What’s up everybody?
Today, I have a very special post for the readers here at Rocket Recruiting. Not only do you get the video, but it is also transcribed so you can go back through and take notes or even print it off.
Let’s get on with it!
Are you making money with the new tax laws or are you losing money with the new tax laws?
I think that is the question of 2018, at least I keep getting, that everybody’s asking you know.
You do have your Rocket Recruiting app that has you know, in there, a calculator, and the power of owning and running your home business.
How is that effected with these new tax laws?
And so, you know, I’m not a tax advisor, and I want to make sure that you, you know, cut through all of the chaos and all of the clutter that’s going on in the social media acting like people understand the tax laws, and trying to break it down for the every day person asking these questions.
So what I wanted to do today is I wanted to bring the expert on to a call, and I wanted to ask these questions. And I want to make sure that you understand as an entrepreneur, and especially as a home business owner, or you’re in direct selling, network marketing, what are the benefits of being a self employed entrepreneur?
And so, I want to welcome today on our call the expert, and a partner of mine, Mr. Tom Bass.
He is the CEO of Accountable Solutions, a full service tax preparation company here in Southern California. But this is the major thing I want you to know, is that when you say, hey, a CPA, you know. This is the biggest thing I commonly hear that you know, all CPA’s, or all EA’s, or tax preparers, they’re all the same, right?
And it’s funny, Tom just schooled me on this because he said, well, are all doctors the same?
You know, can I go into a foot doctor and because he’s a doctor, can I go get a foot doctor to do open heart surgery?
So, you need to understand that all CPA’s or tax advisers, tax professionals, they’re not all the same.
So Tom is an enrolled agent, an EA, he’s been over 20 plus years as an EA, and you know, he and his partner Rhonda, they’ve been in direct sales for you know, 50 years, 40, 50 years, so, you know, in his 20s, in his 30s.
But he’s been focused on home business taxes, and understanding the tax benefits of a home based business, and so I want to just share with you this fact.
An enrolled agent, so CPA’s and enrolled agents take 16 hours in training in classes, and with that, an enrolled agent 100% of those are on taxes, so that’s all they do is they are
The tax experts.
Where CPA’s, on their tests, they have one essay question talking about the philosophy of tax, so it’s one essay question. So they don’t focus on taxes in particular where an enrolled agent, that’s exactly what they study for and what they focus on as their unique, specific niche.
So I felt like no better person to get on a call today and really ask these questions as a tax expert.
So Tom, welcome to the call today.
Hey, good to be here with you Eric.
Awesome, so I figure we’ll just kind of jump right in.
You know a lot of people, I’ve been getting these questions, I’ve been doing these Zoom meetings in these groups, and people are going, man, you know, I hear that the tax benefits, you know, benefit me, is it still the case? And, this is one question with Rocket Recruiting, we had many people say your calculator, is it still beneficial with the new tax laws, and does it benefit me?
So let’s maybe just start off in more of a general stroke as far as, you know, what do you see as far as the new tax laws, and as a self employed entrepreneurial home business owner, how do you see it impacting them?
Well, the first thing I tell people is that, more than likely, you’re going to experience at least one negative aspect from the new tax laws, and one positive. Just as a general statement.
But in terms of direct sellers, and we literally, as you indicated, specialize in that. We have clients in all 50 states. There’s not really any big drawback from the laws that is going to be … As far as the business itself, the only thing in there that is going to impact us, to me it’s not even going to be a really significant amount, is when they talk about the meals and entertainment.
They’re really just separating the entertainment portion from the meals. We’re still going to be able to deduct meals when we travel overnight, and I’ve heard a lot of so called experts in particularly on Facebook that have just put out a lot of misinformation, either from you know, just pure ignorance, or not actually delving into it. Because the type of reports you get from the media, they really are you know, misleading to a great extent.
So, as far as separating it, we’re still going to be able to deduct 50% of the meals whether you’re traveling or you’re taking out a client, and even in a local setting. And, the entertainment is, that’s just like buying tickets to a sporting event or to a concert or something like that, where it’s typically, you buy tickets for somebody and you don’t even go with them.
