I am an enrolled agent and have been doing taxes for over 15 years. You better be very careful to follow what this man is saying, because he is not giving the complete picture.
Thank you, sir!, for this great content!, folks all over need to know regardless of being a home owner or not, it’ll help you maneuver to get to where you want ya life to be, as far your/one’s aspirations, to achieve things, there will be less speed bumps, because you paid attention to how the game is played.
If I am an LLC I have an EIN, taxed as a Sole prop (Schedule C), Vehicle is under 6000lbs, it is in my personal name, Can I at least Depreciate the vehicle over 5 years? Use Section 179? Bonus Depreciation? Thank you in advance, great info
Karlton so I have an LLC and ill start selling cars out of a small office. I still work and live off of a W2 income. I want to buy a dually so when I go to car auctions I have something to pull it with. I want write off the truck and accessories I need to make a tow pig. i havent many sales, but I have money to pay it. Shouldd I wait to generate money to then write it off? I live in California.
This is a luxury vehicle and by definition neither section 179 nor bonus depreciation will allow full expensing for a passenger vehicle. This is especially true because NO ONE has 100% business use of such a vehicle and thus you can't fully expense it. As a CPA it's scary to see everyone believing this guy verbatim
This is a simple business practice, as long as your LLC is a legitimate business, and not just an LLC to write off “business expenses” that really aren’t used for your business. If your a sales rep for XYC corporation, you can’t open an LLC and say your a sales rep for the LLC, when you don’t exchange any finances, make any revenue with the LLC, etc. When you file your taxes, your LLC has to show profits, salaries paid, expenses like the car, etc, or it will throw up a red flag and an audit will follow. I know because I’ve done it for 20+ years.
40K value is the new limit, vehicles can't be assigned to an individual or business in this way, and... any way it goes..., 10K is the max depreciation now due to post plandemic tax law changes... there are 87,000 new reasons why I would question all this...
“The consumers basically have more money in their accounts by multiples than they did pre-pandemic,” the Bank of America chief added. “They’re earning more money. Their credit quality is as high as it’s ever been. They have more excess capacity and investing with BFI". Ms Vanessa Saint.
I'm an economist and I have been managing with my income but getting to know BFI investment company, I became secured and stress free from every debts and loans. 👍
As a CPA licensed consultant, I've worked with a lot of clients that try to do this. It doesn't work unless you buy a used car at a depreciated value of no more than $40k. You're only allowed to claim a maximum of $10,200 of depreciation year over year for each filing. Also they closed the loophole with luxury cars after Covid-19 so purchasing a Porsche or corvette etc. won't fall under this small business tax write-off. You can no longer allocate a car to an individual or business either. Most people who attempt the second part wind up having their car repo'd and can face jail time. My advice would be to buy a used car with a luxury or sport trim level (SUV's are best) and pay your monthly payments and write off the car after 2-4 years. Put minimal miles on the car and sell it, essentially that's free money minus the sales tax (Unless you sell from Montana).
I'm a 6fig w2 employee with a side gig doing RE photography. Gross estimated 75k 2022. LLC. Purchased 2023 c8 corvette in business name. Still have personal car. The c8 IS used 75% for business (I have a lot of properties to drive to and stage the car in driveways for nice listing). I was going to depreciate 75% which is 60k over 5y at 12k per year. Do you see a problem with this approach if I have milage to support 75% biz?
Even when you buy an EV. The only way around that is to buy a model X plad add so that the weight of the car put you in a class a farm equipment. Once you have looked labeled as far as equipment you can write-off the entire car to your LLC. Just FYI so that you actually get it right
@@drusier The max depreciation you can claim is $10,200. Because you're claiming 12k you'll end up owing $1800 in taxes each year if you can validate your LLC business asset. The net profit of your LLC is more than the value of the car which is a major red flag with the IRS. I would prepare for an IRS audit which may cause your business vehicle to be excluded from your LLC tax write-off.
And by watching just one video, I have subscribed. Well done. I know your strategy is not unique in the business world, the privileged class grew up in families that have empires where these practices are not only commonplace but expected and passed on. And that, in and of itself, that class structure, acts as a gatekeeper to this kind of knowledge you're spreading in this video. You're helping the ordinary man circumvent those gatekeepers that have held supreme authority throughout history. Good on you. I can't wait to watch more of your catalog to see what other topics you delve into.
TurdFurgeson571... Awesome comment! Some of us are afraid to move outside of the box! And some of us reason that since we've never heard of it, it doesn't exist. I'm truly ready to learn! Be safe out there 💚💯
You are using these cars for personal use! How can your business be deducting these cars if they aren’t used for the business? Is it hard for the irs to prove you are using them for personal use?
Great explanation of using a management business to work for your other business! I’ve heard of rich people doing that but didn’t know the concept as to why!
If he was a white man would you have said he was well spoken? Why do ppl always associate blk ppl with not being articulate or educated? I guess it's just an unconscious bias ppl have in general. Smh
@@nateg5915 You know, I thought about this after I posted and I think its because he’s around my age and I’m not well spoken, so, its just good to see someone in my age group as a well adjusted adult.
