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If you want to pay fewer taxes or outright avoid taxes in 2024, you’re in the right place. We’re about to give you all the last-chance tax tips and loopholes you can use NOW to pay WAY less in taxes in 2024. All of these are perfectly legal, but many will require some form of real estate investing. Don’t own any rental property yet? Not a problem! You can STILL start planning to pay lower taxes BEFORE you buy!

We brought back our two favorite tax experts, Amanda Han and Matt MacFarland, on to the show to share all the last-minute tax tips YOU can use to pay Uncle Sam less and keep more in your pocket. Plus, Amanda and Matt share a tax “loophole” that anyone who makes under $100K per year OR owns a short-term rental property can use to save thousands, if not tens of thousands, in taxes.

We’ll also get into common ways anyone can reduce their taxes through retirement account contributions, charitable donations, and more. Plus, the common misconception costing you thousands of dollars in write-offs that you never knew you could take!

Click here to listen on Apple Podcasts.

Listen to the Podcast Here

Read the Transcript Here

Rob:
Welcome to the BiggerPockets Podcast, show 846. Today, we’re talking about what you can do in the last 30 to 90 days of the year to impact 2023 taxes and get your financial house in order for a better 2024. And today, on loan from our sister show, BiggerPockets Money, Mindy Jensen is joining as my co-host today.

Mindy:
Rob, I am so excited to be filling David’s shoes today-

Rob:
Excited to have you.

Mindy:
… so that he can take a day off and work on filling out his beard.

Rob:
Right. I know, it’s getting a little out of control.

Mindy:
Whether you just had a major tax bill due, or you’re new to real estate, can you still impact how much you’re going to pay to Uncle Sam this year? Well, we are here to share some ideas for how you can pay less this year, and set yourself up to save more next year.

Rob:
And that’s what we do every single week on the BiggerPockets podcast. We bring you stories, how tos, and answers you need in order to make smart real estate decisions now, in today’s market.

Mindy:
By the way, in today’s show, you’re going to hear how you can write off your pro membership.

Rob:
Right, that’s just a tip.

Mindy:
That’s just a tip.

Rob:
It’s just a tip. Not a quick tip, but it’s a good one.

Mindy:
It’s an extra quick tip.

Rob:
Welcome to the show, Amanda and Matt. How are you doing?

Matt:
Great. Thanks for having us, Rob and David. I mean, Mindy.

Mindy:
I know, we look a lot alike, so it is hard to … I get that a lot.

Rob:
How’s everyone doing?

Amanda:
Awesome. I think contrary to popular belief, a lot of people who see us nowadays are thinking this is our slow season. But actually, for people like us who focus heavily on tax planning, this is actually a pretty busy time for us. So we’re really excited to be here, and share all the tips and tricks on what investors can do to protect their hard-earned money.

Mindy:
You said the P word, tax planning.

Rob:
Yeah.

Mindy:
I guess that’s the TP word, the different TP word. I think that’s really important to note, that your tax professional can help you plan for saving this money, but they can’t help you plan for 2023 at the end of 2023. They’re helping plan for next year, so the best time to talk to your tax professional is now for next year’s taxes. The best time to talk about 2023’s taxes was last year, at the end of this-

Rob:
I was going to say, a year ago.

Mindy:
A year ago, yeah, just about a year ago. Because there are things that you need to be doing during the course of the year, as Amanda and Matt will share. Because they’re the tax pros, not me.

Rob:
That’s true, that’s true. Taxes are a very interesting game of dominoes and chess mixed together. It’s the 4D chess, as they say. And Amanda and Matt, you’re going to give us an overview of areas that listeners can still make changes to in 2023 to improve their tax situation. So I believe today, we’re going to be talking about things like retirement accounts, HSA accounts, withholdings, charitable donations, real estate deductions, including one that I’ve never heard of.

Mindy:
We’ll also get into how you can stay in good standing with your tax team. I have a bit of a rant on this one. And best practices in the industry to help make tax time less stressful. Amanda, why is this important? And, is it too late to change anything in 2023? I know I said that the best time to plan for 2023 was the end of last year. There are still things we can do this year. What are some of the things that our listeners can do to help fix their 2023 tax situation?

Amanda:
Well, I think if you’re a listener who has already been doing tax planning, starting with earlier this year, let’s say in January, 2023, then you’re probably ahead of, I don’t know, 90% of investors that we meet. So the reality is, most investors have not done appropriate planning this year. And if you fall within that large number of people who haven’t done it, year-end planning is sort of like the last ditch effort on making sure you could still do certain things before year-end to have the right facts to pay less taxes next year. Effectively, where your numbers fall on December 31st determines how much taxes you will pay or save by next April.

Matt:
Yeah. I mean, there’s still a few things you could do next year to impact 2023 taxes. But obviously, there’s a lot more you can do between now and year-end. A lot more options you would have to put in place now, versus obviously waiting until after year-end, for sure.

Amanda:
Yeah. I think we talk a lot during the year about … an example might be, how do we pay our kids and take a tax deduction for it? So inevitably, sometime in early next year, somebody will say, “Hey, I heard you on a podcast where you said to pay my kids, and I really want to do that now for last year.” Well, guess what? It’s too late in 2024 to pay your kids for 2023. But right now, it’s not too late to pay your kids for 2023, as long as all of that is done correctly before the end of the year. So that’s just one of many examples of what else we can consider in the next, like Rob said, 30 to 60 days to still get some pretty massive tax savings.

Rob:
Well, I’m excited to dive into that, but before we do, we’re going to take a quick break. Okay, and we’re back with Amanda Han and Matt MacFarland. Let’s get into a few things that you mentioned on that list. What are some things that listeners should be doing with their retirement accounts and HSAs before the end of the year? Matt, I’ll start with you.

Matt:
Yeah. I think one of the things that, first and foremost, they should be doing is definitely talk with their tax advisor about how the year’s going, and what type of retirement account is going to be best for their business or their activities. Right? So it’s not one size fits all. There’s obviously loads of different kinds of retirement accounts, but you want to figure out which one is going to be the best for your situation. How much income did you make this year? Do you have any employees? How much are you wanting to contribute? What’s your tax liability going to be? All those good questions.
Because some of the retirement accounts may need to be set up before year-end, and some of them may actually not have to be set up by year-end and not even funded until next year for this year. So it’s going to depend on everyone’s personal goals, for sure.

Amanda:
Yeah. If you’re someone who had active real estate income, or I guess income of all sorts, but we’re talking specifically to people in real estate. So for example, if you had a lot of wholesale income, fix and flip income, or just realtor commissions, there are generally really great ways for you to maximize your tax savings by putting money towards retirement account. And so one way to look at it is, if I had $60,000, would I rather pay that to the IRS, or would I rather redirect that money towards saving for my own retirement? And if I put it towards retirement account, not only do I get a tax deduction for it, but I could also potentially use it to invest in real estate as well, through a self-directed investing avenue.

