Tax, SDIRAs & Cost Segregation
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback
Updated over 5 years ago,
Write off or not to write off, that is the question!
Hello BP!
Wanted to get your thoughts on write offs for your business and whether it is worth doing? This could apply to a real estate business or other small business. Basically I jumped off the deep end and quit my W-2 job in May to go full time with my handyman business as well as pursue RE endeavors. Now that I do not have a W-2, financing is going to be tough for future purchases.Wife stays home with the kiddos, so no income there.
Right now I am waiting for a seasoning period to end to refi on my first BRRRR property. However, the income from my business has been greatly reduced because my CPA took advantage of writing off as much as we could to reduce taxes over the last several years. Side note, I have been running my handyman business part time for 3 years while I was working full time and so business income has been recorded in the taxes. The problem will be what my 'income' shows after write offs is low.
The question is, How do you know how much stuff to write off to make sure you don't shoot yourself in the foot for financing? A CPA is not going to know what a bank is looking for, correct?
I recall one of the podcast guests talked about not writing off much because he rather pay the taxes and be able to get financing than not pay taxes and not be able to finance properties.
What are your thoughts and opinions? Write off as much as possible or just a small amount?
I think what I need to do is find a lender who is willing to work along side of me and realize that the properties will cash flow positive after all expenses are accounted for. Basically let the property speak for itself instead of my income guaranteeing it. I know this goes more for commercial loans, so maybe that's what I need to look into but I am interested in BRRRR method so commercial loans are not the correct avenue for that. Having a pile in my retirement accounts I do not think holds much weight in the eyes of the lenders? Maybe ill find a lender in a walmart like Arthur Garcia.