You know, it’s just something you give them as an incentive, or you know, a gift, so that there’s the human nature that, well now, I owe you something, you invite somebody over for dinner, and now you’re going to get an invitation. It’s like giving somebody a gift and thinking you’re going to get one in return.
You got it, and so, you know, one thing I want to mention to everybody, and this is you know, I’ve talked a lot about on videos. You know, mastering the irresistible offer, right, like, what’s an irresistible offer? And you know, when you’re so focused on the product, you give people the ability to say no, because like, hey I’ve got a skin crème, and hey I want you to buy my skin crème, well I already have skin crème, so no, I don’t want your skin crème.
But when you start talking about tax benefits, and you start saying, hey, have you ever wondered how much you’re losing on every paycheck by not having a home business, you start to, what you’re creating is this openness of wow, how much am I looking at my taxes?
I never even looked at it that way, how much am I losing? And so, the reason why we talk about these tax benefits, and why it’s been so powerful, you know, being connected, and partnered up with Tom and Rhonda is that’s what they’ve been preaching for years, is that everyone needs a home business, everybody needs to be an entrepreneur.
That’s what sparks the economy. And so, as Tom’s talking right now, you know, I want you to understand, these are very positive, these new tax laws are extremely powerful and positive for the self employed, and really you know, another reason why everyone needs a home business. So in your direct sales business, you know, focusing on product, but also focusing in on the benefits for the tax benefits of being a home business owner also.
Now, you had mentioned earlier, L’Oreal, going in and talking to somebody. I thought that was interesting because when we talk about sharing the message of tax benefits, you know, you gave an example of going into Nordstrom.
Can you share that story?
Sure, well one of my clients is the regional director for L’Oreal cosmetics and one of her employees was saying that they felt like they needed a new tax person. So she came in to my office, and basically the story was that she and her husband both have W2 income, they had no … Their home was rental, and so they really had no significant tax write offs at all.
So I was asking her as I typically do, well what do you do to make extra money? Because most people in Southern California need more money, and she said, well, nothing. So, I started asking her, well, have you ever … What do you know about direct sales? And she said, well people are always asking me to sign up for something, and as far as I’m concerned it’s just a scam.
By the time she left, she acknowledged, well maybe getting in direct sales would be a way we could save enough money to make a down payment on a house, because that’s what we really want to do, and our jobs are not ones that we can swiftly make more money. So, anyway, I proceed to tell her about several companies that we worked with, and she said, well, she’d get back to me.
She wouldn’t commit though.
I said, well I can call people that are seven figure income that would be glad to have you on their team, because she had a great personality, very attractive gal, young, obviously was not intimidated by talking to people, that’s what she did for a living. But, what she also revealed to him is that she really doesn’t like what she does, but the pay is good.
So I don’t think she got home until she texted me back on the phone and said, I’d like you to refer me to one of those people that you mentioned. So I did, and the lady happened to be a seven figure income earner in Southern California, Orange County, and she sent her a really nice email and said basically, I’ve been looking for some people to work with on a really close basis, and Tom said he thinks you’d be good, so let’s talk.
Whoo, you guys, how powerful is that? To me, that’s rejection free, it’s resistance free, like hey are you open to making some extra money, or how are you making some extra money?
Or is this your whole world right here?
What you find is that perception is not reality, meaning most people that you think have the perfect life, the perfect job, the perfect this, they’re searching, they’re looking for new things.
Most people are always open.
And when you start to talk about these tax benefits, what I have realized, and it’s blown me away, is that so few people understand what’s going on, and how to benefit from the tax strategies, or tax benefits that they just don’t do it. It’s like, you don’t know what you don’t know. So, that’s why this is so powerful, and it’s funny, I’ve had many experiences like that.
Hearing Tom as we were talking, have that same experience, it’s just by opening somebody’s eyes to the fact they might be losing some money, how could we help put some more money in your pocket and get you, you know, either a side income, something that you start to build on the side, or a full time switch into something maybe you’re more passionate about.