Rob:
Yeah, okay. So is $60,000 the max that you can contribute to your retirement account, or how exactly does that work?

Matt:
Yeah, it’s around that number. It’s a combined number between what you can do as an employee and what your employer can do when you put them two together. Now, that’s for defined, and they call it defined contribution plans, like a 401k. If somebody fits the right profile, there’s even options like a defined benefit plan, that don’t have those limits, where we’ve seen people put 150, $200,000 into it every year. So yeah, there’s definitely different types of plans, different limits. But yeah, to answer your question, that’s around at what it is for those 401k type plans.

Amanda:
Yeah. I think the max this year is about 66,000 in the 401k, and then the defined benefit plan Matt is talking about, could be added on top of that too, so it’s not one or the other. A lot of our clients looking are able to do both of those together.

Rob:
Oh, okay. And Mindy, is this something that you’re doing as well?

Mindy:
Yes, but I didn’t have that defined benefit plan, so now I have to go talk to my guy, but I have a self-directed solo 401k. So I am a little bit older than probably some of the people that are listening to this show, I have a lot of 401ks from past jobs. And every time I left my job, I would just roll it over into an IRA. And when I became self-employed, I’m a real estate agent, so therefore I am self-employed, 1099, and you have to have self-employment income to have a self-directed solo 401k. I gathered up all of my IRAs, I rolled them into my 401k plan, and now I can use that pot of money to invest in real estate. I can use it to invest in the stock market. I can use it to make loans to other real estate investors, private loans. I can use it for a lot of things.
There are a few things I can’t use it, to invest in weird collectible things like cars, and I think paintings, and wine. Conveniently, none of the things I want to invest in anyway, so it works out really well. I want to invest in real estate, the stock market, and make private loans, so it works out perfect. But what I do is I funnel all of my real estate agent income into that account. That is 100% tax-free, because it’s going there before I pay any taxes on it. And then, my company matches up to 25% of my income. So I think the contribution limits this year are 22,500 if you’re under 50. You get an extra 6,000, if you’re over 50, which I am. So now I’ve got 28,500 in that account, plus 25% of that on top of that that my company matched. So that is the amount of money that goes in there right off the top of my income.
My husband is under the same rules, so he also has a self-directed solo 401k. So every year we can legally, I don’t want to say legally redirect, but legally redirect money that would’ve been taxed to this non-taxed account of … I didn’t do the math really quickly. 28 and 28 is 50-something plus-

Rob:
56k.

Mindy:
Yeah, plus 25% on top of that. The first 60 or $70,000 coming in, we’re paying no taxes on.

Rob:
Dang, okay.

Mindy:
And the reason we’re able to do this is because we have other sources of income and other buckets that we can pull from to live off of. And again, you don’t know what you don’t know. So if you are doing your own taxes because you want to save the $300 it costs or whatever, you could be shooting yourself in the foot and not having all of these extra benefits, because you didn’t know about it. Who reads the tax code? People like Amanda and Matt read the tax code. That’s what you’re paying them for.

Rob:
What, you don’t brush up every night before bed?

Mindy:
No, I do not.

Rob:
I’ve got a 7,000-page booklet, and I’m currently on page three, but it’s-

Matt:
It helps you go to sleep faster, for sure.

Mindy:
Boy, it sure would.

Rob:
It’s a genius podcast idea, just you reading the tax code, and you go to sleep to that.

Matt:
Right, right.

Mindy:
Oh.

Amanda:
I think what’s really interesting is that, in your scenario, Mindy, because your spouse is also self-employed or has other active income outside of a W-2, effectively, you guys can double up on all those things. So you’re doubling up on the solo 401k right now. If you decide to get into a defined benefit plan where we’re doing more than the 66,000, you can double up too.
So we have clients who are able to write off $400,000 or more against their taxable income. And what I love about it is in the self-directed arena, once the money’s in there, we also get to invest that in real estate and have it grow tax deferred, whether it’s a rental property, or you wanted to do hard money lending to some of Rob’s fix and flip deals or something. It’s really a really amazing way to save taxes today, as well as having tax deferred money growing for you too.

Mindy:
So you’ve used that phrase, “Defined benefit plan,” a couple of times. Can you explain what that means to our listeners?

Matt:
Yeah. It’s kind of more like a, I almost say like a supercharged retirement account. So where a 401k, they call it like I was saying, a defined contribution, so they tell you how much you put in, and it’ll grow based on how your performance is. A defined benefit is actually kind of flip-flop where they say, “Here’s the amount of benefit that it’s going to be calculated at retirement age,” and they back into how much you’re allowed to contribute, like actuarial calculations. So that’s why it works really well for people who are in their 50s or 60s who are getting close to retirement age, because it allows you to put a lot more in, because you have less years to get to that defined benefit amount that they do all these calculations on.
So that’s where it can really be powerful, especially if you have no other employees. Or if you do have employees, they’re really young, like they’re in their 20s or something, because then you wouldn’t have to contribute very much for them, because it’s 40 years of retirement or something.

Amanda:
We’ve seen it. Yeah, the older you are, typically, the higher dollar amount you can put in, currently. We’ve seen it as young as 40s, but anyone under 40, in their 30s, it has to be pretty extraordinary circumstances where it could make sense. So you could still do it, it’s just that the older in age, the more you can put in per year.
What I also love about a lot of these retirement contributions, since we’re talking about year-end, is that for the most part, a lot of this money does not have to go in before the end of the year. You have until the date you file the 2023 tax returns to contribute. So if you’re in a sole proprietorship, you have maybe as late as October 15th of 2024 to actually put the money in. If you have a corporation, you might have until next September to put the money in. So it allows us to have more time with our money, but still be able to count on that deduction upfront.

Matt:
Yeah. You have more time to contribute, but the key is to understand, what are your numbers going to look like for this year? So you need to know, as we’re coming up on year-end, how much taxable income am I going to have? Is it going to be 800,000? Is it going to be 500? Because if you think it’s 800 and you’re not planning on this contribution, maybe you’re going out and buying more real estate, which isn’t a bad thing. But maybe you’ve spent more money than maybe you needed to, if that makes sense. Right? So that’s why it’s important to kind of get an idea of where 2023 looks like before making some of these decisions.

Rob:
Sure, sure. Well, can we talk a little bit about charitable donations? Because I see this one being a … I feel like I see a TikTok on this every single day. But how does that actually work? If you donate to some kind of charitable organization, are you deducting … you’re not getting necessarily a credit on your taxes. It’s still just like a typical write-off, right? Or am I missing how that works?

