Ep 111-112, Feb. 2021:

Adam Braatz - WVCC:

Today on Wisconsin veterans forward taxes. You know, they say there are two certainties in life and that's death and taxes. Here we are. Again, I feel like we just did this last year. It's the strangest thing, probably because we did it's tax season again, or rather tax season is fast a upon us time for us to do everybody's favorite annual activity that is putting our taxes together. And either paying money that's owed or hopefully getting some sort of a return which isn't free money. It's just money that you already overpaid. But it's, it's something that nobody likes and nobody really likes to talk about. And it's something that is easy to get wrong especially with how complicated the whole tax ecosystem has become at the state and the federal level over the last couple years, cuz of COVID stuff, we get we get fallout funding, we get grant funding, we get state, we get, you know, you name it.

Adam Braatz - WVCC:

It's hard to know what's taxed and to what extent and how to file and it's easy to mess it up. And if you mess it up one or two things can happen. You can get yourself into a little bit of trouble, obviously if you're not trying to scam anybody in the tax world you know, you, you're probably okay, but you're gonna need to go back and do a whole bunch of extra work if you're trying to scam the, the IRS or whatever, that's just a really bad idea. And you're, you're probably gonna suffer for it. But if you make a mistake, it could cause a whole bunch of headaches and extra work and all this stuff, or you could be leaving money on the table because if you end up underpaying the, the federal government and they find out or the state and they find out they're going to get that money eventually they're, they're, they're just gonna get there.

Adam Braatz - WVCC:

If you underpay. I don't think they're really gonna go out of their way usually to make sure that you have just every single thing that you could have squeezed out of your tax return. So it's important to know what's going on. And here we are at our a hundred and like 12th episode or whatever. And this time last year we invited a tax expert, Megan Schwan. She is the founder of sidekick accounting services. She's gonna tell us more about this about out her company and what they do, but, but her episodes from last year around this time, still to this day out of a hundred, some odd episodes are most listened to and re-listened to episode that we've ever done. So not only is this clearly a compelling and interesting topic and relevant to a lot of people but it is also, she's also very knowledgeable and very personable.

Adam Braatz - WVCC:

You're gonna enjoy the conversation. I know I did. And maybe I spoke too soon when I said, no, nobody likes taxes, accountants probably like taxes, or at least they like the fact that taxes exist. That probably should be my first question. Megan, you be ready after the bumper, the, my first question aside from like, how are you is gonna be, do you like taxes? That's a good question for an accountant. All right, we're gonna get into it in our conversation with Megan founder of sidekick accounting, right after this, you are listening to w veterans forward Wisconsin's premier audio resource for veterans, military families, veteran owned and veteran friendly businesses. Wisconsin veterans forward is brought to you by the Wisconsin veterans chamber of commerce at wiveteranschamber.org. Megan, how are you? And do you like taxes?

Megan Schwan - Sidekick Accounting:

Hi Adam. Thanks for having me back. I'm really excited to have this conversation today. Yeah,

Adam Braatz - WVCC:

Me too.

Megan Schwan - Sidekick Accounting:

And to answer your question I am not a huge fan of preparing taxes. Ah, I really enjoy the knowledge because taxes really is more of a game, right? It's playing, it's a game that we as business owners and individuals have to play each year. But business owners have a little bit more leverage with the game and that's what I, what I do enjoy learning about taxes and being able to use that, to help our clients.

Adam Braatz - WVCC:

So am I right to assume that that at while nobody really likes paying taxes, perhaps it could be more accurate, accurate that you like helping people and businesses maximize their benefit from taxes or, or, or their benefits from, you know, stipends or paybacks or any of those things or tax incentives while minimizing their liabilities. Is that accurate?

Megan Schwan - Sidekick Accounting:

That's, that's very accurate. Yep.