So I wanted to do this, I wanted to share my screen, and I wanted to go into Rocket Recruiting, and many people talked about the tax savings calculator. So if you’ve never gotten into Rocket Recruiting, you know, we’ve built this as a simple tool to quantify and make it to where people can see what it might mean to them to be in a home based business, what it might mean to them to in tax benefits, if I do join a home based business.
So we wanted to make it very simple, our version 2.0 we’ve created videos you can share with people that tell this story. We’ve got tools and training from top network marketing, and direct selling experts. We’ve got leads, phone verified leads, that’s extremely powerful, everybody’s looking for an alternative way to keep leads coming in.
But I wanted to go through, we’ve even got an action accountability partner in here that tracks doing five actions a day, working on your business. But I wanted to go into here and go into each one so Tom can talk about them, and if there’s any difference as far as benefits in that section. So, as we would walk in, so for instance, if I was in front of somebody like the girl at L’Oreal, at the counter, and I said, have you ever wondered maybe how much money you’re losing by not being in a home based business, here let me pull out a little calculator and in a couple of minutes, I can show you what that number might be.
So I took it from this fluffy, you know, tax benefits, where people are like, I don’t even know what that means,
- is it a dollar,
- is it a million,
- is it next year,
- when can I take it?
And so very quickly I could walk them through a few categories, and then calculate. So let’s go through number one. So I’d say hey, your home or office, what do you spend monthly? Is there any benefit, an increase or decrease in the home office deductions?
No, not at all. Not in the deduction itself.
All right. What about business vehicles, or mileage?
Well it’s going to go up one penny per mile to 54.5.
So that’s going up more per mile, and again, you guys, if you’re in a home business, and you’re not taking you know, these benefits, just think of what Tom just said. What’d you say 54?
Right, it’s almost 55 cents.
Just think of it as every two miles, you’re throwing a dollar out the window. I mean, think of that. You’re sitting here working your business, but yet you don’t understand how to make sure that you maximize or optimize your business and all of the benefits of it. But yet you’re driving over to me a new prospect, and you’re not tracking that, and you … Just think of every two miles, you’re throwing out a dollar, out the window.
Well, you can even make it stronger than that, because basically, what we try to get people to understand is that any time you’re outside of your home, there’s virtually nothing you can be doing that doesn’t have a business connotation or business intent to it. It’s just like if you are going to the market on the way home from work, you’re not going there, because you need, you know, milk and eggs, or whatever the wife, or your spouse asked you to bring.
You’re going there to meet somebody.
If you’re in the health and beauty business, then you go down the health and beauty aisle and say, oh, I’ve got some higher quality products than that, my cosmetics are made in Switzerland, you know, pharmaceutical grade, we don’t have any fillers in there.
They’d be just a lot more effective, if you’d be interested give me a call, I don’t care if they throw your card away, or are insulted or whatever, now they’ve got a business trip.
Did you hear that?
- Ooh, that’s powerful.
- That’s the first time I’ve heard that.
- That’s actually great.
I mean making every destination, you’re talking to somebody. You know, again, going back to taking five actions on your business every day, consistency, what Tom just said right there, that’s powerful, because it gives you the ability to start to have an intent, that everywhere you’re going you have an intent to make one new connection.
Well, how many people do we know that they make at least one stop at you know, at a coffee place. I hate to give away names. But the same idea, if you go into a Starbucks and you’re intent is to meet somebody, and there’s nobody there, and you buy a latte instead, and the barista can’t even speak English, it’s still deductible, because that was your intent. That’s the reason you went there.
Oh I love it. Extremely powerful, you guys. This is a huge tax benefit of being self employed, being an entrepreneur, so I hope you guys are writing that down, that’s extremely powerful to start making those different stops tax deductible.
So what about we put business travel, you know, many people … And I think it was you, Tom, that said to me, I don’t ever take vacations, I take business trips. Because, and it’s probably stemmed from exactly what you just said. I don’t go to the grocery store, I go in and I talk to people, I make a contact there.
