Posted over 10 years ago

Decrease your income taxes with these hints

I promised my wife I'd work with her and be available to help with the income taxes for a couple days. I drive the MRS crazy with the things I do. I decided that since I have time between her questions, I'd post today in between her requests. I've always spent about half the year earning money and the other half figuring out how to keep it. As I'm doing this, I realize I may be able to offer some suggestions that would help your tax situation. First- disclaimer- I'm NOT an acct., but I know a lot and have beaten the IRS twice in audits and am VERY proud of it.

If you have the ability to build a home and a flexible wife, MOVE often if property is appreciating in your area. Many years ago, you could sell your personal residence ONE time in your life, at age 55 or older and take the first 125K tax free(250K if married). This rule was changed and now ; there is no age requirement, you can do it over and over again and make 500K EACH time tax free.I did this 4 times in UTAH, never left the neighborhood, and made about 600-700K TAX free. That is like after taxes earnings of near a million dollars. Have your own business, or start a SECOND business. The reason is that you are allowed to deduct a lot of items for business purposes that you can't as a person only. YOU MUST do this!! Turn current EXPENSES into deductions. You don't have to spend more to save taxes. They just have to qualify as a deduction, rather than just an expense. YOU MUST be in the real estate business. You are limited to 25K deductions as passive losses if not in the business. No limit if you are in the business. I take hundres of thousands in loss each year from depreciation, and I couldn't do this if I was not in the business.YOU DON"T have to make any money. Take your hobby and make it a business. When it doesn't make any money, shut it down after 3 years and start another one for 3 years. Write off ALL your trips. Look for real estate or a job where ever you go. Document it and set up appts. The worst case, you might be offered a better job in Hawaii. You then may deduct the costs of the trip. Buy properties where you like to visit. IRS allows you expense to check your properties twice a year. I own in Cancun and have written off 50 trips!! Have your kids do the laundry, wash the cars, mow the lawns(where you maintain a home office) etc. You may pay them "fair " market rate (find the highest custom wash place). Then, you tell them they get to buy their own clothes and food!! You just created tax deductions for expenses that previuosly weren't decuctible, clothes and food. Buy a computer, and depreciate it. Then give it to a kid. LEASE it back from them and you create a tax deduction!! Isn't this fun? Then the kid buys his own school lunches, etc--tax deductible. I'M NOT an acct. but I do know this stuff. I'm sure others have some good ideas also. I had an Acct that told me to always try to take the most deductions possible. If you can make an argument for your position, do it. Calling a tangerine an orange is a definite arguable point. Both are round, orange with seeds and pulp. Calling a cucumber an orange, you may go to jail!! I hope this causes you to think. You have to beat the tax man to create real wealth, imo.Paying Income taxes is one of the top 4 obstacles to creating real wealth along with procrastination, spending habits and inflation. Good luck. Rich in FL. rich weese,

weese investin' properties

Rich Weese

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Comments (11)

  1. Thanks for the suggestion.

  2. Love it, there is a guy that teaches this, former IRS agent, cannot remember his , ah, Drew Miles I think. google him and see.

  3. You're welcome. There are lots of valuable posts on here. Rich

  4. Sweet post, inspired me to grab a book on beating the tax man, now I'm going to set up a corporation next week and start racking up some business expenses. Once I make some cash in real estate with this business I'll be able to pay for 93% of my car, some business lunches, travel, and computer hardware with money that would have been lost to tax anyways!! and this is just the start... thanks Rich.

  5. Jon, It was enjoyable meeting with you and Bruce. I still hope you consider the splits we discussed on the acreage. I've thought about that a little more, and think it is a lot of potential bang for your buck. Rich

  6. Thanks for all the tax tips, Rich. God speed in FL and everywhere else you are going.

  7. That's a GREAT article Rich, thanks for sharing your thoughts. Jeff

  8. Great tips Rich very useful to those of us who dont have the smallest clue about taxes.

  9. I'm pretty sure it was you, Steve. I'm no techie and all this stuff is new and crazy to me. I've never done this utube, or facebook or tweeeter. Its'just not me. I'll always look for input and ideas. Rich.

  10. Rich, I'm glad to see that you started the blog. Blog about your activities investing in FL and the things you are exploring in other of real estate investing (like HML and transactional lending), and I'm sure that you will have the readers following your adventures. Great write-up about taxes; I forwarded a forum link (where you wrote almost the exact same thing) to my CPA. I know that in one of my forum posts I tried to get you to give us some tax tips that you use: And you delivered here on your blog (and in another form post too). My wife is the one who has been adamant about getting us to lower our taxes, and I better join in now that you have illustrated several practices to get that result. I'm looking forward to reading more of your blogging. BTW - When I read this post: "Someone suggested I should have a blog." Now, did that "someone" happen to have a dog's photo for an avatar? Steve Babiak