It all depends on how long you keep your car. My wife and I own an LLC and an S Corp. Since we keep cars for well over 10 years, based on the advice of our accountant, we opted for deducting monthly travel/mileage expenses, so we receive $750 each for each company which is 36K a year that doesn't go through payroll and is a business expense. It's my understanding that if you purchase the car through the LLC or S Corp, you can not deduct mileage etc in addition to the payments/depreciation. Now, if you turn over cars every few years, then purchasing would work out in your favor.
"you can not deduct mileage etc in addition to the payments/depreciation." This was my understanding also. I'm no accountant though, but going to get one soon.
A BIG piece of information that’s missing from this video is if you want to write off 100% of your vehicle, it needs to be 100% used for business only.
This totally just helped me with my dads current business I wanted to create an LLC for myself. But really had no business but will be getting my management degree. Instead of being a manager within my fathers company I can have my own management company and work with him from that perspective to give myself/ entity more tax opportunities!!
I think this video may get people audited by IRS and State revenue departments. You need to make sure you pay “Management co” for actual service they provide and MUST be reasonable. You can’t just make payments without any reasonable business needs. IRS would challenge that and possibly hit you with penalties and interest.
On IRS website (IRS Tax Reform Tax Tip 2019-100), it says "If a taxpayer uses the car for both business and personal purposes, the expenses must be split. The deduction is based on the portion of mileage used for business." I think you do have a good reason to say the Porsche is for business purpose. But, I think it's hard to justify it's 100% for business. For the Tesla, I want to know what the business purpose is for the management company to own the car?
Don’t try to navigate such a move solo. Work with a tax professional to sort yourself. If he is wrong, I’m sure he’ll survive an audit just fine. But from your perspective he is a random guy on the internet.
“Tax loopholes” are for the middle class and people who are working hard to break free and become financially free. Don’t be fooled that getting rid of these tax loopholes is because “the rich just get richer” Vote to keep 1031 exchanges and more!!!
Love the breakdown. With what I’ve learned over a decade investing, given enough time, solid investments have the potential to double the initial principal amount, but many investors are instead attracted to the lure of high yields in short periods of time despite the possibility of unattractive losses before even getting out. So the onus is on newbies to beware. Got my second Carrera GT with my first Q ROI.
@Ralph ZimmermanAs long as you diversify your portfolio, any single stock that you own shouldn’t have too much of an impact on your overall return. If it does, buying individual stocks might not be the right choice for you, as you can also try out the Roth IRA or I series bonds. Even index funds will fluctuate, so you can’t get rid of all of your risk, try how you might. With help, these are achievable. LEVI CLEMANS, a pro Fiduciary oversees my portfolio. You can look him up online, and connect him.
You also need to know that it’s possible to lose money, since stocks don’t have principal guarantees. If you’re looking for a guaranteed return, perhaps a high yield CD might be better.
With Clemans' oversight, I’ve been able to select well run companies with strong finances and a history of shareholder friendly management practices that have made me good gains in the past months.
Dude, words matter: You didn't 'purchase' or 'buy' anything!! You LEASED a car. Please, STOP using incorrect words and especially so as a 'tax expert'. Good grief...
He did explain how he did it. He leased his first car under his business for the tax write-off ($800) of his first car, and then hired his wife under his LLC for the write-off of the second car. He shared how he did it for his LLC. Title is not misleading, he gave you two available legal options.
Pops to you and your family bro. I've been waaaayyy too scared over the years to teach exactly what you're teaching in this video. Most people won't be able to digest it and I feared people messing up and blaming me. You know how that goes! But I love to hear how your entire family works together! Next to understanding taxes, working together is how you truly build wealth.
I absolutely want to take advantage of this with my next vehicle purchase. With what I do for a living it's most definitely passable as a business expense and direct advertising for my particular craft. However, I had been told by a CPA years ago that in order to deduct the vehicle purchase costs, it had to be 100% used for business and never for personal use. I'm hoping I'm completely misinformed on that because I've had my eye on a particular model lexus for a while now but haven't been able to justify the cost when my camry is doing just fine and is all but paid off lol. I'd much rather be cruising in my fully deductible GSF 👌😎
technically, if you have a wrap or some sort of sign pointing towards your business on the vehicle... even doing personal errands can technically be viewed as "business", since you are actively advertising when you drive.
I'm weary of someone calling themselves the "Tax Alchemist" that isn't a CPA, doesn't even have a degree in Acct, Finance, or any Business related field. I mean that's like me a Financial Analyst making vids on how to do Dental Surgery.
@@PaulSorensen5 yea, you can’t just slap a wrap on a personal vehicle and expect tax deductions on the vehicle as the intended Purpose initially is personal. I’m talking about in regards to a Company owned/purchased vehicle with a wrap, this in theory should allow a double deduction for both car expense + advertising.
@@daltondasilva8051 thank you for your encouragement! Four months after this comment and I’m about to start building the first floor of the building baby! The foundation is solid. Only up from here!! Sending my love your way. Thank you again!✊🏽
I'm glad I stumbled onto this video...a couple of questions: A). Is the Porsche lease in the name of your company and did you have to personally guarantee? B). Would this work if the company is a holding company?
Unfortunately you are not going far enough with your explanation. If you lease your car to your company, you have to realize that as income on your personal return. This is the kind of advice that gets folks in trouble.