Adam Braatz - WVCC:

Nailed it. So, so before we go a step further, I want to make absolutely certain that anybody watching or listening from here on to eternity and perpetuity understands that neither of us are giving you financial advice. This is all anecdotal for entertainment purposes. Only. We may talk about hypothetical situations. She's clearly an expert but Megan is not giving you financial advice. Our overarching bit of guidance is if you have questions, go to your accountant or find an accounting specialist or hit Megan up. Cause you, she knows what she's talking about. And I'll put her website you know, along the bottom here. So you know where to where to find her. But we are not, we're not giving you financial advice so that we're getting that liability. Just, just taking care of, is there any other like legal mumbo jumbo that we need to say here before we dive in Megan?

Megan Schwan - Sidekick Accounting:

No, I would just emphasize that because everybody's tax situation is different. So just using broad, you know, examples or terms might not fit your specific situation, which is why it's really important to work with a professional who knows about your specific situation and can give you further guidance. So,

Adam Braatz - WVCC:

Absolutely. And that is the best advice that we give is to work with a professional to help you. So, so this time, last year we were having a conversation about like, what the heck is going on with taxes because we had, we had bailout money, we had grants, we had tax incentives and rebates. Some people had unemployment or expanded unemployment benefits. Some things were coming from, from this department or this department or, or what, I mean, you name it. It was really hard to get to, to, to wrap our brains around what came from where and what, you know. So, so we had a lot to go over. Is that still the case the, this year? Is it the same complications and craziness? Are there new complications and craziness? What, what are you on the lookout right now as we approach tax season?

Megan Schwan - Sidekick Accounting:

Yeah. So there definitely has been some additional changes for this tax season, but they kind of are in the reverse. So last year, $10,000 of unemployment was from taxable income. That is not the case this year. So that was not something that was renewed which could definitely impact people who had unemployment yet into this year. So something to be aware of, the other big thing was the advanced child tax credit payments that were received from July through December for many people. And basically if

Adam Braatz - WVCC:

You elected to take it,

Megan Schwan - Sidekick Accounting:

If you elected to take it yeah. And it was automatic. So if you didn't elect to not take it, then you probably received it as well. So you should be getting something called the notice 6, 4 19 for that, which will outline what tax payments and what amounts they were. And that is something that you will definitely need to have for your tax prepare. If you didn't get in the, a mail, you can go online. So the IRS will show you your stimulus payments and those child tax credit payments as well. So that is something that'll most likely be impacting people a lot this year. The other piece of that is that the EIC, which is the earned income credit levels were adjusted a bit. So that may impact people who you know, are usually in the lower income tax bracket. They might not be seeing as great of a return because of the advanced child tax credits and then this lower and EIC. So that's probably some of the bigger changes that have, that are happening for this tax season that might throw people for a loop if they just kind of, we're not paying attention or we're not aware of some of those things, but

Adam Braatz - WVCC:

So they, so if they go to irs.gov, you're saying they can see if they log in a list of all of their kind of like, is it just federal or

Megan Schwan - Sidekick Accounting:

Just yeah. The federal yep. Cause the earn the advanced child tax credits were federal payments. So through the IRS yep.

Adam Braatz - WVCC:

Is there something, is there a similar thing for, for state to tax benefits or not really?

Megan Schwan - Sidekick Accounting:

Yeah. You can log in or you can set up a tax account for Wisconsin, but there weren't any stimulus payments per se that were paid out through the state. So it should be mostly federal.

Adam Braatz - WVCC:

What about grants? Whether, you know, if you have a small business, let's say you're an LLC you'd file in a, you know, any of that income in a similar fashion to being an individual. So let's say an LLC or an individual receives some sort of support grant is, is grant funding, taxable income.

Megan Schwan - Sidekick Accounting:

So the that's a bit of a tricky question only because some of them are, and some of them are not. So you have to just kind of be aware of that, especially in different states as well, but you should receive a 10 99 from the state or organization that you received grant money for to be able to, to decipher whether or not it's taxable from that. So

Adam Braatz - WVCC:

Right on is there anything else that's, that's new that's looming. I know, I know the, the, the thing that I want to ask about, but I'm, I'm saving it for the end here. Is there, is there anything else that people need to have on their radar before they start putting their paperwork together before they file for, for 2022?

