Can I Write That Off with Craig Cody; Ever thought about what you can write as a business expense Craig goes into some true but seldom used write off strategies.
You might just be amazed you are going to love the topic is “Can I write that off?”
Today I have a returning yes because of you guys. His name is Craig Cody and Craig is a certified tax coach, certified public accountant, business owner and former New York City police officer with 17 years’ experience on the force in addition to being a certified public accountant for the past 15 years.
He’s also a certified tax coach and as a certified tax coach Craig belongs to a selection of the group of tax practitioners throughout the country who undergo extensive training and continued education and various tax planning techniques and strategies to become as well as remain certified Unser. With his organization.
Craig has co-author Amazon best seller book Secrets of the Tax-Free Life and today I’m excited because this is one that you are going to love is the topic is “Can I write that off?” Craig thanks so much for being with us today.
Oh, thank you very much for having me today.
I’m psyched. We got such a great response to you being on here. The last time that this is really I know is going to be fun. I know it’s always fun for me but it is fun for a lot of our guests too. Can I write that off? Boy, that is probably a thousand different things or a thousand different questions we could ask.
I don’t know if I’ve ever been asked that question before. Can I write that off? First, you have to get everything out of your shoe box and put it in order before I can tell you whether you can write that off right.
Sometimes when I tell them yes, they’re actually really surprised. Yeah. Because they’re just grasping a store straw they’re just open right. Exactly, exactly.
OK here’s what I want to ask you, and then what is the unique thing that someone has asked you Can I write that off? Oh, it was probably some type of cosmetic surgery.
And I’ll leave it at that. Leave it to the imagination. OK.
- Well, actually it was work induced which was even strange and not boring not boring.
I’m sure it’s not so I’m sure that. And I know a lot of people.
You know it’s getting that time of the year. And you know as they go through all their income expenses and stuff and they’re gone I’m sure of that I can write it off or I wish I can write that off.
What are some of the things that you want to tell us about that?
Well, some of the unique things. Let’s talk about OK. You know can I write off my pool? you know. And that’s one of them when they’re shocked when I say yeah well if you have a home office you can write off your pool because you’re allowed to have a home athletic facility for the use of your employees and you and their families. So that money is typically a little bit of a shocker.
So, what if you live up north and you have a game.
If it’s a gym you could write it off. Not a game. OK or a pool or even if it was an ice skating rink we have a few of those. You could write that off. Yeah. So, you could write off you actually depreciate the actual pool and you could write off the operating expenses. Sweet. You have just had to document everything. A lot of things just come down to making sure you document what you’re supposed to.
So, one of the other fun things a lot of business owners come up to you and say give us a list. Some are probably crazy but that’s OK.
Yes, some of some of them that they can’t write off they come up to me for. But you know there’s a lot of times they’ll come up with a medical expense item and you know you know can I write this off while you can write it off but you’re not going to get the benefit of it unless we do it a certain way.
Another thing that’s actually interesting is if your child goes to a special school and maybe they have ADHD or ADD or there’s some reason that they have to go to a special school that could actually be a legitimate medical deduction and we could create a medical expense reimbursement plan so that can work. Well, we just had a client that had to pay huge fees for rehab that they thought they were going to write off to schedule late and moves like thirty thousand dollars of deduction.
So, we were able to show them how to do it the right way and take four hundred thousand dollars and such. So, you need to ask. You know that’s really what it comes down is she should ask and you should have somebody that’s you know willing to look into things and not just shut their mind out and is willing to invest in education and learning what’s out there that you can do. There are so many things out there. So many things and that’s why when we work with clients sometimes they’re shocked or wait I could write my pool off. Yeah, you can.
Yeah, that’s why it’s so important to have someone like yourself as a member of a team because you are a team member right. Everybody
should have a team. You know we you know we spend so much time working on our businesses, building up businesses you know can’t do it alone. We need to concentrate on what you’re really good at and have other people deal with the stuff that you’re not really good at.
