Tax Planning for the New Tax Law Changes with Moneeka Sawyer of the Real Estate Investing For Women Podcast

Hello everyone. Welcome to the Real Estate Investing for Women podcast. I get so many questions on the tax laws, especially with the changes that have happened this year. I am beyond excited to have this conversation.

This is a great year for tax planning.

Exactly. Let’s jump right in, okay? Let’s start with what is the biggest mistake real estate owners make?

That mistake happens to be the same mistake that all business owners make. It’s called failing to plan. They’re going to buy a car or a truck or something. They do all this research. What do they do to plan for lowering their taxes? Nothing. A lot of people wait until February, March, April to actually even have a conversation with their CPA. Failing to plan. Now is a great time to start planning for 2018.

That’s right. We’re half way through the year, and most of us don’t want to even think about this until about the beginning of April, right?

Most definitely.

Then you’re freaked out, and you’re not going to be able to get all the benefits that you could and take advantage of all the write offs and all those things that you could, because in a freaked out space, you’re not going to be as-

Well, it’s too late number one because the year’s already over, and your tax CPA accountant is probably overwhelmed. He doesn’t have the time to do planning with you. You’re back to basically putting the right numbers in the right boxes, and that’s it.

That’s it. Right. Exactly. Just before the show, Craig and I were having a conversation about my taxes. I’m also planning for next year, so I’m kind of in that space of planning. Great idea, right? Make sure you’re planning.

Planning should go on all year round.

Right. What is proactive tax planning, and how can it minimize your taxes? Let’s find out about that.

Most accountants and CPAs are focused on getting the right numbers in the right boxes and kind of looking in the rear view mirror like recording history, not helping you make history. If you communicate with them, they you could look for legal ways that maybe do things a little bit differently or set up structures a little bit differently that can have a huge impact on the amount of tax you pay. That’s proactive planning. Just taking the time. It’s not rocket science. It’s take the time to have those conversations so you can plan and keep more of what you make.

Right, so that you can invest even more, right?

Exactly. Exactly.

Tell us how you can take advantage of your CPA or how you can use your CPA for your advantage?

I always say people think of they don’t want to call their CPA for their accountant because, “He’s going to send me a bill.” I always say, “You know what? Think of it as an income item versus an expense item.” If you’re making money and you communicate with your CPA, he’s probably going to be saving you a lot more money than it’s costing you. Take the time to communicate before the year’s over and maybe do things a little bit differently or structure things a little bit differently and save that money.

I’ve always heard from my coaches, “Don’t trip over pennies trying to get dollars.” It’s really important. This is one of the things that I talk to my listeners about all the time is you cannot be a professional at all the things that you’re doing in your business. Do the things that you do best, and get better. Just do them really, really, really well, and then hire a team of people you trust for the things that you can’t do. Real estate agents are constantly studying the markets. Mortgage brokers are constantly looking at what the products are and what the rates are. Our CPA knows tax law like we could never possibly know because they’re up with it, and they’re doing it every single year. Lawyers, same thing. The laws change. It’s really important to hire a team that is good that you trust and then actually utilize them. Pay them for their services the same way as you would expect to get paid for your own services. In the end, they’re going to save you a huge amount of money and help you grow your business in the fastest, most profitable way possible.

Right. Don’t just set it and forget it. Communicate with them. Go over the numbers, because the more knowledge you have about your numbers, the more money you can make. You can see trends. You can see where you’re making your money depending on what you’re doing and maybe focus more on that area than another area. I think it’s really important to have that communication.

Tell us how often should a business owner communicate with his or her CPA?

With our clients, we communicate with them monthly. We go over the P and L every month. We set up a Zoom call. Nobody has to travel anywhere. We go over the numbers. It might be a five minute conversation. It could a 45. It depends on what’s going on that month. This way they know what’s going on with their numbers, we know what’s going on with their life, and you never know when you get that, “Yeah. Oh yeah. You know what? We were thinking about doing this, or we just got permits for the building because we know we could see it in three years and take the $500,000 exemption.” It’s like, “No, no. You can’t do that. That’s your business. It’s not your home.”

That’s right.

By communicating, you find those things out.

Right. It’s not then just a 30 minute conversation in March about what can we do.

Honestly, if you think you’re going to get a lot done in March when your guy or girl is probably overwhelmed, no. No. It’s not going to happen. Take the time during the year when they can communicate, and make sure they communicate with you. If they don’t, there’s plenty of people out there that will.

The other thing is that a lot of people who invest in real estate don’t think of it as a business. They think of it as something completely different. “This is my investments.” You know, your investments, whether it’s in stock or real estate or wherever you’re investing, this is your business. It’s part of your financial future, and you want to treat it as a business. With businesses, you look at numbers, and you talk to your professionals.


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Listen to the full interview with Moneeka Sawyer here!

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