Amanda:
Yeah, exactly. So charitable donations, if you donate something that’s worth $100, is going to reduce your taxable income by $100. It doesn’t mean you’re going to save $100 in actual tax, because our tax saving is going to be the write-off multiplied by your tax rate. So in most charitable planning strategies, our leading indicator does have to be an investor or a taxpayer who is charitable-minded. Because at the end of the day, we are giving away things to charity.
But I think a lot of our more higher net worth clients who really just don’t need the cashflow from the rentals to live off of immediately, there are structures we set up where they put a property into a charitable trust, and what they’re doing is they’re pledging that they will donate the cashflow into the various charities, to get an immediate deduction upfront. But the benefit is at the end of the trust terms, let’s say it’s a five-year or a 10-year trust, the real estate comes back to the investor. And that’s what a lot of our investors like, right? If they’re not needing the cashflow to live off of, they were going to donate it anyways over the next five, 10 years. Why not get a huge upfront deduction? If at the end of all this, we get the real estate back anyways in our name or in our beneficiary’s name.

Rob:
Got it. So you’re saying, you have to be charitably-minded in general, because you’re still spending the money and the tax benefit, it’s the same as other deductions. So for example, when people are just like, “Oh, I need write-offs, I’m just going to buy this to write it off.” And it’s like, “Well, you’re still spending the money.” So you should really only buy things as a, “write-off,” if you actually need it. Otherwise, you’re just buying things for no reason. Does that make sense?

Amanda:
Yeah, that’s that Schitt’s Creek.

Rob:
That’s exactly what I’m talking about.

Amanda:
[inaudible 00:16:17].

Rob:
Like, “It’s a write-off.” Yeah. And it’s like, “Well, yeah, I guess so.”

Matt:
“Who’s paying for that?” It’s, “Who cares? Somebody’s paying for it.”

Rob:
And so just to spell the charitable donation part of it out a little bit more, can you highlight how these can help get your taxable income down, from a tactical standpoint?

Matt:
Yeah, it’s a great question. So a lot of times, that charitable lead trust that Amanda was talking about is a great strategy. We obviously have a lot of clients who are real estate investors. And sometimes, they can reduce taxable income a lot, or with their real estate, and sometimes it’s not enough. So other times, we’ll look at, “Okay, what are some other things we can do?” And maybe charitable gifting and strategies come to play. Another big one is a donor-advised fund. That’s another, it’s an easy thing. Everybody can go to, I don’t know, any broker [inaudible 00:17:06] Fidelity, Vanguard, the big ones, set one up in five minutes. It’s a way that you can put money into one of these accounts and take a tax deduction now, but not necessarily have to fund the actual charities of your choice for over time.
So I guess a example where that might work could be, maybe you’re somebody that, “I donate $50,000 a year to my church every year for the next five years, so I know I’m going to give away 250. But I happen to have the money now, and I need the deduction now, because maybe I had a higher income year than I usually do, but I don’t necessarily want the church to get all the money right now.” So you can put it in this donor-advised fund, you’ll get the deduction this year, and then the fund will spread. You can tell the fund every year, “Give $50,000 to my church.”
So that’s one way, and we see that work really well. But it’s definitely a way to bring down your taxable income. Again, depending on your tax bracket, could save you 30, 40, 50 cents on the dollar.

Amanda:
It’s funny, I think how we started out our conversation here with some of the more advanced strategies that Matt and I work with clients on, that are very high net worth, very high income. But the reality is, a lot of our clients are newer investors who are not making 500,000 or a million dollars a year. And also, even for those people who are, if they’re heavily involved in real estate, odds are, they don’t have a huge tax liability to begin with to even need this defined benefit or charitable donation. Right?
So a lot of the clients we work with, they’re able to use real estate naturally to offset their taxes through depreciation, through real estate professional, or through the short-term rental loophole. And for us, when we do year-end planning, that’s typically where we begin. We say, “Hey, let’s look at your real estate. How can we maximize the tax savings from your real estate?” And if that’s enough, that gets us down to 10% or zero taxes, then we’re done. Our job is done, it’s easy. But if we can’t get it down to an acceptable amount, then we look at all these very advanced charitable planning, defined benefit, to get to where we want to be, basically.

Mindy:
Okay. Well, we’ve teased about real estate, and that kind of is what the BiggerPockets Real Estate podcast is all about. So what are some ways that real estate can help offset your taxes?

Matt:
Well, yeah. Obviously, as I’ve mentioned, I think probably 80, 90% of our clients invest in real estate, for those who don’t know. And it runs the gamut. It’s people doing full-time real estate, to the other extreme, where they’re working the W-2 job and investing on the side, like Amanda was mentioning. So first and foremost, I think real estate, obviously, a lot of times I think people have kind of a, I don’t know, tunnel vision on real estate though. You hear somebody say, “Well, I make too much money, so the real estate’s not helping me.”
But keep in mind, obviously when we’re investing in rental real estate, if you’ve got deductions you’re taking that you couldn’t deduct before, or you’ve got depreciation offset, we’re offsetting the cashflow first and foremost. So the goal would be, “Hey, if I made $10,000 to cashflow on this rental property, but I’m not paying any taxes on it because I’ve got depreciation,” that’s a win right out of the gate, right? Because that’s $10,000 in your pocket that you don’t have to pay taxes on. And then from there, it’s like, “Okay, what else can we do to look for ways to offset W-2 income, or other business income?” Or whatever somebody else might have.

Rob:
I feel like most people, and I’m sure we’ll get into some of these actual strategies here in a second, but when you look at just the general deductions … Or sorry, the general depreciation. Obviously, that’s a straight line depreciation that can lower your taxes and does have, obviously, a bit of an impact on everything. But once you start using some of these bigger cost segregation, bonus depreciation plays, I feel like that’s where you really start unlocking a lot of the tax benefits of real estate.
Is that something that you’re typically pushing clients towards? Or is that really only reserved for some of the more higher level real estate investors?

