. But because you've bought the same stock inside of a 401k, you get some tax deferral. But when you do end up taking that income, eventually you have to take the income, you've gone to an ordinary income tax bracket, which if you're halfway successful is going to be a higher bracket than the 15% or 20% you're going to be in the capital gains bracket. So that's income shifting you've gone from a lower tax bracket to a higher tax bracket, hoping that the trade off of deferral outpaces that to complicate it even further. Like if if you and I go into the bank, and we say I want to borrow some money, none of us would borrow the money and sign on the dotted line if we didn't know the terms of the loan. If the bank said pay me back at some point in the future, and whenever you decide to pay me back, that's what I'll decide how much interest I'm going to charge you. None of us would ever do that loan. Like we would never do it. But we're doing that with our retirement plans all the time. We're deferring the tax into the future. When more than likely my belief in my belief is taxes are going to be higher. You ask every every stage I've ever been on I ask the audience show a hands how many people think taxes are going up, I get everybody how many things taxes are going down, I get nobody. But yet, we're going through this tax deferral to when they're going to be higher idea. And it just doesn't doesn't make any sense most of the time when you do the math. So that's a that's a good example of where we really need to look at someone specific situation and say is it a good idea? Is it not a good idea? And just finally before we get into these strategies, what is the difference between tax avoidance and tax evasion? That's a that's a good question because so many people just surrender that I have to pay something. And if I go do any type of tax strategies, I'm going to get in trouble. Because some of those cases make a lot of news, especially actors like crocodile Dundee got in trouble, Wesley Stein's gotten trouble. I love how you call him crocodile Dundee. You're referring to the great Hollywood, great Australian acting icon and legend Paul Hogan. Yeah, yeah, yeah, you just typical American just like forget his name that crocodile Dundee dude, you know, for Hogan. Yeah. Yeah, just to give context, Paul Hogan, who starred in the 1986 movie crocodile Dundee and was very famous for the catchphrase, you know, get a mate and like throw another shrimp on the barbie. He was investigated very heavily by the Australian Taxation Office for a number of years and he ended up beating the rap. He actually ended up not having they found that he didn't do anything wrong. But this thing drew out over like three or four years and kind of stained his reputation. So that's what's what that's what Ron is referring to there. Yeah, it isn't true that the bad news is what makes the press the end of the story isn't nearly as well known, right? Exactly. It was like, you know, that's the way the world does sometimes. So the tax evasion component is absolutely criminal. And I'll read it right out of the code. It says an attempt to reduce your tax liability by deceit, sub to subterfuge or concealment. Right? So you're trying to lie, cheat and steal. In order to not pay taxes, you're going to be in trouble. tax avoidance is again, this is directly off the IRS.gov website tax avoidance is completely legal. Lowly lowering your tax bill by structuring your transaction to reap the largest tax benefit for you. Hmm. And as you go through IRS.gov, they literally tell you that a good tax plan will evaluate different ways to take the same deduction. You could take one deduction one way, I can have to take it another way because we're in different industries. And I think that's what we're President Donald Trump's argument is is that he's not evading tax. He's legally and morally and ethically avoiding it, right? He's not evading and trying to be deceitful. He seems to be arguing that he's well, he's just playing within the rules. Yeah, yeah, they're they're rules. It's kind of interesting because this is the first time we've ever had a real estate based president, right? But the good news, if there's good news in in this at all is the there's a there's a law that says the vice, the vice president and the president get audited every year now that so long as they're in office. And that's that started back in the 70s. So if if he didn't have his fair share on it before he certainly will was so long. All right, let's get into the nitty-gritty here. We've we've done enough build up here. So let's let's do what we'll do. This is how we'll do it. We'll do some simple strategies for W2 employees. And then we'll move on to the entrepreneurial to people who own businesses. So let's start with with with the employee. If someone's listening here, they're an employee, they're W2 here in the US. What's some simple strategies they can incorporate, Ron? Well, there's just to understand, first of all, and this kind of applies to everybody, but understand that the the IRS doesn't make the rules. This was like a big aha moment for me in the beginning was Congressman really make the rules and then send it over to the IRS to enforce it. And so Congressman are writing rules. I mean, the Roth IRA was named after the Congressman who wrote that rule. The Augusta deduction was kind of nicknamed after the Senator from Georgia who submitted the rule that says, Hey, here's a way that you can deduct some stuff. So they're writing rules to benefit themselves. And we just need to understand the intent behind the rule and when it's applicable. So for for W2 employee, most people just think it's while I got my mortgage and I got my kids, you know, my employer takes out the rest of taxes and I can't really deduct anything else. But that's not really true. You can deduct all kinds of stuff or you could have other income that isn't necessarily taxable. So for example, when you buy a house, I love real estate. I think we bought nearly 400 homes during the crisis. Single family homes when you buy it on discount and then you go do a cash out refi because it's a loan. So if I buy a $100,000 house for 60 grand, and then I go finance it for $80,000, I'm going to pull out that extra cash and that's not income under the IRS rules. Yeah, I can spend the money however I want to spend the money. And so cash out of the property, whether it's real estate or if it's a car or if it's your your life insurance and that's structured properly. There's all kinds of ways to get income without it being taxed as ordinary income like you've earned it from your employer. So that's that's one almost everyone can use. Another no brainer one is take your hobbies and make it a business. So whatever you thoroughly enjoy in your pastime, if you enjoy it so much, the IRS is a requirement is you only have to have an intent to make a profit. So write yourself a business plan of how are you going to make some money? Shouldn't take more than 30 minutes or something like that. Start a little LLC on the side. But now that you're a business, you're entitled to take all kinds of deductions against all other income that you normally wouldn't have had. So let me give you an example of this. I love this idea like take your hobbies and make it a business. So let's just say you love going to the movies. You just love to watch movies and you go to the cinema three times a week. And you're spending well in LA it could be like $18 for a damn ticket. But let's say let's say it's $12 right wherever you are $12 for a movie ticket 12 times three is $36. Let's say you spend $36 every week on going to the movies. What Ron seems to be saying here is that why don't you have the intent of being a movie reviewer starting a YouTube channel where you review movies where you walk out of the cinema you record yourself on an iPhone saying this movie sucked or this movie was great. And you do it with the intent for business. So you start an LLC which would be like John Smith LLC. And then you have the intent of being a movie reviewer. Now the $36 every week that you're spending on going to the movies that's now a tax write off