WCG Bizcast

Jason Watson, CPA, Jason Schneider, CPA, and Megan Oeltjenbruns, CPA, wrap up our series of bizcasts discussing WCG and what we have to offer those looking to join our team. They discuss the type of client engagements we are seeking as a firm. Visit WCG today at: https://wcginc.com/ --- Find us Online! ► Facebook: https://www.facebook.com/WCGIncCPA/ ► LinkedIn: https://www.linkedin.com/company/wcginc ► Twitter: https://twitter.com/wcginccpa ► Instagram: https://www.instagram.com/wcginccpa/

Jason Watson, CPA, Jason Schneider, CPA, and Megan Oeltjenbruns, CPA, discuss the culture at WCG for prospective employees looking for a new work family. Visit WCG today at: https://wcginc.com/ --- Find us Online! ► Facebook: https://www.facebook.com/WCGIncCPA/ ► LinkedIn: https://www.linkedin.com/company/wcginc ► Twitter: https://twitter.com/wcginccpa ► Instagram: https://www.instagram.com/wcginccpa/

Jason Watson, CPA, Jason Schneider, CPA, and Megan Oeltjenbruns, CPA, discuss the challenges of our firm faces, internally and systemically, and why we are excited about them. Visit WCG today at: https://wcginc.com/ --- Find us Online! ► Facebook: https://www.facebook.com/WCGIncCPA/ ► LinkedIn: https://www.linkedin.com/company/wcginc ► Twitter: https://twitter.com/wcginccpa ► Instagram: https://www.instagram.com/wcginccpa/

Jason Watson, CPA, Jason Schneider, CPA, and Megan Oeltjenbruns, CPA, discuss what it takes to be successful at WCG and the positions that we are seeking to fill. Visit WCG today at: https://wcginc.com/ --- Find us Online! ► Facebook: https://www.facebook.com/WCGIncCPA/ ► LinkedIn: https://www.linkedin.com/company/wcginc ► Twitter: https://twitter.com/wcginccpa ► Instagram: https://www.instagram.com/wcginccpa/

Jason Watson, CPA, Jason Schneider, CPA and Megan Oeltjenbruns, CPA, discuss life at WCG. The leadership WCG is looking for and how two of our newest leaders have adapted to the merging of two CPA firms in the last year. Visit WCG today at: https://wcginc.com/ --- Find us Online! ► Facebook: https://www.facebook.com/WCGIncCPA/ ► LinkedIn: https://www.linkedin.com/company/wcginc ► Twitter: https://twitter.com/wcginccpa ► Instagram: https://www.instagram.com/wcginccpa/

