deductions

 

Millionaire property investor Rob Rowsell’s CPA explains how real estate investors can benefit from discretionary expense write-offs. These tax deductions are key to legally avoiding paying too much in taxes and fees. Pay close attention to this tax advice, and remember: Saved taxes is another income stream!

Discretionary Expense Write-Offs for Real Estate Investors and Tax Breaks for Multi-Family Property OwnersWhat Qualifies As Discretionary Expense Write-Offs?

Discretionary Expense Write-Offs can benefit Property Investors immensely. CPA Kevin Bassett starts the clip by explaining that deducting Owners’ Discretionary Expenses (ODE’s) is one of his favorite tax strategies. Others refer to it as Perks or Grateful Expenses.

Next, he presents his one page form on pre-taxing your lifestyle. When he starts working together with a new client, they fill out this form. The client does this in order to determine which of their expenses are deductible.

Kevin’s Top Six Discretionary Expense Write-Offs

  1. Company Vehicles and Work Trucks
  2. Home Office Space
  3. Home Internet Bills and Other Office Expenses
  4. The Augusta Rule (See Below)
  5. Shareholder Meetings
  6. Putting Your Spouse and Kids on Your Payroll

Regarding shareholder meetings, Kevin mentioned that this deduction is fairly straightforward if they are in US territories. Why not hold your shareholder meeting on the beach in Hawaii, since it’s tax deductible? Kevin recommends putting your spouse on payroll, in order to double your IRA deduction. Also, he pays his kids the IRA limit of $6,500 annually to work in the office. He invests the money in an account to meet everyday needs when they go to college. He also contributes to a 529 account for their tuition, and deposits into a pre-taxed Roth IRA for their retirement. The earlier you start investing, the more the interest will compound.

Kevin went on to expand on writing off your home office. When you invoke the Safe Harbor Rule, the IRS will not audit this deduction. Using this simplified deduction, you can write off $1500 on your home office space. This is based on $5 x 300 square feet. Benefits include no depreciation recapture (no gains when you sell your home on that 300 square feet), and no need for you to itemize. Let’s say you have two businesses in your home, each in a different room. For example, you and your spouse both work from home. You may be able to write off both home offices. Check with your CPA to confirm this.

The Augusta Rule

If you work from home, the IRS allows you to rent your home out for up to 14 days tax free. Your S-Corp (not an LLC) can pay a rental fee to use your home office for meetings, and you may deduct that amount. The amount you charge can be a fair market rate based on hotels and AirBNB properties in your area. Many companies will use the Augusta Rule by hosting quarterly meetings and their annual Christmas party in home.

Finally, Kevin reminds us to be thorough when listing our companies’ discretionary expense write-offs. However, don’t be greedy. After all, pigs get slaughtered.

Join Our Community

Do you own multi-family properties? If not, do you aspire to one day? Then you should consider joining our online discussion group, the ATL Inner Circle Community! Each month, Rob Rowsell will teach you what you must do in order to build wealth in the real estate business. It’s not as easy as it looks! Property taxes, liens, and legal fees can all be hard to navigate, so having a successful guide in your corner like Rob is a must! Sign up today!

Rob Rowsell’s personal CPA shares a key Real Estate Investor Tax Strategy: write off meals, conferences and events, and sponsorships. Learn how to write off each of these deductions to get the most returns while avoiding a costly IRS audit.

Write off meals, write off conferences, deduct sponsorships as part of your real estate tax strategyWrite Off Meals, Conference Events, and Sponsorships

Kevin opens up, introducing the term “pre-taxing your lifestyle”. When you start a business or begin investing, you can start deducting things you were already spending money on. First, he breaks down the rules for us to write off meals. Business meals are 50% deductible. This is down from the 100% deductions we were able to take during Covid. Overtime meals, or OT meals, are 100% deductible.

What about Entertainment expenses? Sadly, we can’t write off any expenses like concert tickets or golf games. However, when that entertainment is part of a corporate function, it is 100% deductible. A corporate function means that you are paying for your entire team to participate.

What about ways we can write off meals completely? Corporate functions can include company picnics or snacks you buy for the office to share in their break room. Also, the aforementioned overtime meals, such as a pizza to feed more than half of your staff working late, count.

Another way to write off meals includes promotional food provided to the public. Also, you can write off food reimbursed from customers you pay for on a consulting trip.

When You Can Write Off Meals 50%

 You may deduct half of your food expense for business meetings with less than half of your employees. Owners’ meetings and meals with customers and vendors also qualify. When you buy meals on business travel, including seminars, out of pocket, you can deduct 50%.

Write-Offs For Corporate Events And Sponsorships

If you treat a customer to a sporting event, you sadly can’t write it off. However, if you take your whole staff to a game, you may deduct 100%. If you pay for a round of golf with a client, it’s a 0% deduction. But let’s say you sponsor an entire golf tournament! Whether it’s a charity game or just a regular sponsorship to get your name out there, it is 100% deductible. Now, that’s thinking big!

Join Our Community

Do you own multi-family properties? If not, do you aspire to one day? Then you should consider joining our online discussion group, the ATL Inner Circle Community! Each month, Rob Rowsell will teach you what you must do in order to build wealth in the real estate business. It’s not as easy as it looks! Property taxes, liens, and legal fees can all be hard to navigate, so having a successful guide in your corner like Rob is a must! Sign up today!

 

Vehicle write-offs are crucial for real estate investors looking to save money on taxes. Listen to real estate expert Rob Rowsell’s personal CPA explain how to write off your vehicle expenses for maximum savings.

Vehicle Write-Offs - Rental Property Investors should write their expenses off properlyVehicle Write-Offs Tax Tips

Rob’s CPA Kevin Bassett starts off explaining that every business owner should look into vehicle write-offs. Whether you invest in real estate or you own another kind of business, you can write it off on your taxes. The only requirement is that you must use the car or truck for business purposes at least 50% of the time in order for your LLC or S-Corp to claim ownership. Otherwise, you must personally own it, and claim the standard mileage deduction, which is 67 cents per mile.

Kevin then moves on to review the 2023 vehicle depreciation rates. You can write off up to $20,200 of the cost of a regular car, including bonus depreciation. Vehicle write-offs for SUVs that weigh more than 6,000 lbs are eligible for up to $28,900 deduction. When writing off a truck over 6,000 lbs with a six foot bed, there is no limit to your write-off. This is not a recommendation to go buy a $100,000 truck at the end of the year, but if you need one, and your business profited enough, go for it.

Join Our Community

Do you own multi-family properties? If not, do you aspire to one day? Then you should consider joining our online discussion group, the ATL Inner Circle Community! Each month, Rob Rowsell will teach you what you must do in order to build wealth in the real estate business. It’s not as easy as it looks! Property taxes, liens, and legal fees can all be hard to navigate, so having a successful guide in your corner like Rob is a must! Sign up today!