right like that's now now you don't you can claim that with the tax man correct. Yeah absolutely it's a legitimate business expense because you're in that industry. Another one was kind of a high profiled one of my buddies was his tax advisor on that one but he said I want to deduct all my clothes and I can't deduct all my clothes but he's a rapper he's on stage. And it's well you know actors have have to have certain outfits right and if you're putting out a persona and it's marketed that way you're an LA get this then all he had to do was open a production company and have his production company do all the clothes but because he didn't have a production company it wasn't it wasn't real. You can't deduct just you know the clothes you and I are wearing but it's required when you're an actor or you're in the producing of films or you go on stage for live performances. So now some of his clothes are deductible. When I go traveling overseas. I record a lot of my travels on my Snapchat and my Insta stories. For example next month I'm going to the UK, Lithuania, Spain and then I'm going to Tampa, Florida, Mexico, then I'm going to Texas for a combination of just fun travel but also some some work type stuff and I will be documenting it every step of the way on my Snapchat and my Insta stories and I consider that to be a business expense because I have a lifestyle business. I coach people on how to travel the world while having an online business. I'm talking about my swanese blue light blocking glasses. I'm recording episodes of this very podcast while I'm on the road. So therefore Ron I mean I already know the answer but let me ask you as the tax expert my the money that I spend on my flights and my accommodation on my food on getting to and from those places. Can I claim those as a business expense? Ron? Absolutely. Yes. Yes. Yes. So I don't have to spend it out of my personal income. I can spend it out of my business as a legitimate business expense. Correct. Exactly. And there's all kinds of rules around it right. So domestic travel you can count both ways international travel sometimes you count one you don't count the travel the day you leave the states but you do count the day that you come back into the states unless there's these four exceptions. So it's again it's back to why it's always confusing but absolutely it's travel is a very legitimate if it's required mandatory necessary for your business in customary which it clearly is it's absolutely deductible. Yeah I love it and so just one more analogy for the employee who's listening now let's just say you like to go you like football you like the NFL you like the NBA whatever whatever your sport is maybe you have the intent of creating a business where you review each game after each game and so now the say a ticket to the basketball or the or the or the NFL is like $100 for a ticket to go and watch your team in person or might be $200 these days. If you have the intent of talking about the game afterwards again on a YouTube channel on a blog or something like that now you can claim the price of your of your ticket. So when Ron's talking about hobbies it's like what do you like to do. If long you've got a the intent of building a business around it or you actually have a business around that thing you can claim all of those fun exercises as a tax deduction. Yeah that'll help even if you end up losing some money that'll help offset the taxes that you would normally have earned and paid inside your W2 income. Right. Anything else for W2 employees Ron? Try to try to if you're going to do retirement I would only do some some Roth type stuff whether it's a Roth IRA Roth 401k tax free position your money so your tax free. Generally speaking again that we probably should start with a disclaimer that all of this is applicable to somebody but not everybody. Yes. So yeah so please understand all the advice that we're giving here that Ron's giving or sharing we're not taking any responsibility for you doing it you can't go and implement this and then come back and say you told me to do this blah blah blah like you got to do your own research you got to talk to your own advisor. So Ron can give you his intel to the best of his knowledge but ultimately you are responsible for whatever actions you take from here. Yeah. Yeah and it clearly it's going to apply to somebody but not everybody so try to just structure your retirement so it's tax you can retire so much sooner if you have a tax exempt tax free tax free retirement structure. So just explain that a tax exempt retirement structure just explain that. Well if someone's got to be saved you know millionaire seems to be this you know benchmark that a lot of people try to shoot for so if you're a millionaire you've saved a million dollars and a traditional 401k or traditional IRA you really don't own a million dollars. You've partnered with the government and they're going to take 30 to 40% of that depending on what state you're in and what your federal bracket is. So you really have like six hundred thousand dollars by the time you're done versus you have the you know seven hundred or eight hundred thousand dollars in a Roth which is tax free always or inside life insurance. You're not going to have to pay tax on those and so the dollars become much more efficient. You don't need as many in order to get to your goal of retirement and so just just understand that frequently deferring the tax. I mean think about it really what was the last time we had a problem that we ignored for decades and it just simply got better like I ignore my health for decades and it got better right. I've got a relationship or an employee who's not doing what they need to be doing. I'm just going to ignore it and it magically goes away and gets better and that just isn't our reality. So deferring tax and ignoring it till retirement frequently when you do the math on the distribution side frequently doesn't make sense. Okay so your advice is do not defer tax until retirement and instead do what? Use other accounts that that allow it to be tax free forever so it's like a Roth IRA. You pay your tax up front but you don't have to pay tax on any of the earnings ever. Gotcha. So think about it like paying tax on the seed or paying tax after you've planted the seeds and it's grown to a big harvest and they're going to tax the whole harvest. Yeah so you're saying pay the tax now and be done with it versus deferring the tax which taxes are going to go up and then you know in retirement you're going to get get stung as you pull out that money. Yeah I'm just saying do the math and frequently I mean first time I used to sell traditional IRAs 401ks and man the first hundred times I did the math I'm like I'm trying to find a situation that it really fits and there's some that does but generally speaking deferring it to when taxes are going to be higher I think they're going up and not small I mean come on we just spent trillions of dollars in America trying to recover the economy. I can't imagine taxes going down in the long term. Okay so there you go take your hobbies and make it a business if you you don't even have to make a profit you just have to have an intent to make a profit and then do the math do not Ron's advice here is do not defer your tax until retirement when taxes are likely going to be higher instead use other accounts that allows it to be tax-free forever like a Roth IRA right Ron? Yeah yeah okay well let's take that one step further real quick it kind of ties into maybe the question you asked earlier was the mistake frequently everyone is making is there's this common belief and if your if your tax person is telling this or your retirement person is telling you this it might be time to upgrade your your advisor is I'm going to be in a lower tax bracket when I'm in retirement it's so common I hear it all the time and it's like really because to go from a hundred and fifty thousand dollar lifestyle to go to the next bracket down you got to get your your spending down to fifty so who wants to cut two-thirds out of their income out to be in this lower tax bracket and to live on a smaller number I mean if