Amanda:
Yeah, that’s a great question. Well, first, I will say that cost segregation is probably one of the most impactful tax strategies within the tool belt. So that’s one that all investors should understand and use at some point in time. And I say some point in time, because cost segregation is not ideal for everyone. We have unfortunately, see clients who do cost segregation prematurely, where it ends up hurting them.
I was actually even talking to another CPA who doesn’t do taxes, but they decided to do their own cost segregation. I was talking to them about how that actually hurt them in the long run. But yeah, if you’re doing things correctly and you understand that you’re able to utilize accelerated depreciation through cost segregation, then it’s definitely really, really powerful. I think there’s a common misconception that cost segregation is expensive. It’s only limited to large properties, like commercial real estate, multifamily, when it’s in fact not true.
We have a lot of clients, actually, the majority of our clients who do cost segregation are people who just own portfolios of single family homes. Whether it’s long-term rentals, or using the short-term rental loophole. That’s really, by far, where we see most of the people using cost segregation. And especially today, with the ability to do a lot of these studies remotely, the cost of getting a cost segregation done has gone down a lot. And with bonus depreciation, this year, we have 80% bonus, the benefit has increased a lot. So we’re looking at much bigger increase in benefit, a much lower cost, which is what makes it more feasible for many investors than it ever has been in the past.

Rob:
We were joking about this before the podcast, how cost segregation is the eighth wonder of the world. Although I think we might’ve said ninth, because there might be an eighth wonder of the world that a lot of people don’t know about, but-

Matt:
Apparently I’m the only one who knows about it, but yeah.

Rob:
Yeah. It’s such a powerful tool, but we kind of went right into this topic. Do you think one of you could … Matt, maybe you could tell us, what is cost segregation, for everyone at home so they understand the general premise of it?

Matt:
Yeah. Cost seg is kind of supercharging real estate depreciation. So big picture, a lot of people may know this, but when you buy rental real estate, we get to take a write off every year for a certain amount against our income. Because in the IRS’ eyes, you get to take a deduction for normal wear and tear, so we call this a paper write-off, because depreciation’s based on a part of your purchase price, but it’s not necessarily money you’re spending every year. So that’s great by itself. They give you, as you were mentioning, I think residential properties, you can write-off over 27 and a half years straight line. Commercial properties are 39 years.
So that by itself is good, but then when you add kind of … and you supercharge it with cost seg, what they’re doing is you’re getting a study done from an engineering study, somebody goes in and looks at the building and says, “Hey, instead of this building being written-off of over 27 and a half years, there are certain components, certain parts of it that are more like personal property,” or we call land improvements, things that are either five year assets or 15 year assets. So it allows you to take a portion of that and say, “That should be written off over five years or 15.” Again, which is great, because now we’re taking more depreciation sooner.
And then when you add that layer of bonus depreciation on it, on top of it, that you were talking about, those five and 15 year assets, we can write off 80% of it right away instead of over five and 15 years. So it’s a way to take a lot more of our depreciation expense upfront. Same amount over the life of the asset, but why not take more upfront if we can use it and benefit from it, and use that savings to kind of reinvest, go out and buy more income producing assets, right?

Rob:
I’m really happy right now, because you said all of that, and I understood it perfectly, like the back of my hand. Because I’ve been studying this stuff so much over the last year, and it really is, I think, the thing that most real estate investors should be most brushed up on. Especially if you’re a short-term rental investor, because there are ways to access this benefit a little bit more if you’re materially participating in the management of your short-term rental. There are seven ways to do that.
But most of the time, if you’re self-managing your short-term rental and you’re spending more time in that business than most other people, or than all other people in your business, then you’re able to use this benefit, and it can really skyrocket your ROI. A lot of people are looking at the cash on cash metric with their rental properties, but they’re not looking at the total ROI of it. And the tax component of real estate is what really explodes your ROI, I think, on any given investment.

Amanda:
Yeah. The short-term rental loophole’s probably one of our favorites. Short-term rentals has been around for many, many years. It’s a strategy that we’ve been using with clients for a long time, but I think it kind of became more mainstream in the last, maybe, three years or so. But it works really well for people who are high income earners. So that income could be from a W-2 job, or a non-real estate business, where real estate investing is sort of just your side hustle. So I’m working as a doctor, or attorney, or an IT guy, making a lot of high W-2 income. Historically, we’re not able to use rental losses to offset all that income, because of these wacky passive loss rules.
And so the short-term rental loophole really is a way that allows people to continue working full-time in their profession, but with short-term investments on the side, where they’re spending the right amount of hours doing the right things for their short-term rentals, and really be able to create some massive tax savings. We have people making three, $400,000 a year of income and paying little to no taxes using that exact loophole.

Mindy:
I have no words, because I’m struck dumb by this loophole. How does this loophole work? Please explain more about this loophole, because I want to do that. I want to pay no taxes.

Rob:
Can I try?

Matt:
Yeah, please.

Rob:
Can I try? And then the tax people can tell me if I’m right or wrong. So ordinarily, to be able to reap the benefits of cost segregation and bonus depreciation in general, you have to be a real estate professional, meaning you have to work 750 hours a year in a real estate business, and it has to make up more than half of your time. So this has made it very difficult for people in the real estate industry, like they said, who work with W-2 or anything like that to reap this reward, because they don’t spend more than half their time in real estate. They’re doing their full-time, nine to five job, which is usually about 2,000 hours a year.
The short-term loophole really blows this thing up, because it now says that if you materially participate in the management of your short-term rental, that’s the official terminology. Again, there are seven ways to do this, but basically, very simplistic and oversimplified way of saying this is, if you work 100 hours on a short-term rental, meaning two hours a week, and you work more than anyone else within that short-term rental, right? So you’re working more hours than your cleaner, than your landscaper and everybody, then you are now able to circumvent the real estate professional status, and now use cost segregation to your benefit. I’m getting sweaty just talking about this, because I see the lawsuits forming. But was I mostly correct there, Amanda and Matt?

Amanda:
Yeah.

Matt:
Yeah, that’s pretty correct. Yeah, the idea is that with this depreciation, we’re trying to create losses on paper. Again, we don’t want you to be losing money on your real estate. But if the depreciation’s more than your net income, now we’ve got a loss from your rentals, and it’s specifically short-term rental in this example, how can we use that loss to offset W-2 and other income? And if you can meet one of those tests that Rob was referring to, now we can use that loss that’s created from the cost seg and use that to offset W-2 income of three or $400,000, as Amanda was referencing. Right?

Amanda:
Yeah. And if the short-term rental loophole is new to you, like this is the first time you’re hearing about it, we actually created-

Matt:
Mindy’s shaking her head.

Amanda:
Yeah. We actually created a whole downloadable resource just on the short-term rental loophole. So you could just go to our website at KeystoneCPA.com to download it, and it kind of has all the details of it. My second comment is, Rob, are you open to working for Keystone CPA as a tax advisor? Because you’re amazing.

Rob:
I don’t know if I qualify, but-

Matt:
He can talk, and he knows taxes. This is a good-

Amanda:
Yes, and he does cost seg too. We got [inaudible 00:28:58] cost seg.

Matt:
Yeah.

Rob:
Like I said-

Mindy:
No poaching, Amanda.

