taxes

 

Successful Multifamily Real Estate Investor Rob Rowsell outlines his Tax Reduction Strategy. The tax reduction program consists of four strategies business investors like you use to reduce their tax expenses. Remember, reducing your taxes IS a source of additional earned income!

Tax Reduction StrategyTax Reduction Strategy For Successful Investors Outlined

Rob has spoken previously on how much of a wealth drain that tax drag can be. Some listeners request that he expand on his tax reduction strategy. It boils down to four principles:

  1. Structure Over Deduction: Finding tax deductions in your records is important. However, making sure your business is properly structured is more so. Setting up your business as an LLC ensures not just legal protections. It also sets up the advantage of tax treatment. Make sure you hire a CPA and business consultant to help you properly structure your business.
    1. Pay yourself tax efficiently. A good accountant will advise you to pay yourself a conservative salary as a safe harbor against audits.
    2. Plan your exit before entering into any project. Knowing the end game before you structure your business will save you time and money in the long run. Restructuring can be a real hassle.
  2. Invest Your Money Tax Efficiently.
    1. Savvy tax planning is the absolute lowest risk way to quickly boost your investment returns.
    2. Invest your money in the right places. Generally, long term capital growth investments go into taxable accounts. “Ordinary income” cash flow investments should be deposited into tax advantaged accounts. These accounts may include retirement accounts such as Roth IRAs.
    3. Leverage unrealized gains to compound tax free. This means using equity in your business to acquire needed tools and even add a second location.
  3. Pay with PRE-Tax Dollars.
    1. Push every legitimate business expense to your business. This way, you will get an automatic discount every time!
  4. Plan BEFORE You Play.
    1. Plan the tax impact before you make any big business decision.
    2. Meet regularly with your CPA. Keep them in the loop on your plans as soon as you possibly can.

Join Our Multifamily Investing Community Today

Do you own your own multifamily rental properties? If not, do you plan to do so one day? Then you should consider joining our online financial group, the ATL Inner Circle Community! Each month, investing pro Rob Rowsell will teach you what you must do in order to build wealth in the real estate business. It’s not quite 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!

 

Successful Multifamily Real Estate Investor Rob Rowsell is here to explain the answer to a burning question. How can YOU can cut tax drag that is sapping the returns from your investment portfolio. Do you want to invest your money wisely? Then you need to take the time to reduce your tax expenses. That is a key component in any multifamily real estate investment strategy. Watch, learn, and then apply this knowledge. Then, you’ll start saving on your precious investment taxes!

Cut tax drag - it can be done if you do the math and calculate your investment expenses.Cut Tax Drag On Your Investments Safely And Legally

Rob starts out by explaining that there are a few major expenses that we all want to avoid as investors. Tax drag is way up there on top of that list. There are just four key ways that our favorite multifamily magnate Rob Rowsell recommends for all investors to cut tax drag:

Choose Structure Over Deduction

First of all, you must make sure that you will always pay yourself tax efficiently on payday. Do you earn a W2 income working for a business that you own? Then your CPA will tell you that you must pay yourself a typical salary range for that position. However, you will want to pay yourself based on the low end of that salary range. That way, you will pay much less in both your income and your payroll taxes. If you are a smart business owner, then you should be able to afford to live on that smaller salary amount.

This practice of paying one’s self tax efficiently is a key component of tax rate arbitrage. The concept of tax rate arbitrage means you use different types tax rates within your business in order to lower your overall tax bill.

Finally, you will need to make sure that you will plan your exit before you go in. This means that you will decide the proper legal entity for your business, such as an LLC, S-Corp, or C-Corp. None of these corporate entity designations are wrong in and of themselves. You must decide which one is the right choice for your specific industry and your intended  pursuits.

Cut Tax Drag By Investing All Of Your Taxes Efficiently

Without a shadow of a doubt, savvy tax planning is the lowest risk way for you to immediately boost your investment returns. Rob repeats this important mantra often: saving on your taxes will create another income stream! Rob has saved well over $250,000 in a single year, all because of his CPA’s savvy tax planning strategies.

Most of the time, you will want to put your long term capital growth investments in your taxable accounts. Your ordinary income cash flow investments, on the other hand, should all go in your tax advantaged accounts. A Roth IRA account is one example of such a tax advantaged account.

Last of all, in order to invest tax efficiently, you should leverage your unrealized gains so that they will compound tax free. Your unrealized gains might include the value of your property increasing after you purchase it. Perhaps you bought a business and then you increased the income that it is generating. You are not taxed on that business income. That way, you could take out some low interest loans from your lender against those numbers. You could use that money in order to scale your business, so you can realize even greater success!

Pay With Your Pre-Tax Dollars

Rob’s third principle to cut tax drag is that you should pay your expenses with your pre-tax dollars. What does that mean for all of us investors? Make sure that you will push all of your legitimate business expenses into your business. When you do that, then you will earn your business an automatic discount. Unlike your employees who are paid and then taxed, an LLC business owner can pay their expenses before they are taxed on their earned income.

Plan BEFORE You Play

Finally, you will need to plan what the tax impact will be of each and every potential investment that you intend on making. Once you reach Rob Rowsell’s high  level of real estate investment savvy, you might just know by June what you will pay in taxes at the end of the year! That is one of the many advantages of regularly consulting with an experienced, hard nosed CPA on your investment plans.

Just make sure that you meet with your CPA in order to plan your tax strategies regularly. Keep them in the loop as early in your planning process as possible. When your CPA knows all the machinations of your plans, they can stop you from making costly mistakes. Many plans can change when you are drawing up investment strategies. Whenever your plans take a left turn, call your accountant immediately, so you can make the necessary adjustments.

Join Our Multifamily Real Estate Investing Community

Do you own your own multifamily rental properties? If not, do you plan to do so one day? Then you need to 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 your wealth in the multifamily real estate business. It’s not as easy as it looks from the outside! Property taxes, liens, and costly legal fees can all be hard to navigate, so having a successful guide in your corner like Rob is a must! So sign up today!

 

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!