00;00;14;09 [Jason]: Jason Watson with WCG Incorporated here in ColoradoSprings, we're a local tax and accounting firm. Joined by RachaelWeber and Joseph Bassett, both tax professionals for us. We'realso hosted by Axe and the Oak here in Colorado Springs, they'vebeen gracious enough to open up early for us, part of our Bourbonand Business00;00;31;29 series, podcasts and videos. We just got done wrapping up a videoand podcast on some of the bigger deductions that we see, cars,that's always a big one for most small00;00;42;29 business owners, meals and travel. We're going to talk this time or,this time around about home office and then all the other likegoofier ones, if you will.00;00;54;25 So, you know, tell me the rules, Rachael, on the home officededuction.00;01;00;04 [Rachael]: It's got to be used regularly and exclusively00;01;03;27 [Jason]: Okay.00;01;04;26 [Rachael]: In your home.00;01;05;13 [Jason]: Okay, regular and exclusive and have a business.00;01;09;01 [Rachael]: A Business purpose.00;01;09;14 [Jason]: That's probably true for every deduction on a plan, right?00;01;12;18 [Rachael]: Yeah.00;01;12;27 [Jason]: For a business deduction to be a legitimate businessdeduction it has to have a business purpose. So, use regularly andexclusively. So, can you break those words down for me? What's"regular" mean?00;01;23;15 [Rachael]: "Regular" means you would be checking your emails,invoicing your customers, doing administrative work. Okay. Meetingwith clients, holding your inventory. It could mean a whole host of00;01;37;27 [Jason]: Right.00;01;38;03 [Rachael]: of things. You're just doing that on a regular basis, notonce a month00;01;42;26 [Jason]: Right.00;01;43;14 [Rachael]: but on a regular basis.00;01;44;21 [Jason]: Yeah. And one of the words that the IRS will also use too is"continuous", right? This is regular and continuous, it's, it's, got alife, you know, it's got a cycle.00;01;53;28 [Jason]: So yeah, absolutely, regular is a big deal. We have folksthat have a rental, one rental, you know, they have a W-2 job, theyhave all those things and they're trying to say, I have a home officeto manage my rental. It's just never going to happen. Now, if wehave 10 rentals, 6 rentals, that's all you do is manage your00;02;11;02 rentals. We have some people that have 3 or 4 VRBOs or Airbnb,short term rentals and that is all they do.00;02;18;24 [Rachael]: Time consuming.00;02;18;29 [Jason]: Their working that stuff 100% so yeah, so that's regular.How about exclusive Joe? Joseph? What's exclusive?00;02;24;27 [Joseph]: So, let's say you have an extra room in the bedroomthat's you want to use for your home office and it also can't be yourtheater room. So you know, that's gotta be exclusively used forbusiness.00;02;33;20 [Jason]: What if you're a videographer and the theater is yourbusiness? I'm teasing you.00;02;38;03 [Joseph]: Well, you have an argument there. Or, or00;02;38;24 [Jason]: No, but you can't mix the use, yeah00;02;41;07 [Joseph]: Right, unless you run a daycare out of your00;02;42;13 [Jason]: Right.00;02;42;21 [Joseph]: House as well.00;02;43;05 [Jason]: Yeah, and daycare has its own special rules and this is notthe podcast for that because00;02;47;27 [Joseph]: Right.00;02;48;01 [Jason]: I don't know those rules by a memory. I look them up oncein awhile when I have to, but that's it. But right, those are some ofthe shared use stuff can be daycare. Other than that, it's regularand exclusive with a business purpose. So, tell me some of thebank, the benefits of having a home office00;03;05;25 deduction or home office reimbursement.00;03;08;10 [Rachael]: Reimbursement? Is that part of your mortgage interest?00;03;13;15 [Jason]: Okay.00;03;13;23 [Rachael]: Your real estate taxes,00;03;15;05 [Jason]: Okay.00;03;15;19 [Rachael]: Utilities.00;03;16;21 [Jason]: Okay.00;03;17;09 [Rachael]: Could become a small deduction.00;03;19;21 [Jason]: Okay.00;03;21;11 [Rachael]: For you, a business deduction.00;03;21;18 [Jason]: Yeah absolutely. And what are some of those expensesthat aren't otherwise available to be deducted? And mortgageinsurance, we say yes, right?00;03;27;29 [Rachael]: Mm-hmm00;03;28;14 [Jason]: Schedule A property taxes, we say yes, but how about theother ones?00;03;31;04 [Rachael]: Utilities, insurance00;03;33;19 [Jason]: HOA dues.00;03;34;21 [Rachael]: Yeah. Mm-hmm.00;03;35;24 [Joseph]: Repairs. Okay, so suddenly those become deductible andin a world where otherwise it wouldn't be.00;03;40;11 [Rachael]: Right.00;03;40;21 [Joseph]: Yeah.00;03;41;01 [Jason]: Okay, and how do we calculate that home officededuction?00;03;45;17 [Rachael]: Well we do it by square footage.00;03;48;07 [Jason]: Yeah, that is probably the most common, is squarefootage. You could do it at room by room, the IRS allow that, theyactually mentioned that in Publication, what? 587, or whatever it is.But I've never seen anybody do room by room.00;04;00;15 [Rachael]: No.00;04;00;20 [Jason]: It's always, usually, I shouldn't say always, but usually it'ssquare footage, yeah. So what's the basic calculation? It's thehome office space divided by00;04;09;24 [Joseph]: Total space of the house.00;04;10;26 [Jason]: Yeah, the total space of the house. What if you use yourgarage, then what do you do?00;04;15;08 [Joseph]: You include it.00;04;16;12 [Jason]: Include it where?00;04;17;08 [Joseph]: In both.00;04;18;01 [Jason]: In both numerator and denominator? Yeah, exactly. So ifwe're going to take the benefit of the garage and it's not otherwisein the denominator then we have to add it in.00;04;29;26 [Rachael]: Mm-hmm.00;04;30;02 [Jason]: Yeah, exactly. So, that's home office. What's this 50 milerule thing? Who wants to talk about that?00;04;38;14 [Joseph]: Right, so the 50 mile rule's, you know, kind of a safeharbor if you will, that if you know, your home office is within 50miles of your tax home then you can, you know, deduct expensesassociated with00;04;50;29 commuting from the tax home to the home office.00;04;54;17 [Jason]: Yeah, exactly. It's, they want, "they" being the IRS and thetax court, they want your home office to be, there's no written ruleon this, it's more of a contrived rule.00;05;06;23 But your home office needs to be within 50 miles of your tax home.Your tax home is where you earn your revenue. So, the greatexample, in one of the tax court cases, is a surgeon had a home inPennsylvania.00;05;23;05 He drove to New York, I believe, and it was 130 miles away. He wasattempting to deduct all those commuting expenses and becausehe was like, well, I got a home office. So then my commute is frommy bedroom to the basement. And then when I hop in the car, it'sall business miles, and of course the00;05;43;06 IRS and tax court said "No." They said it's too far from your taxhome, basically. So they dis, disallowed all those expenses asdeductible expenses and00;05;54;27 consider them commuting expenses, which is normally a personalexpense.00;05;59;03 [Rachael]: Mm-hmm.00;05;59;12 [Jason]: Non deductible. So, that's this 50 mile rule. What, youknow, talk to me about the audit rate risk for home offices and00;06;09;25 [Rachael]: [Inaudible]00;06;10;00 [Jason]: and, you've, and you've been doing taxes for a little bit oftime.00;06;14;07 [Rachael]: Just a little while.00;06;14;13 [Jason]: So tell me a little bit about the history.00;06;16;12 [Rachael]: It's kind of high. Yeah and it's, it's almost like they canwalk in and assume you're doing something wrong because they're,they're not easy rules. And you know, maybe the square footageisn't complete or they can say, Hey, what's with the day bed andyour home office?00;06;31;02 [Jason]: Right.00;06;31;13 [Rachael]: Or, and it's not just the deductions that you're getting,your utilities, your small amount of additional square footage, butit's that commuting miles00;06;42;07 [Jason]: Right.00;06;42;15 [Rachael]: That are, it's going to be pricey00;06;43;26 [Jason]: Yeah.00;06;44;04 [Rachael]: If its not done right.00;06;45;07 [Jason]: Yeah, absolutely. So, home offices, 20 years ago were notvery common, so it was a high audit rate risk.00;06;53;19 [Rachael]: Mm-hmm.00;06;54;11 [Jason]: Today telecommuters and all that stuff is a lot higher. Butnow we're back to not being seen very often because if you're aW-2 individual working out of your home office for a company out ofCalifornia,00;07;07;05 you would have to deduct that on Form 2106.00;07;10;19 [Rachael]: Mm-hmm.00;07;11;04 [Jason]: And those