Megan Schwan - Sidekick Accounting:

Let me think. Yeah, I mean, it's just, you know, one of the big things that we come across a lot is people will forget to provide us like a tax form. So that's one thing that's really important is like to really, you know, even sit down and rack your brain, like where did all my income come from this year? Was it from, you know, personal retirement fund or was, you know, a grant, you know, which should be indicated in your financials, if you're keeping up with your bookkeeping and if you're not right, that would definitely be something that I would encourage you to make a change on this year is to keep up and, you know, have organized financial records for your business, because those are those things that kind of fly under the radar sometimes. And then they can come back and bite us in the butt, you know, if we're not paying attention to on the income side and the expense side.

Megan Schwan - Sidekick Accounting:

So it's really important to make sure the financial records are in place, but that's one of the big things that, you know, can happen and can kind of come up. And oftentimes, you know, the IRS takes, you know, a while to process things. So we've, you know, had clients that, or people that have came to us after using another accountant where they've gotten notices, you know, two years later after those taxes were filed because they forgot a form. And that's, that's pretty average. It takes about two years for, for the IRS, you know, before COVID to come back with stuff, but now it can take even longer. And that's one thing to keep in mind too, is if you keep, you don't have the right amounts for the stimulus payment that went out last March, which was 1400, about $1,400 per person, or the advanced child tax credits. If you don't have the right amounts for those, that's gonna automatically flag your return and can really delay your refunds as much as six months we were seeing last year. And that's pretty much the case this year. So making sure you have correct financial information before taking it to your tax repair and before they file your return is super important to making sure you get a timely refund and a timely processing on your returns

Adam Braatz - WVCC:

Right on. That's great advice. Now, the, the one thing that I wanted to ask about, and I'm looking at my other screen here, I have my trading view up and I see a very exciting couple of days for folks like me that are holding Bitcoin and Ethereum and Sheba and crypto.com coin. Things are looking lovely after a couple months of things looking not so lovely more people than ever are holding cryptocurrencies and more people than ever. I mean, they're saying this is the year, the NFT for better or for worse, whatever you may think about those. I noticed that there are no lukewarm opinions about cryptocurrencies and there definitely are no lukewarm opinions about NFTs. All of that aside, what is the, what implications, what are the impacts on our taxable income? Let's say I have X amount of dollars in Ethereum right now. How does that impact my taxes? My individual filing.

Megan Schwan - Sidekick Accounting:

Yeah. And right now it's, it's somewhat similar to like what a stock market shares would be. So you don't pay taxes on, you know, earnings until it comes a taxable event. Like you sell your your stock or your coins cryptocurrency, right.

Adam Braatz - WVCC:

Considered a capital asset right now for, for the time being correct.

Megan Schwan - Sidekick Accounting:

Right, exactly. Yeah. So, but the, the big thing though this year is because it's been such a huge gray area for, especially concerning the IRS is they are specifically focusing on cryptocurrencies and Ft NFT legislation in 2022. So I'm expecting that there's probably gonna be uptick in audits for people that have had cryptocurrency, you know, transactions. And now with the NFTs becoming very popular as well. Like that is something that the IRS themselves have indicated that they're gonna be doing a lot more looking into. So again, you know, just like with anything with the IRS, you wanna make sure you have proper dot documentation in place, you know, and if you are selling something but re purchasing a lot of times that can be considered like a wash sale or whatever it might be, depending on what that looked like for you. So keeping track of some of those things on your own is probably a good idea because there hasn't been a whole lot of regulation on those platforms kind of being proactive, you know, like at sidekick, we're all about proactivity, like being proactive about those funding sources or investments is probably your better bet to you know, having a good transition or conversation with the IRS. If that's something that ends up coming up.

Adam Braatz - WVCC:

So generally speaking though, for somebody like me, if it's considered a CA capital asset investment if I let's say I put in this year a X amount of dollars into, you know, my Coinbase account or whatever, bought X amount of dollars worth the cryptocurrency, but I haven't taken anything out.

Megan Schwan - Sidekick Accounting:

Yeah, there's not a taxable event then. Okay. So you're just, yeah, if you're just purchasing and you're letting it sit and you're not selling it then you're not having a, a taxable event. So it doesn't impact your taxes at that,

Adam Braatz - WVCC:

But it's not necessarily a writeoff though.

