Pod Insights Money Guy Show Financial Advisors React to Horrible Tax Advice on TikTok About this episode Brian and Bo take on some of the craziest tax advice we've found on TikTok!
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Transcript Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.
0:00 Brian Preston? Hey Podcast Family, you have to know, we are known kind of on the YouTube world as the React channel.
0:06 Speaker 01 That's right, yep.
0:07 Brian Preston? The Money Guy Show, but we don't want you to miss out on any of the fun, so we have something special for you today.
0:13 Speaker 01 We are so excited. We are going to actually release for you the same audio that we do on our React videos. Now, if you've not checked out the React videos, go to youtube.com/moneyguyshow and check them out. But if you just want to know what we're getting into from the audio side, make sure you listen up.
0:28 Brian Preston? It's gonna be fun.
0:36 Speaker 02 So I accidentally put my lunch and my margarita on my business card, which means now I have to make it a tax write-off.
0:41 Brian Preston? Oh my gosh.
0:42 Speaker 02 That's what this video is for.
0:46 Brian Preston? Hey, hey, hey, it's Brian and Beau from the Money Guy Show. The team has put together some tax videos, but I'll be honest, we did get out of them. It's not necessarily good stuff.
0:56 Speaker 01 Brian, I am so excited because I love that we can speak into what's good and what's not out on the internet to help you do money better. So with that, let's dive in.
1:07 Speaker 03 There's only one car you buy and the rest you lease. $150,000 Range Rover, it weighs 6,000 pounds. Section 179 IRS says anything over 6,000 pounds, you can write off 100%. You could buy it on December 31st, write it off that year, even though you didn't even drive the car.
1:21 Brian Preston? Boom.
1:22 Speaker 01 What?
1:22 Speaker 03 $158,000, you get to write it off that day against your earned income. If you have self-employment money or an LLC producing other income. I would pay cash for the Range Rover, we did, but the Cullinan that I have is a leased vehicle. I leased it with no money. I put it on a 24-month lease, never longer than that. Whatever the payment is, if you can't handle that payment, don't do it. And then every 24 months, I trade that car in. Why do I do a lease rather than own? Because I can write off 100% of that lease payment every month against my business income.
1:50 Brian Preston? Grant is one of those guys, he throws out some good stuff, but he also throws out some stuff that's got a lot of shades of gray.
1:56 Speaker 01 Lots of gray.
1:57 Brian Preston? And when he's spot on that, look, when a vehicle weighs over 6,000 pounds, it's one of those little quirks of the tax code that now qualifies as a piece of equipment or machinery that you can accelerate. Rate the depreciation through that section 179. The part he's failing to mention when he says 100% deductible is that it's going to make you track the mileage. You're going to have to compare what's business use, what's personal use and so forth. And for a lot of people, it's hard to reach 100%. First of all, you can't even consider this unless it exceeds 50%. So the fact that he says you don't even have to drive it unless you're making YouTube videos or other things like grants. Maybe he's got some way that he can justify it.
2:39 Brian Preston? But if you're running just a small business, I don't know that it necessarily works for you.
2:43 Speaker 01 Who wants to have an auto payment every single month for as long as you exist? He said, I'm going to lease it for 24 months, no more. I'm just going to rinse and repeat, rinse and repeat, rinse and repeat, rinse and repeat. You know what's better than that, in my opinion? Buy a reasonable, affordable car today, pay cash for it, have no payments, drive that car for seven, eight, nine, 10 years and don't be wasting money on the automobile. Yeah, so what if it's 100% deductible because it's the lease payment? You're still spending that money. You know what's better than getting the tax deduction? Not spending the money at all. It makes no sense.
3:16 Brian Preston? Well, deductible is not free. And also remember, even when you take a deduction, even if you're in the high tax bracket like Grant likely is, you're still paying 60 cents on the dollar. This is saving you the deduction. It's not free.
3:29 Speaker 04 Snitch on someone for not paying their taxes, you get 30% of whatever they owe. So if you want to pay 30% less in taxes, just don't pay your taxes.
3:37 Brian Preston? Snitches get stitches.
3:38 Speaker 01 Snitch on yourself. Just don't pay your taxes and snitch on yourself. No, I gotta know, Brian, this is where, this is not inside of my tax lexicon. Is it true that there is some sort of benefit if you turn in a tax evader?