there's a distance is disincentive to to live in a life and setting up your retirement I don't know what it is that is huge I don't want to learn how to live on 50 grand when my lifestyle is 150. Wow all right so there was some good advice is some great advice there for the for the employee so we move on now Ron to the self-employed now a self-employed different from being an entrepreneur or a business owner or is it the same thing it can be the same thing and it's usually self-employed you start up and you kind of have your own job but once you start hiring others you kind of you kind of tend to get more into the entrepreneur some little entrepreneurs but by and large most businesses that scale big tend to take on some employees so there's a fine line that may or may not make a difference there okay so for the business owner or the entrepreneur or the self-employed let's go through a few cool little tax-saving strategies here Ron so this will kind of fall into the the income shifting rule that we talked about one of the ways is is instead of taking income which is taxed as ordinary income or even taking it as a self-employed person which then you get a self-employment tax put on it then take out and this is very very common in executive level companies CEO CEO CFO all those guys can take a shareholder loan and very favorable terms from the company and very favorable repayment terms so I'm an executive at Microsoft and Microsoft has said that you know the C-suite level executives can borrow you know hundred thousand dollars with you know market rates which are what 3% or 4% and they can kind of pay it back you know on some kind of terms that are very favorable maybe there's required monthly payments maybe there's not but the corporation really gets to make up the rules and so you can't use this one every year and it's important everyone hears that one don't use this every year but take some income out of your business as a shareholder loan instead of income yeah it kind of goes back to that example I said about you know cash out refi technically it's money you can use however you want to use it but it's not income so then hence it's not tax you can't do it you know five years in a row I'm taking out two million dollars out of my business and it's a shareholder loan and the number just keeps getting bigger and bigger and bigger the IRS is going to cry foul on that for sure so just take take some money out as a shareholder loan document properly by having what the bank would charge for a small business loan is an interest rate and then maybe your terms are you pay it back you know no payments for the first year you start payments in the second year you pay it back over five years or maybe your plan is to sell the business within the next couple years and so upon the sale of the business it'll be returned at that time and there is no payments until then I mean there's there's all kinds of different ways you can structure it but take that loan from your business you personally and then that's not taxed yeah so that means that so basically let's just say you have a business basically what you're doing is is that rather than paying yourself a salary or paying yourself from the business into your personal account because we all we need personal money you need to pay ourselves a salary you know to live to pay the rent either groceries or whatever what you're saying is is that um and by the way sorry when you pay yourself that income it is taxed right the government will take a hit but what you're saying is that once you know once every five years I guess like not every not every year but once every five years you can classify a payment to yourself as a loan as a personal loan from your business which is completely tax-free is that correct yeah and that is so long as as you pay it back to the company at some at some point but again it's just it's tax-free income so the money that goes from your business account to your personal account you don't have to pay tax on personally it's just like a transfer essentially and then at some point later on you pay it back either with interest or no interest Ron it's got to be reasonable and customary and if you borrowed money from anywhere else there'd be some interest so uh it has to be documented it can't be a random you know two million dollars it just came out for no reason you got to have a loan dock between you personally and the company it's got to be terms associated you got to have a balance interest rate payment default language all that needs to be in there so just document it properly is uh is all you really need to do okay great all right what's another tip let's move on to our next one uh this is this this one should apply to what you're doing uh normally uh what we pay for our clothes having our shirts pressed or laundry is not tax deductible but while you're in travel status it is so when you're traveling the world and you're paying uh you send your stuff down to the hotel uh to get cleaned because you're going to be on film the next day laundry is 100 tax deductible while you're in travel status which is an overnight stay away from your primary tax home or where you primarily do business on out of LA you fly up to San Francisco for the night if you pack dirty dirty laundry and have it cleaned in in the new city uh it's 100 deductible i love it i'm a big fan i'm pretty filthy i'm a filthy animal i tend to go on trips and i don't do laundry much much to the dismay of uh of ex-girlfriends of mine who are like you're disgusting james but now now i've got now i've got a reason to like pay the 30 or 40 bucks or whatever those hotels try to charge you to do laundry i can you claim it as a business expense i like it thanks ron yeah buy your travel status the uh the other one you mentioned earlier was that that august rule from august in georgia is kind of where it got the nickname someone wanted to to write off they wanted to rent out their personal residence for the golf tournament that they have there yeah it's the the master's golf tournament which happens in august to georgia every year um so just think of that the august rule and i love this geron's talk with ron and i have had at least a few conversations about this so give it to us plain and simple run and if you're listening and you're an entrepreneur or a business owner i think you're gonna like this this this is uh sometimes it's called a vrbo deduction as well because this vacation rental by my owner got really big home away is another one uh and the idea of having strangers in my home for 14 days a year didn't really uh i didn't really like but i like the idea of renting out my house and it's also very common that uh i mean i've got a home office you've got a home office that deduction has been around forever in a day but remember that your social security number is different than your ein number your employer identification number and you treated yourself as differently under the irs code there's two separate entities you personalize your business so it's common it wouldn't be uncommon for you to have 14 days a year a little over one a month to have a business meeting and you're going to invite a whole bunch of people into that business meeting maybe there's eight 10 12 15 people and they're not going to fit in our home office so we got to rent the whole house out and if you rent the whole house out for 14 days a year uh it's completely deductible for the business as an expense as regular and customary but that income is completely tax exempt and doesn't even have to be declared at 14 days at 15 days the irs says this is a business and it's declarable income so personally write yourself call around to your hotels get some comparable bids on here's how i see see what it is you have a business with you have an llc okay you have a personal account where you you've got your checking amount of money and money that you use to pay rent and food and all those kind of things for 14 days of the year you can host a business meeting or business meetings in your home where you invite colleagues or business associates or potential clients and you call it like a mastermind or you call it like