Megan Schwan - Sidekick Accounting:

It's not a writeoff no. Okay.

Adam Braatz - WVCC:

What if I just put it, let's say I put in $5,000 and I took out a thousand. I have to pay taxes on that thousand. Is that how that works?

Megan Schwan - Sidekick Accounting:

If there was an earning on it. So like if you just took it out and there wasn't any earnings and that's kind of where the gray areas are with. Right. So, because it's not, there's not a whole lot of right. Especially depending on which crypto you're investing in Bitcoin might be a little bit more advanced because it's been around for so long, but some of the newer ones you know, don't always have that, that record keeping piece of it as much of your, you know, so that's where, like,

Adam Braatz - WVCC:

I think that's the point of a lot of them too, right.

Megan Schwan - Sidekick Accounting:

Which is the point, right? Iris is like, wait a minute. Like,

Adam Braatz - WVCC:

But there are programs now that, that compile, they, they look at your wallets and they compile things and they tell you what your tax liability is always be very careful, anything, you know, the, the crypto space and especially NFT space right now. I gotta tell everybody is just like the wild, wild west. It is. Yeah. There's tons of opportunities there, but there are more scammers than, than you can shake a stick at. And so just be very, very careful with your data at all times, cuz I'd hate for, for people to get ripped off. That would be, that would stink. Can we talk about intention in filing? Like a lot of people are worried about if I file something incorrectly, I could go to jail, but my under standing is if your intention, it, it like there's a mistake. And then there's deliberately trying to defraud the government. And if you just make a mistake, you don't have to worry necessarily about going to jail. Is that accurate?

Megan Schwan - Sidekick Accounting:

I would say that's accurate. Yeah. Like I can't speak to like definitively, but I would say overall, yes, that is something that they do, you know, take into consideration. And usually you can tell, right. If somebody's scamming, a lot of times they're gonna be like, you know, big amounts of, you know, things and a lot of red flags, but if it's an innocent mistake, you know, usually it's pretty obvious when, when it comes to that. So

Adam Braatz - WVCC:

Do you have a feeling that there's gonna be a lot of innocent mistakes when it comes to audits and whatnot over the next couple years, as it pertains to people's cryptocurrency holdings,

Megan Schwan - Sidekick Accounting:

Cryptocurrency P PPP is probably gonna be another one, you know, because right. One of the things that got funded along with PPP funds was audits. And so with NFTs cryptocurrencies and PPP re recipients there are probably gonna be a number of audits that are uptaking as a result of that as well. So

Adam Braatz - WVCC:

Let's talk about that too. Cause you know nonprofits, chambers of commerce, small business owners, some corporate entities, lots of people got paycheck protection program or plan or whatever it is, the PPP funding those loans. And they got those loans forgiven. What is the tax liability? What's the tax responsibility for that? Is that loan money taxable? Or does it wash out when they get when they get it forgiven or what?

Megan Schwan - Sidekick Accounting:

Yeah, so that was one of the big legislation issues or disagreements or whatever you wanna call it. Last year for taxes. And it was right up to the wire in all honesty. I mean, they were, they were talking about this, like in December, the end of December about the taxability of PPP and originally it was the P P P funds were not taxable. So the income you were actually received from that, but you couldn't include the expenses that you used to pay with those PPP funds. So that was changed, thankfully. So you were able to still deduct like payroll expenses is mostly what it was, right. It was the payment paycheck protection program. So it was for payroll mostly, but rent and utilities could also be some things that you could deduct with PPP funds. So those were all allowed. So when your loan is forgiven, because on your financial reports, your PPP is considered a loan until it's forgiven one, if it's forgive, it is considered non-taxable income. So there's actually lines, you know, that you can input non-taxable income in for your schedule C and S Corp and partnership returns. And so that's usually where that gets indicated, but it's not taxable income once it's forgiven thankfully for a lot of people because that definitely would've impacted a lot of businesses in probably a very negative way. If they weren't able to deduct those expenses.

