This Tax Advice Could Land You In Jail ft. Jasmine DiLucci

You can check out Jasmine’s content here: https://www.youtube.com/@taxleverage Can viral tax hacks actually land you in prison? Tax attorney, CPA, and Enrolled Agent Jasmine DiLucci joins Brian and Bo to separate legal tax avoidance from illegal tax evasion. From writing off your car and home office to hiring your kids, deducting vacations, and moving to Puerto Rico, we're examining popular tax advice to find out what actually works—and what could create serious IRS problems. Plus, discover legitimate tax planning strategies involving 401(k)s, Roth accounts, real estate, business deductions, and the three tax buckets that can help you build a more tax-efficient financial future. ⁠⁠⁠⁠Jump start your journey with our FREE financial resources⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠Reach your goals faster with our products⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠Take the relationship to the next level: become a client⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠Subscribe on YouTube for early access and go beyond the podcast⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠Connect with us on social media for more content⁠⁠⁠⁠⁠⁠⁠ Bring confidence to your wealth building with simplified strategies from The Money Guy. Learn how to apply financial tactics that go beyond common sense and help you reach your money goals faster. Make your assets do the heavy lifting so you can quit worrying and start living a more fulfilled life. Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:01Speaker 00

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• 0:26Speaker 01

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• 0:51Brian Preston?

  We got a special one today. Tax advice that could land you in jail with a special guest. We got Jasmine DeLuigi. See, I blame you for that little slur there. Bo's over here making fun of coming up with all kinds of different ways. Jasmine, welcome to the show.

• 1:08Speaker 04

  Thank you so much. Excited to be here.

• 1:09Speaker 05

  I am so excited to have you on today because you're a bit of a tax wizard. Like we watch, oftentimes we collaborate, but we're actually like fans of your content. We love watching it, love diving into it, and it's so, so good. So thank you for coming on today, being willing to like go through some tax stuff with us. Cause in our mind, in our opinion, there is so much tax stuff that lives out on the internet that I can't be positive, I'm not the wizard, that doesn't sound like it's great tax advice.

• 1:37Brian Preston?

  But it's very clickable.

• 1:38Speaker 04

  Yeah. Oh yeah, there's lots of great, I mean, you can hear tax advice from your hairdresser nowadays. You can hear tax advice from your Realtor. You can hear tax from, you know, everyone. So yeah, no, that's crazy.

• 1:48Speaker 05

  And so you are, for folks who aren't familiar with you, right? You're practicing tax attorney, CPA, enrolled agent. You have a practice, you have a social media channel. You do all things taxes and you have been doing that for your entire career.

• 2:02Brian Preston?

  Well, I think I'm nerdy, but you were actually an enrolled agent and like as a teenager.

• 2:06Speaker 04

  Yeah. So back in eighth grade, I told all my friends in the cafeteria, I was like, I'm going to be a tax attorney.

• 2:12Brian Preston?

  That's so cool.

• 2:13Speaker 04

  They told me.

• 2:14Speaker 05

  And man, that popularity winning contest right there, obviously.

• 2:19Speaker 04

  Yeah. You know, so dreams come true. That's what I always say, they were wrong. But yeah, I got my enrolled agent license, which is, you don't need like a high school degree. At the time, there was actually no age requirement. And so I just started taking it. Now there's an age requirement.

• 2:31Brian Preston?

  They added it because of you.

• 2:32Speaker 04

  And they probably did. I was thinking about it because it like happened right after. And at the time when I took it, my dad went around being like, is there an age requirement? Is there an age requirement? So I think he made a kind of a big stir about it. And then, yeah, they introduced one pretty soon.

• 2:44Brian Preston?

  That's amazing. And I'll tell you what I love about your content, Jasmine, is that I feel like, you know, it's educational. It's, it's, it's, it's not trying to fluff things up just because you, you want to create an angle that makes it more clickable. You truly trying to educate the masses and I love that because that's kind of our abundance cycle foundation. So it's creator to creator, we, we really do enjoy your content.

• 3:06Speaker 04

  Thank you. Yeah. I mean, I just like, I love learning and I love learning about tax. And so it's like being able to share that has been just like one of the best things ever.

• 3:14Speaker 05

  Well, I'm super curious because obviously no one, maybe I shouldn't say no one. Maybe that's too broad of a brush to paint with, but most people don't like paying taxes and they certainly don't want to pay like more taxes than they have to. And we say all the time on the show that we have an entire tax system, an entire tax code that's built around tax avoidance. If you understand how it works and the unique intricacies, you can avoid taxes. But if you try to evade taxes, that part's illegal. And I just feel like a lot of what we see on the internet and a lot of the stuff we come across blends the lines of those two where it's not quite as clear. Would you agree with that assessment?

• 3:53Speaker 04

  Yeah. Well, I mean, in general, what people do with tax is they, to be honest, use their common sense. And you know, sometimes taxes in line with common sense and sometimes taxes not in line with common sense, you know, it just goes back to like, let's just look at the rule. And so it's easy to just say whatever and people will do that. And they say something that makes common sense. Someone listens and, and then you've got.

• 4:12Speaker 05

  And then you have tax evaders and not tax avoiders. That's exactly right. And it sounds like, right? Cause we're asking the question, you know, we always say, Brian, we say, what is it? Don't mess with the IRS because what you say.

• 4:25Brian Preston?

  They have the guns.

• 4:26Speaker 05

  They have the guns.

• 4:27Brian Preston?

  I mean, that's the thing. And then also I think it's, it's important for people to understand and what we're going to kind of cover today, tax avoidance versus tax evasion is that I had a tax partner and I shared this with you earlier, Jasmine, who said, everything's deductible until you get caught. And I feel like that's what a lot of people on social media, they're counting on that there's so few audits out there that they're just counting on this stuff slips through the cracks, but that doesn't mean that you're on solid ground. So we ought to talk about, because we love tax avoidance, but we do need to keep people on, on the right side of the law so they don't end up in jail.

• 4:59Speaker 04

  Yeah.

• 5:00Speaker 05

  So we were thinking we'd play a little game, right? And we're going to talk about some different tax hacks that we've heard of, that either we've seen on the internet or we've heard people communicate. And we want to ask you, all right, do you love this tax hack? Yep, it's legitimate. You should do it. I kind of like it, but here's what you need to know. Or absolutely no, I hate that. It's going to land you in jail. And I think a lot of our people, because when you are hanging out at the barbecue and you hear your, you know, cousin Eddie say, hey, I got this great way to save money on taxes. I think you're going to hear some of those right now. And I'm hoping you can maybe dispel the myths from the truths. Is that fair?

• 5:38Speaker 04

  Yeah, let's do it.

• 5:39Speaker 05

  Awesome. All right, Reeves, with that, are you going to throw to us the tax hacks that we ought to know and ought to be aware of?

• 5:48Speaker 06

  I certainly can. Are you ready?

• 5:50Speaker 05

  Yes, ma'am.

• 5:51Speaker 06

  All right. The first one is I drive a lot for work, so I'm going to write off the value of my vehicle. Do we like it, love it, or hate it?

• 6:00Speaker 04

  Like it?

• 6:01Speaker 05

  Okay.

• 6:02Speaker 04

  Yeah. So it's always like, like it to me is like with qualifiers.

• 6:05Brian Preston?

  Cause it depends. That's what we always say, it depends.

• 6:08Speaker 04

  It depends. So driving to and from your primary place of business is personal commuting and non-deductible. Right? Now, one way to successfully change that is if you are able to legally establish a home office, which people are a little too loose with sometimes, but if you legally are able to establish your principal place of business as your home, then driving to a secondary place of work, a client, whatever, it is deductible. It's business mileage, basically. And then you would take that portion and that portion of your vehicle can be deductible.

• 6:37Speaker 05

  If you have a home office, can you drive to the not home office and that part counts?

• 6:42Speaker 04

  That becomes business mileage. Yeah. Yeah. It would move from personal commuting, which it would have been, had you not had the home office to business mileage.

• 6:49Speaker 05

  Got it.

• 6:49Brian Preston?

  And then also you have to keep really good records.

• 6:52Speaker 04

  Yep.

• 6:52Brian Preston?

  Cause that's what you, by the way, what's a good app that people can use to, to track their mileage?

• 6:57Speaker 04

  I like Mile IQ.

• 6:58Brian Preston?

  Okay. Mile IQ, because the one in QuickBooks, I thought it was going to be awesome, but it's kind of spotty a little bit. So to hear a good, that's a, that, by the way, that recommendation makes this collab worthwhile right there because you have to keep great records. You also, and then what about the fact that is the weight matter of the vehicle? Cause I hear every content creator says you got to drive a G-Wagon so that it weighs enough.

