TOP 5 MISTAKES THAT MAY BE COSTING YOU MONEY AMANDA HAN & MATTHEW MACFARLAND
For real estate investors, it is even more important to ensure that we minimize
our taxes because $1 saved can provide us with $4 of real estate investments.
For example, if we were to reduce our taxes ea ch year by $5,000, then we
would have $10,000 of extra cash in just two years. With the additional
$10,000, we may be able to use that as a down-payment and purchase a rental
property worth $50,000. Imagine how much faster you can grow your real
One of the most common
estate portfolio when you are able to maximize your tax savings and re-direct
mistakes
that money to real estate?
CPAs are tax deductions
we
see
as
being taken in the wrong
It may be surprising to know that a large majority of Americans unknowingly
places. Take the example
overpay in their income taxes each year. This begs the question of “Why?”
of
Why is it that the average American loses so much money to taxes each year?
Tony. Tony is a pilot by
a
taxpayer
named
trade and he also has a
Well, as tax strategists, we hate to say this but one of the major reasons that
business
taxpayers lose a ton of money to Uncle Sam is really because they receive bad
sells nutritional products.
advice. As such, we want to share with you some of the most common and
For all of Tony’s travel
costly tax mistakes that you need to know in order to protect yourself from
costs, in previous years
overpaying the IRS this year:
his
tax
in
which
preparer
he
took
those deductions on his
Mistake #1: Deducting Expenses in the Wrong Place
Have you heard of the phrase “all men are created equal?” Well, unfortunately,
not all tax deductions are created equal. For example, did you know that your
travel expenses can, on one hand, reduce your tax by 50%, but on the other
hand could save you nothing? Surprisingly there is actually a right way along
with a wrong way to take your tax deductions.
Schedule
A
unreimbursed
employee
business
expenses.
Based
on his
as
income
level and the limitations
on Schedule A, he was
unable to benefit from
any of his $20,000 of
travel costs incurred. Had
he
correctly
reported
these travel costs to be
part
of
his
business
expenses (i.e.: on his
business tax return or
Schedule C), he would
have increased his tax
refund
$10,000.
by
close
to