expenses, those deductions are no longerallowed. So, home office is almost been shrunk down to just forbusiness owners.00;07;18;02 [Rachael]: Yeah.00;07;18;29 [Jason]: So, how are we going to do that? Joseph, talk to, talk to usabout how we're going to do the home office from an S Corpperspective.00;07;28;20 [Joseph]: So, we'll use an accountable plan for the home office forthe S Corp and one of the reasons why we do that, so you know SCorp's are cash basis, you know, and00;07;38;07 [Jason]: Typically.00;07;38;23 [Joseph]: Typically, typically.00;07;39;14 [Jason]: Yes, small businesses enjoy using cash as their method of00;07;43;18 [Joseph]: Right. Accounting, it's simple. Depending on their grossreceipts.00;07;45;18 [Jason]: Yeah.00;07;45;27 [Joseph]: And we just, we have you record it, you know, for like, likeRachael said, your interest, taxes, insurance, and then you getreimbursed by the S Corp for your business use percentage of00;07;58;00 [Jason]: Okay.00;07;58;06 [Joseph]: Business expenses.00;07;59;18 [Jason]: So, just to back up for a viewers and listeners, anaccountable plan is the method used to reimburse people,employees for business use of their personal assets.00;08;13;03 [Jason]: Car, cell phone, home, are probably the biggest ones,right?00;08;16;05 [Joseph]: Mm-hmm.00;08;16;19 [Jason]: So, and we forgot to put cell phone down on our big list ofdeductions, but we can talk about that in a second. So, the benefitto that is we're getting reimbursed by our business. That expense iskind of tucked away on the S Corp tax return, using00;08;35;29 an S Corp in your00;08;36;29 [Joseph]: Mm-hmm.00;08;37;28 [Jason]: example as occupancy expense. Not that you can't defendit, not that we're doing anything wrong, but it certainly is not as highof an audit rate as filing Form 8829.00;08;49;29 [Rachael]: Mm-hmm.00;08;50;06 [Jason]: Which is clearly the Office In Home worksheet.00;08;53;12 [Joseph]: Right.00;08;53;20 [Jason]: That gets tucked on or tacked onto your Schedule C, if youwere to have a business only on your 1040. So, that just shrinksdramatically, the audit rate risk, from home office perspective.00;09;07;06 [Joseph]: And too, S Corp's already face a lower audit ratethemselves.00;09;10;14 [Jason]: Yes, 0.4% given I think 2017 data00;09;14;28 [Joseph]: Mm-hmm, 2017, yeah.00;09;15;02 [Jason]: Is the latest that we have now. So the IRS takes forever tocompile00;09;19;03 [Joseph]: Yeah.00;09;19;11 [Jason]: This stuff. I mean, I guess it makes a little bit of sensebecause audits take time00;09;23;07 [Rachael]: Mm-hmm.00;09;23;18 [Jason]: to generate and to do. But I still like to think we can live ina real time world. You know what I mean? Like we should know likeright now how many audits are happening. So, alright, let's talkabout commuting expenses. You know, you get up in the morning,you drive to WCG Inc, you know, is00;09;45;22 that an expense you can deduct?00;09;47;09 [Rachael]: No, it's not.00;09;48;01 [Jason]: Okay. Are you bummed out about that?00;09;49;20 [Rachael]: Yes, I am.00;09;50;08 [Jason]: Yeah, okay, we should write our Senators and ourCongress people. So, okay, so commute expenses? No. Even ifyou travel far, let's say you moved to Denver and you drove everyday down in the Colorado Springs, it doesn't matter, right?00;10;03;18 [Rachael]: Still personal, yeah.00;10;03;27 [Jason]: Right, so there's no like, Hey, we recognize that you'retraveling really far, we'll give you that deduction. There's nothinglike that. So, commuting expenses, parking, tolls, all that associatedwith going to00;10;16;18 your tax home if you will, are not going to be deductible. So, great,Country Club Dues, Rachel?00;10;23;14 [Rachael]: No, can't do it.00;10;24;15 [Jason]: No! Wow! Just hammered, boom.00;10;28;06 [Rachael]: Sad, yeah.00;10;29;14 [Jason]: Talk to me a little more about that. So we have someonewho has a membership somewhere, but they do entertain, shouldn'tsay that00;10;35;07 [Rachael]: Nope. Yeah.00;10;35;11 [Joseph]: Yeah, discuss business.00;10;36;08 [Jason]: They do discuss business at their country club.00;10;40;17 [Rachael]: Mm-hmm.00;10;40;20 [Jason]: How does that work?00;10;41;29 [Rachael]: Those expenses for the country club dues are going tobe personal.00;10;46;19 [Jason]: Right.00;10;46;25 [Rachael]: It's great that they're generating business00;10;48;29 [Jason]: Yes.00;10;49;07 [Rachael]: At the country club00;10;50;14 [Jason]: Okay.00;10;50;20 [Rachael]: but the dues are not deductible.00;10;52;01 [Jason]: All right, so this same member, buys a meal. The businesspurpose is clear. They00;10;59;20 [Rachael]: Yup.00;10;59;23 [Jason]: Were there to discuss business and now this individual isbuying a meal that's going to get tacked on top of his or her dues.How's that work?00;11;07;16 [Rachael]: That meal portion is going to be 50%00;11;10;14 [Jason]: Okay. Deductible as a business meal. Just, just like we'vealways done.00;11;13;06 [Rachael]: Mm-hmm.00;11;13;09 [Jason]: With meals. Okay, great. Talk to me a little abouteducation. Can you run education expenses through yourbusiness?00;11;20;21 [Joseph]: It depends.00;11;21;20 [Jason]: It depends, ah look just the classic accountant.00;11;24;28 [Rachael]: Yeah, maybe.00;11;26;00 [Jason]: Yeah.00;11;26;14 [Joseph]: If those education expenses are to improve your currentfield, then possibly. If they're to do something completely different,you know so if I was going to go to school to become a doctor now,which probably won't happen.00;11;37;13 [Jason]: Yeah.00;11;37;23 [Joseph]: But, those won't be deductible.00;11;40;03 [Jason]: Right, so the rule is it has to improve your current workskills. And you can even do, deducted a degree or even like, youknow, college courses, even if it leads to a degree, provided it'simproving your current00;11;57;20 work skills. So, you're absolutely correct, the other half of that is ifyou need it for certifications, like your continuing educations and allthat stuff. So, people who are CPAs have to go do all these, youknow, nauseating00;12;10;15 [Rachael]: [All laugh]00;12;11;02 [Jason]: Continuing Ed credits, you know, I'm sure we learned a lottoo, but you know, anyway, so, so that's education. How about yourchildren? Can you hire your children and consider them employeesand have the company00;12;27;10 pay for the education? Who wants to take that one?00;12;31;01 [Joseph]: I would say yes.00;12;32;07 [Jason]: I'd say no. [Laughs]00;12;34;09 [Joseph]: Like, the client advocacy in me would say Yes.00;12;38;13 [Jason]: Yeah.00;12;38;20 [Joseph]: Because of the, the relation though it will be disallowed.00;12;41;15 [Jason]: Right? Yeah, I was giving you a hard time. So section 127says if your child is 20 years or younger, they have attribution toyou as Mom and Dad being an owner of the company.00;12;54;21 If you own 5% or more of the company, you can't deduct thateducation.00;13;00;01 [Jason]: But if your child legitimately works, and is 21 or older, sowe're talking junior or senior00;13;08;24 [Rachael]: In college.00;13;08;29 [Jason]: If you're on a six year plan, you're a sophomore, right?Then the company can pay up to 5,250 a year, I think that's 2019limit. So, that might get index every year, like everything else. So,anyway that's education. How about client gifts? How do youhandle that?00;13;23;16 [Rachael]: Oh, they're $25 cap.00;13;27;08 [Jason]: Ahh $25?00;13;27;14 [Rachael]: I know, its really, yep. Mm-hmm.00;13;28;29 [Joseph]: Well they give you the $4 for gift wrapping, so00;13;31;16 [Jason]: And they give you $4 per pen or something.00;13;33;09 [Joseph]: Per pen, yeah.00;13;33;11 [Rachael]: That's advertising, yes.00;13;37;02 [Jason]: So, talk to me more about the $25 rule. Is that like all giftsor, or is it just for gifts to specific people?00;13;48;14 [Rachael]: It's gifts to a limited clientele. If you were handing giftsout to the general public and it was a lower cost, then that would beconsidered advertising.00;14;00;07 [Jason]: Okay.00;14;00;14 [Rachael]: And I think they give $4 for each advertising gift.00;14;04;21 [Jason]: Yeah.00;14;04;27 [Rachael]: Which I'm not quite sure what, you know, a pen or acalendar or something like that.00;14;08;26 [Jason]: Yeah, I don't know how much stuff like that costs either,yeah.00;14;12;12 [Rachael]: But your $75 wine basket is going to be a $25 businessgift.00;14;17;29 [Jason]: Yeah, and as I've seen it, read it maybe in Journal ofAccountancy, other things