The Dark Truth About Tax Write Offs
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- čas přidán 29. 05. 2023
- The untold truth about tax write-offs for business that no one talks about. Yes, you can use tax write-offs to save on taxes but they may come with some unexpected consequences.
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Disclaimer: The information provided in this video is for informational purposes only and is not meant to take the place of professional legal, accounting, or financial advice. If you have any legal questions about this video or the subjects discussed, or any other legal matter, you should consult with an attorney or tax professional in your jurisdiction (i.e. where you live).
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Moral of the story is Don’t use lots of write offs the years you need to make big purchases.
Excellent information! Thank you!!
Very well explained, thank you. Surprised I didn’t think of this myself
Thanks! Glad to hear the point came across clearly.
Great Info! I never would have considered the pitfalls of having too many write-offs!
Thanks for watching!
Dope format and info!
Thanks. I had fun wit this one!
Bro u the 🐐
Damn, I need to hire a tax nerd.
Serahack9_solution
This video is a bit misleading. Mortgages and credit cards use gross income to calculate debt to income ratio. Your gross income doesn’t change, it’s still your gross income. The only thing that changes is your deductions which affects how much of that income is taxable.
Write offs do not effect mortgages or credit cards.
Sorry, but that isn’t true. The only deductions that won’t count against you are deductions that don’t actually cost you anything (ex: depreciation). Everything else will reduce you your borrowing power.
@@LYFEAccounting debt to income is calculated on gross income. Your gross income does not drop when you are performing write offs. Masters in Accounting and Finance and CPA here. You are fundamentally wrong in the info you are providing.
Ok, perfect. Let's play a game. Say I have a partnership LLC that had 30k in gross income and 10k in ordinary business income AFTER deductions reported on my K-1. Which of those numbers would be reported on Schedule E of my Form 1040 and eventually flow into my Adjusted Gross Income?
So you are providing a very specific example of flowthrough income to your personal income tax return which is not what you stated in the video. In the video you make the very general assumption that write offs always impact your debt to income ratio. In this example, your personal gross income is impacted. However your business’s gross income has remain unchanged. Therefore if your business stands on its own, and is able to seek credit and loans in your business’s name, creditors will look at the debt to income ratio of your business before any sort of tax deductions.
Your videos have been great and I’ve enjoyed watching them, this is the first one that’s been clickbaity and not transparent. If you want to talk about how write offs impact your personal gross income as it flows through to your personal tax return, then state that clearly. That is not what your video states.
First and foremost, thanks for supporting the channel. I appreciate your feedback.
I gave a pretty common example of flow through income to your personal income tax (most businesses) to illustrate a very common scenario in which your business write-offs can impact your debt-to-income ratio (home loans when self-employed). This is the same real scenario mentioned in the video and actually the exact same guidance and warning that Freddie Mac provides for the self-employed.
You are correct that it is not always the case for situations that don't fit that scenario - thanks for pointing that out.
I have thoughts on business loans but I'll save that for another day.
Overall, thanks for making sure things are mentioned clearly. Noted for next time!
Lesson. Buy a fixer upper to flip. Then new construction home.
I had a question ,Can you write off your pets medical bills?
Breaking News: Lying to the IRS can have consequences!
That's not what this is about at all dude.
10/10