1.888.502.3767 | CONTACT US
If you don't plan accordingly for your investing goals and choose the correct entity structure, the taxes will definitely hurt your bottom line in a big way. As a real estate investor you need to stay updated on which entities are on the IRS hit list. Recordkeeping also plays a big part in wealth building. Done the right way, you can save yourself a lot of headaches and money come tax time.
1. LIMITED LIABILITY COMPANIES (LLC'S): An LLC is an unincorporated business entity filed under state law, in which all owners (called "members") have limited legal liability. It is a hybrid entity that combines some of the major legal advantages of corporations and the excellent tax advantages of general partnerships. The owners in an LLC are called members or managers.
Tax Status: As a separate legal entity, an LLC can be taxed as a sole proprietor, as a partnership or as a corporation. But for real estate ownership, an LLC should elect to be taxed as a partnership and thereby be governed by the favorable tax benefits of partnership tax law.
Financial planning requires a system you can follow to be fully prepared for tax time. It's imperative that as real estate investors and business owners, you create an accounting strategy that avoids expensive mistakes, gets the most deductions and plans your wealth building accordingly. Here are some tips on how to achieve those goals.
DEDUCTIONS FOR REAL ESTATE INVESTORS
When it comes to maximizing deductions, it is much more beneficial for real estate to be considered a "business" and not just an "investment". Being considered also a business will give the property owner these advantages over being considered just an investment:
1. Eligibility to deduct start-up expenditures
2. Eligibility to deduct Section 179 first year expensing in certain situations
With the new year quickly approaching, it's time to make some strategic moves to lower your tax bill.
Prepay Deductible ExpendituresIf you itemize deductions, accelerating some deductible expenditures into this year to produce higher write-offs makes sense if you expect to be in the same or lower tax bracket next year.
Early Mortgage Payment: Accelerating the house payment that's due in January will give you 13 months' worth of deductible interest in the new year – also applicable to vacation homes.
Page 5 of 18
Our Free Assessment allows you to find out just how much you could have saved over the years, and how much you could save in the future. Assessments can find missed deductions, potential audit triggers and identify compliance and asset protection risk.
For those about to file taxes, we offer a free consultation. Learn how you can legally reduce the amount you pay out, personally, or maximize the financial efficiency of your business as a whole. We also advise on business formation and business restructuring.
At the Wealth Building CPA we teach our students how to become savvy and wealthy investors without making costly mistakes. Our many articles, webinars and podcasts demonstrate how to use money and tax strategies to maximize profits and minimize losses. This aggressive approach will fast track you to financial success. We implement a lot of the teachings from renowned real estate and wealth building experts such as: Robert Kiyosaki, Robert Allen, Scott Scheel, Ron Legrand, Zig Ziglar, Carleton Sheets, David Lindahl, Robert Shemin, Dave Ramsey and many more.
5010 Sunnyside Avenue, Suite 210Beltsville, MD 20705Tel 888.502.3767Fax 866.466.3146
©2015 WBCPA | Site by HTMelle