So as far as business travel, when people say I’m going on vacation, you know to me you’re going on a business trip, you should have the intent to go and build your business anywhere in the world that you go. So maybe elaborate a little bit more on this one, is there any changes?
Well there’s actually no changes, but the one thing that we … And we’ve been through audits, and you know, it’s a great story and it doesn’t work every time, but I actually had an individual that was selling cosmetics, full time job, his wife didn’t work. He had four little daughters, very young, preschoolers. And, they were getting audited, and he called me and said, you know, they’re trying to disallow thousands of dollars in deductions, you need to take it over.
Well, basically the auditor said well he pretty well approved all of the expenses, we had proof, that’s not the problem. The problem is you let him go to Hawaii, stay 10 days, spent $7,500, took his wife and four little girls, and you let him charge the whole thing off.
She said, well we just can’t do that. I said, well, let’s think about that a minute, I said, I guarantee you when he got off the plane, the stewardesses on that flight in Hawaii were going to have a facial that night in the hotel.
And he was talking about how much fun that was going to be, and if they didn’t want to do that, he was saying, well we’re going to have a party when we get back to Seattle, because that’s your home base. And I said, go look up on the internet at that resort, that’s a huge resort. There’s hundreds of chaise lounges out there. Can’t you see all those ladies out there the next day elbow to elbow in the chaise lounges, under the palm trees, and here he comes walking down the aisle between them.
He’s talking about how his products you know, are pharmaceutical grade, great ingredients, on and on and on, and there’s the little girls with the samples and his wife’s there with the brochures, sitting there, a marketing machine, 24/7. You don’t make 160,000 in commission at 30% markup selling one tube of lipstick to individual ladies, one at a time.
That takes a lot of time, and she said I agree, it does.
Same thing, argument, they went to Cancun three months later, she let me keep both of those trips 100%.
The reason is, is because the whole, what you’re really trying to point out to people is the choice you get to make as an auditor is, okay, you can disallow that, you get a little extra tax this year, but you’re also taking away from him his secret sauce. That’s what he does to make more money and pay you more taxes, so you want a little more tax now, or less for years to come until he figures something else out if he’s even able to.
And I didn’t have to explain to them about … I was spinning it just like a lawyer does, I didn’t explain to him that there’s hundreds of people that he got an override on their commissions. But, you know, it’s a good story and it makes sense, and that to me is really what an audit comes down to, it’s having the right person that understands the business, that can spin it in a way that it makes it legitimate.
Well and I think you hit it on the head, if you didn’t understand direct sales, you would’ve never been able to explain that.
In H&R Block, like I walk in off the store, and they basically ask me for my numbers. They really don’t care about me, they just see, here’s my number, we’re going to plug them into the thing, and there you go.
But, you get an audit, I mean, who’s there to help you exactly what you just said is that to me, you know, auditors, these are every day people, these are normal people, and they’re not stupid, it’s like, you’ve got to show them that you truly have a business. You’re truly working that business, and show them that common sense, that I’m actually making money doing something or even if I’m not making money, I’m working the business. And it has the potential.
Yeah, that’s exactly right.
All right, so on meals and entertainment, we talked about that briefly, as far as meals still, I mean, it’s 50% is deductible, but entertainment is the one that if you’re just gifting like Tom had talked about, you know, the sports, the box seat at sports, that’s something that’s been taken away.
Got it, so I look at this and correct me if I’m wrong here, but you know, any time that I’m going to you know, talk about the business, I typically will do it around like a luncheon or a dinner time, or go out and have a cup of coffee. And so, typically meals is the major thing for me, when you talk about entertainment, it’s very … Well I guess there has been definitely times, but meals, I think is a major portion of when I’m talking about business.
Is that kind of what you see?
That’s exactly what I see, yes.
Okay. Yeah, well especially in China, they don’t go anywhere but eating, and around a table, so it’s all deductible.
All right, then general office deductions. So, like, telephone, internet, supplies, marketing materials, things like that.