Yeah, that’s the main thing. So, what I’m going to have I kind of friend who has a multimillion dollar business I’m going to think about some of the things that actually had so like you if you have a boat you could possibly right to potentially you could write that off for some time. But, will you advise it? You really have to be careful on that. OK. But typically, if somebody buys a boat and it can actually be a second home and they can write interest they could write the interest off on their own schedule day.
So, there are rules with that that a lot of people watch you fall on this subject. That could be a good thing. You know there’s a million-dollar limit on mortgage interest and stuff like that but they might that might change in the next 24 hours might become a loan.
I figured they might go higher. I don’t think so. I mean I think that tax money. Looks like big business is really going to get a big bulk of whatever these tax savings going to be. Well, that’s a whole another story for a whole another day. Where that comes from. Yes eventually. So OK. Let’s let’s keep moving on. What can I write off stuff that most people don’t even think about? Most business owners. Yes.
I mean people don’t think about their home office. They definitely don’t think about that. Some people do but most people don’t. They don’t think about you know their medical expenses they don’t think about how to properly do that.
They don’t think about how to write off their kids. You know Camp high school tuition, hockey you know hockey lessons are hockey camp and stuff like that. All right. So, there’s a way to do that by hiring your kids and then you pay them directly and then you let them pay for the camp or the school directly out of their bank account.
Well, I you know I brought that up to son in law the other day because he is a real estate agent. Of course, he’s technically in his own business. I say you know what I said your kids again old enough where you can hire them and make them pay for their own stuff and he goes. Yeah, the last time I talked my accountant about that he said there was no benefit to it. I said, “fire him!”
Right. Exactly. Get somebody that thinks properly. Right. Exactly. That’s very true because if he’s a realtor and he’s a schedule C that’s a home run. Yeah, I said you know just there’s stuff that they can do you know for your business that you can pay them and let them start paying their own bills. Right. and Write the whole things off.
Exactly. Make nondeductible expenses deductible and you know I spend a lot of time going to you know advance training and learn this stuff. Yeah so you know the typical CPA has to do about 30 to 40 hours a year in training. I do easily two weeks if not more. Right. Because now you’re learning the ins and outs of what can and can’t be done.
And you think well I’m not going to go there. But no, I will go there. You would think that everyone would go for that. But there again that’s why we have different personalities, we have different thought processes, and different things I just need to find the right person who will work with you on your side. That’s all it really is. Exactly it’s kind of like working versus a new business. That’s amazing.
Yeah. So, we have yes, we have hiring the kids we have the home office we have them your current truck expenses and if you have a home office now or you travel from one office to your other office becomes deductible where you can have, too often you can have a home office and another office and do both of them. Oh yes so let’s just say you know in my case I spend easily two hours every morning and answering e-mails and doing stuff. Plus, you know easily two hours’ time on the weekends.
It’s always you spend 14 hours a week working from that home office. Then it falls under the rules and it’s qualified. OK so and most people I speak to you know that when I tell you I got to do 14 hours they look at me like 14 hours? You know I’m working 60 hours or 40 hours in my regular office and I’m home and I’m doing e-mails, I’m doing billing, I’m doing this. You know that’s a drop in the bucket.
So yeah that’s a huge thing because I was there again. Not that I have two offices but I was always kind of under the impression you could only do one. No. Now well think about if you’re a real estate company and you have multiple offices. Yeah. Why can’t you. You’re allowed to deduct the rent on all those offices and all the expenses that are associated with same principal to dental practices. So, and we all do a lot of administrative stuff when we’re sitting at home or whether it’s you know in an office or you know the TV which is which means you know I’m working in your office so you should be doing it in your office in front of the TV in your office. Right
Right. That’s why I have one right here. So, have. Exactly. Matter of fact I don’t even know if it works but haven’t thrown it out yet. So yeah. So that’s a bunch of things that you can do. Then we have the you know you’re about to rent your home out 14 days a year and not pay income tax on that money. So that’s an interesting thing that is very interesting.