So basically, the corvette I’m looking at could be a huge plus for my detailing company versus a deficit as my dad says lmao, I appreciate this insight
You could definitely justify it both as a Prop (similar to what Karlton did) but I'm not sure 100% is easy to prove. There is no way you're not driving it for personal use. Since you're in detailing business, you should have all kinds of equipment/sprayers/chemicals/soap whatever in your business vehicle (assume you drive to client's car to detail it and not them dropping it off). Remember IRS requires you to keep a mileage log and you have to prove every mile if you want to deduct it 100%
as a business man going on 50, having been a self employed business owner since 21.. i've bought lots of cars in my business, and in my line of work were justified. but the 6 figure Mercedes, Auidi, Vettes, Range Rover etc.. I regret every single one of them. you don't need that kind of tax write off, much smarter choices in the business world .. i now drive a 20 year old truck with 150k miles on it. nope its not an expensive tax write off, but that's the point. . it gets me from point a to point b and i leave the expensive tax write offs for things that have far far more return on investment and appreciation
I just stumbled on your channel at the RIGHT time cause I'm about to start another LLC after like 15 yrs...right on time. DO you have any vids on putting your LLC in a trust or how to structure it?
I'm thinking about forming an LLC for a rental property, and just knowing that you have so many options with establishing a business opposed to leaving everything in your personal name is very interesting!
Are you sure you’re actually an accountant? It’s true that you can depreciate over five years, but you can’t deduct the whole car payment, only the interest. It is true that you can deduct the entire car lease payment if the car is used 100% for business.
Great video, I've been following the channel for a bit and had a question regarding Bonus Depreciation. So as a new business owner who was fortunate enough 2021 to make a 6 figure profit in their first year, I made the decision to purchase a ModelX under my business to help offset my taxes due at the end of the year. After having a few appointments with my CPA who's been super helpful, he told me I am not able to use Bonus Dep because the ModelX is a 2018 and not a 2021; not from the same tax year. All the research and laws i've read does not mention the car has to be from the same year. How do I politely inform him of this to be able to write off the ModelX without coming off as a know it all or being disrepectfuly
Your tax account is wrong. You can take bonus depreciation +179 on any vehicle purchased and used in business after 2017. Call my office and we will take care of this for you.
@@karltondennis thank you. I definitely will. also thank you for what you do for everyone to become more educated and understanding of tax laws in our favor!
Is it not awesome to see all young men ? I get your intention but it’s doesn’t come across good. It’s coming off as a racist bc we all know the true racists are the folks who only stand up for their own race and disregards others. Brother, be proud of all successful men ok
Great job explaining the benefits of the C-Corp and when you need a management S-Corp to manage it. Sometimes articles make it too complicated to digest the information.
This video singlehandedly makes me distrust all the rest of his videos. 1st of all...he must be getting paid by Porsche and Tesla for this. He legit does a commercial for both of them. 2nd. And most important. The "tax advice" he gives is questionable at best. Can you take a 179 for a Tesla SUV? Sure...but you won't pass an audit, unless the car is under $25,000. I.R.C. § 179(b)(5)(A) In General - The cost of any sport utility vehicle for any taxable year which may be taken into account under this section shall not exceed $25,000.
"...but a guy on UA-cam said I could..." I like the videos for what they are - infotainment - but I would never rely on any of them, especially this one.
Maybe I’m missing something, but wouldn’t the rental payments for the vehicle received by the lessor have to be included as income; essentially cancelling out the benefit?
When you rent (or lease) an item, you are able to deduct the cost of the leased item. So if he is leasing the car to his corp at the same amount he is paying out of pocket, it cancels out.
@@CollinEichinger0221 if there’s a lease expense then there’s lease income. So if he’s leasing the car to the corporation, he’s receiving income from the corporation.
I'm glad you're sharing some specifics terms and processes to research, but these are very loosely business purchases bro. If I were the IRS watching this I'd audit you tomorrow and ask you to prove that over 50% of this car's use is for business. On that note, 24-year-old comment dwellers, this man's income is primarily derived from being on screen. However vapid that may be, it helps substantiate the claim that this car is for business; you can not, which is why you're watching this video instead of making it. Be reasonable.
Hey Karlton, this is super helpful thank you for sharing! Do you know if write-offs and depreciation work the same (or similar) way in Canada? I have a Model X and am about to lease a 2017 718 Cayman S under my LTD corp and wanted to chat with you or one of your counterparts about how to properly structure the vehicles before moving forward.
Great video! When you leased the car from yourself to your company did that negatively affect your taxes/ tax return when you filed your personal taxes? Wouldn't that be considered income for you?
How were you able to get approved for the Porsche lease under your C corporation as a new, small business owner? Would the title to the Porsche need to be under the C corp and also the monthly payment would need to come from the C corp in order for the deduction to be valid?
I can really resonate that having a nice vehicle when you're a young entrepreneur increases your legitimacy as a proper expert in your craft. It has for me! Just gotta stay within your means of course and make a wise choice for the car you end up with.
I was always under the impression that the expense had to be both ordinary and necessary to the business. IRS Pub 535 states "An ordinary expense is one that is common and acceptedIN YOUR INDUSTRY. A necessary expense is one that is helpful and appropriate for your trade or business". Am I misunderstanding?