an annual retreat or you call it like a monthly mastermind session okay and you do host people in your home they come to your home they sit around your living room and you have a conversation about business in some capacity now basically what you while you're doing this previously or afterwards you would have contacted three close by hotels that would be in my case in la it's the andas hotel the roosevelt and and the loze hotel in hollywood and i've already done this by the way so i emailed them and i say hey i'm thinking about having 10 people over to my i'm thinking about having a 10 person board meeting or a business meeting or mastermind how much would it cost me to use one of your business rooms and for you to cater it with some food and some drinks for like three hours from like 7 p.m. until 11 p.m. or all day they have subsequently then emailed me proposals and in this in this case it ranges from five grand a 15 grand if you can believe it but let's just take the average ten thousand dollars let's just say hypothetically it's going to cost me ten thousand dollars to rent a room to have a a meeting or a retreat or something in a in a nice hotel instead i don't pay the 10 grand to the hotel instead i just have the people come over to my home we have the board meeting or the meeting or the business event in my home i spend a couple hundred dollars buying some nice food and some drinks or whatever i have it in my home i am then able james swanick personal james swanick the person i'm now able to send an invoice and charge my business which let's just say it's james swanick the business ten thousand dollars for that day for that event um for hosting the event in my home my business is then able to pay ten thousand dollars to me personally that's james swanick the person james swanick the person does not have to declare that as income which means the government cannot tax me on that ten thousand dollars that's just entered my personal account and guess what the business has just paid a legitimate business expense which is what you want because you want your business racking up expenses because then you don't have to pay as much as much tax so you've had this double win where your business has got a legitimate business expense and you personally have just received ten thousand dollars tax free that means you do not have to pay the government 30 40 percent on that it's just ten grand sitting in your pocket and you can do that 14 times a year for 14 days per year now i like i said i've done this i've meticulously got records from three hotels and i did this i did the average of how much it would cost and um i once ron told me that i actually had an event at my home recently where i had people come over and we sat in my living room and we did a little mastermind and i'm now going to be um you know i now drop an invoice i send it from james swanick personal to my business to my llc and then i transfer the funds over into my account and now i've got this tax free personal money sitting in the bank account that my the government doesn't have to that i don't have to pay the government any um percentage on did i explain that well enough ron did i am i am i a good student of yours now that that's dead on the only thing i would add is really that invoice goes in a filing cabinet and you're only ever really going to use that invoice or all of those comps and emails from the hotel in the event you ever get audited because now you've got some justification of why 10 in your case is a reasonable and cuspary number i mean 10 000 a day times 14 days is 140 thousand dollars tax exempt coming out of your business and they're gonna say you know is that reasonable for your area and you're gonna say here's all my hotels so it's only in the event of an audit that that paperwork is ever there and used i love it it's the augusta rule so i'd encourage you if you're listening to google it first what's the actual code in the irs code that the augusta rule do you know 80 a a is an apple okay cool now now one of the a lot of the questions i get from people about this augusta rule ron is well does it have to be a home that you own or can it be a place that you rent can it be a place that you're air being being already like like what are there any limit what what are the limitations if any on on doing this yeah the code actually doesn't call it a home we're using home because that's where we live and that's where we're doing it kind of thing but they they call it a dwelling unit and it doesn't matter that you own it or you rent it so if i mean i know a lot of people nowadays that just don't want to own a home they want flexibility in their life and they want to live a couple years here a couple years there and so they just rent and so it doesn't matter if you own it if you rent it they go in to define a dwelling unit can be your boat right it can be all kinds of different things so there there's a way to so long as it's not a something that is regularly in used on a daily basis for like a hotel motel type rule like if you own the hotel but but other than that it doesn't matter if you own your house if you rent your apartment you can still use this Augusta rule i love it you want to hold it i know you know ryan's had a mastermind on a yacht right rented a yacht and that clearly would would have qualified yeah he's talking about ron's referring to ryan maran who's a mutual friend of ours we're talking to ron fossum who is a tax extraordinaire a tab beating the tax man extraordinary extraordinary is a serial entrepreneur just before we go on with some more tactics ron where can our listener find more about you if they want to engage your services they can they can just grab us at ron's tax tips.com it's a real short simple page we can send them a how to bust some tax myths if they've got some questions how to stop sabotaging your your small business growth if they want to engage us as a short questionnaire and you can set up an appointment we can have a conversation about what some of these tax tips might apply to you and which ones do and which ones don't and that's ron's tax tips is it ron's tax tips.com okay i love it all right so we're continuing on here let's do a few more here ron what else we got besides the the augusta rule besides doing laundry in a hotel besides taking income you know as a as a personal loan from your business what else we got i i love this one if uh if if you've made a mistake in your taxes and now you're hearing some of these and you're like oh i could have done that last year i could have done that i've been doing that for years and i never knew i could deduct it the irs allows everyone to go back and refile their taxes it's called a 1040x and you can amend your previous year's taxes and with that amendment uh they'll not only give you your money back that you overpaid but they'll give it back to you with interest so check that out you made the mistake james didn't know you qualified for this augusta deduction but you can go back in your calendar because i i know mine is an outlook and i know where i'm at every single day i'm like oh well last year i did seven days right and so you can go back refile last year's taxes document the seven days and take that deduction and they'll send you your your money back plus interest so you make the mistake you say to the tax office i'm sorry i made the mistake and i went no worries it's all cool here's your money back and you know what we'll throw in a little bit of extra for good measure yeah i love it thanks irs big fan love your work only the government right only the government and that's called a 1040x where you amend previous years taxes okay cool what else we got ron let's keep going x is an x-ray uh what else that so business gifts are frequently something to get maxed out uh so the a legitimate business gift given directly or indirectly to a specific person is limited to 25 per person per year so uh i i want to give a gift of you know $50 to to ryan who hosted us very graciously i can only deduct $25 of that gift to to ryan okay so instead of a gift given directly to a person or indirectly to a person uh you can get gift cards you