like that, but that's an individual limit. Soif you don't donate, or if you don't provide that gift to an individual, ifyou just do it to the business00;14;33;01 [Rachael]: Mm-hmm.00;14;33;10 [Jason]: There might be different rules00;14;34;03 [Rachael]: Yes.00;14;34;13 [Jason]: allowing you to take more deduction. So if you say, DearBob, thanks for all the business00;14;39;27 [Rachael]: versus staff at.00;14;41;03 [Jason]: Yeah, exactly.00;14;42;19 [Rachael]: Yeah.00;14;43;06 [Jason]: yeah, exactly. So, and you can see why, you know, theIRS is always worried about transfer of wealth without taxation.00;14;50;02 [Rachael]: Mm-hmm.00;14;50;12 [Jason]: Right? So if you, if you come in there with a bunch of clientgifts for one person it might look like a transfer of wealth. So, howabout professional attire? I am rocking the WCG.00;15;00;18 [Joseph]: That's true, very nice.00;15;00;29 [Jason]: On my shirt here. But tell me about professional attire.People will constantly ask you00;15;07;09 [Rachael]: Yep.00;15;07;28 [Jason]: I have to look good in my business suit, I have to have mynails and hair done, I have to rock, I have to rock this image.00;15;15;25 [Rachael]: And they're all personal.00;15;17;27 [Jason]: Yes, even though they're dead sexy, right? Even thoughthey're very good looking.00;15;21;21 [Rachael]: And necessary00;15;22;01 [Jason]: Yes.00;15;22;14 [Rachael]: Absolutely necessary. Yeah. So there's a businesspurpose behind it, but no tax deduction.00;15;26;09 [Jason]: Right. So what's the rule?00;15;28;07 [Joseph]: If it's not suitable for everyday wear00;15;30;00 [Jason]: Yes.00;15;30;11 [Joseph]: You can deduct it.00;15;30;20 [Jason]: So, if it's, yeah, so if you can, if it's suitable for everydaywear, easily convertible into everyday wear, then it's not deductible.00;15;38;08 [Rachael]: Mm-hmm.00;15;38;25 [Jason]: Right? Business suits are, you know, clearly somethingyou can convert to everyday use. We do have some, TVpersonalities.00;15;47;10 [Joseph]: Yes.00;15;47;15 [Jason]: We do have some models, you know, and we can, we canidentify some of that attire as costumes, something that theywouldn't, you know, be caught dead in. And that's true for some ofthese models, for sure.00;16;01;26 They wear stuff and they're like, I'm never wearing that in public. Itjust, it looks good on a cover of a magazine, but that's about it.00;16;08;15 [Jason]: Those are costumes, they're not suitable for everyday use.Those are something that we can deduct. TV personalities, they'llbuy, you know, a thousand jackets and they'll give them away andso those become marketing toys00;16;20;19 [Rachael]: Yeah.00;16;20;25 [Jason]: Or ploys or whatever, so absolutely. Let's talk about, perdiem and I'll just kind of talk about this real quick. Per diems a funnything. If you own 10% or more of a corporation and, and also theremight be some00;16;38;21 attribution there, where if your brother or your sister or your Mom or00;16;42;16 [Joseph]: Spouse.00;16;43;12 [Jason]: Whatever, then you are assumed to have the same,greater than 10%. If you are in that boat, you cannot take a perdiem reimbursement. So the scenario would be like this, I'm 100%owner of a corporation. I pay myself $71 a day for every day thatI'm in San Francisco, because00;17;02;15 that's the per diem rate. Let's say using 2018 numbers, I haven'tseen them, I haven't looked at per diem in a while cause we don't,we don't see 2106 expenses anymore. But, that would not beallowed. WCG Inc says, Rachel, we need you to go to, let's sayCortez, we really00;17;18;23 didn't like you very much. I'm teasing, Cortez is lovely. But, and wesay, Hey, we're going to give you $71 per per day that you're00;17;27;08 there for meals, that would be acceptable.00;17;30;11 [Rachael]: Mm-hmm.00;17;30;13 [Jason]: Now that will not be revenue to you. You maybe only spend$20, you know, whatever. You still get to take that $71 as tax freeincome.00;17;40;24 [Jason]: So, because you don't own 10% or more of WCG Inc.That'll change, you know, you'll own, own it all and00;17;49;07 [Rachael]: Eighty-five percent like you.00;17;50;09 [Jason]: Joseph, I'll be working for you one day, it'll be awesome.So, but that's per diem, per diem is a little tricky. There is the, themeals and incidentals component. There is the lodging component.The meals and incidentals component, as far as I know and read it,is00;18;06;24 available to Schedule C, Sole Prop, single member LLC types. Theminute you're a corporation or you act with a corporation through anS Corp election that gets tossed out the window.00;18;18;06 Lodging, regardless, is always going to be actual expenses. Youdon't get the high, low seasonal rates and all that stuff that you seein those per diem tables as a business owner. So, we ran throughhome office, all kinds of good stuff there. We ran through all kindsof other deductions that we get entertained with,00;18;38;10 quite literally, cause some people are pretty clever, right?00;18;41;22 [Rachael]: Mm-hmm.00;18;41;29 [Jason]: With, with their deductions. The bottom line is, people askme all the time and they ask all of us all the time, how do I save ontaxes, right? And the first thing I say is, look, your job is to buildwealth, not save taxes.00;18;56;12 We can save taxes along the way, that's great. But your job in life isto build wealth. Now, if you still want to save taxes the trick is tolook at what cash you're already comfortable with leaving yourbody.00;19;10;24 [Jason]: So go through your checkbook and try to figure out if therewas one thing that you missed or maybe this expense really didhave a business connection to it and I forgot that it did, or to digdeep. So, it's to look at the money that you're already willing tospend and try00;19;28;06 to find a business connection.00;19;29;23 [Rachael]: Mm-hmm.00;19;30;15 [Jason]: Now, I say find a business connection, like discover abusiness connection00;19;35;18 [Rachael]: Not create one.00;19;35;27 [Jason]: Not fabricate a business connection. So anyway, those,those are some of the other business deductions that we see a lotof: commuting expenses, country club dues, education, client00;19;47;20 gifts, professional attire, per diem, all that good stuff. We talkedabout home office in this segment as well. We didn't talk about cellphones. You know, cell phones, you know, folks will try to deduct100%, right?00;20;02;16 [Joseph]: Mm-hmm.00;20;02;21 [Jason]: "I use it for my business," oh, I know you use it for yourbusiness, I see that. But the minute you get a text saying, Heyhoney, you know, you're out of beer you should probably pick somemore up on the way home; and milk and eggs are low too. Nowyour cell phone's no longer 100%.00;20;17;04 [Rachael]: Mm-hmm.00;20;18;17 [Jason]: So, you know our firm-wide soft ceiling is around 80%, ifyou're a realtor, you're probably on the phone all the time. Peoplehave kicked landlines to the curb but still your phone is going tohave a high personal use and I, I believe, we believe as a firm, 20%is00;20;37;00 about the minimum there, meaning 80% is for business.00;20;40;26 [Jason]: Maybe you're a dentist, right? And you use your cell phoneoccasionally, you do have an office phone and all those otherthings, so maybe that's like 30% business use and 70% forpersonal. So, commonly we see cell phones being paid for by thebusiness and they00;20;58;19 truly are a mixed-use asset, so a mixed-use asset should be00;21;03;06 [Joseph]: Paid by you personally00;21;04;10 [Jason]: Exactly.00;21;05;00 [Joseph]: And reimbursed to you on an accountable plan.00;21;06;04 [Jason]: Yup. So, assets that you own personally should be paid forpersonally. If there's a business connection or use of that assetthen get reimbursed. No different than you working for Google andGoogle says, Hey, you know, drive down to the store, pick up some,you know, some pencils and we'll00;21;21;15 reimburse you. Well, you bring in a receipt and you're bringing inyour mileage log, and maybe you have to use your cell phone andall that stuff, and they would cut you a check for the business use ofyour personal stuff. So, anyway those are some of the common taxdeductions that we see here at WCG.00;21;36;06 My name is Jason Watson with WCG. I'm alongside Rachel Weberand Joseph Bassett. We're at the Axe and the Oak and this is a partof our Bourbon and Business series of podcasts and videos and wethank you for joining us and we'll00;21;51;00 talk to you real soon.