All of that’s still 100% deductible. In fact, the way we look at a business, every business, whether it’s a product or service is literally a marketing business. So, there’s a lot of things you can do that when we’re categorizing like you do the bookkeeping. That’s our biggest category, because whether you’re buying leads or you know, your website, or your telemarketing, or you know, direct mail type advertising, all those things are marketing. And it even goes into the way you answer your phones.
It’s just the way you treat people.
You guys, everybody that’s watching this, please understand whatever business you’re in, you know, home business, small business, medium sized, whatever business you’re in, this is something that I see many people, they don’t quite grasp this.
What Tom just said right there, your tools.
So Rocket Recruiting, this is a tool to help you in your business, is tax deductible. Leads that you buy, that’s tax deductible, these are things that you’re marketing, that you’re growing, that you’re investing in yourself, in your business, and getting the benefit, training, going out to conferences, you know.
Treating this business that you’re investing into it, so it can pay you. And, that’s something that I notice many people, because they don’t track it, that they just, you know, don’t even think about it, and don’t realize at the end of the year how big that equals. And so, the whole point of this is being able to say to somebody, you know, those five categories, right there, that these are all things that you’re doing currently, but yet, you’re not getting any benefit of it, because you’re you know, you’re an employee, a W2 wage earner.
So to be able to say have you ever wondered how much money you might be losing each money by not being in a home based business, well, if I can walk you through a couple of those categories and click calculate savings.
While you’re doing that, let me throw in something. What most people don’t really, they really don’t get it. They’ll see the notice kind of pop up here, but what really makes all this possible is that the home office deduction is a big portion of that, is things that are … Part of that, normally not deductible, they’re basically personal expenses that you’d now get to take a percentage of and deduct as if they were business expenses. That’s the real gift you want to look at it that way, from the government, because now, you’re actually getting to make tax deductible things that you’re going to spend money on anyway.
Yes, I mean, I hope you guys are getting this. This is to me, this should be blowing many of your minds, because what Tom’s talking about, these are …
- It’s not tax evasion,
- this is not running away with thing,
these are things that are given to you, but yet people are so scared of taxes that they don’t do anything about it. And I wanted to make that clear, a distinction earlier about CPA’s and EA’s in being a tax professional, knowing taxes, because if your tax advisor is telling you “no, you can’t take these things,” you’ve got to fire him, that’s just plain and simple, you’ve got to fire him, you’re losing money.
So, you need to go find somebody like Tom, and get where you’ve got a partner, you’ve got somebody that can help you in your business, just like you know, in any business that I start,
- you have a financial person,
- you have an operations person,
- you have sales people,
- you have people that manage and help you grow your business.
And the taxes accounting, this is something I strongly recommend that you make sure that you’ve got the right partner.
So, when I just calculate savings, you see the nations averages, it’s about $484.63 per month. So just taking kind of average numbers that, things that I was currently doing, that I wasn’t getting any benefits of the tax benefits, and now moving it to where I’m getting the benefits, I mean, let’s say close to $500 a month, that’s a game changer for most people.
I think I read somewhere that 70% of all bankruptcies could have been avoided by an extra $300 per month. Okay, we’re talking $500, let’s cut it in half, you know, 300, 250 a month, and that’s why getting into that home business.
And so the whole point of it is saying hey, I’m going to keep more money on my next paycheck, that’s going to give me money to get into my home based business, and so there’s really no out of pocket expense, now I can start working my business, I can start spending time and sharing what I just learned and what you just learned, and I can share that with other people, and get people to join my business.
Now I’m making money on top of it, and at the end of the year, when I go into file my taxes, or you know, do my tax with Tom, I can look at all my expenses, the things that I went to conferences, you know, all my travel, all of my mileage, all of those things that I’m tracking, I now can deduct those, offset what I took on each paycheck, and now I’m hoping I come out around even. You know, I don’t want to give more money to the government, to have an interest free loan, I’d much rather have more of that in my pocket to help me make more money.
And that should be your goal also, is that correct Tom?
Oh it’s absolutely correct.