3:49 Brian Preston? I don't know about turning in. There's definitely whistleblower provisions.
3:53 Speaker 01 Sure.
3:53 Brian Preston? But I don't think that this is a tool or tactic that you want to do on your neighbors that maybe aren't rolling the trash can behind the house or doing things like, because, look, I always wonder, yeah, you could probably go tell on somebody if you know they're doing something that's incredibly illegal. But I'd also be careful of just being a person that's going to go get on the radar of telling on neighbors or doing something. I think that was a joke. I'm going to, I'm going to. Assume his tongue was firmly planted on his cheek.
4:22 Speaker 01 For sure, it was a joke. There is no magical way to do that. But it would us, what is interesting is if you get on the wrong side of the IRS, if you are shady and you are aggressive and how you file your taxes, they can literally come and take your stuff. So you want to make sure you always stay on the right side of the IRS so that you don't have to turn yourself in.
4:43 Brian Preston? So don't get on the naughty list of the IRS.
4:45 Speaker 02 Stop throwing birthday parties. Throw a mastermind event instead. Masterminds are tax deductible. If you're bringing your group of friends together, we should be talking about revenue generating activities. You're still going to have alcohol there. You can still have music there. And instead of just talking about how you're going to party and get turned up, we're going to talk about how we're actually going to make some money, help each other and push our ideas into the world and into the marketplace. This is how you're able to leverage the tax system while still having fun and turn around and get write offs for you and your friends.
5:12 Brian Preston? He's a blast to hang out with. I mean, he is, he is already in two videos that I've experienced from this gentleman. We've got our family is going to be eating free.
5:21 Speaker 02 This is how I'm able to afford having that private chef every single year, every single month, every single day.
5:26 Speaker 01 Private chef every night.
5:27 Brian Preston? All I have to do is get them to pass the Parmesan bread. And then all of a sudden, I'm the CEO and my daughters, they're, they're, they're my minions that are running my, my enterprise here.
5:36 Speaker 01 Yep.
5:36 Brian Preston? And now he's figured out that he can have a way for all of his friends to hang out and it's deductible. Now, look, I do want to give a little bit of a nod. I'm a member of a mastermind group. You are too. But the difference is these are other successful business people. We meet in the city. We have, yes, we break bread, but we really are like, we even have like an outline. We have an agenda. We have forms that we're filling out to discuss. It is a true, like I can tell you, I've learned about 504 loans on the SBA. I've learned about relationship stuff, all kinds of things that can be very beneficial, not only to my business, my, my personal life, but the purpose was ultimately for the good of the business.
6:19 Brian Preston? That's the key part that makes it deductible. As he shared in the past, feeding your family for free. Or bringing a group of friends together with a bunch of booze. It might be deductible if it's business related and legitimate business, but it doesn't necessarily mean it's always deductible. And that scares the heck out of me.
6:38 Speaker 01 Yeah, I think, let me give him, let me give him a bit of the doubt. Here's what he said that I liked. You ready for this? Hey, rather than spending your time going out, partying, wilding out, getting turned up is the language he said. Hey, spend your time meeting with other like-minded people to talk about how you can have successful business endeavors and have, make wise, productive financial decisions. I like that one much more than getting turned up. And if it happens to be inside of a business setting, then yes, it would be deductible, but it's probably not going to be a bunch of knuckle-headed buddies sitting around partying. I don't think that's satisfying.
7:11 Brian Preston? I'm hopeful that maybe he really is just living the life where all he hangs out with is business owners. Doesn't mean that his family meals are free, as he shared in a previous video, though.
7:21 Speaker 02 So I accidentally put my lunch and my margarita on my business card, which means now I have to make it a tax write-off, so that's what this video is for.
7:29 Brian Preston? Oh, my gosh.
7:37 Brian Preston? By the way, I have been at, I have been at an event where somebody says, hey, we gotta talk about some business.
7:42 Speaker 01 We gotta bring it up right now. We gotta make this legitimate.