Adam Braatz - WVCC:

So interesting. And so what happens if your, your PPP loan is, for some reason not forgiven, is that all of a sudden you gotta pay? Not only do you have to pay the loan back, but it's taxable income?

Megan Schwan - Sidekick Accounting:

No. So then it's just a loan. It's just a loan. It it's not considered. Yeah. So, but you then would have to repay those funds,

Adam Braatz - WVCC:

But you could write off the expenses.

Megan Schwan - Sidekick Accounting:

Yep. Yep. You can still write off the expenses for that.

Adam Braatz - WVCC:

Yep. Well, at least it's not complicated or anything. That would be a real,

Megan Schwan - Sidekick Accounting:

It would've been more if they would've allowed that to pass,

Adam Braatz - WVCC:

So, oh, I can imagine engine, but the biggest

Megan Schwan - Sidekick Accounting:

Thing, oh, sorry. I, no, go ahead. Interject that. The biggest thing when, when terms of that is like making sure, you know, whatever you put on your loan documents, if you submitted for forgiveness that period of time is when you would use those funds. So making sure you have, you know, some kind of a note or something in your financial record that this payroll was paid with PPP funds or this rent expense was paid with PPP funds over that period of time, just so that it matches up. And especially if you got funding from many different places, because there were other local grants that people were able to receive and get as well that were what we would call restricted. So it could only be used for cert and things like payroll or rented utilities. So you wanna make sure to have those broken out if you've got multiple grants, because you didn't wanna, you can't expense the same thing twice. So you can't expense you know an expense can't be used under PPP funds and this grant fund, if that makes sense, hopefully

Adam Braatz - WVCC:

Well, it does. And, and we're very familiar being in the nonprofit world that, you know, you get, you get grants that are restricted to certain, you know, programmatic outcomes and you have to keep good record of that to say that, you know, your, this grant funding was used for this, this purpose. And you have to be able to verify that so compiling all of this stuff can sometimes be a real headache, but even easier, something that makes it easier rather is just keeping better records and planning better for tax season as the year goes on. And that was something we were talking about before we went live is you talked about tax planning and, and preparation for, for your tax liability. What is, what is that and, and how is it, how is it helpful?

Megan Schwan - Sidekick Accounting:

Sure. So tax planning is a holistic look at your tax, you and the legal law to be able to leverage your business, to save money and tax tax liability, basically, and keep more money in your pocket. As business owners, you know, we work really hard for what we do and for the money that we earn and it's super depressing, you know, getting a huge tax bill at the end of the year for the income that you earned. And so that was kind of why I got into it because I was, you know, preparing taxes for people and it was just like, there's gotta be a different way. And that was where I was able to discover tax planning, which a lot of accountants unfortunately do not do because we are taught to be reactive. So we do taxes after the taxe year closes.

Megan Schwan - Sidekick Accounting:

We're not, you know, always thinking proactively sometimes you can get, you know, tax preparers that are tax planning and they tell you to purchase a piece of equipment or office supply at the end of the year, you know, to save in tax liability. But that's not really what tax true tax planning is. It's a, it's a, like I mentioned, it's a holistic approach to taxes and the tax law. So it's looking at your personal situation along with your business. Do you have kids, do you have properties? Do you have retirement funding? Do you have other investments, et cetera, et cetera, along with your business. And so we do tax planning with our clients now and with other people as well, even if we're not doing bookkeeping because our goal is to help businesses be successful. And I feel like tax planning is definitely one of those pieces to really helping businesses continue to grow and be successful with what they're doing, cuz it's such a huge part of what we have to do as well.

Adam Braatz - WVCC:

Well, if if you fail to plan yeah, you are planning to fail or however, the, the saying goes,

Megan Schwan - Sidekick Accounting:

I think you got it.

Adam Braatz - WVCC:

Yeah. That makes sense. Is, is tax planning, something that is growing in popularity like a, a accountant supported tax planning for, for businesses? Is that something that's growing in popularity as things become more complicated?