My question is what he was saying at the end. How can we justify buying something just to write it off? Because at the end of the day aren’t you just spending money? Of course it lowers your taxable income down but you are still spending that money you would of had for your self/business. I’m new to this would love some help to understand🙏🏼. Is it just to buy what you were needing or wanting anyways in a smart way… because to me yes it a write off but you still spending the money you’re would of had?
I bought a car to make videos on UA-cam. I have kept track of my miles and stuff with the car. But I haven't registered the channel as an LLC. I am still able to write that off right?
There are depreciation limits on lux cars. Also personal use of a corporate vehicle has to be charged to the user, just like use of a corporate jet for personal use / vacations, etc.
So I've never really understood the "write off"... so when you "write it off" you're really only not paying taxes on that amount of income, correct? So if I write off a company truck that is $100k in 2 years, I'm really just saving like 15% of the $50k per year?
Definitely dropping gems in this video 🤩🤩🤩. I purchased a Tesla under my business this year. Could you please share an example of a vehicle leasing agreement?
So do I do the following; on my P&L I show the expense which contributes to net income of which taxes obligation is calculated. Then when filing taxes I list the depreciation of the vehicle as well? Essentially having the car reduce my table income twice?
I am an enrolled agent and have been doing taxes for over 15 years. You better be very careful to follow what this man is saying, because he is not giving the complete picture.
What's the big picture?
@@acbarker5311 You may have to recapture the depreciation you took when and if you sell the car
Well until someone contests what he’s saying with facts(which I haven’t read yet), I’m rolling with him doing my own investigation 💯
@@XZAVRZIIED-ny6hjthere's a CPA who has debunked a handful of his videos already
Thank you, sir!, for this great content!, folks all over need to know regardless of being a home owner or not, it’ll help you maneuver to get to where you want ya life to be, as far your/one’s aspirations, to achieve things, there will be less speed bumps, because you paid attention to how the game is played.
I’m going to need this knowledge soon. Thank You KD! 💯
This was heat bro. Definitely getting in-touch!
I am happy for u. Would u plz make an video for llc two partners?
If I am an LLC I have an EIN, taxed as a Sole prop (Schedule C), Vehicle is under 6000lbs, it is in my personal name, Can I at least Depreciate the vehicle over 5 years? Use Section 179? Bonus Depreciation?
Thank you in advance, great info
Smart. Learning from you
Looks like South coast plaza
I’m thinking about starting an LLC/S-CORP would a motorcycle count as a business vehicle or not just curious
This guy is pretty smart 👌🏾
Karlton so I have an LLC and ill start selling cars out of a small office. I still work and live off of a W2 income. I want to buy a dually so when I go to car auctions I have something to pull it with. I want write off the truck and accessories I need to make a tow pig. i havent many sales, but I have money to pay it. Shouldd I wait to generate money to then write it off? I live in California.
Hi , you do business in Illinois?
This is a luxury vehicle and by definition neither section 179 nor bonus depreciation will allow full expensing for a passenger vehicle. This is especially true because NO ONE has 100% business use of such a vehicle and thus you can't fully expense it. As a CPA it's scary to see everyone believing this guy verbatim
Intriguing indeed.🤠
We have to protect him at all costs, he is giving knowledge schools don’t teach
Big Facts 💯
They actually do teach this in classes for an Accounting Major ...
Hey WhatsApp guy.. get lost scammer!
Bro is Karla Dennis your mom?
CONTENT..... CONTENT...... MY MOMS COMPANY......... THIS GUY NEEDS TO BE ERASED
Best video I've ever seen
dojo in the building
Yessir
dojo2mf moon
Ong
Ohhh shittt, we bringing the dojo here?
This is a simple business practice, as long as your LLC is a legitimate business, and not just an LLC to write off “business expenses” that really aren’t used for your business. If your a sales rep for XYC corporation, you can’t open an LLC and say your a sales rep for the LLC, when you don’t exchange any finances, make any revenue with the LLC, etc. When you file your taxes, your LLC has to show profits, salaries paid, expenses like the car, etc, or it will throw up a red flag and an audit will follow. I know because I’ve done it for 20+ years.
Hi. Do I HAVE TO transfer my business vehicle title into my LLC name to write it off? Thanks!
40K value is the new limit, vehicles can't be assigned to an individual or business in this way, and... any way it goes..., 10K is the max depreciation now due to post plandemic tax law changes... there are 87,000 new reasons why I would question all this...
4 minutes lost hearing him talk about himself! 😐
“The consumers basically have more money in their accounts by multiples than they did pre-pandemic,” the Bank of America chief added. “They’re earning more money. Their credit quality is as high as it’s ever been. They have more excess capacity and investing with BFI". Ms Vanessa Saint.
I'm an economist and I have been managing with my income but getting to know BFI investment company, I became secured and stress free from every debts and loans. 👍
He talks more like he's selling me a car then talking about tax deductions
As a CPA licensed consultant, I've worked with a lot of clients that try to do this. It doesn't work unless you buy a used car at a depreciated value of no more than $40k. You're only allowed to claim a maximum of $10,200 of depreciation year over year for each filing. Also they closed the loophole with luxury cars after Covid-19 so purchasing a Porsche or corvette etc. won't fall under this small business tax write-off. You can no longer allocate a car to an individual or business either. Most people who attempt the second part wind up having their car repo'd and can face jail time.
