Special Interview with Tax Strategist Shauna A. Wekherlien CEO and Founder of Tax Goddess

[Music] [Music] Hey everyone, retire on dividends here. Uh, right now, I have two special guests that are joining me as we await our very special guest, um, who is arriving in 30 minutes. Apologize for that. Um, but we decided while we wait, we're gonna, um, do some Q&A. Uh, so the community, feel free to ask any questions to Ambassador of Quan. Where is he? Right there. Or TNA Parabolic, right there. Or me. I know you guys are probably sick of me. Um, but, uh, for those of you that maybe aren't familiar with, uh, Best Day Ever, Ambassador of Quan, or Parabolic, would, would you both like to introduce yourselves?

>> Ladies first.

>> Ladies first. Okay. Uh, well, I did not, um, prepare an introduction, but good afternoon, everyone. Um, my name is Parabolic Code. Some of you in the YouTube world know me as TNA. Uh, that actually was a moniker given to me by the Retire on Dividends community because I was a nurse artist, and it happens to be the, um, uh, the ticker symbol for one of his favorite traded funds. So that's how I got TNA. But, uh, yeah, I, um, have a presence on X. Um, I am a nurse by trade, but, uh, in a journey of pivot, pivoting, uh, to investor. Um, I'm a Bitcoin, uh, fan, you could say, and I'm just here for the learning, here for the alpha, and here to give back to the community any way I can.

>> Yay.

>> Thank you.

>> Um, my name is Jonathan. Uh, Best Day Ever. Uh, on X, Ambassador of Quan. Hello. Hope everybody is super well. And you can all blame me for the, the, the mishap on, on the time. I think time zone issues. I don't know. I'm old.

>> That's my fault. That's my go-to.

>> Uh, so that all falls on me. Um, the tax goddess, Shauna, will be here, and, and we'll get that going. But we'd love to, uh, either answer questions or just have some general conversation. Um, we are streaming on X and on YouTube right now, right, Rod?

>> Uh, yes. Yeah, we're on X on YouTube. So if you have questions, whether you're on YouTube or X, we will see it.

>> Um, and, um, Jeremy, I guess I was going to mention this anyway. Obviously, you had some questions today in the Wolf financial space. Do you care to share your the questions, especially about the, you know, the time, the time they do have to pay out, uh, the distribution, 90% distribution?

>> Yeah, I asked them about the, the Rick rule, um, regarding the 90% uh payout of of all income. And, um, I had, had asked ChatGPT and, and tried to do a little research, and it indicated that, um, that, uh, all RICs are given nine months from the close of their financial, uh, year. With YieldMax, that is October 31st. Their fiscal year starts on November 1st, and so that, that means that they are not required to, to pay out till July of the following year. Um, but they did indicate that they attempt to get everything cleared up by the end of the actual calendar year, so that, um, by the time December closes, that all the, the needed payments to qualify under the Rick rule have been made. Um, that, that came from Michael Venuto. So, I, I believe and, and would stand on that information.

>> Whenever you say the Rick Rule, I keep saying thinking you're saying Rick RDE.

>> That back to your wrestling days, right?

>> Exactly. I can't, can't help myself. But, um, was there anything else, um, that was mentioned in the Wolf spaces? I know you were both there. Uh, did, so did either of you hear anything else that we should share with the community? I came a little late.

>> Well, I had a question actually that came up in the community today. When clarity was asking, um, about the difference between distributions and dividends, and his closing statement was, "Okay, so these are distributions, they're not dividends." But I'm not sure that that falls in line with the, with the legal jargon of the prospectus in the SEC. Do you guys have anything to share about that?

>> You want to take that, or you want me to?

>> I mean, distributions. ETFs pay distributions, right? Equities, companies pay dividends. So, um, I know ETFs are the ones that have that Rick rule.

>> Very nice.

>> Yeah.

>> Got that hip action in there, didn't you?

>> Exactly. Um.

>> Good thing you didn't see the, the rest of me. But, um, no. Uh, yeah, I mean, that's, to me, it's as simple as that. Feel free to chime in any further, but to me, it's ETFs, they, they pay distributions, um, and then.

>> Yeah, for, for, for us holders, I think the important distinction is that distributions, which are paid, uh, based on the, the company and organization and not profits from a company, are going to be qualified as income, as opposed to a qualified distribution, which gets taxed differently. So the tax ramification is really what's important there.

>> Yep.

>> Okay.

>> But yes, I think he, I think he had it backwards, meaning I think he was implying that the, that distributions had a tax advantage. And I would, I would gently push back and say distributions actually are, are taxed higher than a dividend from, say, if you own Coca-Cola or a dividend that you would get by owning a T-bill.

