Tax Tips, IRS, End of Year Tips | Monthly Mastermind December 2022
Lisa Faast and Rob discussed year-end tax strategies for pharmacies. They emphasized the importance of understanding tax laws and leveraging them to reduce tax burdens. Key tips included utilizing the Employee Retention Tax Credit (ERTC), paying children up to $12,900 without tax implications, and maximizing Section 179 deductions for equipment purchases. They also highlighted the benefits of the Augusta rule for renting out personal residences for business meetings, the R&D tax credit for all businesses, and the potential tax benefits of solar panel installations. Rob stressed the importance of accurate bookkeeping and separating personal and business expenses to avoid IRS audits.
Action Items
Introduction to Tax Topic and Meeting Purpose
- Lisa Faast introduces the topic of taxes, expressing her newfound interest in understanding tax laws and regulations.
- Lisa mentions the presence of Rob, a pharmacy owner and tax expert, who will share his insights and experiences.
- The meeting aims to provide tax tips and philosophies to help pharmacy owners prepare for the year-end.
- Lisa emphasizes that she and Rob are not tax professionals but are sharing their experiences and information.
Year-End Tax Strategies for Pharmacies
- Lisa discusses the importance of understanding year-end tax strategies, whether it has been a good or bad year for the pharmacy.
- For a good year, pharmacies might want to offset some tax burdens by moving expenses into the current year.
- For a bad year, pharmacies might want to move expenses into the next year if they expect better performance.
- Lisa reiterates the importance of consulting a tax expert for specific advice tailored to individual situations.
Disclaimers and Tax Variations by State
- Lisa provides disclaimers, stating that she and Rob are not providing legal advice but sharing their experiences.
- She notes that taxes vary by state, and while they will discuss federal-level tax strategies, state-specific advice should be sought.
- Lisa shares her personal experience of moving from California to Texas to avoid state taxes.
- She encourages participants to consult their state tax experts for state-specific advice.
Introduction of Rob and His Background
- Lisa introduces Rob, highlighting his involvement in pharmacies, real estate, and other ventures.
- Rob emphasizes the importance of keeping money rather than just making money, as the IRS views business owners as partners.
- He shares his belief that the IRS is not out to get business owners but to partner with them to grow the economy.
- Rob mentions his reliance on books, studies, and a former IRS trial tax attorney named Scott Esther for his insights.cific advice.
Understanding the Tax Code and IRS Interpretation
- Rob explains the complexity of the tax code, which is over 78,000 pages, and its interpretation by the IRS.
- He emphasizes the importance of keeping receipts and documentation to prove the legitimacy of tax strategies.
- Rob shares a quote from a federal judge encouraging taxpayers to arrange their affairs to minimize taxes.
- He discusses the concept of two tax systems: one for the informed and one for the uninformed, and the importance of accurate bookkeeping.
Tax Deductions and Intent to Make a Profit
- Rob explains the importance of having an intent to make a profit and the need for reasonable claims to qualify for tax deductions.
- He discusses the concept of business meals and the 24-hour rule for tax deductibility.
- Rob shares an example of a business dinner that could qualify as a tax-deductible expense.
- He explains the concept of business trips and vacations, including the importance of documenting business purposes.