Tax Saving Idea Thread

[Brandon McLean]

Hello!  Let's start a list of ideas we all can do to pay less taxes!  

I heard someone on the podcast recently just briefly say "Learn to live on pre-tax money." And I haven't been able to get that out of my head since. I've been searching around a bit for some real strategies we can start doing to "live on pre-tax" money, but haven't found a real list yet, so I figured we could all collaborate here. 

I have an idea...and maybe a CPA or some other knowledgeable tax expert can help on this...

...so here's my idea:

I want to start paying all our regular ongoing bills and utilities with money straight from the LLC rental income....cell phones (we use our phones for mostly work anyway), electric bill, internet, water, etc etc....

I'm thinking of making a lease where my business rents the home office space from me and my wife, and the rent is roughly equal to the utility payments, or just have that on the lease..."XYZ, LLC will pay Brandon rent by paying the utilities directly"...Our home office is a whole bedroom in our house with desks and printer and computer stations and everything, white board, filing cabinets. The room is 100% used by my business, so I think it's legit to rent it like that. I think it will be better than the home office deduction. (I use the home office deduction for my band, which is my sole proprietorship, another bedroom totally taken over used 100% for band rehearsals)

Please don't say "ask your accountant"...I know, and I have and I will talk to her more about this stuff.  Just curious of what you think of my idea and curious of other ways to legally pay less taxes.

[Natalie Kolodij]

This thread is a disaster waiting to be an explosion of great ideas that don't comply in any way with the IRC. Everyone's circumstances are so different that a catch all thread isn't really a feasible idea. A strategy may save person A. $10k and if executed by person B. will end up costing them $20k. 

Your tax professional should be saving you tons of money through legal, tax savings strategies. 

Running expenses through your LLC doesn't make it a business expense. It does the following:

1. Breaks the corporate veil so your LLC now offers no legal protection as you've intermingled funds with your personal.
2. Makes more work for your Tax person to go through and sort out the expenses that are your non deductible personal expenses which in turn= a higher tax prep bill for you. 

And the second thing you described is just how the home office deduction works. You don't need to rent to your business, ect. Self rentals are a huge frowny face per the IRS.