In this episode of our Bourbon and Business series, Jason Watson, CPA, sits down with Rachael Weber and Joseph Bassett of WCG Inc (formerly Watson CPA Group) to chat about our favorite part of tax season - tax deductions! The three most popular being car, meals, and travel deductions for both personal and business use. Stay tuned for part 2 of Business Tax Deductions, where we delve into the "odds and ends" deductions like your home office and country club dues! This material is based on content from our website and our book, Taxpayer’s Comprehensive Guide to LLCs and S Corps. https://wcginc.com/kb/operating-agree... https://wcginc.com/book Thank you! Warm Regards, WCG Inc. (formerly Watson CPA Group) 2393 Flying Horse Club Drive Colorado Springs, CO 80921 719-387-9800 phone 719-345-2100 text message 855-345-9700 fax https://wcginc.com/ Facebook - https://wcginc.com/facebook LinkedIn- https://wcginc.com/linkedin Twitter - https://wcginc.com/twitter YouTube - https://wcginc.com/youtube Special Thanks to Axe and the Oak Distillery for hosting our Bourbon and Business series!

In this second segment on Business Financial Planning, Jason Watson, CPA, sits down with Bud Rainsberger of RWA Partners in Colorado Springs to continue their discussion about when, why, and how to sell your small business. Bud explains the importance of understanding your motivation for selling, and, he touches on the emotionality of the decision and how it can impact your personal and professional life going forward. Special thanks go to Axe and the Oak Distillery for graciously hosting our Bourbon and Business podcast series! This material is based on content from our website and our book, Taxpayer’s Comprehensive Guide to LLCs and S Corps. This material is based on content from our website and our book, Taxpayer’s Comprehensive Guide to LLCs and S Corps. https://wcginc.com/kb/operating-agree...https://wcginc.com/bookThank you! Warm Regards, WCG Inc. (formerly Watson CPA Group) 2393 Flying Horse Club Drive Colorado Springs, CO 80921 719-387-9800 phone 719-345-2100 text message 855-345-9700 fax https://wcginc.com/ Facebook - https://wcginc.com/facebook LinkedIn- https://wcginc.com/linkedin Twitter - https://wcginc.com/twitter YouTube - https://wcginc.com/youtube