Rob:
That’s right.

Amanda:
Oh. Sorry, BiggerPockets.

Matt:
Sorry. Edit that out, okay? Edit that part out.

Rob:
It’s all of our duty as real estate investors to understand this stuff, because it’s not what you make, it’s what you keep, right? That’s the rule at the end of the day. If you want more context on this, we did an episode with Mitchell Baldridge on the BiggerPockets podcast a couple of weeks ago, or a couple of months ago. Go check that out. It dives all completely into cost segregation. Episode 823, so be sure to go and check that out.
But that’s really just one of the strategies that we’re here to talk about today. We’ve also got other good stuff in the works here, like 1031s. Can you tell us how that sort of can impact your taxes as well?

Amanda:
Yeah. The market has been interesting, to say the least, in real estate. And so in the last two years, we just had a lot of clients really analyze their portfolio and try to figure out, is this specific property one that I would like to keep in the longterm, or are there ways for me to reposition my equity and money into other bigger, better deals? And one of the ways to do that without paying a lot in taxes is using the 1031 exchange strategy. And this is only exclusively for real estate. We can’t sell stock in 1031 exchange into another stock, but we certainly could do that with real estate.
It’s sort of like playing monopoly, right? You buy a couple green houses, trade it up to a red hotel. And so when we do that in the real world, what happens is then we get to defer any capital gains taxes that we would otherwise pay. So instead of sell real estate, pay taxes, reinvest the rest, what we’re able to do is sell real estate, reinvest everything that we’ve made into this next bigger and better property, provided that we follow these 1031 exchange rules. So this is one that saved, that many or most of our clients look at, and really is an amazing way to build lifetime wealth through real estate, and sometimes even generational wealth through real estate too.

Matt:
Yeah. You think about it, you’re getting to almost kick the can down the road, right? So we have a lot of clients who will sell property one, buy property two, hold that for five years, sell that one in a 1031 exchange. And kind of just rinse and repeat over 30, 40 years, and never paying taxes until down the road. And if everything works out and they pass away still owning the real estate, then it goes to their heirs, totally income tax-free. So it is a powerful strategy to kind of eliminate that tax drag that Amanda was referring to, from having to pay tax now and reinvesting the net, and all that good stuff, right?

Mindy:
Yeah. The 1031 is the action you want to take with the advice of your tax professional-

Rob:
Big time.

Mindy:
… before you even list the house on the market. You want to get all of the information, because we’ve kind of glossed over what you have to do. There are very specific timelines, very specific rules. It’s a government program. Of course, there are very specific rules. And if you miss a deadline, you miss a date, you don’t cross your T or dot your I, the whole thing’s out the window. And all of that sweet tax savings that Matt was just talking about is now your tax obligation.
So let’s say that I had a 1031, and I didn’t do all the things I just told myself I was supposed to do. I didn’t call up Amanda Han and say, “Hey, Amanda, help me through this.” Instead, I said, “Amanda, I just sold my house and I want to do a 1031.” And she says, “You are hosed, because you didn’t call me beforehand.” Do I have any recourse? Is there anything I can do with that?

Matt:
For sure. And to your point, Mindy, I think taking a step back to same thing we were talking about earlier, right? A 1031 exchange isn’t necessary for everybody, so it needs to be something that makes sense in your scenario. Sometimes, there’s people that they jump the gun, they’ve heard about 1031 exchange, they go out and do one. It’s like, hey, actually your tax liability on the sale was $1,000, or you actually had a loss on the sale, so you didn’t even need to do it. So it’s oversimplifying things, but to your point, it’s like make sure it makes sense.
Now, if somebody goes through the process and figures out, “Hey, I didn’t follow the rules,” or, “I couldn’t find my replacement property,” or what have you, “Now I’m sitting on this gain that I might be paying taxes on,” there’s definitely things people can do. One thing we kind of look at is, especially coming up on year-end, now’s a good time, but for people who’d maybe had these kind of failed 1031, for a lack of better term, right? Maybe now is the time to look at, do you reinvest in somebody’s syndication before year-end that’s going to go out and buy an apartment building that’s going to do a cost seg? It’s going to give you a K-1 with an expected loss, and you can use that loss to offset this gain from sale of the real estate.
So we jokingly refer it as a lazy man’s 1031, where you get the similar benefit, but you just didn’t go through the hoops, I guess.

Amanda:
Yeah. Or maybe you just have other rentals that you’ve owned that you have not done a cost segregation on, or you didn’t need to, for some reason. Well, this is a good opportunity for you to do a cost segregation on the rest of your portfolio, because those losses that you generate typically can offset the gain on that failed or partially failed 1031 exchange.
So absolutely, this is a big one that we are currently working with a lot of clients. Again, because of the kind of shift in the market, we had a lot of people who sold earlier in the year, but they just couldn’t find the ideal replacement properties. And so now, this is the time to do the homework and say, “Okay, what can we still do? What can we still buy? What can we still cost segregate until that we can offset the gain that already incurred earlier this year?”

Rob:
Sure, sure. So we’ve got two more here in the buying category that I just want to quickly run through. I’ll give one to each of you. But Matt, can you tell us about the cash-out strategy and how that could help with the whole tax preparation side of things?

Matt:
Yeah. If you’ve got some equity built up in your rental properties and you’re looking to tap into that and use that to continue to build your portfolio, you can borrow against your rental property. If you reinvest into other rental properties, that interest you’re paying on that extra loan amount is now tax-deductible against the new rentals. The cash amount that you took out from the previous rental, not taxable to you right now, because that’s another loan. Right? So it’s a way to get additional cash into your portfolio, reinvest it, and do it in tax efficient manner.

Rob:
Awesome. And Amanda, what about syndications?

Amanda:
Syndications, gosh. I love syndications for several reasons. One, it gives you the ability to leverage other people’s knowledge and other people’s credit or borrowing ability into bigger and better deals, that maybe me by myself am not able to access. We were talking about the tax benefits of depreciation, accelerated depreciation. Well, typically, we’re talking about that on a smaller scale, my single families, my duplexes. But the same exact concepts and strategies work at the syndication level. And in fact, it works with little to no effort from me, right? Because it’s the sponsors who are doing all of those strategies. And what I get is a nicely wrapped tax loss on the K-1 that I hopefully get to use to offset either my passive income, or maybe even some of my active income, if I’m a real estate professional.
So yeah, syndication investment is also really a big point that we look at for year-end. Again, with a lot of our clients who had a really great year in real estate or in their business, and we’re saying, “Hey, how can we just get more losses in the limited amount of time that we have?” But again, like we keep saying, it’s not a one size fits all, so definitely make sure you work with your tax advisor. We have seen clients who pour a lot of money into syndications expecting to use these losses, where without that proper planning, they were actually limited in how much they were able to get in terms of benefits too.