7:45 Brian Preston? And, and, and look, in some ways, as long as you got the right key people. Now, this is, this is back to my point, as I was talking about earlier. You can't just be out with the family and you say, hey, um, I'm gonna put you on the payroll this month, so that makes this meal deductible. But I think that you do need to be mindful. The IRS doesn't mind you running meals and they're 50% deductible to you if, once again, it's business related, meaning it's actually necessary for your business, but that doesn't mean that you just get to go to Disney World and say, hey, if I say the word amortization, it's almost like Cinderella or pixie dust has fallen upon us and it's now magical.
8:27 Speaker 01 I, I would just caution you for most of your business lunches. Maybe you don't have margaritas every time. It just seems like bad business. Seems like an aggressive standpoint.
8:35 Speaker 05 make, the more the IRS will take. So if you go from making seventy-five thousand to a hundred and fifty thousand dollars, you're not going to see seventy-five thousand divided by twelve on your paycheck. As a matter of fact, I know people who get a raise from a hundred thousand on their job to two hundred thousand, and they've actually seen less on their check. Because the more money you make, the more tax brackets you enter into. I did not think
9:01 Brian Preston? It's usually the credits that are the cause of what she just talked about.
9:03 Speaker 05 that you make more money and get less. That just didn't seem fair to me.
9:07 Speaker 01 So, yes, it is true. We live in a progressive tax system where as your income goes up, the percentage you pay on your next dollar does get taxed at higher and higher rates. However, I don't know that I agree with her assessment that I had someone who made a hundred thousand dollars, and then the next year they made two hundred thousand and they saw less? That seems like too big of a change to me. We have seen it at tighter income thresholds where higher income resulted in less take-home pay because of losing credits or causing social security to become taxable, or something along those lines. But to go from one hundred to two hundred thousand and see less? That seems difficult to me because generally speaking, making more money is usually always better than making less money.
9:48 Brian Preston? The only way that I've seen that actually happen in practice is if you've now crossed over the tax credits. Like, think about child tax credits. On a lower income side, it might be earned income credit, or some of the other things that all of a sudden now the fact that you made more money actually caused you got less take-home pay. But for people who aren't running a file of credits, it's mathematically impossible to go from a hundred thousand to two hundred thousand, even if you're in a higher tax bracket, to have less money. Now, you might have a lower effective take-home rate because your tax rates did go up because we're a progressive tax system, but it doesn't necessarily mean that you're making less money.
10:30 Speaker 01 Even if you're in the highest tax bracket, so you're paying fifty percent taxes, every one additional dollar you make, while fifty cents of it is going to taxes, you still get to keep fifty cents. So it's not true that the more money you make, the less you keep in most circumstances.
10:45 Speaker 06 This is you and this is your company. The goal is to make your company broke on paper. If your company doesn't make any money, you don't have to pay any taxes. So this is how you can legally get the money out of your company.
10:55 Brian Preston? Yeah, but if you're buying Ferraris, that doesn't work either.
10:57 Speaker 06 You work for your trust. When you set up your trust, you transfer your intellectual property into the trust. So all the money your company generates with your intellectual property has to go back to the trust. And because we set up your trust in Cyprus, you don't have to pay any income tax and inheritance tax.
11:12 Brian Preston? Oh, my gosh. Do you realize that's where the crime just occurred?
11:16 Speaker 06 Things you want and benefit from them like they are yours. Now, watch our pinned video to know exactly how you can benefit from the work for your trust structure.
11:22 Brian Preston? Anybody, and tell me, if you have a CPA, you can put this in the comments. I guarantee you their engagement letter, that one of the first things they're gonna ask you about two things, really. They're gonna ask you about offshore holdings, because they wanna know if you have money outside the United States, because they wanna make sure you're getting that reported, otherwise they don't wanna sign your tax return as your tax preparer. And they're gonna ask you about crypto. And the reason is that it's kind of unique here in the United States, is it doesn't, there are some exclusions. But the IRS and the United States requires all citizens to report all sources of income. Now, there might be some exclusions or some offsets, but the government wants to know what you're earning worldwide.
12:02 Brian Preston? So don't listen to some crazy YouTube video that says, "Go open up an account in Cyprus and voila, it's now doesn't exist to the government." That is a one-way, fast-track trip into getting treated like Al Capone.
12:16 Speaker 06 I'm in Dubai. Most people don't realize it's a full zero tax. And they're like, "No, no, I don't get it." But what's the stipulation? No, there's no stipulation. It is 0% corporate, 0% dividend, and 0% income. So the best part is I can go to Dubai, I can clean 50 million, be left with 50 million.