My advice would be to buy a used car with a luxury or sport trim level (SUV's are best) and pay your monthly payments and write off the car after 2-4 years. Put minimal miles on the car and sell it, essentially that's free money minus the sales tax (Unless you sell from Montana).
I'm a 6fig w2 employee with a side gig doing RE photography. Gross estimated 75k 2022. LLC. Purchased 2023 c8 corvette in business name. Still have personal car. The c8 IS used 75% for business (I have a lot of properties to drive to and stage the car in driveways for nice listing). I was going to depreciate 75% which is 60k over 5y at 12k per year. Do you see a problem with this approach if I have milage to support 75% biz?
Thanks for the advice !
Even when you buy an EV. The only way around that is to buy a model X plad add so that the weight of the car put you in a class a farm equipment. Once you have looked labeled as far as equipment you can write-off the entire car to your LLC. Just FYI so that you actually get it right
@@drusier The max depreciation you can claim is $10,200. Because you're claiming 12k you'll end up owing $1800 in taxes each year if you can validate your LLC business asset. The net profit of your LLC is more than the value of the car which is a major red flag with the IRS. I would prepare for an IRS audit which may cause your business vehicle to be excluded from your LLC tax write-off.
It's called "Bonus" depreciation!! Bonus depreciation is for certain equipment, vehicles that weigh 6000 gswr (or more).
And by watching just one video, I have subscribed. Well done. I know your strategy is not unique in the business world, the privileged class grew up in families that have empires where these practices are not only commonplace but expected and passed on. And that, in and of itself, that class structure, acts as a gatekeeper to this kind of knowledge you're spreading in this video. You're helping the ordinary man circumvent those gatekeepers that have held supreme authority throughout history. Good on you. I can't wait to watch more of your catalog to see what other topics you delve into.
Nobody cares bro sthu
TurdFurgeson571... Awesome comment! Some of us are afraid to move outside of the box! And some of us reason that since we've never heard of it, it doesn't exist. I'm truly ready to learn! Be safe out there 💚💯
Lmao shut up. This information can be accessed by anyone, especially in the last 20 years. The only gate keepers are the ignorant and unmotivated.
@@BK_2016sr5
who crapped on your coffee
Amen
You are using these cars for personal use! How can your business be deducting these cars if they aren’t used for the business? Is it hard for the irs to prove you are using them for personal use?
Such quality content. Not only the information, but how it’s delivered. Very well done.
Great explanation of using a management business to work for your other business! I’ve heard of rich people doing that but didn’t know the concept as to why!
Now i need a smart wife. Lmao 🤣
Creating a management company as an llc ? To work under your corporation ??
Spitting FACTS! Also, last time I tried filming in that parking lot with my car I got kicked out lmaoo
Step 1. Have a rich parent that gives you a comfortable six figure job and their company.
Wow, you're so well spoken, I cannot think of anyone who could've explained this to me any better. Take my like and follow sir.
If he was a white man would you have said he was well spoken? Why do ppl always associate blk ppl with not being articulate or educated? I guess it's just an unconscious bias ppl have in general. Smh
@@nateg5915 You know, I thought about this after I posted and I think its because he’s around my age and I’m not well spoken, so, its just good to see someone in my age group as a well adjusted adult.
I see now this is a money-making channel. You have knowledge but it's you using UA-cam for profits.
It all depends on how long you keep your car. My wife and I own an LLC and an S Corp. Since we keep cars for well over 10 years, based on the advice of our accountant, we opted for deducting monthly travel/mileage expenses, so we receive $750 each for each company which is 36K a year that doesn't go through payroll and is a business expense. It's my understanding that if you purchase the car through the LLC or S Corp, you can not deduct mileage etc in addition to the payments/depreciation. Now, if you turn over cars every few years, then purchasing would work out in your favor.
"you can not deduct mileage etc in addition to the payments/depreciation." This was my understanding also. I'm no accountant though, but going to get one soon.
I would like to get a better understanding of this when you can.
I 100% agree with you. I was told the same thing. Just one or the other
this is what I do
is your accountant taking new clients?
A BIG piece of information that’s missing from this video is if you want to write off 100% of your vehicle, it needs to be 100% used for business only.
Would 100% business be considered as going to the business office and back home, just that?
@@lauraa.x_o that and meetings, business related errands, etc.
In addition 6000lb or more but no more than 14000lb.
I respect the hustle 100% but it's kinda surface level
@@lauraa.x_o those are commuting miles and dont count
@@lauraa.x_o It seems he and his wife are working from home. And, as M Tigress mentioned, IRS does not count commuting as "business purpose"
This totally just helped me with my dads current business I wanted to create an LLC for myself. But really had no business but will be getting my management degree. Instead of being a manager within my fathers company I can have my own management company and work with him from that perspective to give myself/ entity more tax opportunities!!
You just gave me an idea as I work for my uncles LLC 👁👄👁
I think this video may get people audited by IRS and State revenue departments. You need to make sure you pay “Management co” for actual service they provide and MUST be reasonable. You can’t just make payments without any reasonable business needs. IRS would challenge that and possibly hit you with penalties and interest.