• 7:20Speaker 04

  It, you know, it's always like, it depends. It's a, so first, first and foremost, you need the business mileage, right? It's like, it doesn't matter what the weight of the vehicle is, if you just don't use it for business or you just use it for personal commuting. Now, if we've met that threshold and we've got good records and we've got proof, okay, this is business use, then okay, well, are we going to be deducting the actual mileage? Or are we going to deduct, deduct the actual expenses? If you're on that actual expenses side, then the vehicle weight comes into play. You know, it's not magic get out of jail free card, but it helps you get around those 280 F auto luxury limitations.

• 7:52Speaker 05

  Got it.

• 7:52Speaker 04

  And so that's the.

• 7:52Speaker 05

  The 280 Fs, obviously.

• 7:53Brian Preston?

  Well, that locks the accelerated depreciation. That's what everybody's really trying to get to.

• 7:58Speaker 04

  Yeah. But that's what you're, you know, that's the, it's like thresholds, right? There's hurdles, the first hurdle to unlock all of the bonus. And then there's also some impact on 179 is the, the 280 F auto luxury limitation.

• 8:08Speaker 05

  Can I ask a part B to this one? And I'm sorry, this wasn't, we didn't talk about this, but I, we got Jasmine here.

• 8:12Brian Preston?

  Yeah, let's hit it.

• 8:14Speaker 05

  So I have people all the time saying, hey, you know, I need a new car. Here's what I'm going to do. I need to replace my spouse's automobile, whatever. We're going to go buy the big SUV. We're going to buy it in November, end of the year. And what I'm going to do is I'm going to turn it into my work vehicle. I'm going to drive that this year for the next two months. And then I'm going to be able to deduct the entire cost of the automobile. And that's going to be the thing that I do because I drove it exclusively for work purposes for the, you know, the whole time it was in service. Like that, love that, hate that. Is that legitimate or, or should you be cautious if you're going to try to perpetrate that strategy?

• 8:44Speaker 04

  Are you saying because what? You're going to switch the use as of January 1st?

• 8:47Speaker 05

  Idea is, yeah, eventually I might decide that's not my work.

• 8:49Brian Preston?

  Isn't there like, you have to do it at least two years, right?

• 8:52Speaker 04

  Well, yeah, it would be the life, not just two. It's the, you'd have a recapture that triggers if you, like the five year usually.

• 8:58Speaker 05

  Okay. So you have to, you have to make it your primary automobile for five years, not just through the end of this year, and then you put it back into service.

• 9:04Speaker 04

  There's always like, if this, you know, it depends. So it's also like, is it in a corporation? Because if it's in a corporation really permanently, once you move it to personal use, like just taking a vehicle that's depreciated out of a corporation is going to trigger a taxable event. So that's one instance. But yeah, just switching from like, you can't just like bonus depreciate the whole thing and then switch it January 1st or within the useful life, then it's going to trigger recapture. Yep.

• 9:25Speaker 05

  So you didn't actually save any money on taxes. It comes back in.

• 9:27Brian Preston?

  It's depreciation recapture is what she's referring to and it can get big.

• 9:31Speaker 05

  Awesome. All right, cool. All right. So that one was a like it. All right, Rebe, tax hack number two.

• 9:37Speaker 06

  Yeah, this is good. We're going deep. The next one, I'm taking home the, I'm taking the home office deduction because I work from home sometimes.

• 9:45Speaker 05

  I took my laptop home. I took my laptop home. This is my home office now.

• 9:49Speaker 04

  Home office. So you know, you're always in between to me. I'm like, depends how it's phrased, right? But like it, you, you know, you have to meet the legal requirements of home office. You know, and so I think people think, you know, I'll just think about work at home, right? It's like.

• 10:04Speaker 05

  Like if I sit at my kitchen table, if I met the.

• 10:06Brian Preston?

  How about just putting a desk in your bedroom? Does that work?

• 10:09Speaker 04

  No. So I mean, you have to meet, it's like, I would, you know, go back to the law. What's the requirement? Well, it needs exclusive use. At first, it's not like laptop on my kitchen, you know, because kitchen inherently is not exclusive use for business. So you know, then you need a dedicated space, exclusive use, you need a regular use. So it really needs to be like a business, even, even part of the definition of a business is that regular continual substantial throughout the year. And then finally, you know, there's different requirements. It could be a separate structure. It could be that your clients actually come to your home. Both of those are more rare. Or what most people end up doing is principal place of business, which is if you can show that you basically do all your admin and management work at home. Now that's where a lot of people are kind of like pledging it because they're like, they've got a whole full fledged office. They're in a regular white collar job and like they magically just do all their admin

• 10:54Speaker 04

  at home. I do think I always look at things historically from a Congress standpoint. I know this is like, it's like tax policy standpoint.

• 11:01Speaker 05

  That's not nerdy at all.

• 11:02Speaker 04

  And you know, home office actually used to be stricter. And then there was a court case that basically came to a result Congress didn't like, and it denied the home office deduction. And they basically said, we don't like that. We want this to actually be more flexible and easier to meet. And so then they introduced this like admin and management. So when I look at that congressional history, I say, okay, like.

• 11:23Speaker 04

  Have good support. I don't, I don't like, I feel good about it if you've got good support for it. Um, not, it's not one of those areas where the IRS feels there's like very high abuse.

• 11:32Speaker 05

  And so the way this works is I can, so I've said it, it's a separate, separate office and I do my stuff there. I'm admin and operations there. That means I can deduct all of my mortgage and all of my utilities, all of my, that means like it's all tax free, right? That's the way it works.

• 11:46Speaker 04

  No. Um, yeah. I mean, there's a couple of ways to calculate home office. Uh, one of the more advantageous ones is to, you prorate it, right? So yeah, it'd be prorated based on that area of exclusive use.

• 11:55Brian Preston?

  Perfect. And that's the big thing I always remind people is that create some boundaries so that that way, because what always blows everything up, whether we're talking about the cars, we're talking about home office, is the personal use component. Cause that's what the IRS is really trying to figure out is how much of this is really for the exclusive business purposes versus how much is personal. And if you're, if you got, you know, all your kids, like your picture, you show the IRS and the audit has all the kids toys in there. And it's, you know, that's probably not going to help your case.

• 12:25Speaker 04

  Yeah. Well, it's always guilty until proven innocent, right? So people say, well, how can they prove that like it has the bed and the crib and that, you know, but it's actually on you to prove that it doesn't.

• 12:33Speaker 05

  Love that. All right. Tax hack number three.

• 12:35Speaker 06

  Yep. Tax hack number three. I'm putting my kids on my business payroll so I can deduct their pay as a business expense. What do we think?

• 12:43Speaker 05

  Have you seen how cute my kids are? I took a picture of them. They're on the website.

• 12:47Brian Preston?

  That's what I saw on social media is that everybody, get your grandparents to pay your kids to be models. That's why I see that all over the place.

• 12:55Speaker 06

  Love it, like it or hate it?

• 12:57Speaker 04

  This is a very general sentence. So it's like, I'm just going to keep going like it because it's like, it can make a lot of sense. But what you see on social media is I've got a construction business and my newborn baby is a model. And it's like, what construction business do you see out there that's got a newborn baby as a model? Like maybe if you ran a food business and you own like Gerber food. Yeah. So it's always facts and circumstances. A lot of people just abuse it with ridiculous things. Um, businesses really don't need newborns, right? Like they don't need two year olds. Like they don't, you know, so if there's.

• 13:26Speaker 06

  Crazy idea.

• 13:28Speaker 04

  So, uh, there's really not like an ordinary necessary business use there. And that's the whole, it's always like, what's the tax position we're taking? That's always the question. Cause people think there's some magic like this and that. But it's like, the tax position here is that you've got an employee that's providing valuable services in return for the money. And because we've got a related party transaction, we're economically on both sides of the transaction. So we've got automatic high scrutiny. So then it goes, okay, well, let's have really good substance. And so if there really is a genuine need and use for a child in your business and based on their wages, you can do it. Uh, but don't be ridiculous.

• 14:01Brian Preston?

  And don't run a file of self-employment or payroll taxes. I mean, cause that's the thing is I think a lot of, you know, all these things, cause that's 15.3%. Everybody seems to forget that. If you, if you're hiring your kids, there's still going to be some taxes for social security and Medicare coming from someplace. And it's like, a lot of people don't think about that substance of it.

• 14:21Speaker 04

  Well, it just depends. I think there is that workaround where if they're under 18, if they're coming out of a, if the wages are coming out of a partnership or, or a sole proprietorship, you would avoid the payroll tax. Uh, but then that's why people do all this funny, funny business, like legal gymnastics is what I call it, right? Where they're like, okay, like have an S corp, and that saves me the most tax. But now that I need to hire my kid, I'm going to have this like fake family management company so that I can have a sole proprietorship and then avoid payroll tax. So they do these weird things that it's like, everyone knows what we're, what people are doing. Like it's literally advised online. The IRS can and does just like collapse those things.