In this first segment about Business Financial Planning, Jason Watson, CPA, sits down with Bud Rainsberger of RWA Partners in Colorado Springs to discuss the importance of having a well-defined plan for your business investments. Topics covered include; when to sell or not sell your business, how much cash are you taking out of the business, and how personal interests can compete with business interests. Special thanks go to Axe and the Oak Distillery for graciously hosting our Bourbon and Business podcast series! This material is based on content from our website and our book, Taxpayer’s Comprehensive Guide to LLCs and S Corps. https://wcginc.com/kb/operating-agree...https://wcginc.com/bookThank you! Warm Regards, WCG Inc. (formerly Watson CPA Group) 2393 Flying Horse Club Drive Colorado Springs, CO 80921 719-387-9800 phone 719-345-2100 text message 855-345-9700 fax https://wcginc.com/ Facebook - https://wcginc.com/facebook LinkedIn- https://wcginc.com/linkedin Twitter - https://wcginc.com/twitter YouTube - https://wcginc.com/youtube

In this Bourbon and Business podcast episode, Jason Watson, CPA, and Quentin Leighty, President of First National Bank in Monument, Colorado, discuss the controversial issue of Marijuana Banking. Quentin sheds light on the gray areas of banking regulations at the Federal and State level, and, offers insight about the recently passed SAFE Banking Act, which protects financial institutions in legalized states that want to offer banking services to MMJ businesses. Special Thanks to Axe and the Oak Distillery for hosting our Bourbon and Business series!This material is based on content from our website and our book, Taxpayer’s Comprehensive Guide to LLCs and S Corps. https://wcginc.com/kb/operating-agree...https://wcginc.com/bookThank you! Warm Regards, WCG Inc. (formerly Watson CPA Group) 2393 Flying Horse Club Drive Colorado Springs, CO 80921 719-387-9800 phone 719-345-2100 text message 855-345-9700 fax https://wcginc.com/ Facebook - https://wcginc.com/facebook LinkedIn- https://wcginc.com/linkedin Twitter - https://wcginc.com/twitter YouTube - https://wcginc.com/youtube 

