Tax Tips, IRS, End of Year Tips with guest speaker: Rob Zachariah
Linkedin: https://www.linkedin.com/in/robinsonzachariah/
Contact Info
Phone Number: 917-566-7373
Email Address: info@pcipharmacy.com
Summary
Lisa Faast and Rob discussed year-end tax strategies for pharmacies. They emphasized the importance of understanding tax guardrails and leveraging them to reduce tax burdens. Lisa highlighted the Employee Retention Tax Credit (ERTC) and Section 179 tax credit for equipment purchases. Rob suggested paying children up to $12,900 each year without tax implications and using personal residences for business meetings to avoid taxable income. They also discussed the R&D tax credit, solar tax credits, and the importance of separating personal and business expenses to maintain asset protection. Both stressed the need for accurate bookkeeping and consulting tax experts for specific advice.
Action Items
- [ ] Review personal credit card statements from the past weeks to identify business expenses that can be transferred to business accounts.
- [ ] Pay outstanding business bills before December 31st and manually pay off business credit cards to reduce taxable revenue.
- [ ] Increase pharmacy inventory purchases before year-end to reduce taxable income.
- [ ] Process payroll for children performing legitimate business work before year-end, up to $12,900 per child.
- [ ] Contact Rob or Lisa via email with any follow-up tax strategy questions.
Outline
Introduction to Tax Topic and Meeting Purpose
- Lisa Faast introduces the topic of taxes, expressing her newfound interest in understanding tax guardrails and strategies.
- Lisa mentions the presence of Rob, a pharmacy owner and tax expert, who will share tax tips and philosophies.
- The meeting aims to help participants prepare for year-end taxes, considering whether it has been a good or bad year for their pharmacies.
- Lisa emphasizes that she and Rob are not tax professionals but will share their experiences and information.
Disclaimers and Meeting Structure
- Lisa provides disclaimers, stating that she and Rob are not accountants or tax attorneys and are not providing legal advice.
- She advises participants to consult their own tax experts for specific advice.
- Lisa notes that taxes vary by state, and she shares her experience of moving from California to Texas to avoid state taxes.
- Lisa introduces Rob, who will provide more detailed information and strategies.
Rob’s Introduction and Tax Philosophy
- Rob introduces himself, mentioning his involvement in pharmacies, real estate, and starting a fund.
- He emphasizes the importance of keeping money rather than just making money, and the role of the IRS as a partner for business owners.
- Rob shares insights from Scott Esther, a former IRS trial tax attorney, on the complexity and interpretation of the tax code.
- He advises participants to not fear the IRS and to use tax strategies to their advantage.
Understanding Tax Codes and Strategies
- Rob explains the complexity of the tax code, with over 78,000 pages, and the importance of accurate bookkeeping.
- He discusses the intent to make a profit as a key factor in qualifying for tax deductions.
- Rob provides examples of tax-deductible meals and business trips, emphasizing the importance of intent and reasonableness.
- He shares strategies for taking advantage of business trips and vacations, including the use of pharmacy conferences and meetings.
Specific Tax Tips and Strategies
- Lisa recommends looking into the Employee Retention Tax Credit (ERTC) for pharmacy owners, noting its potential benefits.
- Rob suggests paying children up to $12,900 per child without paying taxes, highlighting the benefits of transferring wealth to children.
- Lisa discusses the Section 179 tax credit for equipment, allowing businesses to deduct the entire cost of equipment purchases in the same year.
- Rob introduces the “vegetable” strategy, where business owners can rent their homes for social gatherings and transfer money tax-free.
Additional Tax Tips and Best Practices
- Lisa advises on the importance of having separate business and personal credit cards and bank accounts to avoid commingling expenses.
- She shares her experience of using BlueVine for business banking to better separate business and personal finances.
- Rob emphasizes the importance of keeping personal and business expenses separate to maintain asset protection.
- Lisa and Rob discuss the R&D tax credit, clarifying that it is available to all businesses, not just compounding pharmacies.
Final Tips and Q&A
The meeting concludes with Lisa and Rob encouraging participants to take action on the discussed tax strategies and to consult their tax experts for specific advice.
Lisa and Rob encourage participants to review their personal credit card statements to categorize business expenses.
They advise paying business bills manually to reduce year-end revenue and take advantage of tax deductions.
Lisa shares her experience of being audited and the importance of having accurate records and documentation.