Megan Schwan - Sidekick Accounting:

Yeah. You know I guess sometimes it's hard when you're the you're in it, because it seems like other people then you're talking to, or, you know, you attract that or you have colleagues that are doing it. The organization where I learned how to do tax planning you know, know there's only probably 400 accountants in that group, so it's not, you know, and that's, you know, there's probably 400 accountants just in Milwaukee in the whole honesty. So like there's not a whole lot of them that are doing it. And one of the reasons is, is because implementing tax plans, they, it takes a decent amount of, you know, energy and work and knowledge, you know, to be able to put together a really exhaustive tax plan for somebody. But then being able to implement it so similar to like the crypto, you know, conversation it, when it comes to the IRS and anything related to taxes, it's all about documentation. So making you have the proper documentation in place, making sure you have the right arguments because the burden of proof is on you as a taxpayer to make sure that it's supported with what you're doing. And I think that's what steers a lot of accounts from doing tax planning is just because it's much more involved than just doing tax preparation. But it is something that we do. And a lot of times the tax plan can be used year over year, over year where you're getting that savings. So it's a huge ROI.

Adam Braatz - WVCC:

Interesting. Yeah. So, so the more you plan and the more you invest on the front end the less of a headache it'll be once you get the tax season and ideally, you know, the less you have to pay or the more you get in return. So that's always a good thing too. Yes. What are some I wanted to make sure to ask what are some things typically for individual or small business returns that people don't write off or don't consider writing off, or don't even consider as, you know, taxable income? What are things that people typically miss?

Megan Schwan - Sidekick Accounting:

Well, in terms of deductions, the one thing that we see a lot that people miss is actually like continuing education. So if you're taking courses or, you know, attending conferences, a lot of times, those are things that you can deduct. If it's business related just to kind of reiterate, I think we might have talked about that last year, but I do a lot of tax classes is the IRS defines a business deduction as anything that's ordinary necessary for your business to operate. So that's very held, you know, it's a very held open broad, you know, what, what does that exactly mean? And what I usually tell people is like, you, you gotta kind of think of it as like, you know, is this helping my business grow? You know, so if it's professional development where you're becoming more skilled and more knowledgeable, or you're becoming a better leader to lead your team or you know, clients, you know, those are things that you're able to deduct.

Megan Schwan - Sidekick Accounting:

But if I were to, you know, go to a conference and stay at a, a Ritz Carleton hotel, as opposed to, you know holiday in, I probably couldn't make the, you know, the argument that it was ordinary necessary for, for me to stay at this big grand hotel. But, you know, so things like that, like not making it too extravagant. Another thing that I get a lot of questions about, and this might be a little bit off of your question, but clothing is another big one that I hear people ask about all the time. And you can't deduct just regular clothing, however, kind of

Adam Braatz - WVCC:

Attire

Megan Schwan - Sidekick Accounting:

That well, even business attire, because that's something that you're gonna be wearing or that you could wear outside of work. You can't really do it. So even if it's not something you normally wear, but you could wear it and deduct it. But the work around there is to get it logoed. So if you get it logoed where you have your logo on it, then it's something that you're able to then write off. You can write off a piece of clothing, getting the logo on it, and any dry cleaning or, you know, washing that you could,

Adam Braatz - WVCC:

You draw the logo on the tag with a shirt That's

Megan Schwan - Sidekick Accounting:

Visible, has to be visible.

Adam Braatz - WVCC:

What, what about this? So I work, I work out on my home let's say I have an LLC and I do all my work outta my basement office. Can I write off my mortgage and my utilities and all of those things? Cause that's where I work. Does that work?

Megan Schwan - Sidekick Accounting:

Yeah. So that's a, that's a great question. And as a sole proprietor or a single member, LLC, where you're filing as a schedule C on your taxes you can take the home office deduction. And so basically that's taking your dedicated space. It does have to be dedicated space. So not always necessarily a room, but if you have, you know, a portion of your room where you have your desk equipment, you can take that square footage divided by the square footage of your whole home and that percentage of your mortgage and your utilities and, you know, even internet or repairs are things that you are able to, to then deduct a portion of that.

