The Tax and Legal Playbook , livre ebook

THE GAME HAS CHANGED!
THE
TAX LEGAL
PLAYBOOK
SECOND EDITION
Game-Changing Solutions to Your Small-Business Questions
MARK J. KOHLER
CPA, Attorney
Entrepreneur Press
Entrepreneur Press, Publisher
Cover Design: Andrew Welyczko
Production and Composition: Eliot House Productions
2019 by Entrepreneur Media, Inc.
All rights reserved.
Reproduction or translation of any part of this work beyond that permitted by Section 107 or 108 of the 1976 United States Copyright Act without permission of the copyright owner is unlawful. Requests for permission or further information should be addressed Entrepreneur Media Inc. Attn: Legal Department, 18061 Fitch, Irvine, CA 92614.
This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional services. If legal advice or other expert assistance is required, the services of a competent professional person should be sought.
Entrepreneur Press is a registered trademark of Entrepreneur Media, Inc.
ebook ISBN: 978-1-61308-403-8
This book is dedicated to all of those trying to make their American Dream a reality in the face of stress, frustration, and opposition, yet stay committed and determined to not give up .
CONTENTS

ACKNOWLEDGMENTS
INTRODUCTION
BUSINESS PLANNING WITH GAME PLANS
The Concept Behind the Complexity of the Tax Cut and Jobs Act
Building and Implementing a Game Plan
What You ll Learn in This Book
How to Read This Book
PART I
PRE-SEASON PLANNING
CHAPTER 1
YOUR GAME PLAN FOR SUCCESS