can get uh give give the gift card to the company not to the person and make sure you follow the advertising and promotion rules rather than a gift and advertising and promotion there is no limit on you can advertise your company as much as you want right so okay document it properly like who's getting the gift cards and follow some rules but give it to a company and and not to the person directly so in that's in this example that you were using in relation to ryan maran what you're saying is instead of giving the gift to ryan maran you'd give it to ryan maran's company so you would need to know what his company name is it might be ryan maran l lc for example right and so and so you would does that mean that you have to somehow type in or write in that you're giving it to his company or where can you literally get a gift and hand it to ryan the person and say oh no this is for your company not for you like what's how do we how do we ship it to the office under the company name huh okay so if you've got a gift you send it to the person's company and that means that you can what how much can you spend if i want to give something to him yeah right there's gift rules and then there's advertising rules so if the way i advertise my business is i hand out gift cards right i'd still need to document who's getting them and i so the iris knows i'm not buying gift cards and giving it to myself right but you don't want to give it a gift the gears gift rules and then there's advertising rules if the only way i advertise is handing out gift cards then there is no limit to it i see so that means you're looking at as at the as sorry you're looking at the gift you give as advertising not as a gift yeah and there's there's just a few different distinctions in there because the iris defines it what's a gift versus advertising right and they're like it's advertising if it does this this and this and this so one example might be is if i give my if i give my customers some tickets to the game if i go to the game there's one set of rules if i just give you the tickets but i don't go to the game i can treat the cost of the tickets either as a gift or as a advertising or an expense whichever one is my to my advantage gotcha but then don't you have to give the tickets to that that their company rather than to the the person yeah if we're going to meet at the stadium i'd just ship it to the company right and now it's considered advertising which means now you you can claim more than the 25 of that gift right how much can you claim like how much if i'm not going to the game 100 so you send the ticket you buy a couple of baseball tickets you buy some tickets to a game you send it to the company of the person you want a gift and they cost you $500 for the tickets now that is an advertising cost rather than a gift which means now you're set you're you're you're able to deduct $500 versus $25 yeah advertising and promotion yep those are the rules you want to follow i love it yeah geez that's good sounds like you don't get to go to the game that works for like theaters and any kind of performing any kind of performance live performance so so if in if in doubt buy tickets from your from your business and send it to whoever it is you want a gift but send it to their business and and classify it as advertising and promotion yeah and make sure you follow the rules for that that category advertising and promotion yeah okay i love it okay cool there's another good one no more no more no more $25 gift cards for people now i'm going to give them $250 gift cards which i'm going to send to their place of business yeah exactly all right what else we got uh boy we can just keep going let's squeeze out let's squeeze out three three more and then a friend of mine Darren who lives in my apartment building here overheard me talking to you but he was walking down and he heard me talking tax strategy and he subsequently sent me a text message with four questions that he wants me to ask you Ron so there you go you're a very popular man people like even someone who just heard me talking taxes like oh are you doing a tax webinar can you ask this um yeah all right so let's do three more of yours and then i'll pepper you with these questions at the end well let's do uh what would be most impactful let's do well right off your kids if you've got kids uh you use them in the business and there's all kinds of ways to document it properly it's got to be age appropriate activities for the children but i mean one of my business partners brought his son in and we had him like you know when Costco showed up with all the water then he was unpacking the water and putting it in the fridge and he was unpacking the Costco reams of paper and putting that in the cupboard pretty simple activities but you can take and it's similar to the Augusta rule you can take $6,300 $6,350 I believe in 2017 $6,300 and $50 as a deduction in the business you don't have to pay Social Security and Medicare and all that because he's a minor child and he's yours uh it's deductible as the business you pay it to him take him to the bank open his own bank account start teaching him about money and how he's earned money has to be a legitimate wage you know you can't pay him $50 an hour because that's not reasonable for a kid unstocking paper but that that money is completely tax exempt he doesn't even have to file a tax return so if you've got three kids there's $18,000 that can come out of your business and go into three separate accounts for them if they're all doing legitimate work inside your business and you've documented it properly and so the benefit to you doing that for your kids is what and the benefit to the kids is what well I I think the biggest benefit quite frankly is the psychology of it you start teaching your kid about the value of a dollar and how money is really created and adding value to someone else before you get paid and then you know teaching them when when and how to spend it because now it's their dollars the kid catches on very quickly when they're spending their dollars versus mom and dad buy me this toy just paid for the pizza party or whatever I think that's the biggest benefit but the the tax benefit which is I think what you're asking is uh it's completely tax exempt income into your household you shifted it from you being in a 35 40 50 tax bracket between state and federal down to that $6,000 comes out it's deductible for the business and the kid doesn't have to file an income on it right so it's basically a tax it's a tax deduction for you for your business and your child gets it tax-free tax-free income into your household terrific and you're basically hiring your kids right you're using your kids in the business so yes um and and the age appropriate activities for the children like how old is a kid is a is a cod she's sorry this is a bit of a tongue twister here at what age do they cease to be a kid or a child in the in the in the government's eyes uh I I don't think there is a I've never seen a number as far as how young they can be before they can do it uh and I've never seen it a number that that they're done uh until they're I mean at some point they're going to break through that $6,000 income year and they're going to have to start filing that makes sense so let's just say that they're from birth up until they're like just as an example 15 years old you know 15 you can pay them is it six is it annually is it 63 50 um from the business or that that's the amount of money that's tax-free so you can pay him 20 grand if you want but the first 63 6,350 they don't have to pay tax on and you can claim it as a tax as a business deduction yeah and it's it's not bad if you go over the 63 you just got a file and now you've shifted income from your 40 bracket over to their you know 15 bracket it's still a good deal you know if they were in $10,000 that year yeah it's still a good deal yeah you shifted income I'm telling you Ron you've inspired me to want to go out and procreate and produce some kids now it's been tough to it's been tough to get me to to to like you know get married and have kids but now you're saving me money on the kids I'm