Adam Braatz - WVCC:

So how do you like that? I see, I didn't know that that's yeah. And

Megan Schwan - Sidekick Accounting:

That can be really huge people, especially this past year, when or two years now, right. People have gone home, you know, to work and a lot of them are staying home. So those are some things that you're able to do. And a hundred percent of whatever improvements you do in that office space are a hundred percent right off as well under that home office.

Adam Braatz - WVCC:

That's good home office. That's a good tidbit. Excellent. so we're, I feel like we could talk for hours

Megan Schwan - Sidekick Accounting:

Probably could,

Adam Braatz - WVCC:

And I'm sure we could do hypotheticals all day long. Is there anything that you want to tell people you know, just overarching again, general advice, not guidance here but you know, aside from planning and make sure you get all your documents together, general advice, what to be on the lookout for, especially this year.

Megan Schwan - Sidekick Accounting:

Yeah, one thing for sure is just to kind of keep your, your ears to the ground on any changes in terms of legislation. I know there's been a lot of change, the talk with the administration making tax changes that could impact people especially business owners. So that's one thing just to kind of, you know, get connected with a professional, that's staying up on things, you know, so that you're able to get that information as it comes. One other thing too, is kind of on the same tax planning conversation, like talk to your accountant about doing specifically tax planning and not just like this buying equipment at the end of the year, but really true tax planning. Yeah. Because there's one big one, I'll give you all a good tidbit there's on called the Augusta rule. And so the Augusta rule was created in the 1970s and it was brought out, but because of Augusta, Georgia and the golf tournaments that they had down there, and basically what it allows is you to rent your home to your business for up to 14 days a year to tax free.

Megan Schwan - Sidekick Accounting:

And so you get to basically write a check, expense it outta your business and pocket that money, and you don't have to claim it as income rental income. So that's a really huge one that we can use as business owners to leverage that law tax law and be able to, to write ourselves a check and expense it through our business. And so that's an example of what tax planning actually is and how you leverage the tax laws to be able to benefit you and your family.

Adam Braatz - WVCC:

That's really interesting. Cause so like if, if I have a single owner, LLC, and I'm in my basement office, I could technically do an owner draw and just take money out to that account and give it to myself, but I wouldn't be able to expense it.

Megan Schwan - Sidekick Accounting:

Right.

Adam Braatz - WVCC:

And with the Augusta rule, I could take 14 days of rent, charge my business, rent from my home and write a check for that rent up to 14 days to me as a homeowner and then write it off as a business expense. Yep.

Megan Schwan - Sidekick Accounting:

And a lot of times, you know, there are some, you know, gun documentation with the IRS, right? So there's documentation that needs to be in place. But a lot of times, you know, people, especially if they have significant others, you know, you're talking to your spouse or your partner about your business probably on a regular basis. And so those can actually be considered like strategy meetings or board meetings. And you just, you know, talk, write down a little bit about which you talked about and that's like your board meeting or your strategic planning meeting. And then you're able to use that as like the, the documentation for, for why it's business related. Right. Because it has to be business related.

Adam Braatz - WVCC:

Right. Of course.

Megan Schwan - Sidekick Accounting:

But then you can, yep. You can write it yourself, a check and it's not taxable.

Adam Braatz - WVCC:

So the Augusta rule, see, this is why this is why you hire a professional. This is why you reach out to Megan in sidekick accounting, you can see the you can see the things scrolling across the bottom there with her website. Megan can't thank you enough for joining us. Thank you again. And I hope to see around this time next year, so we can keep providing that good information for for our, our viewers and, and our listeners.

Megan Schwan - Sidekick Accounting:

Yeah, absolutely. Thanks Adam.

Adam Braatz - WVCC:

Good stuff. Love talking about tax as well. I mean, nobody really loves talking about taxes, but I love sharing information that could potentially save you some money, potentially put a little more, a little more liquidity in your world in your pocket. Appreciate you joining us once again on Wisconsin, veterans Ford, we'll see you. Same time, same place next week. Thank you for listening to Wisconsin veterans forward brought to you by the Wisconsin veterans chamber of commerce. Please visit us at wiveteranschamber.org. Don't forget to subscribe to this podcast, leave a rating and review in what, whatever platform you're listening through.