• 14:51Speaker 05

  And make it all, no matter how complicated you think the structure is, they'll bring it all down and say, here's the materiality. It doesn't work.

• 14:57Brian Preston?

  And then I don't mind just sharing this as the old guy here at the table, from a parental standpoint, I'm always trying to connect the behavior with the money component. Cause what you want to do is get your kids to actually not only see money as a tool, but as a component of how to use the tool well in the future. And that's why I like, when my daughter got her first job, her real job in fast food, opening up that custodial Roth and kind of explaining how money works and then letting her be part of it, I think was better than if I'd have just hired her as a model when she was a baby and then just has this magical account that grows. And then by the way, be careful also the fact that when that child turns 18, they could, a lot of these accounts, they can just take it. And by the way, I've also experienced that is when your daughter

• 15:41Brian Preston?

  gets to, uh, you know, you open this custodial Roth, when they get to be 18 and they, they want to open the fidelity app and they see all these other accounts in their name.

• 15:50Speaker 05

  Whoa, I'm loaded.

• 15:51Brian Preston?

  It's an education moment. So you have to think about these things. Don't think about just the money and the taxes. Think about also how you're going to let your child learn how to use money well as, as part of this.

• 16:01Speaker 04

  A hundred percent.

• 16:02Speaker 06

  All right. Three more tax hacks for your consideration. Number four, I'm moving to Puerto Rico for the tax breaks.

• 16:09Brian Preston?

  Now, I'm assuming you do pretty good. Have you ever looked into moving to Puerto Rico?

• 16:13Speaker 04

  I have never looked into moving to Puerto Rico.

• 16:14Brian Preston?

  I'm not ashamed to say, I've actually used Zillow.

• 16:18Speaker 05

  We've looked at it.

• 16:19Brian Preston?

  And I've scrolled around Puerto Rico saying, what is it? You know, cause when you see how the rule works, you're like, maybe I should look in Puerto Rico, but then, you know.

• 16:28Speaker 05

  For those that aren't familiar, what's great about Puerto Rico from a tax standpoint? And can we just move there and automatically we don't have to pay any taxes anymore?

• 16:35Speaker 04

  Yeah. I mean, it's just under different rules. Basically you can go down, your, your tax rate just goes down very substantially. Uh, if you're a bona fide resident and meet certain requirements around where the sourcing of your income is. Um, you know, as far as like answering this, like I kind of hate it. It doesn't mean it's not legal that you can't do it, but it's just, it's such a big economic change for people that I just like realistically, people just try to not do it. You know, they just keep not trying to divorce the economics from the tax. So like, how about if I just pretend like I'm in Puerto Rico?

• 17:02Speaker 05

  Buy a place in Puerto Rico. Does that count? And that doesn't count. It doesn't satisfy.

• 17:06Speaker 04

  And it's kind of the same thing that people do with all the state tax stuff, right? Like you're living in Nevada, but like you're really living in California, you know, and they've all, we, everyone's seen this stuff before. It's not new. Um, it's just what everyone tries to do. And so it's like, even when you're doing it legitimately, when the IRS or when the state authority comes in, they're just assuming you're not doing it.

• 17:25Speaker 05

  You have to prove them otherwise, right?

• 17:26Speaker 06

  We gotta hate it. I'm kind of excited.

• 17:30Speaker 05

  You heard it here. Jasmine hates Puerto Rico.

• 17:33Brian Preston?

  She did not say that.

• 17:36Speaker 06

  She just said, you need to actually move there.

• 17:39Brian Preston?

  Yeah. You actually, cause you realize it's for economic development and incentives. That's why it is one of the unique things. Cause there's a lot of things you can do in a state that gives you state tax, you know, deductions. Very few things change federal taxes. The Puerto Rico is unique in the fact that it impacts your federal taxation. That's why people get so excited about it.

• 17:58Speaker 04

  Yeah. But then, you know, who wants to move to Puerto Rico?

• 18:01Brian Preston?

  Once you think about kids and all the other stuff, logistically it just fell apart.

• 18:05Speaker 06

  Yeah. All right. Tax hack number five. Don't worry. I took a couple of work calls on vacation so I can write the whole thing off as a business expense.

• 18:14Brian Preston?

  I watched some videos on this just like last night. I think Bora Bora came to mind or something.

• 18:19Speaker 04

  Hate it. Yeah. It's just not the, the, there's so many things wrong with it. And there's so many rules with, uh, you know, in general, when we have something that's high abuse, which certainly travel is, um, there's just a lot of rules, a lot of hurdles in place. But fundamentally, the location for sure needs to be necessary for the business. And so being like, well, I took work calls there. If you could have equally done it in your kitchen, it's just the, the location itself wasn't necessary, but the business is not ordinarily necessary.

• 18:43Brian Preston?

  And I've watched enough of your content, Jasmine. You've also shared when like you get a group of investors together or, or people, you have an investment club and y'all decide, we're going to go to Paris to hold our annual meeting. There's even issues with that, isn't it? Cause you could have, if you all live stateside and you went international, there's another boundary you have to cross for the government to be okay with it.

• 19:04Speaker 04

  Yeah. But so all of these high abuse areas, like almost all of the things in 274D, which includes travel.

• 19:09Speaker 05

  You know, 274D. I can't remember if it's 273 or 275. It's right there in the middle.

• 19:14Speaker 04

  274D. And there's just hurdles in place. So for travel, uh, we, sure, we have 162A, ordinary necessary business expenses. People love to be like, oh, like, as if they just read some creative whatever. And then, okay, next hurdle, 274D travel. Um, we have also got the treasure regulations come in and say, okay, primary purpose business. So they're also looking at, um, it's total facts and circumstances, but they look at how much time and how much significance of the business activities versus personal. And then we keep going. There's more hurdles. And so the one you're probably thinking about for my content is 274H.

• 19:48Brian Preston?

  I was thinking D and then H. Yeah. You're throwing up those.

• 19:51Speaker 04

  And it is for international specifically, there's an additional hurdle, right? Because they're like, you know, um, again, people would love to just go on their, you know, board of directors trip to Bora Bora. Um, but if it's as reasonable to have just done it in the U.S., then, um, it's not deductible. Yeah.

• 20:06Speaker 05

  It's so interesting. We're, we're joking about you being able to pull out these parts of the tax code. I would argue, if you're someone out there trying to carry out or execute these strategies and you've never even heard these parts of the code, she's meant, that should be a red flag to you. Holy cow. There's something more to this that I don't know, that I probably shouldn't know. And I think a lot of people just, they see it on Tik Tok, see it on Instagram, like boom, I'm going to do that. Not recognizing it is involved. It is complicated. It is deep.

• 20:30Speaker 04

  Yeah. A lot of times they literally just don't look at it. They're like, it's a gray area. And I'm like, actually it's literally in the code.

• 20:38Speaker 04

  Eyes like.

• 20:39Speaker 05

  Not gray at all.

• 20:41Speaker 06

  All right. Last but not least, I claim sovereign citizenship, so I don't have to pay taxes.

• 20:49Speaker 04

  This can land you in jail.

• 20:51Speaker 05

  This one will get you actually in jail.

• 20:54Speaker 04

  I mean, it always goes back to, I mean, this is criminal, right? And I mean, some, a lot of other things are not, you know, are criminal as well. But of course, there's always a materiality element. Realistically, the criminal division of the IRS is relatively small. They want to go after big things. Their, their rate of conviction is, I mean, it's like, they basically convict everybody. Like, they go after cases that they win. So more likely to go in jail if it's more money, for sure. But yeah, not legal.

• 21:20Brian Preston?

  So I think it's interesting, because we put sovereign citizens as one, you know, I think, I think, is this the one I think Wesley Snipes might have fallen into where he was? Somebody told him that the code section, that if he, and we've also heard people writing letters to the IRS saying, under this section, I'm exempt. That stuff doesn't work. So be very careful. But also, we could have expanded this to talk about, when you watch content and it talks about, you know, turn yourself into a church, turn yourself into a foundation, all these things, as our headline said, this is how you end up in the orange jumpsuit and look like a Tennessee fan. Is when you, is when you, when you go this far with taking the tax avoidance to full-on tax evasion.

• 22:02Speaker 04

  Yeah, people think, you know, I relied on an advisor, right? When you look at the requirements to rely on an advisor, it includes several things. At first, you have to hire someone who's actually qualified and competent, right? So it's like, I relied on a buffoon is not a good argument. Yeah, I relied on a random, like a taxiligand, it's not an argument. So you've already, like, missed those requirements, but so I relied on someone qualified. I gave them all the information. And it's also including that you actually do due diligence, right? There's like, there is a level of due diligence on your end required. And so, yeah, I mean, it's just like, whether it's this, or there's so many other tax investments people do, and they're like, but someone said, like, there's a legal letter. And it's like, the IRS doesn't care about that guy. The IRS cares about you. You signed your return under penalties of perjury.