So, you guys, you know, I wanted to get the expert on the call, we’re coming up to about 45 minutes, 50 minutes, so we’ll kind of wrap it up here. But, I wanted to make sure you guys understood, with all of the craziness and posts that I’m seeing on Facebook and Twitter and Instagram, it’s something that I wanted to cut through the chaos. I wanted to bring you right to the expert. To give you the real story.
And, again, what we just talked about today are just some of the core of what I found, that people can benefit immediately. There’s so many more, there’s like Tom talked in general office, there’s so many more deductions that you can receive for being a self employed entrepreneur, that you just got to make sure you’ve got the right partner, you’ve got somebody that’s supporting you, not only you know financially, but also your dream.
That’s another thing, you know, getting into do you have somebody that treats you, in your direct sales business, that you’re a legitimate business? I can’t tell you how many times I hear people go, my tax writer laughs at me, and tells me why do I keep doing that scammy stuff.
You need somebody that believes in what you’re doing, and is going to support you in building that dream.
Tax adviser or your spouse, I mean those are two, it’s like, make sure that they’re on the same side of the line with you.
So, Tom, is there any other, as we close, how can people contact you? Maybe give your contact information. You know, I know that you do review of people’s past years. If you feel like you know, your tax adviser isn’t getting you what you deserve, as far as your returns or at the end of the year, you know, let Tom mention it, but you can get a review of the last few years to see if you got everything that you deserve, and Tom will, you know, I’ll turn it over to you, kind of any last words in how to people contact you.
Well the best way to contact us is directsellerstaxexpert.com, our phone number’s 866-282-3127, toll free.
One thing I’d like to throw in, that’s, we’ve also heard a considerable amount of misinformation about the new tax rules, and basically as you can see, there’s virtually nothing that’s going to dramatically impact the deductions that we’re entitled to, but as far as the taxes themselves, the rates, the brackets have gone down a couple of percent, so that’s definitely in our favor.
Also, the fact that in your Schedule C or your S Corp, or if you happen to be in a partnership, as far as the business is concerned, the 20% of your profit is actually going to be taxed at a zero rate, so that’s going to be a big plus, and you couple that with the rate reduction, virtually most everybody and there’s other things in there that are going to help reduce taxes, but almost everyone is going to see a difference. There are some things that can be done, for example, in the high tax states like New Jersey, New York, California, Illinois, Connecticut, where you’re not going to be able to deduct but $10,000 against your state income tax, plus your property tax.
You can actually take the 10,000 in your state income tax and then the property tax, you can actually add that onto the basis of your house, which is that would be like as if you paid 20,000 or 20 whatever that percentage is, that you didn’t get to deduct, you get to add that to the basis of the house, so that when you ultimately sell it, if you were going to have to end up paying some capital gains tax, that would reduce it, that figure. So you’re not losing it in that sense, and you can carry it forward as long as you need to.
So that’s a big plus, and that didn’t come out of the new law, that’s just been in the rules for years and years, and now it begins to make more sense for a lot of people.
Awesome, well you guys, I hope you got some value, got some clarity on what benefits with the new tax laws, again, make sure that you’re … And again, one thing I want to make very clear is the last thing we want you doing is going out and giving tax advice.
That isn’t the intent of this, that you know, you watch this webinar, and you’re now a tax advisor, that is not the intent.
What we wanted to make clear is that all the tax benefits that you had previously, I mean, those still, with these new tax laws, and many more, and you know, some less, some a lot more, that you still get all of those same benefits. The Rocket Recruiting, we wanted to make sure that everybody from a tax professional, we showed you that you still get all of these tax benefits with the tax savings calculator, and again, we’d love to do more of these calls.
Touch base with Tom, touch base with him company. Amazing, I’ve partnered with them for, you know, 10 plus years, and they’re passionate about direct sellers, and they’re passionate about you know, network marketing of just, that as a legitimate business, and really helping direct sellers make their business profitable.
So thank you so much Tom for your time, really appreciate you jumping on, I know you’re extremely busy, and excited for people to connect with you, excited to bring you back on another call. So, thank you everyone, go to Rocketrecruitingapp.com if you haven’t already gone there and are not a member, we have lots of tools and training inside the system, excited to connect with you on a future call.