Could you rent it to your company for a Christmas party or a new year’s party or any other kind of party during the year. You can do that or you could rent it as a you know especially with air BMB that’s really popular. Yeah but you want to make sure you don’t go off with the14 days because if you go over the 14 days it’s all taxes. All that’s taxable yes. So is it 14 days total or is that total OK. Those 14 days total for the year. So, you know that has just brought up like for where I live every once in a while, you know you have a super bowl that comes here you could rent out your house for the weekend for megabucks.
And you don’t have to pay that. You know I had a client that used to rent the house in Brooklyn for movies and they used to pay me that was wonderful they were paying a $5000 a day. So conceivably if she was able to get on that rented for 14 days you know she would have made you know a lot of money.
Yeah. Would have paid part of her mortgage right. And she would not have had to claim any of it legally on a tax return. Oh, I love that. And you just got to be careful that you don’t go over the 40 days at least. So, you need two guys who everyone is listening as you need to think about how you can do that in different venues. You know if you can’t rent it out, you know rent it out for your party you have an associate renting out for a little party. I don’t know it doesn’t matter just get. Figure out how you can get the 14 days in there because it could it could be worth it to you.
Exactly. Exactly. So, but yeah there’s some interesting stuff out there. And I think what everybody needs to do is they need to communicate with the CPA and stay in touch with them and make sure that they stay in touch with each other. So, you know they could all help each other keep more of what they’re making.
Yeah that’s the key. I always say that’s where the profit that you never see is when you pay to the IRS. so let’s get to keep more of it. Exactly. That’s the that’s probably the easiest profit to make. You know rather than going out and getting more clients, you know they get more of it. Yeah. Yeah because you were thinking about paying less and now you get to keep it. that correct at all. That would be nice if we keep it all.
But the thing happens no right as much as that that’s legally allowed. So that we can have more fun and do whatever we want with it. Yeah there was. Right. There was one the Supreme Court justices that quote it says there’s nothing wrong with structuring your so use to pay the least amount of tax possible. Who was that guy? OK I have to because I knew it. I want to it wasn’t Holmes was it?
No I’m thinking it might have been Marshall but I’m not exactly sure I was OK. I remember that. Yeah I remember that reading bunch stuff. It’s my responsibility, it’s my job to pay As little as possible because it’s written in the tax code so that I can I just have to be able to know where it is and what it is. And that’s why again we’re going to talk to people like Craig so that we cannot do that. OK. Have that team member.
Exactly and it was actually William Rehnquist. There is nothing wrong with the strategy to avoid the payment of taxes. The Internal Revenue Code doesn’t prevent that. That’s a statement from Justice cool yeah. So that’s pretty awesome. I love that. OK. What’s another really weird thing that someone’s asked you if they can write off that was available? That was available. That was available.
You know cosmetic dentistry you know somebody had to get new guess you want to call them false teeth implants. And you know the first time I heard it, you know like, that can’t be deductibles. I go back to my grandparents and with the old dentist and it is you could actually write it off as legitimate medical experts. While I would think it would apply to certain industries. But what the heck. You know I’d like fewer news anchor act or something like that than it would be part of your income producing.
Right but if I don’t have if I don’t have teeth I can’t chew food so I can’t eat so I can’t survive. So that’s another way of looking at it. Yeah pretty wild. Yes, sometimes just a matter of the way you document different things but I think that one’s a pretty straightforward one was the first time I heard it I was a little surprised. You know I’ve gotten some weird ones over the times and you know you know my dog obviously you can’t deduct the cost of your dog now you have. If it’s a Rottweiler and it’s in a junkyard Yeah that’s a different story because of every army of service. Exactly. OK.
But that’s not a huge cost for pet poodle at home. No, you can’t deduct that. What about if you tried to pay them by the hour and they’d have to have a social security number. There social security number. Have a lot of fun with these huh? People try, “Can I claim my dog as a dependent?” NO. Well, you feed them then. And that’s a statement from Joe Justice.