Exactly
And this guy is clearly using his vehicles for a lot of personal use.
Come on bro. You can’t start a video with: “At 25, I was making comfortable 6 figures working for Mommy.” 😅🤣😂
On IRS website (IRS Tax Reform Tax Tip 2019-100), it says "If a taxpayer uses the car for both business and personal purposes, the expenses must be split. The deduction is based on the portion of mileage used for business."
I think you do have a good reason to say the Porsche is for business purpose. But, I think it's hard to justify it's 100% for business. For the Tesla, I want to know what the business purpose is for the management company to own the car?
Don’t try to navigate such a move solo. Work with a tax professional to sort yourself. If he is wrong,
I’m sure he’ll survive an audit just fine.
But from your perspective he is a random guy on the internet.
When your business is brand based on wealth. It’s easily justified.
@@MeetSuperDavenot true. No where close to true
@@republicandan ABSOLUTELY TRUE AS I SIT WITH THE IRS NOW CONFIMRING ME AND REFUTING YOUR NON SENSE.
“Tax loopholes” are for the middle class and people who are working hard to break free and become financially free. Don’t be fooled that getting rid of these tax loopholes is because “the rich just get richer” Vote to keep 1031 exchanges and more!!!
Love the breakdown. With what I’ve learned over a decade investing, given enough time, solid investments have the potential to double the initial principal amount, but many investors are instead attracted to the lure of high yields in short periods of time despite the possibility of unattractive losses before even getting out. So the onus is on newbies to beware. Got my second Carrera GT with my first Q ROI.
@Ralph ZimmermanAs long as you diversify your portfolio, any single stock that you own shouldn’t have too much of an impact on your overall return. If it does, buying individual stocks might not be the right choice for you, as you can also try out the Roth IRA or I series bonds. Even index funds will fluctuate, so you can’t get rid of all of your risk, try how you might. With help, these are achievable. LEVI CLEMANS, a pro Fiduciary oversees my portfolio. You can look him up online, and connect him.
You also need to know that it’s possible to lose money, since stocks don’t have principal guarantees. If you’re looking for a guaranteed return, perhaps a high yield CD might be better.
With Clemans' oversight, I’ve been able to select well run companies with strong finances and a history of shareholder friendly management practices that have made me good gains in the past months.
@@mendeleyborisov92Right? I think I’ll have a look at that and maybe add it to my portfolio. But is it possible to beat the market?
Dude, words matter: You didn't 'purchase' or 'buy' anything!! You LEASED a car.
Please, STOP using incorrect words and especially so as a 'tax expert'. Good grief...
I’m disappointed that the title was misleading. I would have like to hear how you do this with an LLC
He did explain how he did it. He leased his first car under his business for the tax write-off ($800) of his first car, and then hired his wife under his LLC for the write-off of the second car. He shared how he did it for his LLC. Title is not misleading, he gave you two available legal options.
Pops to you and your family bro. I've been waaaayyy too scared over the years to teach exactly what you're teaching in this video. Most people won't be able to digest it and I feared people messing up and blaming me. You know how that goes! But I love to hear how your entire family works together! Next to understanding taxes, working together is how you truly build wealth.
Props*
Awesome channel man! We’ll done.
But.. it’s: “poor-shhuh” 😉
Just ask the Germans.
I absolutely want to take advantage of this with my next vehicle purchase. With what I do for a living it's most definitely passable as a business expense and direct advertising for my particular craft. However, I had been told by a CPA years ago that in order to deduct the vehicle purchase costs, it had to be 100% used for business and never for personal use. I'm hoping I'm completely misinformed on that because I've had my eye on a particular model lexus for a while now but haven't been able to justify the cost when my camry is doing just fine and is all but paid off lol. I'd much rather be cruising in my fully deductible GSF 👌😎
technically, if you have a wrap or some sort of sign pointing towards your business on the vehicle... even doing personal errands can technically be viewed as "business", since you are actively advertising when you drive.
I'm weary of someone calling themselves the "Tax Alchemist" that isn't a CPA, doesn't even have a degree in Acct, Finance, or any Business related field. I mean that's like me a Financial Analyst making vids on how to do Dental Surgery.
Cars get old and you need to upgrade to be truly efficient in your business. Justified 😎
@@Meowskatools I'm pretty that's a common mistake, and you can only deduct the cost of wrapping the advertisement but not simply driving it.
@@PaulSorensen5 yea, you can’t just slap a wrap on a personal vehicle and expect tax deductions on the vehicle as the intended Purpose initially is personal. I’m talking about in regards to a Company owned/purchased vehicle with a wrap, this in theory should allow a double deduction for both car expense + advertising.
You're phenomenal. As a new business LLC owner, I have no income yet to purchase a new vehicle, but I can't wait until I am!
You will soon man! Trust me hard work pays off
@@daltondasilva8051 thank you for your encouragement! Four months after this comment and I’m about to start building the first floor of the building baby! The foundation is solid. Only up from here!! Sending my love your way. Thank you again!✊🏽
Just wait for Bidens IRS agents my brotha. Keep living that hood rich lifestyle.