• 22:47Speaker 05

  And that's a big deal. And that will get you in, in super hot water with the government. And so it sounds like there's all these different tax hacks that we hear about that are not legit, but there are legitimate ways that you can actually save money on taxes. A lot of people go out there. You mentioned some of, real estate is a great example. If you were legitimately operating in real estate, there are tax advantages to doing that. If you're a small business owner, there are legitimate tax advantages there. If you're saving traditional ways in retirement accounts, there are legitimate tax advantages to those things. This stuff that's kind of way out there in the ether, super complicated, super complex, for most people, it probably makes sense to avoid those, to not get themselves in a bad situation. Agree?

• 23:26Speaker 04

  Hundred percent.

• 23:26Speaker 05

  She says she loved that. She says she loved that.

• 23:29Brian Preston?

  And I want to kind of, because I can't wait to open this up for, for questions. But Jasmine, you, if somebody is like, business structure, or any of these things, if they're small business owners, I mean, tell everybody what your channel is. Because as you can tell, I actually watch a lot of Jasmine's content. This is fun to kind of get in the weeds, to hear about the different sections of, of the IRS code. How do people know more about you?

• 23:54Speaker 04

  Yeah, so @taxleverage is on, on YouTube, and then @moretaxleverage.

• 23:59Speaker 05

  You thought tax leverage was not enough? We got more tax leverage.

• 24:02Speaker 04

  More tax leverage. And then I also actually have a tax planning roadmap. So what I did was, because I mean, to me, it's, I look at all this crazy advice, and it's just, I think people think it's more complex than it is, and really just need someone to like, explain it in layman's terms, just go step by step. So that's what I ended up doing, just like a free roadmap for everyone. And it just goes through, like, here are the levels that you should be, if you're a business owner.

• 24:24Speaker 05

  Love that. Awesome. Well, one of the things we get to do is, obviously, we get to put together content that we think is interesting. We also get to sit here every Tuesday at 10:00 AM, where we get to answer live questions for you, our audience, because we really do believe there's a better way to do money. There's a better way to do taxes, and we want to load you up. So if you're out there in the chat right now, and you have a question, you want to get either our take on, or realistically, you want to get Jasmine's take on, make sure that you get it in the chat right now, because we want to load you up. Are you okay? Answer the questions.

• 24:53Speaker 04

  Let's do it. I'm excited.

• 24:55Speaker 05

  With that, Creative Director Rebi, I'm going to throw it over to you.

• 24:58Brian Preston?

  By the way, I think Jasmine thinks we're crazy, because like, we've already filmed a react this morning, and then now we're, and by the way, Bo, I'm seeing, this thing looks like Mission Control. There is no way they would let me see this much data.

• 25:09Speaker 05

  Ask them if there was like, a blinder.

• 25:12Brian Preston?

  So this, you're probably like, this place is chaos. So welcome to our chaos. We are excited. So we'll let Rebi now see what crazy chaos she can create with questions.

• 25:23Speaker 06

  I will, I will kind of tame the chaos and get to some really good questions here, like Melissa's question. It says, my teen daughter babysits and gets paid in cash and makes under $8,000 per year. She also invests in a Roth IRA. Does she need to file taxes? What evidence is needed for earned income for a Roth IRA? Good question.

• 25:46Speaker 05

  So I already loved the start of Melissa's question. She recognizes that in order to be able to contribute to an IRA, whether it be Roth or traditional, you have to have some sort of earned income. That has to be a thing. But her question is, okay, well, what counts? If my daughter funds, wants to fund a Roth, and she does babysitting, what things have to be true for this to be legitimate?

• 26:06Speaker 04

  I mean, it sounds like she has earned income, but it's just not being reported.

• 26:10Speaker 05

  So she got to report the income.

• 26:11Speaker 04

  Yeah, you would report the income. It's funny, because people do that with their kids, too. They're like, I'm just not going to issue the W-2 and not do all these things, but then can I move it to the Roth? And I'm like, you're kind of undercutting your own tax position.

• 26:19Brian Preston?

  Exactly.

• 26:20Speaker 04

  Yeah. So same thing here. I mean, it's honestly, I mean, to some extent, figuring out, because like, what, what should be happening is I would expect there to be a W-2 in those types of situations now. Probably they're trying to, what, 1099 contractor.

• 26:31Brian Preston?

  Well, you just probably file a Schedule C. I mean, it's probably.

• 26:34Speaker 05

  Claim Schedule C as income for that, probably.

• 26:37Speaker 04

  Yeah.

• 26:38Speaker 05

  But you have to encourage your child, hey, you actually have to file a tax return. You have to report this. I know, look, I want to be careful, because I don't want any tax evaders in my neighborhood to get arrested. But I know there's a lot of young, young folks who babysit, and I don't think they're filing a tax return.

• 26:56Brian Preston?

  They're probably also not funding a custodial Roth IRA either.

• 26:59Speaker 05

  But if you want to do one of these things, like saving a Roth IRA, do that, then you actually do have to file a tax return. Whether you're cutting, mowing yards, or whether you are babysitting, or whether you're any other side, side jobs, you have to treat it like a legitimate business, report the income, and able to be able to take advantage of some of those other sort of saving strategies, right?

• 27:17Brian Preston?

  Especially at this level of 8,000 per year, I would, I would, I would think a Schedule C, under your child's tax, you know, social security number, and then probably paying the, the self-employment, being prepared to, that's the other part. Don't be shocked to find out, they might not owe that much in income taxes, but there, there's going to be a bill for the self-employment taxes, the Medicare and Social Security.

• 27:38Speaker 05

  It's like making over 150 bucks a week and babysitting. That's like.

• 27:41Brian Preston?

  Oh, no. Melissa, and by the way, your daughter, how old, how old was she?

• 27:45Speaker 05

  She's a teen.

• 27:46Speaker 06

  Teenager, yeah.

• 27:47Brian Preston?

  That's awesome. I mean, the wealth multiplier, because that's the other thing, you know, it's just how much the money will grow if you put that in that custodial Roth. And just, don't even try to beat the market, just buy an index fund and wowzer. I mean, it's going to be, it's going to be something big.

• 27:59Speaker 06

  Some good stuff. All right, next question's from RPAT0024. It says, father-in-law and mother-in-law bought a home in Florida to avoid taxes.

• 28:11Speaker 05

  Just outed his in-laws right off the bat.

• 28:15Brian Preston?

  That's why their name is RPAT0024.

• 28:18Speaker 06

  I was going to say, very anonymous.

• 28:20Brian Preston?

  It's a little harder to trace that crime.

• 28:22Speaker 06

  So the rest of the question says, now they need to live in Florida for more than half the year, and he needs to work his job remote there.

• 28:29Brian Preston?

  Okay, that sounds like they're getting, they're making it legit.

• 28:31Speaker 06

  He says, is this worth it? He is within five years of retiring.

• 28:36Speaker 05

  So that they moved from Michigan to Florida to avoid tax. Okay, why does that matter? Why does it matter if they live in Florida versus live in Michigan?

• 28:43Speaker 04

  Yeah, I mean, it's just where are you a resident, right? So you can kind of view it like, I always use California as the example, because they're high tax, but it's like, if you're a resident of California, then they'll just tax you on your, wherever your income was, right? You can go to another state, that tax, that income is still sourced to that state, but then the remainder, it's still taxed in California.

• 29:00Speaker 05

  California, yeah.

• 29:00Speaker 04

  So that.

• 29:01Speaker 05

  So it sounds like the in-laws, they're moving to Florida in order to know, because Florida's a state that has no state income tax. They're moving there to avoid taxes. Is that legitimate? If they're in Florida for over half the year, and he's working remotely, is that an okay thing to do? And it sounds like this is part of their preparation for retirement, getting ready to potentially move down there full-time. I'm reading a lot of context.

• 29:22Speaker 04

  Yeah. I mean, first off, I would need to know the other state, right? We don't have the other state.

• 29:25Speaker 05

  I think it was Michigan.

• 29:26Speaker 06

  I think it is Michigan.

• 29:27Speaker 05

  In Michigan, bought a home in Florida.

