Camp Accountant is officially in the books and there was money to be made and taxes to be cut.
There were lots of smiling faces and new friends made. It goes to prove you do not have to be a tax professional to enjoy this stuff. (Anything that keeps money in your pocket automatically generates interest.)
Randy Lappla and Chris Dudley were our guest speakers; I talked (and talked and talked and talked) all afternoon. Let’s break down some of the day’s events.
Turning Real Estate into a Cash Cow
Randy started us out with a powerful program involving real estate.
There are many ways to build passive income. Real estate can be one of the best when handled properly. Randy showed us how you can supercharge deductions with income property.
I’ve published on cost segregation studies in the past. Most people’s eyes gloss over when the topic arises, but that is a huge mistake. That is why I invited Randy to speak with the group.
There are several ways cost segregation tax rules can cut your tax bill. First, you can get outsized deductions up front. If you have owned the property a few years you can catch up past deductions in the current year. Second, with a cost segregation study you can deduct more when you improve your property. We even had an example of how a $100,000 new roof can lead to $150,000 in deductions. Legally, I might add! And third, cost segregation sometimes allows for some tax arbitrage.
The tax code has changed a lot when it comes to real estate. The advantages are becoming so great you might want to consider adding real estate to your investment portfolio. Real estate was always a powerful wealth creation tool. Now you keep more of your gains than ever.
Randy Leppla’s contact information:
Taking Your Side Hustle to the Next Level
After a short break and snack we had a short presentation by Chris and me. What I wanted people to know is when they need to transform their side hustle into a tax savings tool.
I talked about when you want to switch from a sole proprietorship to an S corporation and the taxes saved. That requires you get paid a wage instead of just drawing any and all earnings.
Chris is a payroll specialist from ADP and provided details on how ADP can help facilitate the options I suggested. If you think this may benefit you, I can help iron out the process. I’ll help you determine what you want to be paid to maximize tax benefits.
Chris Dudley’s contact information:
After the morning sessions I broke out in song for the group. Or maybe not. (Had you thinking for a moment, didn’t I?)
All work and no play is really bad for the soul so we filled the middle of the day with a pleasant nature walk to The Wealthy Accountant’s tax office. You could not have asked for a better day to walk the Northwoods of Nowhere, Wisconsin. For the record, it has snowed twice in less than a week since Camp. Yes, that would make it a record snow total for the month of October in these parts.
We got bogged down at the office as people asked questions about how I live in my natural habitat. A photo op ensued.
I shared future plans for the blog and courses soon to be announced.
We took a shortcut back to Camp for nourishment..
After a long walk and tummies full it was my turn to speak while others slept. (Not a single soul nodded off.)
Choosing the Best Retirement Plan for Maximum Tax Benefits and Wealth Accumulation
The keynote address was a play on a recently published blog post where I said investing in a traditional retirement account is like taking out a loan. I felt the topic needed deeper discussion.
I started with a word and number play from the book Thinking, Fast and Slow (Amazon affiliate link) to prove how we frequently make poor financial decisions. Once we saw how psychology affected our thinking we were able to see the same mistake/s played out in our retirement plans.
The reason we make financial mistakes is because it seems so simple while it is really complicated.
Where should we put our money first? It was decided the pecking order for investing is as follows:
- Roth 401(k)
- Roth IRA
- Traditional 401(k)
- Traditional IRA
- Non-qualified accounts
We gave deferred compensation plans a short hearing, too.
Then I showed why the ordering is wrong, especially on the last three entries.
The math proved out, which is always good if you are an accountant. Just as we saw at the beginning of class, we sometimes think “fast” and make the wrong choice. My hope is the room left with a better understanding of when retirement accounts are the right and wrong choice.
We ended the day with a Q& A session where attendees could ask anything they wanted about yours truly.
Tax and money questions soon turned to more personal issues. Folks wanted to know what happen with the Mr. Money Mustache thing. (There really wasn’t much more to add.) People wanted to know why I have distanced myself from the FIRE community. (There wasn’t much more to add to what I have already published.)
I shared several projects I am working on. Then we wrapped it up and called it a day.
I was exhausted. Whew!
Many people wanted to attend but could not. All the sessions (and some open mic moments after some sessions) were recorded and placed in a private Facebook group. Attendees get free access. I will be adding several short videos over the next week or so to the Facebook group, providing a short synopsis of each session. (The internet was slow at the venue so video quality is poor. The new videos loaded in the next week or so should remedy that.)
It was decided that anyone could view the sessions, but that would be unfair to those who paid to attend. Therefore, I am granting access to the private Facebook group for $20 for non-attendees. Use the link below. Proceeds go to charity.
Finally, I bought extra t-shirts (intentionally). I will use t-shirts as a promotional item in the future with courses offered. Every attendee received a t-shirt. If you can’t wait you can also get an awesome Wealthy Accountant t-shirt for $15 while supplies last. Tax and shipping are included. My total cost for the t-shirts is $9.44. If shipping and sales tax does not bring the cost to $15, the remainder will also go to charity. (The three charities I love to support are: Special Olympics, Bethesda and Doctors Without Borders.)
More Wealth Building Resources
Personal Capital is an incredible tool to manage all your investments in one place. You can watch your net worth grow as you reach toward financial independence and beyond. Did I mention Personal Capital is free?
Side Hustle Selling tradelines yields a high return compared to time invested, as much as $1,000 per hour. The tradeline company I use is Tradeline Supply Company. Let Darren know you are from The Wealthy Accountant. Call 888-844-8910, email Darren@TradelineSupply.com or read my review.
Medi-Share is a low cost way to manage health care costs. As health insurance premiums continue to sky rocket, there is an alternative preserving the wealth of families all over America. Here is my review of Medi-Share and additional resources to bring health care under control in your household.
QuickBooks is a daily part of life in my office. Managing a business requires accurate books without wasting time. QuickBooks is an excellent tool for managing your business, rental properties, side hustle and personal finances.
A cost segregation study can reduce taxes $100,000 for income property owners. Here is my review of how cost segregation studies work and how to get one yourself.
Worthy Financial offers a flat 5% on their investment. You can read my review here.
Sunday 1st of December 2019
Is there an alternate way to view the videos other the facebook group?
Sunday 1st of December 2019
Not at this time. At some point in the future I may put them on YouTube.
I will have synopsis videos on the FB page soon that will highlight each lesson.
Thursday 31st of October 2019
So the order to invest is not HSA Roth 401(k) Roth IRA Traditional 401(k) Traditional IRA Non-qualified accounts ??
Friday 1st of November 2019
I think the group agreed with me the top of the list is accurate in 99.9999999% of the cases, Matt. The few instances where a reordering would be warranted the results would only provide a modestly better result.
The bottom three (traditional retirement products versus non-qualified accounts) are another story. I outlined several instances where the NQ account beats traditional retirement products. Not everyone will have a problem. Perhaps a third might be better served by rethinking the "fill the traditional retirement account first" mantra. NQ accounts also have advantages that in some instances outperform traditional retirement plans. Facts and circumstances prevail.