I'm glad I stumbled onto this video...a couple of questions: A). Is the Porsche lease in the name of your company and did you have to personally guarantee? B). Would this work if the company is a holding company?
Great questions, I'm wondering the same thing
if your business have enough credibility and credit score then you don't have to be a personal guarantee.
Business expenses have to be ordinary and necessary. Ask yourself, why does a holding company need a car.
Wait wait wait.
Working for your mom; making a six figure income, and that Porsche was expensive? Lol
I’m a realtor and purchased a pre owned vehicle cash to use for my business. Can I write this vehicle off even though I don’t have a monthly payment?
He doesn't seem to answering these kinds of questions
Yes you can, you can also write off depreciation,maintenance and repairs. I do so every year. Im a Realtor
Karlton you are sadly misinformed and you are misinforming others. I’ve been a CPA for 45 years.
Hello. Quick question. Could you have written off the Porsche the same if you had an LLC instead of C Corp?
You could just do a 179 deduction and write off the whole thing upfront.
“At 25 I was making a comfortable 6 figures at my mother’s company” yeah stopped listening right there lol ……… also it’s PORSCH-UH
Unfortunately you are not going far enough with your explanation. If you lease your car to your company, you have to realize that as income on your personal return. This is the kind of advice that gets folks in trouble.
So basically, the corvette I’m looking at could be a huge plus for my detailing company versus a deficit as my dad says lmao, I appreciate this insight
You could definitely justify it both as a Prop (similar to what Karlton did) but I'm not sure 100% is easy to prove. There is no way you're not driving it for personal use. Since you're in detailing business, you should have all kinds of equipment/sprayers/chemicals/soap whatever in your business vehicle (assume you drive to client's car to detail it and not them dropping it off).
Remember IRS requires you to keep a mileage log and you have to prove every mile if you want to deduct it 100%
Sounds like he is ratting himself out. IRS don't watch UA-cam?
as a business man going on 50, having been a self employed business owner since 21.. i've bought lots of cars in my business, and in my line of work were justified. but the 6 figure Mercedes, Auidi, Vettes, Range Rover etc.. I regret every single one of them. you don't need that kind of tax write off, much smarter choices in the business world .. i now drive a 20 year old truck with 150k miles on it. nope its not an expensive tax write off, but that's the point. . it gets me from point a to point b and i leave the expensive tax write offs for things that have far far more return on investment and appreciation
I can relate to this!! I'm sitting here like what's the point....I like nice things too but I'm not understanding this
I just stumbled on your channel at the RIGHT time cause I'm about to start another LLC after like 15 yrs...right on time. DO you have any vids on putting your LLC in a trust or how to structure it?
So in order to get the vehicle,.... you failed to explain you needed to have a business first. Thanks but no thanks.
I'm thinking about forming an LLC for a rental property, and just knowing that you have so many options with establishing a business opposed to leaving everything in your personal name is very interesting!
You definitely want the LLC for liability protection too, probably an umbrella insurance policy to add also
Are you sure you’re actually an accountant? It’s true that you can depreciate over five years, but you can’t deduct the whole car payment, only the interest. It is true that you can deduct the entire car lease payment if the car is used 100% for business.
Is a management company the same as a holding company that owns your other businesses?
Great video, I've been following the channel for a bit and had a question regarding Bonus Depreciation. So as a new business owner who was fortunate enough 2021 to make a 6 figure profit in their first year, I made the decision to purchase a ModelX under my business to help offset my taxes due at the end of the year. After having a few appointments with my CPA who's been super helpful, he told me I am not able to use Bonus Dep because the ModelX is a 2018 and not a 2021; not from the same tax year. All the research and laws i've read does not mention the car has to be from the same year. How do I politely inform him of this to be able to write off the ModelX without coming off as a know it all or being disrepectfuly
Your tax account is wrong. You can take bonus depreciation +179 on any vehicle purchased and used in business after 2017. Call my office and we will take care of this for you.
@@karltondennis thank you. I definitely will. also thank you for what you do for everyone to become more educated and understanding of tax laws in our favor!
@@karltondennis
I’m opening a business can you help me impending an S corp?
@@karltondennis please brother help me get off the hamster wheel
You cant simy expense your car payment lol
You spent too much time talking about why u purchased that car… bruh… change the title
Awesome to see young Black Men succeeding and sharing knowledge!! ✊🏿
Young men in general. Most of them are stuck in clubs haha. I love these channels🙌🏼🔥
Is it not awesome to see all young men ? I get your intention but it’s doesn’t come across good. It’s coming off as a racist bc we all know the true racists are the folks who only stand up for their own race and disregards others. Brother, be proud of all successful men ok
C8 Corvette HERE WE COME!
Great job explaining the benefits of the C-Corp and when you need a management S-Corp to manage it. Sometimes articles make it too complicated to digest the information.
This video singlehandedly makes me distrust all the rest of his videos. 1st of all...he must be getting paid by Porsche and Tesla for this. He legit does a commercial for both of them.
2nd. And most important. The "tax advice" he gives is questionable at best. Can you take a 179 for a Tesla SUV? Sure...but you won't pass an audit, unless the car is under $25,000.
I.R.C. § 179(b)(5)(A) In General -
The cost of any sport utility vehicle for any taxable year which may be taken into account under this section shall not exceed $25,000.