• 29:29Speaker 04

  Okay. I mean, you literally have to just look at the, because the thing is, Michigan doesn't care what Florida's law is. Florida doesn't care what Michigan's law is. So they can both still consider you a tax resident. And so you want to make sure, if you're going to do it, first off, do it really well. So just being in Florida for more than six months isn't necessarily enough to not be a resident of another state. You just literally have to go look at their laws to see what the rules are. And so, because a lot of people do that, they'll be like, well, I spend more time elsewhere. But a lot of, a lot of the states look at intent, and going back to intent, like in things like fraud, or whatever it is, they can't look at your intent by what you say, they go by actions. And so they'll look at more than just, oh, you were there than, more than six months. They'll look at things like your driver's license, your, where's your, which home do you own?

• 30:10Speaker 05

  Oh, did you actually switch to domicile?

• 30:11Brian Preston?

  Voting records.

• 30:12Speaker 04

  Look at all of the voting records, yeah. Where your, where's your family? Like, do you still have a home back? Where you moved from? So this question almost feels like they're implying that they also still.

• 30:20Speaker 05

  They really live in Michigan.

• 30:22Brian Preston?

  And that's what I was going to add is, because I remember when, when we were, the firm I was working at, we did professional athletes. And you'd be shocked to know every state that an athlete plays in, they, a lot of them, you have to file tax returns, even though they live somewhere else, they still have to file in those states. So I would encourage you, if your parents, make sure the actual work is truly occurring in Florida, because I imagine they're going to change the, to their employer, they're going to tell them, hey, I've officially moved to Florida, I've, you know, got my tax return, my voting records, but then actually do the work in Florida, because when the IRS, or Michigan, specifically Michigan, ask you, if they send you a notice, you're going to have to show them that this was just, the only times I came to Michigan was to visit grandkids and, and other things, because if they find out you're working there,

• 31:07Brian Preston?

  they're going to expect that they kept the strings and they got those taxes. So be legitimate, do the work. Now, let's face it, Florida's, winters in Florida are going to be much better than winters in Michigan. So that's probably also, there probably is not only a tax strategy here. I, I could make a case for, I spend some time in Florida in the winter, it does feel like you're getting a, a get out of winter card that's pretty sweet.

• 31:32Speaker 05

  And look, when you have the conversation about tax evasion with your in-laws at Thanksgiving, let us know how that goes. Let us know how that went, RPAT.

• 31:42Speaker 06

  Oh, man. All right. Next question is from Foo Following Faith.

• 31:46Speaker 05

  Love that.

• 31:47Speaker 06

  Is there a limit on how far in the past you can reimburse yourself for expenses with an ABLE account?

• 31:55Speaker 05

  Oh, gosh.

• 31:58Speaker 00

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• 32:52Speaker 04

  Pop quiz, Brian. I don't have this off the top of my head. I'm sorry.

• 32:55Speaker 05

  Because I'm trying to remember about reimbursed ABLE expenses because one of the questions we get asked all the time. It's not specific to ABLE, but it's specific to like health savings accounts. Health savings accounts are this great thing where you can fund them presently. And then even if you pay for your medical expenses out of pocket, at some point in the future, you can reimburse yourself. And there's not really a statute of limitations on that. So I can have medical expenses today and I can reimburse myself when I'm 80 years old for medical expenses I incur today. It's a wonderful way to get tax-free savings inside of a quadruple tax advantaged account. So I'm wondering if that's kind of the line that is going now.

• 33:30Brian Preston?

  Let me, because I don't know specifically Foo Folling. I just want to be honest with you. Do you know?

• 33:35Speaker 04

  No, I don't have this.

• 33:36Brian Preston?

  But I do want to, you need to go look it up. So that's the disclaimer I will put out there.

• 33:43Brian Preston?

  The thing I will tell you though, it's like most things, it's when you set something up is when you start the clock or the access. And a lot of things with, you think about health savings accounts. You think about 529s because that's what ABLE accounts even use the structure of, very similar to 529s. It's the year, it's the tax year is the determining factor. Was the account open? So I'm thinking that's probably, if you, you're probably not going to be able to open an ABLE account and then go two years in the past. Now, maybe there's some weird, because realize these accounts were set up because Congress, coming back to your point, you mentioned Congress earlier. They recognize that, hey, parents who have disabled children, they incur expenses that most people just don't deal with.

• 34:26Brian Preston?

  And there's this horrible thing that happens where you don't qualify for any government benefits, once you have hardly any assets in your name. So they're like, let's create something kind of like what we did with 529s for, when they called them ABLE accounts. And they're very powerful, up to $100,000. But I don't think they let you go back in time. And I could be wrong on that because like I said, they created already some special powers on these accounts. But you need to go look at the fine print. And I apologize, this is a live show, so we don't get to see all the disclaimers. And that's what, I will say this about anybody who works in taxation. It can make you look silly if you're answering questions without going and pulling the actual code sections and so forth.

• 35:05Speaker 04

  I respect that, as you should.

• 35:07Speaker 05

  I clearly did tons of research when I typed it into Google. And it is interesting. One of the things that came up, it says unlike HSAs, which allow you to reimburse yourself for years or decades in the past, ABLE accounts do not have explicit IRS rules or a clear multi-year grace period, same with HSA. So it's not entirely clear what the rules are, but it does sound like they tend to be more similar to 529 accounts than to HSAs in terms of reimbursing your expenses for, or reimbursing yourself expenses incurred in the current year. Again, do the research because it looks like there's a bunch of different carve-outs and SSI comes into it. So it's a complicated question. You want to make sure before you do, before you act on it, like Jasmine said earlier, you actually look up the code sections and know what it is that you're doing. And you do more than a quick Google search to answer that question.

• 35:53Speaker 04

  All right.

• 35:54Brian Preston?

  Did the camera, because I'm not used to sharing. I just spilled drink all over me. So I didn't know if the camera caught that at the live stream. Let me know if you saw that I struggled with this basic function.

• 36:04Speaker 05

  If it didn't, you would have never known.

• 36:06Speaker 04

  Now they know. I didn't even notice.

• 36:08Speaker 05

  You're like those guys that admit to tax fraud online. If you didn't say it on air, nobody would have known.

• 36:15Brian Preston?

  Oh, everybody saw it. The team is telling me great. No, the audience saw it. So I just wanted to, I'm not losing functionality over here. I just.

• 36:24Speaker 04

  Oh, that's hilarious. All right, next question is from October 2025 Vet. I believe is the username. He says, I retired early at 52.

• 36:38Brian Preston?

  I bet around October of 2025.

• 36:40Speaker 04

  But I'm wondering, is it worth starting an LLC to pay myself to make annual Roth contributions? Or is it too much trouble than it's worth because of the tax obligations?

• 36:52Brian Preston?

  Why the LLC?

• 36:53Speaker 04

  No, so. Starting a business is what he's asking, probably.

• 36:56Speaker 05

  I know, I know where this question's coming from. Because again, we talked about how much we love Roth IRAs and how valuable they are. Well, some people are like, hey, I'm retired. And I know in order to be able to do and do Roth contributions, I have to have some earned income. Well, I'm retired, I've got money. Should I pay myself so that then I can contribute to a Roth? Is that a sound tax planning strategy?

• 37:18Speaker 04

  Not if you don't do the economics, right? So it's like, I always think it's a great idea to start a business.

• 37:23Speaker 05

  Sure, but an actual legitimate business, right?

• 37:26Speaker 04

  Yeah, so I mean, if the goal is, no, I'm retired and I'm not running a business, then you just don't even have the economics to do that.

• 37:33Brian Preston?

  Well, and also you have to pay, I mean, why would do an LLC? You could just do a Schedule C on your tax return. But then you have to pay 15.3% self-employment tax on. So you put, you've already put yourself, you've got to make greater than 15.3% for this thing to even make sense. So it all falls apart right there.

• 37:53Speaker 05

  I got a much better idea that I think is probably a lot easier. If you are retired and you have any sort of pre-tax assets.

• 37:58Brian Preston?

  Go work at Walmart.

• 38:00Speaker 05

  Okay, you could do that. Or if your desire is to create more Roth assets, you could just do direct Roth conversions. If you're in a lower tax bracket, you're able to convert pre-tax 401Ks, pre-tax, you know, TSP, whatever, the thing that you have access to. That may be a better way, even for retired folks that don't have any earned income, to create Roth assets inside their portfolio without having to like start a business and pay yourself and do all that complicated stuff.

• 38:26Brian Preston?

  See, I want Jasmine to see that there are people who retire early.

• 38:31Brian Preston?

  Because we had an earlier off-camera conversation and Jasmine believes no one should ever retire. Or you don't believe people actually retire.

• 38:39Speaker 04

  My advice would be to not retire.

• 38:41Speaker 05

  There we go.

• 38:43Brian Preston?

  I love it.

• 38:46Speaker 04

  All right, I mean, have we exhausted that? Is there anything else we can say? Okay, great, great, great. Kelly Baumgartner is up next. What if we receive a bonus commission November 1st? Do we need to pay extra tax to get us in the correct tax bracket, 37% on that commission by the end of the year? Or wait until taxes are due in April?

