How to Get Proactive With Your Tax Strategy to Save The Most Money

The New Year is here! Set yourself up right from the start with this quick nugget of wisdom on your tax strategy. --- Transcript    Tom Greetings, and welcome to The Remote Real Estate Investor. On this weekend wisdom, we're going to be talking about the new year and getting your taxes in order. This is going to be a brief episode on the importance of finding your CPA. All right, let's do it.   Welcome. Alright, so this is a weekend wisdom. We're talking about taxes, it's the beginning of the new year. And it's not too early to start getting yourself in order to have a successful tax season. Michael, why don't you lead us off with a few pointers?   Michael: Yeah, so I think a lot of people treat tax as a reactive thing. And towards the end of the year, they're like, oh, man, I gotta get all of my stuff in order to get to my tax professional, when really, it should be the opposite approach. And it should be proactive. And we should be saying, Oh, it's the beginning of the year, awesome, I get to strategize with my tax professional about how I'm going to save so much in tax this year. So I think a couple things to do is first and foremost, if you don't have someone that you're working with as a tax professional is find one. And I would say that they should be well versed in real estate, either owning real estate themselves are having a lot of clients that own real estate, because that means that they're going to be up to date on what the local local tax law with the most up to date, tax law and tax code says, I would also say kind of have a plan for what you're thinking about doing both in terms of acquisitions and any sales or any rehabs and talk to them about that. Tom, you always say that you like to overshare. Same thing with your tax person, make sure that they're well aware of what's in your head for the year. And we just recorded an episode a little bit ago about goals. And so be talking to them about what your goals are and what your plan might look like.   Tom: That's great. Yeah. And to those of you who like to use it, is it QuickBooks? Or what's the do it yourself?   Michael: Yeah, that's not like…   Tom: I'm sure there are people that have success using that. But from my personal experience, it's worth paying the money and getting a professional, you know, we all understand there's benefits, tax benefits of investing in real estate, the deductions, the deferrals…   Michael: The depreciation…   Tom: The triple D's, squeeze as much juice as you can out of that fruit. And we recommend paying for a professional who has experience.   Michael: But Tom, I don't own any rental real estate yet. Do I need to go get a CPA?   Tom: I think probably not. Probably not. I think I think that would be a good use case. This is not investing advice. This is not legal advice. Like if I'm talking to my sisters, and they and they they have a little bit less complicated taxes, I'd say yeah, does that make sense. But as it gets more complicated, you can use it, I was just having an interesting discussion with my tax advisor recently about building a little home office and how I can use some of that for deduction, like those costs. So anyways, there's just you want to squeeze as much juice as you can out of that fruit. So I recommend it.   Michael: Awesome.   Emil: Only point I’ll add, on as you kind of hear things about bonus depreciation are these things that are new to you, I always send those to my accountant and ask them about it. Because sometimes you do something, get super excited about it, it may not apply to your situation, or it does, there's something you may need to do to be able to take advantage of that, right. So like, when I stumble on new things, or I hear someone talking about how like, I don't know, if I structure things in a certain way in an LLC, that gives me this tax advantage. Or if I go full time real estate professional, all these different things, send it to your CPA, ask them about it. They should be k