"...but a guy on UA-cam said I could..."
I like the videos for what they are - infotainment - but I would never rely on any of them, especially this one.
I love that you show all the ins and out of business write offs! Thank you 🙏
What are the requirements for a newly formed LLC business to start thinking about leasing or buying a car under the business name?
Maybe I’m missing something, but wouldn’t the rental payments for the vehicle received by the lessor have to be included as income; essentially cancelling out the benefit?
When you rent (or lease) an item, you are able to deduct the cost of the leased item. So if he is leasing the car to his corp at the same amount he is paying out of pocket, it cancels out.
@@CollinEichinger0221 if there’s a lease expense then there’s lease income. So if he’s leasing the car to the corporation, he’s receiving income from the corporation.
@@arthurmoore289 correct. The lease expense negates the amount of the lease income resulting in a net income of zero.
@@CollinEichinger0221 so what’s the benefit if it all cancels out?
@@arthurmoore289 it cancels out on his personal return and then he can still take the deduction on his corp return.
I'm glad you're sharing some specifics terms and processes to research, but these are very loosely business purchases bro. If I were the IRS watching this I'd audit you tomorrow and ask you to prove that over 50% of this car's use is for business.
On that note, 24-year-old comment dwellers, this man's income is primarily derived from being on screen. However vapid that may be, it helps substantiate the claim that this car is for business; you can not, which is why you're watching this video instead of making it.
Be reasonable.
Especially when he gets to talking about going golfing, hauling his future kids, and taking trips.
Hey Karlton, this is super helpful thank you for sharing! Do you know if write-offs and depreciation work the same (or similar) way in Canada? I have a Model X and am about to lease a 2017 718 Cayman S under my LTD corp and wanted to chat with you or one of your counterparts about how to properly structure the vehicles before moving forward.
Put the car in the co name. Any tax benefits will be far above titling it in your personal name
Go straight to the points dont talking too much about car brands and interiors ,keep video shorter
Creating a lease agreement for your business to use your car is incredibly smart 🔥🔥🔥
Great video! When you leased the car from yourself to your company did that negatively affect your taxes/ tax return when you filed your personal taxes? Wouldn't that be considered income for you?
Technically, the company is "suppose" to issue a 1099 to report the lease payments, so there's no net tax benefit.
Could someone do the same with an LLC? Or would it have to be S corp or C corp? Also what type of form did you use to lease to your business?
Great question because that's what I have...
How were you able to get approved for the Porsche lease under your C corporation as a new, small business owner? Would the title to the Porsche need to be under the C corp and also the monthly payment would need to come from the C corp in order for the deduction to be valid?
I can really resonate that having a nice vehicle when you're a young entrepreneur increases your legitimacy as a proper expert in your craft. It has for me! Just gotta stay within your means of course and make a wise choice for the car you end up with.
"increases your legitimacy" hahahahaha good one 😆
I was always under the impression that the expense had to be both ordinary and necessary to the business. IRS Pub 535 states "An ordinary expense is one that is common and acceptedIN YOUR INDUSTRY. A necessary expense is one that is helpful and appropriate for your trade or business". Am I misunderstanding?
Amazing channel! Great at stripping the topics down and keeping everything simple! Definitely telling my teenage sons to subscribe and watch!
My question is what he was saying at the end. How can we justify buying something just to write it off? Because at the end of the day aren’t you just spending money? Of course it lowers your taxable income down but you are still spending that money you would of had for your self/business. I’m new to this would love some help to understand🙏🏼. Is it just to buy what you were needing or wanting anyways in a smart way… because to me yes it a write off but you still spending the money you’re would of had?
Great info!
Porsche 😍👍🏽 > Tesla 🤮👎🏽
Gonna need a tax write off for that gyno surgery my guy.
So this is only beneficial if the business is making money?
Didn’t learn nothing.. waisted time
Can you do this with an LLC or just the c corp
I bought a car to make videos on UA-cam. I have kept track of my miles and stuff with the car. But I haven't registered the channel as an LLC. I am still able to write that off right?
There are depreciation limits on lux cars. Also personal use of a corporate vehicle has to be charged to the user, just like use of a corporate jet for personal use / vacations, etc.
So a Lamborghini can be a write off?
The baddest dude in the tax game 🔥
Whats better then? Lease or finance??
THIS!!! 💯💯💯
This is what dads teach my brothas
Pray the same success in Jesus Name
How can this be applied to commercial vehicles, like Semi and dumptrucks?
New sub because of this video, started an LLC this year looking forward to maximizing all the benefits of being an entrepreneur
How to commit tax fraud 101
So I've never really understood the "write off"... so when you "write it off" you're really only not paying taxes on that amount of income, correct? So if I write off a company truck that is $100k in 2 years, I'm really just saving like 15% of the $50k per year?
Yes, you still spend the 100k but save 15k in tax expense over the two years, based off your numbers.
Definitely dropping gems in this video 🤩🤩🤩. I purchased a Tesla under my business this year. Could you please share an example of a vehicle leasing agreement?
So do I do the following; on my P&L I show the expense which contributes to net income of which taxes obligation is calculated. Then when filing taxes I list the depreciation of the vehicle as well? Essentially having the car reduce my table income twice?