• 39:08Speaker 05

  You remember when you would just take tests? And there was like a question and you read the question. And you get like three quarters way through the question. Like I forgot the first part of the question. I feel like this one is one I got to read again. Did you get that on the first go-through? If I get, if I receive a bonus commission November 1st on the few weeks, do I need to pay extra tax to get us in the correct tax bracket? 37% of that commission. So it sounds like we're in the 37% income bracket. Ah, I know what happened. 37% income, they did not withhold at the correct marginal tax bracket. That's what's going on here. Do they need to do something differently before we get to April? Since they know they're going to owe tax on that commission?

• 39:44Brian Preston?

  I bet there's going to be some additional homework or context we're going to need.

• 39:48Speaker 04

  Yeah.

• 39:48Brian Preston?

  I'll let Jasmine take it away.

• 39:50Speaker 04

  Well, I mean, I'm going to assume this person probably got, somehow got the bonus without withholdings. Because I mean, normally when you get a bonus through like a W-2, it'll withhold even, I mean, really high.

• 39:59Speaker 05

  Oftentimes higher than what your marginal bracket is.

• 40:01Speaker 04

  Exactly. So normally it's fine.

• 40:03Brian Preston?

  Don't let them 1099 you, Kelly. That's, by the way, IRS hates that and they want to know about it. So you can go back to your employer and be like, oh.

• 40:10Speaker 04

  Yeah, yeah. So I mean, because yeah, that's not supposed to happen. If you're a W-2 employee getting a bonus, it would still be W-2. So, but yeah, I mean, probably this person's fine because they're probably within safe harbor for estimated tax payments, in which case they should just save the money, make a little interest on it.

• 40:25Brian Preston?

  Remind everybody what safe harbor is.

• 40:26Speaker 04

  So I mean, I always describe it like everyone's subject to the same requirement, right? So you have to pay the IRS throughout the year. Safe harbor is, because you don't know how much you're going to make by the end of the year, right? And so you can either pay in 90% of your current year tax, which we don't know what that is until the end of the year ends, or 100% or 110% depending on your AGI of prior year tax. This person's probably fine if they're W-2. They probably are paid in at least 100% or 110% of prior year, in which case hang on to your extra money, make, you know, put in a money market that's safe or something safe that gets an interest rate and then pay it before April 15.

• 41:00Speaker 05

  So what I'm hearing you say is it's okay to owe money at tax time, right? It's not, even if you have this and you're going to have, you have to pay 5,000, 10,000, whatever, that's not a bad thing. That doesn't mean you did something wrong.

• 41:13Brian Preston?

  Kelly, here's the homework I would do is, because you gave us some context clues here. If you, if there, if you thought you were, you were in the 37% bracket with this income, that's much higher than $150,000. Go look at last year's taxes, make sure you're at 110% of last year. And if you're not, make an estimate of tax payment by January 15th. If you're over that sum, just make sure, exactly what Jasmine said, you have the money to pay in the remainder in April 15th.

• 41:39Speaker 04

  Yeah, you would just compare that total tax line item on your actual 1040, not what you owed, but like what you originally owed.

• 41:44Brian Preston?

  Total tax.

• 41:45Speaker 04

  Total tax. And then what are my current withholdings year-to-date?

• 41:48Brian Preston?

  Yeah, love it. Multiply by 1.1.

• 41:51Speaker 04

  I feel like we're dropping a ton of really good information. This is awesome. This next question.

• 41:55Brian Preston?

  Oh, we've got to be careful. Remember, remember how you started being like a playing athlete in like freshman year way ahead because somebody got sick or something? Like a pulled a muscle or something like that? Don't sleep on Jasmine.

• 42:08Speaker 05

  I know.

• 42:09Brian Preston?

  This is kind of fun, dropping this type of stuff.

• 42:12Speaker 05

  There are two and a half great tax minds at this table right now.

• 42:18Speaker 06

  All right. Well, this next one, we're going to speak a little more broadly.

• 42:20Speaker 05

  Okay.

• 42:20Speaker 06

  All three of you, you work with a lot of professionals, entrepreneurs in a lot of different sectors. You have a lot of experience across all those things. So this person, Andrew, asks, how do you handle uncertainty due to AI? I'm a software engineer. If I knew I could make my current salary plus inflation for 20 years, I'd be set. But fears of AI replacement keep me money stressed. What would you say to Andrew? And what are you guys seeing? Like, are you stressed about uncertainty due to AI for certain sectors? What do you think?

• 42:51Speaker 05

  If you had a client ask you this question, what would your response to that person be?

• 42:57Speaker 04

  I'm not even remote, like a client concerned for themselves or asking me if I'm concerned?

• 43:01Speaker 05

  Asking for themselves. And then I'm curious to know, are you concerned about it?

• 43:04Speaker 04

  Because I was gonna say, I'm not concerned at all. I mean, the, a great person with AI is always going to be better than AI on its own, right? And so it's like, it just comes down to being really good. And so there is a real fear for anyone that's not good or not great. You know, it's just, the AI will be great. So then you also have to add real value.

• 43:25Speaker 05

  I love that.

• 43:26Brian Preston?

  Here's what I was gonna share is that I know from working with a lot of tech people is that this industry is cruel. Once you're 50 and over, I'm just gonna straight up tell you, because that's not in the brochure for that industry, but I have a lot of clients who somewhere between 50 to 58, this industry typically shows you the door and you're used to making great income. So it just being in this industry, save like your life depends upon it. That's because there is a chance that this industry, whether we're talking about AI or not, you need to be saving and taking that responsibility serious because that industry has a tendency to shed people as they get older. Now, bring in AI. If you're

• 44:09Brian Preston?

  really fearful, and I don't know, look, I kind of lean into what Jasmine was saying. I think if you are talented, this thing's going to amplify you. It's not going to necessarily replace you. But there are certain careers that you have to be careful. Are you on that bubble that, you know, you either need to take your skill to a different place or higher so you can kind of administer all these AI agents, or you need to figure something else? So I would probably use that as motivation to be aggressive with my savings behavior. And then, and then maybe figure out how you make that money, that army of dollars work for you just in case. Now, hopefully, that's one of the things I've shared with you guys.

• 44:50Brian Preston?

  When I was saving in my twenties, I thought I was leaving the workforce at 50. And now, as you can see, I'm over 50. I'm not, I don't like giving my real age.

• 44:59Speaker 05

  As you can see, no one would guess.

• 45:01Brian Preston?

  Look, but here I am. I love, I love working. But I never regretted that I saved so hard in my twenties, because it gave me additional flexibility and opportunities. So I think you could do the exact same thing, Andrew, is be fearful to the point that you actually change your behavior to save extra. And then if this thing turns out to be a big nothing burger, you're not going to be hurt because of what you did for yourself.

• 45:25Speaker 04

  Yeah.

• 45:25Speaker 05

  And I love what you said. A good person with AI is likely going to be better than AI on its own. So if you are concerned about your specific vocation or role, how am I adopting my skill set? How am I learning new things? How am I able to use this technological advancement to make me better at the very thing that I'm doing? Because I think when it comes to like your work, if I can just keep myself in the top echelon, if I can be a top performer in whatever field I am, whether it's a software engineer or fill in the blank, if I can make sure that my skill set causes me to rise to the top, I'm likely going to be positioned better to whether whatever sort of industry shifts might happen due to technological advances.

• 46:06Speaker 04

  Yeah. It's also like, what skill set are you building? I know it's easy to feel very niched and just do one thing repetitively over, you know, decades, but that's what, you know, AI comes in. I mean, to me, it's like building, being a great communicator, right? Being a great manager, like being very quick to learn and adaptable. There's just always demand for that.

• 46:23Speaker 05

  Yeah, absolutely.

• 46:25Speaker 06

  Good answer. Thank you for the question, Andrew. We appreciate you being here. Next question's from Ren. It says, hi, the Money Guy and Jasmine. Do you have any suggestions on how to find a good tax accountant or financial advisor?

• 46:40Brian Preston?

  Such a good question.

• 46:42Speaker 06

  With tax credentials, even those who have not yet, for even those for, who have not yet reached critical mass net worth yet. Thank you.

• 46:49Speaker 05

  Well, look, the best way to find-

• 46:50Brian Preston?

  I can't wait to hear you answer this one.

• 46:52Speaker 05

  The best way to find a financial advisor is go to moneyguy.com slash become a client, obviously. But when it comes to hiring a tax accountant, when it comes to hiring a tax preparer, when it comes to a tax professional, we, this is probably the number one question we get asked the most.

• 47:06Brian Preston?

