Freaking taxes and Uncle Sam

This is the time when i get angry about paying taxes :smile::laughing::grin:

Poll

So How much $$$ You just pay for 2019?

I just paid $32500 to United State Treasury :face_with_symbols_over_mouth::face_with_symbols_over_mouth::face_with_symbols_over_mouth::face_with_symbols_over_mouth:

Any tips for next year

When you own a business, you should have a banker, accountant and attorney. We also have a Financial Adviser who works with us on the 401K and Profit Sharing. By and large, you can’t avoid that many taxes but you can do a lot of things to defer taxes to a later time (retirement) and in the process, also lower your tax bracket. The difference can be startling.

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Gotta figure out how to have less money in the bank at tax time.
Buy a truck, dump trailer, detached garage.
Then after, sell the used ones and get some money back…
No way i would send them that much.
Id spend it first.

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That is only a temporary fix for that year. If you’re being legitimate, you’d have to reclaim the amount you sold the vehicles for the following year (although there are some funky tax laws when it comes to vehicles). Seriously though, be a roofer and not a used car salesman. Find a savvy accountant and financial advisor to get counsel on the optimal way to deal with your income and taxes.

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I have an accountant , I hate lawyers :laughing:

I dislike Attorneys as well … until a situation arrives where I need one. Then they’re my best friend. You asked for advice, I gave my best shot at providing it to you based upon what has worked for me and my company.

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Thanks for the advice

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First congratulations on turning a profit. Taxes are evidence of a profitable year! Second read the millionaire next door and other books returning financial intelligence of you haven’t yet. If you have read it again and read more others.

Personally, I buy capital purchases with zero money down that allow for full depreciation of the asset. It’s what works for where I am in my business and currently. This year it was a truck (over 6k lbs). This allows for me to keep a large amount of income via a write off and pay for it over time. I then take that money and invest it, not blow it at the club or buying stupid stuff. But I wouldn’t recommend just buying a truck every year; nor selling it and not reporting it.

The IRS expects you to report the sale price and recapture it as ordinary income. Thus only writing off the depreciation and interest. You don’t want to owe those people money.

For example…
100k truck = 40k write off
I then move that 40k from my tax savings account to my investment fund; which has other savings. Then I will find a real estate investment and write off the income it generates at a rate of either 27.5 years or 29 years depending on commercial or residential. That’s the difficult part in this current market.but here’s a hypothetical. Purchase a 500k property that’s $18,181.81/yr for commercial and 17,241.37 for residential. Do this 5 times and you can wrote off almost 100k a year. 50 times and you can write off almost a million.

Do this enough and you can replace your earned income with passive income that is offset by depreciation and boom you beat Uncle Sam. But you will pay the piper either now or until the day you die. How long you do it for is up to you…

Earned income is taxed, it’s how the system works. You will have to pay taxes for several years. But if you’re smart eventually you will buy Income producing assets, that allow for the depreciation to offset most, of not all, of your income. Thus paying zero taxes. That’s how Trump does it.

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Wow . Great respond. Thanks a lot

Wookie, you have great input. Besides this post, I liked your post on another thread about roofing sales commissions. I am new to Talk Roofing. Is there a way to PM or email to have further discussion about sales commissions?

I am happy to help any way I can. This site helps me a ton and it’s only possible if people actively contribute. Just shoot me a PM if you have any questions.

Full disclosure: I have never sent or received a PM on this site (Not really sure how to do it). But I’m sure we can figure it out.

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Create an LLC and then look into filing as an s or c Corp and pay yourself a salary.

Do you pay yourself? Are you turning in mileage? Mileage? Do you have a cell phone reimbursement policy? How about Business Use of Home. While it’s certainly possible you could owe that much there are steps you can take to reduce it. Set yourself up with a retirement plan. Form a C Corp and write a meal allowance policy. Contribute to retirement. Lease a vehicle (allowable) with an option to purchase clause and then buy it out for cheap at the end personally, etc. An accountant who does taxes is good, but unless they are offering tax planning an advisement you are leaving$$ on the table.

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Thanks a lot. I dont have to worry too much about 2020 taxes next year.

With this covid ‐ 19 and shingles prices going up

I’m not an amazing roofer, but I’m still a tax preparer and financial planner :slight_smile: most of my guys like to work for us because in addition to dealing with customers I give great tax advice.

For what it’s worth I tell all my foreman (who are independent) to use Everlance or a similar mileage tracker and SmartReceipts or similar. Mileage and meals aren’t taxable if they follow GAAP. Same with cell allowance, office expenses etc.

I rarely"pay" myself, but I write that $2k check for mileage to jobs about every month.

Those expenses add up.