like any ladies out there that want to like uh you know pop out a couple kids you do it for 10 years that's 60 grand that the kid could be they could pay for their own start paying for their own college or do something with them but uh that's a truckload of money 60 grand per kid tax exempt I love it all right let's go we've got two more and then I'll get these questions this is great we're talking to Ron Fossum international tax expert on how to beat the tax man you can check out more of him at ronztaxtips.com what's another one Ron? I like I said I got my start in real estate for my investing once I started getting out of the stock market type stuff and looking for other alternatives I got heavy into real estate so if you restore a historical building in certain territories uh and like the go zone for example if you built after a hurricane Katrina there's some there's some other areas they're very specific areas if it meets a historical criteria then and you restore the building to its original stature then frequently the IRS will give you a tax exempt status for that building and so the rents that that building then generates are tax free so you got to buy a dilapidated building that meets a historical standard everyone agrees that it's you know it's a good deal uh and negotiated in advance then they they literally give you a tax exempt certificate that says the rent that this generates is tax free that's unbelievable it's unbelievable so you can so you have to buy a historic building you'd have to buy this right as long as it's it's it's considered a historical building and then in most cases not all but you have to check you get a tax exempt status for it which means all the tax that you receive from any of the tenants that live in there in forever i'm assuming is tax free yeah so so long as the building continues to be the standard they'll usually give you a certificate for like five years or ten years and then they're gonna look at the building and make sure it still meets his normal standards but yeah yeah absolutely the more the more i'm hearing you go through these strategies the more i'm actually on the side of president donald trump where where he comes to like not wanting to show his his um tax returns because he's being ordered now time might tell maybe he has to produce them but i i tend to the the more i get into these conversations about taxes the more i tend to lean towards the idea that he actually doesn't have anything to hide it's just he's literally just playing by these irs rules and he always like in the two in the 2016 debate between trump and hillary clinton it's all the democrats were always like show us your tax returns what are you hiding show us your tax returns the bomb shells that are hiding in there maybe there's no bomb shells in there at all maybe it's just a very clever use of the irs code and maybe it's not even a clever use maybe it's just you consider it if you do your reading and you do your research and you read it thoroughly enough you understand the rules you play by the rules and you can end up paying no tax or very little tax am i am i articulating that well without earning the uh the wrath of all the anti-trump listeners out there who will start abusing me and sending me messages saying i can't believe you're defending trump i'm like well i'm not defending trump i'm just i'm defending the idea that you can use the irs code to your advantage legally yeah absolutely and let's use someone a little bit more neutral you're dead on by the way but uh you know robert kiyosaki wrote about this in rich dad poor dad uh and sold 60 million books the tax code is written for self-employed people and the highest tax that you'll ever pay is as a w2 employee so it's not new news and it's been around for a long long time he just has implemented it probably on a massive scale i haven't seen his returns but uh i would strongly suggest that he just implemented it all and so the people that haven't implemented it are probably the ones that are upset the most so you saw he sold millions of books robert kiyosaki but are you saying that that that he's managed to keep most if not all of that money because of the way that he structured the the dealer and what what do you think or know that he's done yeah roberts robert loved real estate right and so he used a lot of 1031 exchanges where you bought a house and sold the house but you exchanged it in like it's called a like kind exchange under the tax code you can do it for life insurance you can do it for annuities you can do it for real estate all kinds of stuff when you swap one investment for another investment and it's the same and then you don't have to pay tax on that transaction and you can defer it defer it defer it you can essentially defer it nearly forever uh by following a certain set of guidelines and he just kept all of his money you can keep buying so he played monopoly right he started with one rental got several rentals sold them by about a bigger you know forplex and then by hotels and just got in i mean he he played that game all the way up till he started buying gold mines hmm because it's all real estate so there you go if you're into real estate check out 1031 exchanges and then also talk about consider restoring historical buildings let's do one last one and then i'll rattle through these questions here oh let's let's do a good one uh as opposed to what the ones you've given us so far which are crap let me do this one uh i'm going to read this one right out of the code as well and this is if your presence is required or not required in your trap whether it was something is a vacation or it's a business trip okay so uh if your presence is required count it as a business day or any day your presence uh at a particular place for a specific business purpose count that as a business day and this is directly out of the code count it as a business day even if you spend most of the day on non-business activities i love it so let's use an example what's an example of that so uh wouldn't it be fair to say that you and i were both guests at someone else's event that's a key point if it's our own event we have control over the schedule and it's not going to fit this rule we'd have to use some other rules but you and i were at an event uh hosted uh by someone else and he dictated the schedule right so when when you were on stage and when i was going to be on stage the days that we had to be there he all asked for that and we followed his schedule it's his event so we showed up for that and he said ron you're gonna speak on uh friday at two o'clock and expect to speak for 45 minutes or an hour great so that morning i run down the street and i go to disneyland yeah that's not a business activity i'm not conducting any kind of business in disneyland i come back and i speak at two o'clock that afternoon it's it the whole day as a business day and how how do you deduct it a business day does that mean like all the money that you spent during that day as considered a business expense even at disneyland or is it like a daily rate that you can deduct what is it if your principal business activity during work hours is in the pursuit of the trade of your business count that day as a business day as deductible also as a business day in any day you're prevented from working because of circumstances beyond your control this one came up i was at an event uh this guy's had me back like four different times and he just constantly changes it so i got to fly in thursday night i got to be there for the event you know friday and saturday and then sunday is going to be my travel day back home and inevitably he changes it like it's beyond my control he says well someone else didn't show up ron we want you to speak uh saturday so take friday off well i'm already there i control but now everything that i do friday is a business day and deductible i'm captive to the host changing the schedule right like got canceled that kind of stuff right that makes sense yeah it does yeah it's so what can you claim as a tax deduction is it like the cost of you going to this event or is it whatever you spend during that day like what's the