Rob:
Or often, they just can’t use the losses, because they aren’t a real estate professional, right? I feel like that happens relatively often, where they hear about the deduction and the losses, they’re like, “Great.” And then they find out that they’re not a real estate professional, and they get mad at the syndicators for not making that super clear. So I’ve heard those stories often too.

Amanda:
Yeah, yeah. And I think just with everybody listening, your syndicator is not your tax advisor, right? Just like your attorney is probably not your tax advisor, your barber is not your tax advisor. So we can all hear these great strategies, but before you implement, you just got to talk to your own tax advisor, because that’s who knows your situation.

Rob:
Yeah.

Mindy:
I want to underline that. Your syndicator is not your tax advisor. They might say things that sound tax advisory, but they’re not going to pay your tax bill when their advice, their information doesn’t actually pan out. So you need to get somebody who actually knows what they’re talking about, which is why you pay a tax advisor.
Okay, moving on. Let’s quickly cover some of the tax strategies for when you’re selling properties. What is this prepay early by one day business?

Amanda:
Prepay early by one day. So when we talk about year-end tax planning, one of the things we look at is the timing of things. And so whether you’re selling a property or not, right? Let’s say I’m someone, I’m looking at a higher taxable income for my rentals, or I was going to be able to use some of these losses for my real estate. One of the things to consider is pre-paying our expenses. And so that means taking a look at what I expect to pay in rental related expenses January of next year, and then pre-paying those before the end of this year. It could be me paying by cash, paying by check, or even just charging it on my credit card.
The significance of this is … Let’s say I had some marketing fees. If I was going to pay January of next year, that’s a 2024 deduction. But if instead, I paid it by December 31st of this year, now it becomes a 2023 tax deduction. So even though I’ve only prepaid it by one day, I’ve accelerated that tax savings by 365 days.

Rob:
Wow. Okay. And another one that I feel like is worth noting is sort of time of the year in which you sell the property. Can you just sort of talk about the difference between selling your property in December, versus selling it in January? Because I feel like that all kind of goes hand in hand.

Matt:
Yeah. I think it actually works kind of really in the same format, right? So if you’re in the process, come December, you’re looking at selling your property, and it looks like it’s going to close in the last week of the year, and you’re sitting on X amount of gain, you’re going to pay taxes. If there’s a way for you to kind of push that sale so it doesn’t close until January 2nd or third … Obviously not killing the deal, we’re not trying to kill the deal. We’re just trying to defer it maybe a week or so. But just by doing that, now all of a sudden, you’ve pushed the tax liability back an entire year, which is good by itself. But then it also gives you another 365 days to plan for next year, and find ways to … longer time to offset that income, versus if it sold on December 27th, and where it is for sure a 2023 transaction.

Rob:
Yeah.

Amanda:
Yeah, I’ll share an example with you guys. I know, so far, we’re talking about the sale of real estate, but I can share an example where we had a client last year who was selling a business. So he was selling a medical business, it was closing in the fourth quarter. And he wasn’t going to be a real estate professional, because he was in his business all year, not enough time to buy short-term rentals. And so one of the suggestions we said is, “Let’s close the deal early the following year.”
So now, fast-forward to 2023, he’s got a lot of real estate now, able to do real estate professional. So not only do we delay the capital gains tax on the business sale, but we also have all these great opportunities to offset it now that he’s able to do real estate professional and has a much larger portfolio. Because he had the time to earn those hours, he had the time to build up the portfolio in that second year. So it could be really phenomenal. We joke that it’s only one day or two days, but it’s a very big difference in terms of maybe hundreds of thousands of taxes or paying no taxes.

Mindy:
And to Matt’s point, you don’t want to blow up the deal when they want to close in December and you want to close in January. But if you are now giving yourself an entire year to find more deductions and consult with your tax professional to have more opportunities, you may want to incentivize your buyer to push back the sale a little bit. Because honestly, what is it going to do to them to … and they might be in a 1031 exchange where they have a tight timeline. But if there’s any wiggle room at all, incentivize them in some way. I’ll reduce the price, I’ll let you put in a tenant early, I’ll do what can work for you. And real estate works best when you can be creative with your solutions, to help find a solution that everybody wins with.

Rob:
Yeah, completely agree. So we’ve covered buying, which we talked about the STR loophole, we talked about the 1031 exchange, cash-out syndications. We just covered selling, which is prepay early, and then selling in December versus January. Now, I want to get into owning real estate. Matt, do you think you could touch a little bit on the tax benefits of ownership when you’re not a real estate pro?

Matt:
Yeah. I think, obviously, real estate investing, some people go into it not going to be full-time real estate investors, right? So from a tax planning perspective, they’re not going to be a real estate professional, or they work full-time and they can’t convince their spouse who maybe doesn’t work full-time to be a real estate professional. Because that conversation comes up a lot too, right? But yeah, if you’re not going to be in that boat, I think real estate investing still makes sense for an asset class, for sure.
As I was mentioning earlier, first and foremost, we’re looking for ways to offset that cashflow, right? So you’re getting cashflow in your pocket and not paying any taxes. And then from that perspective, other things you can do to look at saving taxes, we talked about charitable gifting strategies earlier, that’s a big one. Retirement planning can come into play. There’s other alternative investments. Some of our higher income people who are not heavy in real estate look at doing oil and gas investing, so that can be a tax efficient investment as a way to reduce your taxable income as well. So there’s different ways to kind of do it.

Amanda:
Yeah. I know, Rob, you mentioned real estate professional status, and I think that’s a common misconception, that people think that there is only a tax benefit for investors if you are a real estate professional.

Rob:
Mm-hmm.

Amanda:
One that’s not talked about a lot is actually for people who make $100,000 or less of income, you actually can use up to $25,000 of rental losses against that W-2 income, regardless of whether you’re a real estate professional or not. And so for some of the people who are maybe starting out in their career, or starting out in real estate where they fall within that definition of $100,000 or less of income, and they’re investing in the long-term rental space, it’s entirely possible that all these strategies, like write-offs and cost segregation could benefit you, because that could save you a big chunk in taxes if you’re able to use 25,000 of losses against that income.

Matt:
Yeah. And then for those who are not real estate professionals, that’s why that’s so powerful, right? Because we can use some of those retirement strategies, making contributions to retirement accounts, or contributions to HSAs to bring that income down closer to $100,000 mark, so we can use that maximum of $25,000 rental loss that’s allowed for us. So again, the importance of tax planning, right? If you don’t know what your numbers are, you’re not making the moves you need to make before year-end. Now’s the time to kind of figure out what those numbers look like.