>> Okay. I do have another question. Something I was thinking about earlier today. Uh, and I'm not, I'm not seeing anything coming up in the chat, but please interrupt me if you guys see another question pop up there. So, um, for, for distributions, if I don't drip back into the fund, let's say I take the distribution and I buy into another fund, does that have a negative tax, uh, consequence? And my second part to that question is, if I'm manually dripping versus have the automatic drip turned on, does that also have a, a negative tax consequence compared to if I were just to drip right into back into the original fund automatically?

>> Um, what do you mean by negative consequence?

>> Well, is it, does it, uh, do I take a bigger tax hit if I manually drip versus automatic drip? And the second part would be, do I take a, a bigger tax hit if I drip into another fund versus buying back into the original?

>> Me or you?

>> I missed the first part. Um, so I'll let you take it and then I'll follow up from there.

>> Sure. Okay. Um, yes, your, your activity when you divest the cash into anything does not impact your tax liability on that money. That t the liability you have is a one-time liability when when you receive the distribution from the fund that you have. What you do with it, um, doesn't increase or decrease it. Um, it only applies it to something else. So, for example, if you drift it into, um, an equity that's only going to give you capital gains, then that money ultimately down the road, if when you cash that out, would be done capital gains. But as far as the initial activity, there is no liability you tax-wise by dripping it manually versus auto drip versus putting it into your bank account.

>> Oh, okay. So, it's not considered income until I sell?

>> It's considered income. Your distributions from, say, a YieldMax fund or REX shares or Granite shares is considered income the minute it gets sent to you, whether it's auto dripped or put into your cash account.

>> Oh, okay.

>> Yeah, that's a question that comes up, I think, a lot. I think people think because they're dripping it and not collecting the cash per se,

>> they think they don't have to pay taxes, you know, but they do, right?

>> It, uh, just a second.

>> What's that?

>> Yeah. So, um, you know, again, whether they drip or it just goes into their cash bucket, um, you know, it's qualified as the same. Obviously, you know, at the end of the year when you get your 1099, that's really what matters. If it's return of capital or not. Um, but, you know, what you do with it, drip or no drip, that part really doesn't matter.

>> Is there any way to, uh, it looks like we have a question here from Justin. Um, Justin, uh, is saying, "What's your favorite YieldMax, Roundhill, and Granite Shares ETF, and, um, why and why?" He's saying he likes MSTR, YB, BTC, and TSY.

>> Well, I'm gonna let you answer first. How about that?

>> Okay. So, my favorite right now is, um, YieldMax, um, PLTY, PLTY, HOY, uh, WNTR, and, um, let's see, probably SMCY. And why? Um, I like to sell.

>> WNTR and no MSTR.

>> I did not sell all of it. I've got it. I've got some of it.

>> Are you bearish on MSTR?

>> [Applause] I'm just preparing for the bear.

>> Okay. Sorry to interrupt. Who else did you have?

>> Yeah, PLTY. Uh, because they're part of the Pal, Palantir Mafia, of course. You know, they're, they're Trump's, um, you know, golden child. And, uh, let's see what I say. HOY is just a banger of a fund. Um, SMCY for the semiconductor exposure. So, you go.

>> Wait, did you name one from Roundhill and Granite or no?

>> Um, I do have HOY.

>> Okay. And Granite? None.

>> I don't believe I, uh, Is it the TQQQs? I have TQQQY.

>> Yeah. Yeah, that one. Yep.

>> PLYY and XBTFY.

>> Okay. Yeah. No, I'm, uh, for Granite, I'm waiting for a fund of funds, be honest. For Roundhill, I'm WPAY. And then YieldMax, I mean, I'm looking at CHIPY lately, and CHIPY's the champion. Really. They are. No one.

>> Yeah, there you go.

>> Really?

>> No one can touch them. I mean, at like 50, well, I don't know today, but it was at 57.

>> They paid out like.

>> 10 almost 11 bucks.

>> Exactly. And, and they launched at 50. So, and it's not like the market's been perfect. Um, you know, so they, they've been performing pretty good. I'm still a fan of ULTY. I know there's a lot of hate on ULTY, too. MSTR's obviously taken a big hit. Um, but lately, it's, you know, more so YAX. Um, you know, that way, you know, they, they've been adding so many more new funds. It's just YAX is such a good choice. Um, turning into its own S&P in a way.

>> How about you, Ambassador? What are your favorites right now?

>> Uh, short answer is the one that pays me today. Um, the longer answer is, um, it's about the strategy. So, um, and picking the underlying. So, I'm a, I'm a fan of, of, of Palantir. Um, I'm still a fan of, of strategy longer term, meaning, um, it holds the Bitcoin. It ultimately is, uh, is, is going to receive some value. The MNAV, it's going to be what it's going to be. Um, but, uh, I, I am, I am enjoying the strategy employed by REX Shares and their incoming growth funds. I like the, the split of it, and also the fact that it has a little bit of leverage, so that when you do have upside, you get a slight acceleration. Um, but, um, yeah, I, I think it comes down to the individual person and what they're looking for. I mean, if you want 140% yield, you go with Granite Shares. You want a 36% yield, you go with REX Shares. And if you want something in between, you, you pick the others.