what's the the tax deduction you can make it almost all your travel is absolutely going to be deductible your meals are going to fall under the meals rules uh but you follow you you want to look into your travel status everything that's deductible in travel status uh is it is a business day and everything in that business day is fully deductible i love it my entrance into disneyland which was it they're trading a hundred bucks or something to get in nowadays fully deductible yeah so now i can go to disneyland buy some candy floss what do they call we call it fairy floss what is cotton candy that's it the americans you americans love to call it cotton candy i'm eating cotton candy i'm eating crap food i'm spending a hundred bucks to get in and then i decide i want to go for a three course meal at the boy you can eat buffet at disneyland i'm eating that and then i race back and i do my talk i can claim all of that disneyland expenditure you can you can claim it all but uh the entrance would be fully deductible the food would be under the the food rules which are usually 50 percent there you go i love it this is all good stuff ron um my question is let me piggyback that one real real quick yep counting certain weekends and holidays and again a straight out of the code count your weekends holidays and other uh necessary standby days as business days if they fall between any two business required business days if they fall if they follow your business meetings your activity and you remain at the business destination for non-business or personal reasons don't count them as business days so you and i were speaking at this event and it was a friday saturday sunday event and you and i decided for non-business reasons we're gonna hang out tuesday monday tuesday and wednesday and then go home right yep there's no required business on monday and tuesday um that then those aren't deductible if we get done sunday and there's a required business reason that we're there wednesday so now we bookended this monday and tuesday still count as business days because i'm required to be there till wednesday gotcha make sense two random days bookended with business on either side they become business days if i don't bookend it and i'm just staying in extra a couple days it's not a business day it's not deductible so my question is thank you for sharing that one my question is in terms of keeping records right is if in doubt should i should i just make all these expenditures on my business credit card for example as a business expense or should i be doing it on personal credit cards and business should i be keeping physical receipt should i is it enough just to have the the electronic receipt which comes up on your credit card statement like how do we kind of like organize and understand these things because here's the thing i might go traveling and i've listened to you give me this advice and in my head i'm like now hang on a second ron said that i can do this thing where i'm speaking and i'm counting the weekends and the holidays maybe i'll put this on my credit card should i make a note to remind myself that if i get audited i'll need to prove that also i just like ah whatever it's fine just put it all on the business credit card as a business expense and we'll be fine so well what's your advice around that yeah there's there's a couple things uh it's so easy to track stuff now and so there's a if you're into using the vehicle stuff right there's an app you can put on your phone that tracks all your mileage and you literally swipe right if it's a business deduction and puts it in the category swipe left if it's a if it's personal and still puts it in the category like it's charity but it's personal still deductible it tracks all of that so it's super simple stuff there's also apps that allow you to take the receipt that you just take a picture of the receipt and it uploads it into your books and then you can categorize it that way so you don't have to have the physical receipts uh digital copy is fine and then sometimes you don't even have to have receipts so like meals the IRS has said meals up to 75 you don't have to have the physical receipt you still need to track if it's a business lunch you know the who what when we're in how you know where did you go who did you talk to would you talk about why is it a business meeting what was your intent to make a profit and just document that in your notes i tend to keep everything in my calendar and uh yeah i back up my outlook left right but that's that's where i tend to keep it off so am i being ineffective or or or full hardy if you like where i will go on a trip travel for example and i know it's work related i'm doing it on my instagram and doing on my snaps my snapchat i'm sharing it i'm doing it's all related to business and i'm just putting it all on my company credit card and just trusting that you know when it comes up it'll show oh look i was in Vilnius Lithuania on this date i was definitely speaking at matt post years event oh look this is in austin i knew i was speaking at ryan maran's event that's business oh look i made a transaction here in bristol in the uk i was filming my personal life with my brother and nisa nephew on my insta stories to show a lifestyle business like and and just keep putting it on there is that full hardy to just be making those transactions on the cart and not making some other or not collecting physical receipts or not you know typing something down to justify in the moment that it's a business expense yeah the the irs is something about it being recorded concurrently which then it later defined concurrently according to webster is at the same time but according to the irs definition it's sometime within a week you've documented something so what's on your credit card statement is most of the information but they're certainly not going to tell you who's who's there right so you and i have lunch where we are and how much the lunch is is obviously there but my name isn't on your statement and what we talked about is on your statement and the irs knows none of us have you know photographic memories so i would go one step further and start making notes on your statements of the missing information that you're going to need so does that mean i've got to wait for a physical copy of the statement and then write a thing like i'm not going to trust me i'm not going to do that right so yeah so what's the what's the what is the best thing in the moment that i can do to cover my ass so to speak yeah so so download an app that takes you got to receive you're in the restaurant like this is going to be done before you leave the restaurant you're going to take a picture of your receipt it's going to upload it and you're going to put your notes right there and you you literally just hit your speaker and say this was lunch with Ron and we spoke about some tax tips and maybe i'm going to hire him for you know x y z and now it's all uploaded and that's going to be if in the event of now you've got to document it and you've got your credit card receipt that's going to show up or your credit card statement it's going to show up 30 later and now you've got those two in the event that are going to be filed in the event of an audit now you've got it is there an app that you suggest i like mileage iq for the travel or for the the vehicles i don't own it it's good it's super super simple if you're trying to track vehicle stuff and then most i mean almost everybody all the all the books company whether it's you know penny or quick books or whatever they all have a feature to upload receipts so just just use whichever people are all over the board what what they use for books but okay sounds good i like it um a couple questions i'll upload it in a minute is i mean the time if you're gonna try to oh i'll do it at the end of the week and catch it up or you don't do it you don't do it life gets in the way you just don't do it you're too busy moving on to the next thing um okay so a couple questions here from darin in my apartment building uh who overheard our conversation how do you organize your records for your accountant well we give them read