I think the biggest one was the pool is something that people were very surprised about or the school. Yes. If they have to go to a special school that you know those are typically pretty expensive things and they could save you a lot of money. Yes, especially some schools. I mean yeah, I can imagine. I mean some schools are expensive as expensive as college.
Yeah some of them are more expensive I think on what the school is for it to be very expensive. Same with rehab can be very expensive. And the ability to structure your fast seat to write that off as a good thing. Yeah. Wow, that’s amazing. Again, that’s just knowing the right people who know the right things. That will put your whole tax perspective into profit and put into profit making mode. Right. And I mean I guess I could throw a little thing in it that’s really more towards contractors and rehabbers and stuff like that is you know domestic production activities deduction. What’s that.
It’s basically a deduction that was meant to keep jobs in the U.S. versus going overseas and giving these factories that say OK a credit or a deduction for juicing goods in the United States I guess as the bill was written it was expanded to include construction or remodelers and stuff like that and it basically if you take that they called Qualified productions activity income and you take then your qualified activities expenses and you get your net income.
You take 9% of that. You get a deduction on your personal returns. If let’s just say you’re a new home builder or you do spec and you know you have five hundred thousand dollars in net profit you know you can wind up with like $45,000. deduction. It’s very often missed. Wow. Yeah wow that’s pretty good.
Wow. Wow. One thing you know that’s why it pays to go and you know go to conferences and learn and socialize. Talk to other people that are doing different things. People love to share ideas. Well yeah, and then that’s what makes you the expert in your market place Exactly. You know the go to guy and you know the little you know more than your average CPA because you’ve taken the time to become the expert just like we tell you know our contract to become the expert take that extra time to become you know the certification or you know become the expert learning more from an expert in their field so that they become now they become the go to guy like you become the go to guy to contractors they’ve become the go to guy to their clients.
Yes, exactly exactly. So, it’s yeah it’s it’s a consistency in in the whole growing your business standpoint.
Yes. I think that kind out of odd type of questions that’s your standard questions that they asked us. So what’s the funniest on that you’ve ever got that just flat out and now she was. Somehow, she called the office and she was a lady of the evening. OK. And she had questions about what she was able to dock or what she wasn’t able to dock.
- Of course they asked her are you incorporated? And you know the interesting thing is even if you’re performing an illegal activity is supposed to pay tax on it my. Yes I know. I know. Yeah that’s the funny thing. Yeah. Well even I mean that’s why they’re trying to make it a cashless society so they can track all the money so they can track everything. Right exactly. Exactly. They don’t know.
I’m not sure we’re bitcoin fits into all that and that and crypto currency but we’ll see. Yeah I am. That’s. It’s kind of funny how many experts there are crypto currency now. It’s amazing. I mean they’re popping up every day. I know. I’ll let them pop up down to. I’m afraid to even consider that. But that’s me. That’s so. Hey Craig you know this a real awesome man. I’m just. Can we. Can I write that off? That’s been a lot of fun today. How can how can our listeners get in touch with you so they can get more of your information and to actually contact you personally if they want you to help or consider you being on their team. Sure.
Well they can go to our website. It’s Craigcodyandcompany.com. and actually if they go to craigcodyandcompany.com/secretweapon They can get a free copy paper copy of our book. Almost most recent book “The 10 most expensive tax mistakes that cost business owners thousands”. They could also call at 5 1 6 6 9 4 0 5 1 or email it firstname.lastname@example.org.
And I’m sure you will have all that information in your show notes. Yes we will make sure everything goes was on our show notes so everyone can go to and download and get whatever information they need. Excuse me I’m losing my voice here. Awesome. So that’s has really been fun. I’m glad that you are all our guests today and we got talking and I’m glad that you are going to be at the podcast . Yes. That sounds like a fun thing.
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