  Do you do taxes for individual? Like, if they, if they don't have a business and a full package with you, do you, so you do like kids' tax returns and?

• 47:14Speaker 04

  We only do tax returns for business owners. And so if it was a kid of one of our business owner clients, we would do it. Yeah. But otherwise, no, we don't just do like individuals without a business.

• 47:22Brian Preston?

  But you typically, didn't you say a hundred thousand dollars of taxation?

• 47:26Speaker 04

  Yeah, a business, a business. Yeah. Tax from a business.

• 47:29Speaker 05

  Okay. And have you found in your experience that, that even though someone might have a designation, it might be an EA, there might be a CPA, they're not all created equal.

• 47:37Speaker 04

  No.

• 47:37Speaker 05

  And so when it comes to finding a preparer, specifically for individuals, because I think that's what Ren's question is, how do they do that? Like, how do you know if you found a good accountant, good tax preparer? Or what should you look for to find someone who is sound in that industry?

• 47:50Speaker 04

  You know, I, I think it's like anything, a few things. So one is first, I do emphasize the license. That's not enough, but I do think someone should be licensed.

• 47:58Speaker 05

  It's like a prerequisite.

• 47:59Speaker 04

  Yeah. It's just a, you know, not to say there's no one good out there that doesn't have a license. There are, but it's just, it's a minimum threshold. I, you have someone that they are held accountable to, right? Because the thing is, it's like literally like, person can get out of prison and then just call themselves an accountant. Like, there's just no, there's no monitoring of, of it.

• 48:18Brian Preston?

  So you're a good person, because you have like every, you have EA, you have CPA, you have a tax attorney. What's, what's the thresholds there?

• 48:25Speaker 04

  To get them?

• 48:25Brian Preston?

  No, no, no. What's, which ones is, so is an EA? Is it EA? Is it just one of these three? Or is there a threshold you should go?

• 48:33Speaker 04

  I think it depends what you need, you know? So I do think if we're talking like an individual tax return, not a complex business, definitely, I mean, probably you're aiming for an enrolled agent or a CPA.

• 48:42Speaker 05

  Okay.

• 48:42Speaker 04

  Yeah. Yeah. So licensed. And then to me, it's, I always go back to, like, you should understand what's going on. And so I think the most dangerous place that people put themselves in is they hire someone that says lots of fancy words, and if anything, makes it sound more complicated and confusing. So then they think that person knows when really the best people are able to actually simplify it and make it understandable.

• 49:01Speaker 05

  All right. We have a, we have a great resource on our website. Go to moneyguy.com/resource. For anyone who's hiring a financial advisor, wherever you're looking, we have these eight questions you should ask. Hey, what are, ask these questions. And it'll help you just kind of raise up, is this person someone who I should be talking with? Is this someone I'm looking for? Are there questions that our audience could ask an accountant? Not, not, not to test them, but to verify that they are someone they should talk to. It's not like one of them is, hey, what's your credential? Like, what, what qualifies you to be a tax preparer? Are there other questions like tenure, client load, specialty areas? Are there other questions they should ask that would be helpful?

• 49:40Speaker 04

  Sometimes I hesitate on those questions just because I think people lie.

• 49:43Speaker 05

  Oh.

• 49:43Speaker 04

  And so it's like, oh, do you do lots of people in my industry?

• 49:45Speaker 05

  That's a great first question. Do you lie? Are you, question one, are you a liar?

• 49:50Speaker 04

  I think-

• 49:50Speaker 05

  That's a great one.

• 49:51Speaker 04

  When people are like, oh, do you do lots of people in my industry? It's like, they're just so, yeah, you know what I mean? So I just feel like those aren't useful questions. I actually prefer, you said not to test them, but I actually prefer the test. Like, that's, that's what I do when I interview accountants and we're always hiring CPAs. It's like, of course, my threshold's like very high, so I'm hiring, but-

• 50:05Speaker 05

  Give us a good question. Give us a good test question.

• 50:07Speaker 04

  I love it. What's the tax difference between, what's the difference in tax basis between a partnership and an escort? To me, that's a great one.

• 50:14Brian Preston?

  Obviously.

• 50:14Speaker 04

  And if someone doesn't-

• 50:17Speaker 05

  Who couldn't answer that question?

• 50:19Speaker 04

  That's for businesses, though, obviously. You know, so you could choose something relevant to like, what's the tax difference between a 401k? Or how do you do a mega backdoor Roth? Or, you know, you just choose a question that you can look up online that's relevant to your situation. And then if that person can't really speak to it at all, or like, let me think about it. They just probably don't do your type of work as often.

• 50:38Brian Preston?

  I, I don't mind sharing that. One of the things, because I was surprised when I sold my tax practice. I was an advisor, I was a tax preparer that was trying to always pay for my fee by looking, I would take into account every, every client and say, what do they do for a living? What are things? Are there things that they're probably not utilizing that if I did this for them or asked them about this, that we could recoup some of my fee? And I was shocked when I sold the practice. And I love the CPA firm that I sold to, but they're more of a transactional, which, you know, versus a consultant. Because whatever you show up with, they are going to ask you questions on them because they're, they're great at what they, I don't want this to come off the wrong way. But it was

• 51:19Brian Preston?

  different than probing for additional deductions and other things. And I think, and I think that's probably the biggest shock people have when they work with tax professionals is how many of them are more transactional? You show up with your shoebox full of stuff, they're just going to take whatever's in that, that shoebox, and they're going to give you a tax return off of that. Whereas I would like, if you're trying to work with somebody and you have a more complex or growing situation, find somebody who's going to at least probe you in the right way to ask the questions to see if they can find additional deductions that are legal. And that, because that's, that's the part I find too many CPAs are super analytical, and they don't do the communication stuff that would actually create more deductions and opportunities for their clients.

• 52:04Speaker 04

  Yeah. Ideally, find someone in between. Because that's where, to me, it's like, you've got your traditional CPAs and accountants, very reactive. I think part of that's also how hard it is to run a tax practice business.

• 52:12Brian Preston?

  Yeah, their load is so heavy.

• 52:14Speaker 04

  They're also a lot of times underpriced. And so to, to, they're just like, their problem is they can't hire enough qualified accountants to help, not that they don't have enough business and stuff.

• 52:22Brian Preston?

  What are you talking about? Everything I see on the internet is everything should be super cheap and fixed fee. You know, complexity doesn't mean anything with anything is what I see all over social media.

• 52:32Speaker 04

  Oh, yeah. So, so there's that. And that's kind of when people are like, oh, I hate my accountant, you know? But then what has popped up, especially with social media, is then the other alternative, where it's really just like a marketer with fancy language who's just overcharging for something really simple. And so they're making it sound kind of like you were saying, well, find someone proactive, but you just gotta be careful of like, finding someone that's really just marketing.

• 52:50Speaker 05

  Yeah.

• 52:50Speaker 04

  Like, yeah. And it's not really being like a true advisor. And so that sweet spot is in between. It is hard. You know, I think sometimes it's like, maybe CPAs are self-selective. A lot of them maybe want to be behind a desk. Like, the most qualified people are like, please don't talk to me, you know, whatever it is. But finding someone in between where it's like they care, they want to be a detailed advisor, but they're not like giving you BS. Yeah.

• 53:10Speaker 05

  Love that.

• 53:10Speaker 06

  Yeah. Good thoughts.

• 53:11Brian Preston?

  I will say, you know, last, because a lot of firms, because of their workload, are trying to make more and more things automated. And I've had clients who I've referred to CPAs, and they've said, you know, I got an, I got an email from the CPA where they don't even want to do that in-person meeting anymore. That is the nature of the industry. It is getting to where- We're dumping more files into systems and then you put in the box, output comes this way.

• 53:40Speaker 05

  What you put in.

• 53:41Brian Preston?

  Interview, talk about these things with your CPA and be prepared because all these things are going to have a cost. If you want to have that in-person meeting with your accountant, then that's probably going to have a cost because time is value. And it's just, I want people to be prepared for that.

• 53:56Speaker 04

  Yeah, but that could be really important.

• 53:58Brian Preston?

  But it is, this is where the world is, this is where the world's going is people are trying to streamline the transaction, which makes it potentially cheaper. But if you're counting on somebody to have a sit down with you, there's a cost to that.

• 54:12Speaker 04

  Yeah, there's a supply deficit right now with accountants, right? It's like they keep retiring. Like honestly, a lot of firms burn people out with tax. A lot of people are like, I want to leave this industry. It just like goes that direction. So yeah, I mean figuring out like, what is highest value for you? I know if it is that in-person meeting, then that's what's high value for you, but it comes like, it comes with a cost.

• 54:29Speaker 06

  Yeah. Good thoughts. Good thoughts. All right. We're going to go to user 55717.

• 54:36Brian Preston?

