In this episode of Financially Fluid, host Ray Godleski interviews CPA Josh Roper, discussing various tax-related topics crucial for business owners and individuals. They explore the nuances of choosing the right business entity, the implications of C-Corp versus S-Corp taxation, and the importance of good record-keeping to avoid IRS audits. The conversation also covers home office deductions, depreciation on equipment, and the complexities of business vehicle write-offs. Additionally, they delve into real estate investments, including passive income rules and the benefits of 1031 exchanges for investment properties. In this conversation, Josh and Ray delve into various aspects of tax planning, focusing on 1031 exchanges, the roles of CPAs and financial planners, and the importance of collaboration in tax strategies.
- Choosing the right business entity depends on your end goals.
- C corporations can be beneficial for reinvesting profits.
- Good record-keeping is essential to avoid IRS audits.
- Home office deductions may complicate capital gains exclusions.
- Depreciation on home office expenses should be reasonable.
- Mileage deductions can be more beneficial for high-mileage businesses.
- Short-term rentals are treated as active income.
- 1031 exchanges allow deferral of capital gains on investment properties.
- Charitable contributions can trigger IRS audits if disproportionate to income.
- Estimated tax payments can be calculated based on prior year liabilities. You can defer taxes through a 1031 exchange by reinvesting in a higher-value property.
- It's crucial to have a qualified intermediary in place before selling property for a 1031 exchange.
- CPAs and financial planners have distinct roles but should collaborate for optimal client outcomes.
- Small business owners should consider hiring a CPA when their financial situation becomes complex.