In segment #2 of Business Banking, Jason Watson, CPA, and Quentin Leighty, President of First National Bank in Monument, Colorado, continue their discussion about how to qualify for small business loans. Topics in this episode cover basic business lending options including collateralization, business acquisition lending, IRA loans, and SBA loans. Special thanks to Axe and the Oak Distillery for hosting our Bourbon and Business podcast series!!This material is based on content from our website and our book, Taxpayer’s Comprehensive Guide to LLCs and S Corps. https://wcginc.com/kb/operating-agree...https://wcginc.com/bookThank you! Warm Regards, WCG Inc. (formerly Watson CPA Group) 2393 Flying Horse Club Drive Colorado Springs, CO 80921 719-387-9800 phone 719-345-2100 text message 855-345-9700 fax https://wcginc.com/ Facebook - https://wcginc.com/facebook LinkedIn- https://wcginc.com/linkedin Twitter - https://wcginc.com/twitter YouTube - https://wcginc.com/youtube

In this first segment about Business Banking, Jason Watson, CPA sits down with Quentin Leighty, President of First National Bank in Monument, Colorado, to discuss the pros of small business owners utilizing community banking vs. going to the "big banks" to finance a business and the perks of relationship-based models for banking. Special thanks go to Axe and the Oak Distillery for graciously hosting our Bourbon and Business podcast series!This material is based on content from our website and our book, Taxpayer’s Comprehensive Guide to LLCs and S Corps. https://wcginc.com/kb/operating-agree...https://wcginc.com/bookThank you! Warm Regards, WCG Inc. (formerly Watson CPA Group) 2393 Flying Horse Club Drive Colorado Springs, CO 80921 719-387-9800 phone 719-345-2100 text message 855-345-9700 fax https://wcginc.com/ Facebook - https://wcginc.com/facebook LinkedIn- https://wcginc.com/linkedinTwitter - https://wcginc.com/twitter YouTube - https://wcginc.com/youtube

Jason Watson, CPA, of WCG Inc. (formerly the Watson CPA Group) with Amanda Rowles and Joseph Bassett discuss WCG's tax preparation process including safely handling your tax documents through our secure client portal and checklists to ensure completeness. They also discuss the turn-around time and how WCG interfaces with the client for missing information or clarifications.The episode concludes with tax return reviews, tax filing deadlines and tax return extensions.This material is based on content from our website and our book, Taxpayer’s Comprehensive Guide to LLCs and S Corps.https://wcginc.com/getting-started/https://wcginc.com/personal-tax-prep/https://wcginc.com/wp-content/documents/SendingDocs.pdfhttps://wcginc.com/bookThank you!Warm Regards,WCG Inc. (formerly Watson CPA Group)2393 Flying Horse Club DriveColorado Springs, CO 80921719-387-9800 phone719-345-2100 text message855-345-9700 faxhttps://wcginc.com/Facebook - https://wcginc.com/facebookLinkedIn- https://wcginc.com/linkedinTwitter - https://wcginc.com/twitterYouTube - https://wcginc.com/youtube

Jason Watson, CPA, of WCG Inc. (formerly the Watson CPA Group) with Amanda Rowles and Joseph Bassett discuss the housekeeping of operating an S Corporation. Issues reviewed are tax planning including all household income sources ending in mock tax returns. They also discuss Periodic Business Reviews (PBRs) and WCG's model of unlimited business consultation.They also review the tax filing deadlines for business returns (S Corps and Partnerships are March 15 whereas C Corporations are April 15). And! Just because pass-thru entities do not have an income tax obligation at the federal level, there might be state issues; that is discussed as well.This material is based on content from our website and our book, Taxpayer’s Comprehensive Guide to LLCs and S Corps.https://wcginc.com/business-services/periodic-business-review/https://wcginc.com/corporate-tax-prep/https://wcginc.com/tax-center/getting-started/https://wcginc.com/bookThank you!Warm Regards,WCG Inc. (formerly Watson CPA Group)2393 Flying Horse Club DriveColorado Springs, CO 80921719-387-9800 phone719-345-2100 text message855-345-9700 faxhttps://wcginc.com/Facebook - https://wcginc.com/facebookLinkedIn- https://wcginc.com/linkedinTwitter - https://wcginc.com/twitterYouTube - https://wcginc.com/youtube