Rob:
Yeah, totally. So we touched a little bit on write-offs. And a lot of people have heard about write-offs, but you can’t write off everything, popular to what they say on Schitt’s Creek. “It’s a write-off.” What is the guiding principle for what you can and can’t write off on your taxes? Amanda, can you shed a little bit of light on this?

Amanda:
Yeah, sure. The one thing that we suggest all investors to do is to practice asking yourself, when you’re spending money on something, ask yourself whether this expense is ordinary and necessary to me as a real estate investor. And the answer to that question will differ person to person. It’ll differ for a short-term rental investor versus a long-term or a midterm investor.
But the reason you want to do that is because then it helps you to understand whether you’re spending money on the right things that will help better your business. And those are really the only two requirements that the IRS looks for, right? Ordinary, is this ordinary for you as an investor, and is it necessary? Is this expense necessary for you to carry on as a real estate investor?
And if you don’t know the answer to that … because let’s face it, right? There are things that are kind of unclear, or just not sure if it is or is not. If you’re unsure, that’s what your tax advisor’s job is, right? So call them up, send them a quick email and say, “Hey, I’m thinking about doing X, Y, Z,” or, “I’m thinking about buying this. How can this be a legitimate tax deduction?” And the powerful word here is, how. How, puts both you and your advisor in a more creative space. So maybe the answer naturally is, “No, you can’t write it off.” But how can you do it? “Well, if A, B, C were to happen, then this could potentially become a legitimate write-off.”

Mindy:
What are some things that investors forget about when they are sharing expenses with their tax professional, and not doing it themselves?

Amanda:
Everything.

Mindy:
What are some of the most common?

Matt:
Yeah, that’s such a great question. I think most investors, they don’t forget about mortgage interest, or property insurance, or property taxes. Right? That’s the stuff that people remember. But it’s more kind of what we call the overhead costs of being a real estate investor, so it’s educational costs, dues you’re paying, professional dues, travel costs to go to conferences, mileages going back and forth to look at properties, to meet with a real estate agent. Business meals, right? Home office deductions is another big one.
All those kinds of things that these are costs that you are likely incurring because you’re being in the business of being a real estate investor. They’re not necessarily specifically tied to a specific property, but you’re still incurring these costs. And those are the ones that people tend to forget about. It’s various reasons, right? They don’t know about it, they forget about it, their books are a mess, and they’re just not organized. All of the above.

Amanda:
Yeah, I think a common misconception is people think they need to have an LLC or a corporation to write these things off. And I feel like we’ve said this a thousand times, but people still don’t always understand it. So the deduction is a business deduction, if it’s ordinary and necessary to your real estate. You don’t have to have an LLC, you don’t have to have a corporation to write these off. Now, if you have an entity, that’s fine too, but having an entity is not a prerequisite to taking any of these deductions that Matt just mentioned.

Mindy:
Matt, you said educational costs. Could I write off, let’s say, a BiggerPockets pro membership account?

Rob:
Ooh, I see what you did there, and I like it.

Matt:
Absolutely, because it’s going to help you learn and expand your investing business. You’re going to make money on your real estate, you’re going to be able to be a better buyer, a better operator, a better seller, all that good stuff. Right?

Mindy:
And what about a trip to Cancun? Oh, for BiggerPockets Con 2024.

Rob:
There you go.

Amanda:
For sure. I think on Instagram, I did a reel last time when we went to San Diego about all the different things you write off. So yeah, it’s the tickets, it’s the hotels, it’s the flight. It’s probably going to be all the meals too, when you’re there, right? Because I’m assuming you’re not going to go and eat by yourself, so you’re there to network with other investors, people that you might be partnering with. So for things like that, yeah, those are pretty clear cut, that those are business expenses.

Mindy:
Okay. And thank you, because you did allow me to give a little bit of a plug. But also, there’s a lot of people who aren’t sure that they can write that off, so they don’t. And you’re missing out on … Look, every dollar you don’t give to Uncle Sam is a good thing.

Rob:
Mm-hmm.

Mindy:
Pay all that you should, but pay as little as you have to. Let’s talk communication, best practices.

Rob:
Best practice. That’s a good one.

Mindy:
How can I work best with you, Amanda Han, my tax provider?

Amanda:
I love that.

Matt:
That was her, “Help me help you,” question, right?

Rob:
Yeah.

Amanda:
Yeah.

Mindy:
Yeah, no. Yeah. Well, there are people who maybe have never worked with a CPA before and don’t know what to expect. Do I just show up at your office with my roller suitcase full of all of my receipts? That’s what you want, right?

Amanda:
I think the heart of tax planning, just like with real estate planning, as a business owner, we need to have the correct numbers. And what I mean by that is, if you told me you made $10,000 in rental income, it’s a very different set of strategies than when you tell me you made $50,000 of rental income. Right? Or maybe even that you had a $10,000 loss, the strategies will be very different.
So in year-end tax planning, the first thing that we want to look at is updating your books and records. Get a good idea. We don’t have to get to the exact dollar amount and the cents, but we need to know overall, big picture, where do we fall currently with respect to numbers? Because that’s the guidance on, okay, where do we go from here? How much income are we trying to offset, or how much additional losses are we trying to extrapolate from the other resources you have?
So I think, and any investor, and also outside of taxes too, just as an investor, you always want to know, how are your properties performing? You don’t want to just know that 12 months later, and then figure out, “Oh, wow. I wish I would’ve known earlier. I would’ve made some different business or investment decisions.”

Matt:
Yeah. And I think to your question about communication, in our experience, best practices there are just to have that open line of communication. So it can be as simple as sending your CPA or tax advisor an email just saying, “Here’s what I’m thinking about doing. Do you have any feedback, input, comments, questions?” All that good stuff, right? Because we can only help you to the extent we know what’s going on in your tax plan, your tax investing, and all that good stuff. So having the open line of communication helps us to start thinking strategically on your behalf, versus waiting until … We were joking off-air, right? April 14th, or even October 14th. That’s a lot harder to help you for last year, right?

Rob:
Yeah, yeah.