Six Characteristics for Success
Game Plan Takeaway and Action Items
PART II
GETTING THE MOST FROM YOUR BUSINESS ENTITY
CHAPTER 2
SOLE PROPRIETORSHIPS
Examine Your Business Needs
Game Plan Takeaway and Action Items
CHAPTER 3
LIMITED LIABILITY COMPANIES
Three Major Reasons to Use an LLC
Series LLCs
Do I Need an LLC for Every Rental Property I Own?
Doesn t a Corporation Give Me Better Asset Protection than an LLC?
Game Plan Takeaway and Action Items
CHAPTER 4
S CORPORATIONS
Reasons to Choose an S Corporation
S Corporation Tax Abuse
Choosing the Proper Payroll Level
The Future of S Corporations
Avoiding the Affordable Care Act Tax
How Do I Create an S Corporations and Make the S-Election
Game Plan Takeaway and Action Items
CHAPTER 5
C CORPORATIONS
When the C Corporation Makes Sense
Myths about C Corporations for Small-Business Owners
Finding Trustworthy Advisors
Game Plan Takeaway and Action Items
CHAPTER 6
199A PASS-THROUGH DEDUCTION STRATEGIES
The Basics of the 199A Deduction
The Deception to Maximize the 199A Deduction in an LLC vs. an S Corporation
Game Plan Takeaway and Action Items
CHAPTER 7
BUILDING PERSONAL AND CORPORATE CREDIT
What Is Corporate Credit?
The Relationship Between Your Personal Credit Score and Corporate Credit
Understand Your Personal Credit Score
Eight Steps to Build and Improve Your Personal Credit Score
Eight Steps to Build Corporate Credit
Six Devastating Mistakes to Avoid When Building Corporate Credit
Game Plan Takeaway and Action Items
CHAPTER 8
BATTLEFRONT ASSET PROTECTION FOR YOUR ENTITY
Inside Liability vs. Outside Liability
Four Ways the Corporate Veil Can Be Pierced
LLC Protection is Not Pierce Proof
Dealing with State Cancellation or Termination
Protecting Yourself and the LLC as a Landlord
Is an Umbrella Insurance Policy the Silver Bullet?
Game Plan Takeaway and Action Items
PART III
GAME-WINNING TAX STRATEGIES
CHAPTER 9
THE UNDERUTILIZED BUSINESS TAX DEDUCTIONS
Write-Offs and Being Too Aggressive
Technology, Electronic Equipment, and Supplies
Phone and Internet Service
Travel Expenses
Dining and Entertainment
Home Office Deduction
Hobby Loss Rules
Game Plan Takeaway and Action Items
CHAPTER 10
THE NEW AND IMPROVED VEHICLE DEDUCTION
Cashing in on the Vehicle Deduction
The Auto Deduction: Mileage vs. Actual
Depreciation Is the Key
The Bonus of Bonus Depreciation
General Rules for Choosing Actual or Mileage
Tracking Mileage
SUV and Truck Deduction
Leased Vehicles
RVs for Business
Game Plan Takeaways and Action Items
CHAPTER 11
WISE HEALTH-CARE STRATEGIES
The KohlerCare Strategy
Minimize or Avoid Affordable Care Act Taxes
Choose the Right Health Insurance Policy
Deduct Your Health Insurance Correctly
Use the Small-Business Health Care Tax Credit
Deduct Your Medical Expenses Strategically
Start a Health Savings Account (HSA)
Understand Health Reimbursement Arrangements
Game Plan Takeaway and Action Items
CHAPTER 12
HIRING FAMILY MEMBERS FOR TAX SAVINGS
Paying Children Who Are Under 18
Paying Children 18 and Older
Paying Grandchildren
Do Family Chores Count?
How Young Can My Children Be When I Hire Them?
Will the Kiddie Tax Apply?
Game Plan Takeaway and Action Items
CHAPTER 13
BUYING RENTAL PROPERTIES
Is Real Estate for Everyone?
Ten Steps to Purchasing Your First Rental Property
Four Benefits of Owning Rental Property
Consider Buying a Rental Property Before Contributing to Your IRA or 401(k)
Don t Oversimplify and Disregard the Risks of Rentals
Game Plan Takeaway and Action Items
CHAPTER 14
THE IMPORTANCE OF BASIC BOOKKEEPING
Start with Separate Accounting
Adopt an Accounting System
Get Help Implementing Your Accounting System
Can I Use My Smartphone for Bookkeeping?
What Do I Do with Receipts?
Game Plan Takeaway and Action Items
CHAPTER 15
DEALING WITH THE IRS
12 Ways to Stay on the Good Side of the IRS
How to Respond to an IRS Notice
How to Handle an Audit
Game Plan Takeaway and Action Items
CHAPTER 16
TAX-SAVING STRATEGIES FOR SELLING PROPERTY
Option 1: Pay the Capital Gains Tax
Option 2: Installment Sale
Option 3: Like-Kind/1031 Exchange
Option 4: Opportunity Zones
Option 5: Charitable Remainder Trust
Game Plan Takeaway and Action Items
PART IV
PROTECTING YOUR ASSETS
CHAPTER 17
AFFORDABLE ASSET PROTECTION STRATEGIES
Asset Protection Myths
Basic Asset Protection that Works
Game Plan Takeaway and Action Items
CHAPTER 18
PRIVACY MEASURES VS. HIDING ASSETS
Reasons to Implement a Privacy Plan
Four Stages of Privacy Protection
Going Offshore
Game Plan Takeaway and Action Items
CHAPTER 19
PROTECTING YOUR HOME FROM A LAWSUIT
Common Roadblocks to Protecting Home Equity
Six Ways to Protect Your Home in a Lawsuit
Game Plan Takeaway and Action Items
CHAPTER 20
ASSET PROTECTION IN MARRIAGE AND DIVORCE
Who Owns What?
The Risk of Commingling
Rules in a Community Property State
Division of Property in Common Law States
Creating a Valid Marital Agreement
Marital Agreements and Asset Protection
Estate Planning and Marital Planning
Using Irrevocable Trusts to Avoid Marital Planning
Game Plan Takeaway and Action Items
CHAPTER 21
CUTTING-EDGE ASSET PROTECTION STRATEGIES
Review Your Assets and Potential Risks
Charging Order Protection Entities
Foreign Charging Order Protection Entities
Domestic Asset Protection Trusts
Retirement Plans
Game Plan Takeaway and Action Items
PART V
THE PROPER APPROACH TO PARTNERS AND INVESTORS
CHAPTER 22
DOCUMENTING A PARTNERSHIP
Pre-Partnership Vetting and Documentation
Setting Up the Partnership
The Best Entity for a Partnership
Partnership Management Tips
Game Plan Takeaway and Action Items
CHAPTER 23
BRINGING ON INVESTORS
Investors vs. Silent Partners
Avoiding the SEC Investor Classification
The Crowdfunding Option
Game Plan Takeaway and Action Items
PART VI
PLANNING FOR THE NEXT SEASON
CHAPTER 24
RETIREMENT PLAN OPTIONS
Contribution Options
The Power of the Roth IRA and Roth 401(k)
IRA vs. 401(k)
Small-Business Solo 401(k) Plan
The Back Door Roth IRA
How Do I Set Up a Roth IRA for My Kids?
Can I Self-Direct my Retirement Plan?
Game Plan Takeaway and Action Items
CHAPTER 25
SELF-DIRECTING YOUR RETIREMENT FUNDS
Self-Directed IRA Basics
The IRA/LLC Structure
Buying a Future Retirement Home with Your IRA
UDFI and UBIT Taxes
Asset Protection for Self-Directed IRAs
Game Plan Takeaway and Action Items
CHAPTER 26
FAMILY TRUSTS AND ESTATE PLANNING
Avoiding Probate with a Revocable Living Trust
Estate Tax and the A-B Trust Strategy
Don t Gift Property with a Low Tax Basis
Creative Provisions for Children
Disinheriting a Child
Don t Forget Fido: Pets in Your Estate Plan
The Living Will/Health-Care Directive
Using an Estate Closer
Game Plan Takeaway and Action Items
EPILOGUE
POST-GAME WRAP-UP
PART VII
APPENDICES
APPE