only access to the bank account so they can just go in and look we train them when you first take on an accountant we train them exactly what it is a lot of this stuff that we do is pretty habitual right so this is always going to be deductible because of this this and this and so they always get it categorized right but they never have access to the money i've heard you know horror stories that account frame out for the money because they had access to the cash just give them read only access yeah i do that i have an accountant and i i they have my username and passwords and i i just give them read only i give them full capacity to make transactions for me like i don't i don't like getting slowed down by like i have nine people who work for me now across the globe and they they always used to send me invoices and then i would physically go into my bank account and i would transfer the money and pay them now i've got a system down where i say don't send me the invoice send the invoice straight to my accountant and my accountant has my username and password and my accountant pays them so i never see an invoice um the accountancy is it and they have full right to to go in at some point you just got to like trust your accountant it's not like unless you're kind of like sylvester Stallone's character in the movie rocky five where uh the movie starts with him you know his accountant basically robbed him of his millions of all the money that he made and now he has to move back to the suburbs of philadelphia that's a that's probably not going to happen in the most case that might happen zero point zero zero zero one percent of the time but for the most part i think you got to trust your your accountant to do those things yeah either that or give them set them up a separate username and password and put uh transaction limits on yeah that's one way of doing it right so it's even though from one of the spectrum they can only read it they can have their own username with limits or you can do full access it you know a lot of it is is what's gonna serve you best so that you actually use it and implement some of the other questions here from Darren you you may have just answered actually um he says do you forward things to your bookkeeper do you file things yourself do you log receipt purposes like mileage etc i think we kind of met we covered those didn't we anything else any other notes on that or do we cover that yeah it's a lot of times that when you're when you're well here's the deal uh you're going to have to outgrow if your business is successful you're going to outgrow your professionals you're probably going to outgrow your attorney you're probably going to outgrow your bookkeeper you're probably going to outgrow your cpa tax planner um if you're trying to get to be a professional football player and you're still being coached by your high school coach odds are you're never going to make it right so uh know that that there's points when it's time to let go of this bookkeeper let go of this account and get the next one up right uh so that that's part of it and then there's some value in it's usually right around three years i have every single one of my professionals audited by someone new so that because i know i can go back and refile for three years so even if they're missing something i can i can have someone new come in with the new strategies and if they can still find stuff i can go back and still get it mm-hmm does that make sense yeah absolutely um and that's a it's a nice segue into the final question that darin asks which is walk us through your daily actions to keep your accounts and finances in order and what you're looking for and ways of minimizing tax so yeah walk us through your daily actions ron yeah so i i'd leverage an assistant quite heavily um so everything goes to to her and she has a separate little scanner on her desk so she scans all the receipts she does it all in the moment i don't even take the picture and upload it um and then she holds me accountable so and then from my assistant it goes to the bookkeeper and the bookkeeper does the monthly stuff and then the end of the year the accountant does that stuff and then like i still have tax planners look at my stuff uh so i tax plan for other people but i don't know at all yeah if there's a new deduction out i want to know about it if something applies to something i'm doing by the way here's a really good one do something in the real estate space because it's impossible to go anywhere and not be on or looking at real estate but no matter where you're going you're in the real estate business right not not all of us have this you know i've got a podcast and i've got these interviews like the lifestyle that you've got any business that you've got set up around it so say say you're in real estate and follow those real estate rules but it's impossible to go anywhere not be in the real estate business i love it that's a great rule i'm a big fan well ron we're gonna wrap this up we could go on for another three hours and i would love to but at some point we got it we got it we got to cut it right that's um uh just a reminder if you're listening or watching just go to ron's tax tips dot com and you can find out some more things you could connect with uh ron fossum there um but some amazing amazing tips here we've got uh take your hobbies and turn it into a business um don't defer tax until retirement um have a tax exempt retirement structure instead of taking income taxed as ordinary income take a sharehold alone um doing laundry on your in your travels is tax deductible which is pretty awesome the august rule which is my favorite which is up to 14 days of the year you can host um people in your home and and claim that as a tax deduction on your business while also paying your personal account tax-free uh income um the IRS allows you to do a 1040x which amends the previous year's taxes plus they'll give you some interest back on it as well so you make the mistake and the the IRS says ah no no worries it's okay but we'll give you some more money as well i'm like sweet cool um business gifts versus advertising in promotion if you want to send someone a gift classified as advertising in promotion that way you get um a much bigger tax uh deduction than if you're just giving it to the person um if you're giving it to the person you're only can deduct $25 per person if you've got kids write off your kids use your kids in the business you can take a $6,350 deduction in the business and the and the and your kids get that uh tax-free um real estate if you restore historical building sometimes you can you can have the building be tax exempt wherever you go you'll consider yourself in the real estate business which means you can deduct travel expenses or things that you're doing in that place so long as you're looking at real estate to buy 1031 exchanges um when you're speaking at someone else's event and your presence is required or even if you're not speaking someone's event if your presence is merely required um then look at the then that could be a business day and look at you know counting weekends and holidays uh as well in terms of being a necessary part of your business that you can um deduct um be sure to record concurrently which means instead of just putting things on a credit card take a photo of a receipt upload it to a book to an app like quick book or Miley Day Q or any of those things and then also the last point I would say is invest in an advisor like Ron um get a tax attorney get someone other than just your accountant who in most cases will not know all the nitty-gritty of of the stuff that Ron Fossum has shared with us today was that an okay summary Ron wow I couldn't have been more succinct in in that summary talk about a near photographic memory my goodness yeah I'm I'm just that good run I've been doing this a while Ron Fossum is his name uh check out ron's tax tips dot com Ron thank you so much this has been so valuable to me personally and to my listeners I really appreciate you taking the time to to share your your wealth of knowledge with us sir oh happy to happy to be here thank you I'm honored