Mindy:
Well, exactly. So I treat my real estate like the business that it is, and everybody listening should also be just like me, and treating it like the business that it is. And I treat my tax professionals like the partners that they are. They are my business partners. They are providing a service for me, and I need them to do the service. I want them to like me. I want to give them my numbers as soon as I have them, and I want them to be organized. So the easiest way for me to give you organized numbers is for me to have them be organized throughout the year. I don’t throw everything into a pile, and then figure it out on April 14th. That would bring so much stress.
I just have the one property now, but when I had more than one property, they had their own folder. This property gets this information, this property gets this information. And then you present this information. You can put it into a spreadsheet. Hey, do you like electronic numbers, Amanda and Matt? Is it easier to do when the work is already there?
So yeah, here’s a PSA from Mindy to everybody who is thinking about using a tax professional, and you should be using a tax professional. Organize everything by property. Make a Dropbox or a Google Drive folder to have the stuff there. Scan receipts and upload them. You don’t have to necessarily do anything with them in the moment, but have them available electronically. Take pictures of documents. More information is better, because your tax pro knows what they’re looking at. They see a document, they’re like, “Oh, that doesn’t make any sense,” or, “That isn’t relevant to this property. I’m putting it to the side.”

Rob:
You’re saying more information, the better. I would say more organized information is better too.

Mindy:
Thank you, yes.

Rob:
I definitely try to create folders that’s like, “2022 Taxes,” and then I click into that, and then it’ll be like, “Cost segs,” and, “LLC closing docs,” and, “Formation docs,” and all that kind of stuff. Because it’s already hard enough to sift through all that, so really try to make things easier for your CPA, so that they don’t have to go digging in a haystack for a needle.

Mindy:
Organized, and with easy to understand names on those folders.

Rob:
Yeah.

Mindy:
Like, “January 2022,” is a really great way to label the January folder.

Rob:
I see Amanda smiling over there. I assume you don’t get organized folders all the time.

Amanda:
So for our clients, we kind of enforce the issue. So for all our clients, when they upload, we set up the folders for them.

Mindy:
Even better.

Rob:
Yeah, great.

Amanda:
So they just drop it into those folders.

Matt:
Yeah.

Amanda:
But yeah, I think the whole concept of bookkeeping or tax planning sounds just really scary to the everyday investor. But really, I think one thing you mentioned earlier, Mindy was like, “Hey, your tax advisor is your friend.” So it’s not scary to call them. Because the goal, for us at least, I don’t need my clients to tell me what the strategies are or ask me very strategic questions. All I need is for you to tell me, what do you have going on? What are you planning on doing? What are you thinking about? And that’s all I need to know for me to then run with, what are the strategies or the considerations for those.
Bookkeeping too, you mentioned a lot of really great ways to help people get their books set up, and it’s really about systems. People, I think, are always asking us, “What is your favorite way? How do you want me to track my expenses? What software?” And we always tell people, “It’s not about what I want. Right? I just need it property by property. But it’s about a system that makes sense for you.” And for Mindy, it might be Excel. For Rob, it might be QuickBooks. But we need it to be a system that you or your bookkeeper likes, because ultimately, you’re the one that’s doing it week in and week out.
One of the questions we get a lot from newbie investors, for someone who’s just starting out, getting into BiggerPockets, learning about real estate, but maybe don’t have a rental property yet and maybe won’t have one until next year, it’s still important to make sure you keep track of all of those expenses. Because even though you’re not going to claim it on this year’s return, since we don’t have income yet, you certainly could carry those expenses forward into next year, and claim those in next year once you start to have real estate income. So just because you’re a newbie and you don’t have real estate income, it doesn’t mean all these expenses are lost. There definitely will be benefit for you in the future, so make sure you capture those.

Matt:
Yeah. A couple quick tips about business travel come to mind too, is make sure you’re documenting your travel ahead of time, right? That’s a big thing that the IR looks for, is that if you are going to travel to Florida for a conference of some kind, having email documentation in place before you book the airfare or the hotels, versus just going down there and deciding, “Hey, I’m going to go to this conference,” or, “I’m going to go to this property.” That’s a good way to kind of substantiate your deductions.
And another one too is if you are in business with your spouse, like I am. Obviously, we talk about business all the time. That doesn’t necessarily mean that we’re writing off every meal that we pay for, because you want to be reasonable in everything you do, right? And yes, you are going to talk about business, but hogs get slaughtered, right? So be reasonable in your deductions. And I think it’s going to go a long way in helping you from a tax planning perspective.

Rob:
Amazing, amazing. Well, thank you guys so much. Again, for anyone that’s wanting to dive into this world, be sure to check out episode 823 to get more into cost segregation. And if you want the very easy to understand manual on this, be sure to also get the book on tax strategies. We always joke that I don’t ever read, but I actually flip through this very often. This has taught me so much about 1031s, and so many other things in my journey. So you guys put a lot of information out there, and we appreciate everything that you do. If people want to reach out and learn more about you, Amanda and Matt, how can people do so?

Amanda:
Oh, yeah. Well, first, I love it. Thank you so much for sharing that book. I didn’t know you’re a fan of the book as well, so thank you for that.

Rob:
It sits behind me every day.

Amanda:
Yeah, I could tell. You just rolled back and grabbed it.

Matt:
He was saying it sits behind him. It doesn’t mean he’s reading it, but it sits behind him.

Amanda:
Right, it’s part of the visual background.

Rob:
Read it? I own it.

Amanda:
So yeah, if a lot of the concepts we talked about today is new to you, short-term rental loophole, what is a real estate professional, why do I care, you’d go to our website at KeystoneCPA.com. We have a lot of great free resources that you can download. It’ll give you some additional information regarding what exactly are within those strategies. And if you’re looking for daily tax tips, or want to know what we’re doing outside of taxes and real estate investing, the best place to find me is on Instagram, as Amanda_Han_CPA.

Matt:
And the best place to find me on social is right behind her in those Instagram videos.

Rob:
Awesome. Well, what about you, Mindy? Where can people reach out and learn more about you on the interwebs?

Mindy:
I am on Twitter, is my favorite, at MindyatBP. That’s M-I-N-D-Y-A-T-B-P.

Rob:
Awesome. And you can always find me on YouTube and on Instagram at Robuilt, R-O-B-U-I-L-T. I talk about all things real estate, short-term rentals. Occasionally, a very simplified version of taxes, but never to the degree of the actual experts on this episode. So go listen to them for all of their tax tips. Thanks, everybody. We appreciate you listening. And be sure to leave us a five-star review on the Apple Podcasts platform, or wherever you download your podcasts. We appreciate you listening, and we will catch you on the next episode of BiggerPockets.

Watch the Episode Here

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In This Episode We Cover:

  • The one rental property “loophole” that allows you to take a MASSIVE deduction
  • A huge real estate write-off any investor who makes under $100K is able to take
  • Retirement investing and how boosting your nest egg can dramatically lower your taxes
  • Common real estate write-offs that you’ve probably missed
  • How to use your home equity for tax-free income AND a big tax write-off
  • What to do RIGHT NOW to avoid paying taxes in 2024 (and beyond!)
  • And So Much More!

Links from the Show

Connect with Amanda & Matt:

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Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.

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