  Oh, just off that name, we probably, this is, they needed a deniability of this question.

• 54:41Speaker 06

  It says, can or should I sell holdings in an UTMA account to reset the cost basis slowly over time to take advantage of the kitty tax?

• 54:52Speaker 05

  Okay. So quick vocabulary, for those of you that aren't familiar, an UTMA account is just a custodial account held for a minor. So you as the parent or grandparent serve as the owner of the account and the minor is the beneficiary. And so you might hold this account and you might invest in something like an individual stock or a low cost index fund that does well through time. Well, one of the things that users think is, oh man, okay, this kid for whom I own this account, I could likely sell the holding that I have and that has done well, but because they're in such a low tax bracket, they're not going to pay any income tax, any capital gains on that because they're so low. Is that a viable strategy? Is that something that user 55717 could potentially carry out?

• 55:33Speaker 04

  I don't know what they mean, but take advantage of the kitty tax. Like it's a bad.

• 55:37Speaker 05

  Yeah, essentially sell a holding that's appreciated, not have to pay capital gains tax, sell it at the 0% capital gains rate, and then just rebuy the same holding again as a way to wash and clear out that gain.

• 55:49Speaker 04

  When you incur the kitty tax, like that's, you're incurring the tax bracket of the parents, right? So.

• 55:53Speaker 05

  So this has to be below the threshold where the kitty tax would take effect.

• 55:56Brian Preston?

  I'm sitting here, I'm mad. We're doing a tax show and then my normal cheat sheet, we don't, this was not one that has a drawer.

• 56:02Speaker 05

  There's no drawer there.

• 56:03Brian Preston?

  I don't have any of my tax numbers that I normally do, but it's typically, they're talking about the zero tax capital gain. But what I don't know is the asterisk on, because kitty, that's, it's back to your point, you know, paying taxes at the parent's tax rate, what, I would need a little more context.

• 56:22Speaker 05

  So it sounds like in 2026, the kitty tax thresholds for a child's unearned income are the first 1,350 are tax free. Meaning if you sell this capital gain, it's less than 1,350, it's probably going to be taxed at 0%. For the next 1,350, so between 1,350 and $2,700 is going to be taxed at the child's own tax rate. Once you go above $2,700 of unearned income for a child, that's where the parent's tax rate kicks in. So if you are selling this account, you fall below those thresholds, I do think that it's probably viable that this person would pay 0% income tax and it would be okay to do.

• 56:57Brian Preston?

  I would ask one more question is like, is the zero capital gains tax rate integration with kitty tax is the 2,700 the correct number? Because it's just, to be careful, it's once again, back to the code section, reading to make sure there wasn't some carve out because legislators, a lot of times kitty tax was enacted so that people wouldn't manipulate.

• 57:19Speaker 05

  Find the backdoor way.

• 57:20Brian Preston?

  I just wanted to make sure before we, we lay something out there, it doesn't mean you wouldn't get away with it, but I just want to make sure we're on solid ground with that, that there was not an asterisk in there to carve out on the zero capital gains tax.

• 57:33Speaker 04

  Yeah. I mean, I think, you know, some of these things, I'm like, wow, we are talking some really small numbers to be like beneficial. So, but yeah, I think a lot of times it's not worth the squeeze. But sure. I mean, if you were like super detailed, you made sure you're not going to run into like some problem, then it sounds like there could be a very small tax benefit.

• 57:48Speaker 06

  I have, oh, go ahead.

• 57:52Brian Preston?

  Well, this is why you had to be careful bringing on Jasmine who deals with clients who only have at least a hundred thousand dollars in taxes. And she's going to totally pop around our, our audience. They're trying to squeeze a little extra juice out of that.

• 58:04Speaker 06

  I think that's, we talk about the hassle factor too. Like you have to think through that. Like, is this actually?

• 58:09Brian Preston?

  Neither one is wrong, by the way. I love our financial mutants, but Jasmine's not wrong either.

• 58:14Speaker 04

  I just fundamentally, obviously I think about things from a business owner perspective, but fundamentally it's like, my money's my money, but my time's my money and my energy is my money. And so a lot of people want to destroy their time and energy.

• 58:23Speaker 05

  To try to save.

• 58:24Speaker 04

  They can save very little money. And I'm like, I just.

• 58:27Speaker 05

  I know this guy, he used to shop online. Whenever he'd shop online, he would spend an hour, hour and a half, like coupon codes, like Nike coupon code, coupon mountain, coupon month, like all this. And he would literally spend an hour to try to save $4 on shipping.

• 58:41Brian Preston?

  There is actual content out there called triple tax, I mean, triple deal saving ninja or something like that, where I was talking about how you could layer your coupon codes with your shopping portal.

• 58:53Speaker 06

  Wait, how do you know this? Do you know the guy?

• 58:55Brian Preston?

  He's talking about me, of course. Yes. I used to be so tight with every dollar. Now I will say, middle age has changed me in some ways. I don't know if it's kids, success, whatever it is, but I know, touche.

• 59:10Speaker 04

  I will pay for convenience like any day of the week. It's like one of, like the highest value thing for me.

• 59:14Brian Preston?

  You have figured this out much earlier than I have. I kept these tight, wide ways way too long, probably.

• 59:20Speaker 06

  I think you're, you've gone past it now. You're in a better place.

• 59:23Speaker 05

  You're in a better place.

• 59:24Brian Preston?

  It's still sitting out there for Bo to pick on me. You can go find something ninja. Just if you look for ninja.

• 59:32Speaker 05

  We don't do a ton of ninja content.

• 59:34Brian Preston?

  If you search the content for ninja, you'll probably find it.

• 59:37Speaker 05

  It'll pop right up.

• 59:38Speaker 06

  For sure.

• 59:39Speaker 05

  Jasmine, thanks so much for hanging out with us. This was awesome. You did not disappoint. We came in expecting to be a tax wizard and you were in fact a tax wizard.

• 59:48Speaker 04

  Thank you.

• 59:49Speaker 05

  If folks want to know more about what you have going on, how to connect with you, how to follow your content, where can they go to learn more?

• 59:54Speaker 04

  Yeah. Great place, jasminedelucci.com. That's our website and then slash roadmap. You can get the free tax planning roadmap.

• 59:59Speaker 05

  Love that. What about if they want to follow you on social, keep up with all that stuff?

• 1:00:03Speaker 04

  At tax leverage for you too.

• 1:00:04Speaker 05

  At tax leverage. Love it.

• 1:00:05Brian Preston?

  This was a blast.

• 1:00:06Speaker 04

  Thank you.

• 1:00:07Brian Preston?

  Thank you for, and look, I will say Bo has hung out with me enough. He's, I mean, if I could deem him an enrolled agent or CPA.

• 1:00:16Speaker 05

  As an actual CPA, she's going to find that so offensive.

• 1:00:19Brian Preston?

  I'd be like a knight with a sword and you know, I would, I would put it on both shoulders. He, I mean, he's gotten good, but I love your content. I really do. Cause I feel like you, you cut through the, the noise, because there's so much noise out there in the, in the content sphere. And I appreciate what you're doing because I think it's educating people and it's helping people. So if y'all aren't familiar with Jasmine's content, go check it out, especially if you're a business owner. I think you, you will leave either being scared to death or at least, you know, knowing a little bit more.

• 1:00:50Speaker 04

  Yeah. Thank you. Yeah. No, I love it. If people, I mean, when I, you know, dreamt about being a tax attorney back in eighth grade, I thought, you know, I'd be behind a desk and all of that. And I enjoy that as well, but I'm like, it does nothing, but nothing more fun than actually sharing with people.

• 1:01:03Speaker 05

  Being in front of the camera. That's awesome.

• 1:01:04Brian Preston?

  Guys, we gave away tons of advice today. If you also want to go just take advantage of our free stuff, Bo gave it out a few times, go to moneyguy.com/resources. If you've reached the level of success, not only from the tax, but from financial planning and knowing how to do things, don't let this be a novel thing where you're trying to do everything yourself. We've literally done this thousands upon thousands of times for our wealthy clients. We work with clients all across the country. Reach out to us, take the relationship to the next level. I'm your host, Brian, joined by Bo and Jasmine. Money Guy, out.

• 1:01:35Speaker 06

  The Money Guy Show is hosted by Brian Preston and Bo Hanson. Brian and Bo are partners with Abound Wealth Management. Abound Wealth Management is a registered investment advisory firm regulated by the Securities and Exchange Commission in accordance and compliance with the securities laws and regulations. Abound Wealth Management does not render or offer to render personalized investment or tax advice through the Money Guy Show. The information provided is for informational purposes only, may not be suitable for all investors and does not constitute financial, tax, investment, or legal advice. All investments involve a degree of risk, including the risk of loss.

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