Episode Details

Katy is flying solo today since Alissa is out teaching a class, but this conversation was too good to push back, so this episode is all about how realtors can lower their taxes. Our guest is Amanda Han, a CPA by day and real estate investor by night, and co-founder of Keystone CPA, where she and her husband help real estate investors nationwide use real estate to legally reduce their tax bill.

Amanda breaks down the real difference between an LLC and an S-corp, and why the decision depends far more on your net profit (not your gross commissions) than most agents realize. She walks through the most common accounting mistakes agents make, why a separate business bank account is the single easiest fix for messy bookkeeping, and how payroll should be set strategically rather than based on what you need to live on month to month. We also get into the investor side of things: depreciation, why it's actually a requirement and not a choice, 1031 exchanges, self-directed retirement accounts you can use to buy real estate, and the difference between temporary and permanent tax savings.

By the end of this conversation, Amanda's goal is to convince every single realtor to become an investor themselves, and honestly, the numbers she shares make a pretty compelling case.

Here's what we cover in this episode: -Why the LLC versus S-corp decision depends on your net profit, not your gross commissions -A general income threshold where an S-corp starts to make financial sense -Why tax planning is a conversation with your CPA, not just filing last year's return -The number one accounting mistake realtors make, and the systems fix that solves it -Why a separate business bank account is the easiest way to stop co-mingling personal and business money -How strategic payroll works for realtors filing as an S-corp, and why it shouldn't match your living expenses -A workaround for agents unsure if they'll be profitable enough for an S-corp this year -Maximizing write-offs: home office, mileage, travel, business meals, and open house expenses -How rental real estate depreciation works, and why it's legally required, not optional -A catch-up option for investors who never took depreciation on a property they already own -1031 exchanges and how they let investors defer taxes while trading up into bigger properties -The concept of step-up basis and how it can eliminate taxes entirely for the next generation -The difference between temporary tax savings and permanent tax savings -Self-directed IRAs and 401(k)s, and how to use retirement funds to invest directly in real estate -How to tell if a "self-directed" account offered by your bank is actually self-directed

Key quotes from this episode: "You don't have to become an accountant and learn all of the tax law. What is the highest and best use of your time?" - Amanda Han "I don't care how much you're getting in commissions. I want to know how much is your profit after all of your expenses and write-offs." - Amanda Han "Depreciation is not a choice. It is actually a requirement." - Amanda Han "You can't retroactively assign income to an entity that didn't exist. So set up the LLC now, even if you're unsure." - Amanda Han "If you're a realtor, you already see the deals. You're walking past wealth-building opportunities every day." - Amanda Han

Products, people, and previous episodes mentioned: -Amanda Han, CPA and co-founder of Keystone CPA -Tax Strategies for the Savvy Real Estate Investor by Amanda Han and Matt MacFarland

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