*Be Wealthy, Brett Tanner, and it's affiliates do not provide tax, legal, or account advise. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on, for tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any transaction. 

Making sure you don't pay too much in taxes is like a game where you try to keep more of your money.

Tax planning is figuring out how to use the rules to pay less tax in a smart and fair way. It's important to understand some simple ideas before making decisions about your money.

Below are some strategies you can consider when making your next tax move. 

1. Cost Segregation and Depreciation

Real estate professionals often overlook the opportunity of depreciation. Cost segregation allows for a larger depreciation percentage in the first year, potentially saving thousands in taxes, providing resources to invest in additional properties.

Most who are aware of the rule focus on the impact in commercial real estate, not realizing the impact it also has on traditional real estate bought during a specific window of time. 

It's advised to explore companies offering cost segregation services and assess eligibility for professional real estate investor status through consultation with your CPA. 

Inside of our mastermind group it's something we've discussed in depth and advise members to discuss this with tax professionals. One of our members, who had recently purchased several rental properties, was able to save over $500k on that year's tax bill. 

"I mean, a tax reduction of $595,000 that's a huge return! As agents and as investors we are always looking for our ROI. On our return as investment, it's huge." - Terry and Steve LaRoche 

One of our affiliates offer free estimates to our listeners and viewers. If you want to get started feel free to click HERE.

2. The Augusta Rule

The Augusta Rule, permitting individuals to rent their primary residence to their business for up to 14 days annually.

By leveraging this rule, you can save 40% of the total cost incurred for renting conference rooms elsewhere, providing a substantial tax-saving opportunity often underutilized.

The history behind how this came to legislation is interesting. It was initially lobbied by residents of Augusta, Georgia, in the 1970's. 

The location of the Masters golf tournament, held at the Augusta National Golf Club, the residents of the city believed they should be able to rent their home to the tournament goers without becoming a full-fledged rental business. 

In October of 1976, Section 280(A)(g) was passed.

3. Section 199A

Understanding IRS Section 199A is not mandatory, but understand it's potential is. Consult with your CPA to optimize this provision, potentially exempting 20% of your income from taxes, with adjustments to W-2 wages if necessary.

Regular collaboration with your CPA is stressed throughout the year to ensure comprehensive tax planning.

PS: When discussing taxes with your CPA embrace asking questions. If they say we are already utilizing 199A turn it back ground, "but are we maximizing its potential? or "What would it have to look like to maximize it?" 

4. Shop CPA's 

Most balk at this tip. it isn't sexy, it isn't some "tax hack", or cheat code. 

It's hard work and due diligence. If you are uncertain if your tax advisor is optimizing your tax bill it's crucial to get 2nd or 3rd opinions. 

Go to additional CPA's, even ones outside of your working area or even state, and provide them your last three tax returns. 

Ask them to identify potential areas that were overlooked or deductions that you missed. I recommend doing this every three years - you might be surprised what you find. 

Summary

Remember - CPA's are oftentimes paid per filing. They aren't incentivized by how much you save on your taxes....YOU ARE. Start researching tax strategies and bring them to your CPA. To an extent, you must become an expert within your line of work and the opportunities available to you. Use your unfair advantages!

Using the 4 tips above, you should be able to significantly change your tax bill and tax liability. 

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