Jason Watson, CPA, of WCG Inc. (formerly the Watson CPA Group) with Amanda Rowles and Joseph Bassett review the S Corp benefits, reduction of self-employment taxes and the whole S Corp vs LLC discussion. But! The crux of this episode is how to retroactively file for a late S Corp election using Form 2553 and IRS Rev Proc 2013-30.Then this episode discusses the timing of the late S Corp election and how it impacts tax return filing deadlines, extensions, late payroll events, and other pitfalls. Here is a spoiler alert- filing a S corporation election is a piece of cake and we are batting 100% in getting the successfully accepted by the IRS with huge tax savings.This material is based on content from our website and our book, Taxpayer’s Comprehensive Guide to LLCs and S Corps.https://wcginc.com/late-s-corp-election/https://wcginc.com/wp-content/documents/SCorpQuestions.pdfhttps://wcginc.com/s-corp-election/https://wcginc.com/bookThank you!Warm Regards,WCG Inc. (formerly Watson CPA Group)2393 Flying Horse Club DriveColorado Springs, CO 80921719-387-9800 phone719-345-2100 text message855-345-9700 faxhttps://wcginc.com/Facebook - https://wcginc.com/facebookLinkedIn- https://wcginc.com/linkedinTwitter - https://wcginc.com/twitterYouTube - https://wcginc.com/youtube

Jason Watson, CPA, of WCG Inc. (formerly the Watson CPA Group) with Amanda Rowles and Joseph Bassett discuss the S Corp tax benefits versus the garden-variety LLC. The S Corp vs LLC discussion starts with general S Corp benefits, but does a deeper dive into reducing self-employment taxes and lowering audit rate risk.They also review the Does It Make Sense questions such as-Does your business earn over $30,000 net income after expenses? Say Yes.Are you located in New York City or Tennessee where S corporation tax rates are egregious and suck up all the federal tax savings? New Hampshire? Say No. Although there might be exceptions where an S Corp makes sense NYC, TN and NH in order to maximize Section 199A deduction benefits.Do you have other W-2 income that exceeds or comes close to exceeding the Social Security limits of $132,900 (2019)? Say No. If you say Yes, we need net business income to exceed $200,000 in #1 above so that the Medicare savings exceeds the “lost” Social Security tax paid by the S Corp.Is this a going concern? In other words, is the business going to continue to earn the same income or more each year? Say Yes.Do you have an LLC or some other entity in place that can be elected to be taxed as an S Corp? Say Yes. If you say No, we have options just not elegant ones such as shelf corporations.Do you have other partners besides a spouse… business partners, that is? Say No. If you say Yes, are you currently splitting income based on ownership percentages or some formula? If you say Formula, then we’ll need to explore a multi-entity arrangement.Does your entity own any appreciating assets such as real estate? Say No. We don’t put appreciating assets into an S corporation. Holding companies own real estate and operating companies elect S Corp status. Chinese Wall.The episode concludes with how to file the S corporation election, Form 2553, etc.This material is based on content from our website and our book, Taxpayer’s Comprehensive Guide to LLCs and S Corps.https://wcginc.com/wp-content/documents/SCorpQuestions.pdfhttps://wcginc.com/s-corp-election/https://wcginc.com/bookThank you!Warm Regards,WCG Inc. (formerly Watson CPA Group)2393 Flying Horse Club DriveColorado Springs, CO 80921719-387-9800 phone719-345-2100 text message855-345-9700 faxhttps://wcginc.com/Facebook - https://wcginc.com/facebookLinkedIn- https://wcginc.com/linkedinTwitter - https://wcginc.com/twitterYouTube - https://wcginc.com/youtube

The Entity Formations and Considerations podcast by WCG Inc. (formerly the Watson CPA Group) explores basic business entity considerations such physical nexus, economic nexus, LLCs versus corporations, and how this impacts professionals such as attorneys, physicians, accountants, engineers, etc. plus adding other members such as a spouse or children. We also touch lightly on the benefits of an S Corp but we also have a full-blown podcast on that topic alone (stay tuned).This podcast pulls from our book, Taxpayer's Comprehensive Guide to LLCs and S Corps, which is available on our website at-https://wcginc.com/business-services/book/Specific to this podcast, you can read Chapter 1 from our Knowledge Base articles as well-https://wcginc.com/kb/category/taxpayers-guide-to-llcs-and-s-corps/chap-1-business-entities-llcs/We hope you enjoy our podcast (it was our first one!). Please contact us with any additional questions or comments.Warm Regards,WCG Inc. (formerly Watson CPA Group)2393 Flying Horse Club DriveColorado Springs, CO 80921719-387-9800 phone719-345-2100 text message855-345-9700 faxhttps://wcginc.com/Facebook - https://wcginc.com/facebookLinkedIn- https://wcginc.com/linkedinTwitter - https://wcginc.com/twitterYouTube - https://wcginc.com/youtube