12:30 Brian Preston? This is why Monte Carlo is so popular, too.
12:32 Speaker 06 50 million to 100 million, whatever the number is. And I can return back to UK and then never pay tax on that.
12:37 Speaker 01 One, he just used the word "clean." I can go to Dubai, have 50 million, I can clean 50 million, and then I can come back and have it. Even that just makes my spidey senses go off a little bit. Because while there are some truths to like corporate tax rates, the fact that I'm taking money from a jurisdiction where maybe I should be paying taxes and going somewhere where I should not be. Paying taxes, I started to get a little bit iffy there.
12:58 Brian Preston? Well, look, it's, and by the way, he's very clear. He's not a US citizen. He's going back to the UK and I don't know completely the rules for UK citizens. But here in the United States, you are required to report all income. There could be some exclusions, other things. I've talked about that previously. Now, I think what's interesting is that there are places that you can live that don't have income taxes, like Monaco and other things. I've mentioned that. But the problem is, the only way you'd have to become a citizen of that territory to truly be subjected to zero taxes. Now, another one I hear about all the time is Puerto Rico. Because there are some unique things that you can do if you wanted to move your business or live in Puerto Rico that potentially could lower your taxes substantially.
13:43 Speaker 01 But you actually have to live there.
13:44 Brian Preston? Yeah, it can't be a sham transaction. That's the key thing I want everybody to know is that, look, there are things written into the tax code, typically to incentivize certain behaviors. And you have to ask yourself, why was this written? But what is never going to be in the tax policy or tax code is basically for you just to hide your money or legally not pay taxes that you've earned and expect that the IRS is going to be completely okay with this. And there's all kinds of precedent. We've picked on Al Capone before. We picked on Wesley Snipes. There's all kinds of people that have thought they could not pay a dime of taxes because somebody misled them and unfortunately found out the full weight and power of the federal government is that you should pay your taxes.
14:26 Speaker 01 Hey, tax tip Tuesday. Don't forget, gambling losses are a tax write-off. Every day for lunch, I come out.
14:33 Brian Preston? Look, come on, he's only telling half the story.
14:36 Speaker 01 You pick up an aluminum can, you get what, five cents? This right here, two, three dollars a pop. I haven't paid taxes in years. Dig through your neighbor's trash, whatever. Go to the bodega, ask for the losers. So if your mother got you scratch tickets for stocking stuff for Christmas and they're all losers, even better. You don't have to win.
14:53 Brian Preston? Hit the jackpot. This is a joke.
14:55 Speaker 01 It's a joke. So surely this had to be tongue in... So what I'm saying is gambling losses are deductible. So all I gotta do is go pick up a bunch of losing scratch-off tickets and voila, offset all of your ordinary income and boom, you don't have to pay any more taxes. Brian, I don't think that's the way that it works.
15:11 Brian Preston? Look, you can deduct gambling losses to offset... Here's the key part that, like I said, has to be a joke. To offset gambling gains. And so if you go and you're pulling the one-armed bandits, say, out in Vegas and you win a mega jackpot, you don't even have to be a mega jackpot. It just has to be big enough that they pull you aside and say, "Sir, we're gonna issue you a tax form." Of course, the federal government then lets you state, "What are your other losses to offset that gambling gain?" But they're not going to let you run around your mom's bingo match and write down and then assume all those losing ticket bingo cards is going to be a great deductible loss for you. But that's fool's gold.
15:54 Speaker 01 Remember, tax avoidance is highly encouraged. We have an entire tax system set up to help you figure out ways that you can avoid paying taxes. However, tax evasion is illegal and it will get you arrested and it will have your stuff taken away from you. So be so careful who you're taking tax advice from. Make sure the person you're listening to is qualified to be sharing the information they're sharing with you and it's not some random person that you found on the internet.
16:21 Brian Preston? That's the biggest thing is I think so many people are trying to tell you there's a shortcut. I tell you to be smart with your tax planning, but don't be a criminal. We're the Money Guy Show. I'm Brian. This is Bo. Money Guy team, out.
16:34 Speaker 05 The Money Guy Show is hosted by Brian Preston. 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 and does not constitute financial, tax, investment, or legal advice.
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