Small Business Owners-Best way to reduce taxable income.

Get a good CPA

Get a credit card under your LLC

Have CPA tell you what can and can't be written off

A good CPA is worth way more than you'll pay him, I have a ton of LLC's, over 20+ I keep all my properties under individual LLC's and my CPA is able to deduct damn near all my travel,dining, a couple leased cars, and some other things. Almost anything could be business related if you're in real estate, any travel could be in search of a new property, most dining could be business related, etc. It's just how willing are you to face an audit if it so comes?

You want everything under an individual LLC. You need separate bank accounts. Get a credit card for your LLC, an LLC is going to get more tax benefits than a sole proprietor. For basic bookkeeping like you want, I'd say $200/mo for a decent CPA to setup a payroll for you. He'll probably set you up on bi weekly tax payments, automatic payroll of you/wife/etc, and bill you quarterly. If its one property you could probably do it yourself, but a good CPA who doesn't have a history of audits under his belt will probably keep the IRS off your arse.

As for your business, real estate, I don't have any 2 properties under 1 LLC, you can't have a lawsuit against one affect another. I own alot of commercial along with residential rentals. Believe me, there are more lawyers than you can imagine waiting out there to sue you. I was once sued bc a customer parked his car under a tree at my store, and a storm knocked a branch down on a car that was illegally parked. I've been sued for a shootout in a shopping center I owned due to lack of security, it sounds nuts, but I wasted a ton of money defending myself in both cases.

With that said, thats why all my properties are held individually. I can't have judgements affect other entities. I suggest you don't keep a rental property under your individual name bc god forbid you have some drunk air bnb idiot slip in your property and decide to sue you, or say a storm hits and roof collapses and kills some schmuck, you don't it to affect yourself. Believe me, litigious lawyers are dying for a guy like you to frick up. Its terrible what the legal industry has done to good people who didn't dot all i's and cross all t's but please get an LLC not just for tax purposes but for protection.

I google my name and there's this website that has all the entities tied to a person and I have a freaking spider web, I don't even know I want to say like 29 LLC's haha. I learned my lessons early in my business career.

I mean whats your tax burden on the LLC as we speak? Is it a condo or house? If its a condo you should be able to depreciate a lot more bc there is no land involved. Do you have a mortgage? What kind of taxable income are you looking at bc I cant imagine most condos have a major tax burden due to depreciation.

What kinda numbers are we looking at? Rent? Cost basis? Condo or home? Did you just buy it? I know some commercial properties have different tax loopholes.

I see $50k avg now.....thats pretty high up there, so we're talking a $500-750k+ property Im assuming?

ah in that case I definitely suggest talking to a CPA man, they know alot more than you think, I have a great one that I drive over an hour to out in katy,tx to take care of my books thats how important he is to me.

Also, this probably isn't popular, but people worry too much about being audited. Make a good faith effort and be in the ballpark. If it's wrong and you get audited, you pay the difference plus a little bit of interest. I'd rather take a little bit of a risk vs a .01% chance than be overall anal about a confusing tax law that has many gray areas.

Thanks man I really appreciate it. I'm great with my personal finances but this is my first entry into business dealings. I'm sure there are tons of tricks that experienced small business owners like yourself have learned to save a few thousand here and there that will save you money down the line. I'm eager to hear any and all.

I agree and I am of the thought to be as aggressive as possible with available loopholes. I didn't create them and I don't always agree with all of them but I will use them to my advantage when available.

I picked up this book years ago:



LINK

Renting the unit and not owning hurts s lot of your potential deductions/ expenses. With that one crushing you may seriously consider purchasing a second you own. Even if it only does decent the tax advantages of it with the first ones income may be worth it.

Look into a retirement account for sure. You can put at least 25% of your income there usually.

Thanks man.