>> Yep. And here's a question I'll just answer real quick. Is the distribution taxed as dividend or capital gain?

>> Okay.

>> So, div, the distribution, it's taxed as income, but when you say taxed as a dividend, dividends, it depends on how, how long you hold, um, you know, the underlying that's paying the dividend. So, if you're holding them for the long term, I forget what it is, maybe six months or a year, um, I believe the dividend can be taxed as capital gains. Um, but the distribution, unfortunately, you know, it's, it's going to be income unless they classify it as return of capital. Then obviously, there's no taxes on it, or we'll call it deferred. It's deferred taxes. You know, that's good to always clarify there. Not sure if you want to add anything to that question.

>> No, you, you, you were good.

>> And then, uh, do you, um, Yes, because someone mentioned, um, SPYI and QQQI. Are you familiar with the 1256 and the tax benefits? I think.

>> Yeah, that allows them to do a 60/40 split, which means that it's not all going to be taxed as, as, um, realized income. Uh, some will be taxed at the capital gains rate. So, it is a tax-advantaged way for a fund to distribute its money. So you do have a benefit there because the, uh, capital gains, even if it's short-term capital gains, is, um, is lower than theoretically, you know, the average person's, um, income, uh, level in the, in the, in the tiered income structure of the, of the IRS code.

>> Is it 40% capital gain?

>> Or is it?

>> I'd have to look it up. I don't, I don't, whatever I'd say would be wrong. So if I'm going to say you're right, which means then you're wrong. I know.

>> Yeah. I'm just going to assume it's less to our benefit. So 40% capital gain.

>> You would think that, right?

>> Yeah. Exactly.

>> Never, never to the holder's benefit.

>> No.

>> You can't give us, you can't, they can't give it to us, you know?

>> Um, YAX falls into this, um, category as well, if I'm not mistaken. YAX and YAG.

>> No. Um, the 56, I believe it's an index. You have to.

>> Index. It has to be done on an index for that to happen. Uh-huh.

>> Whoa. Okay.

>> Parabolic, I think what you're talking about is the way that the prospectus is written is that they can, if they want to dump a fund, dump a fund. But let's say they have a chance to to harvest losses on a particular fund inside of YAX. So let's say MSTR at the end of the year, before the year ends, you know, they've lost X number of dollars holding it, they can actually sell that fund and then create a synthetic version of it for 31 days, which allows them to take the tax harvest value of what they've lost on the fund, still meet the criteria, the prospectus by holding a synthetic version of it until the 31 days has passed, and then they can re-buy the actual, um, ETF. Yeah.

>> I didn't realize that. Okay. And then I believe they, when I asked this question of them, they said all future fund of funds would have that, would would have that availability to them that they didn't prior. Um, but I think it's YAX, maybe not YAG, but everything they roll out that's a fund of fund will have that feature, that tax feature. Okay.

>> That's what they've said.

>> Yeah.

>> So I will take them at their word.

>> Hold or sell ULTY?

>> Oh man. Question of the quarter. Well, do you guys own ULTY and would you hold it or sell it, or will you hold it or sell it?

>> I do not hold ULTY. I've never held ULTY. I, um, kind of got a thumbs down on ULTY actually from, from this. So, that's.

>> You.

>> I hold ULTY. Diamond hands. All right. I'm holding. So, Ambassador. Um, I, I bought some ULTY back in October of, of, um, 2024, when they changed the prospectus. And I held it for about six weeks, watched their trades to see how different they were. Didn't see much of a difference. I don't think I gave them long enough, but then I, I sold out at a, at a small loss because I wasn't seeing, um, the advantage of what they changed. That's when they changed the prospectus to be able to do things. I think it took them a while to unwind it and go. But I, I do not hold any ULTY. And, and I also want to say that, that when everybody was like screaming about ULTY being the best thing since sliced bread, I actually said in a Wolf space, I said, "Are you guys afraid that this is going to turn?" Because it really hasn't changed as much as people are saying it is. And, um, and unfortunately, it seems like that is coming to pass. You're getting as much hate as you were love a couple months ago.

>> Yeah. But I think they're used to that, right?

>> Michael Bonito said he was.

>> What a beating.

>> Man.

>> It's a love-hate relationship. Um, question from Nikki. Um, so she's asking, if it all depends on the person's situation, ROC or tax. So, you know, what I would, everyone has a different cost basis. Everyone buys at a different time. So, you don't really know what your own return of capital will be till really till you get your 1099, right? So, from your brokerage. Um, I know even what you see on the YieldMax or whatever website, that's an estimate, right? It's an estimate. Um, plus, it's not based on when you got in the fund either. So, um, it's safe to always base it on your 1099. I don't know if brokers, do brokers offer like an estimate themselves based on your account? I don't think so. No, that's too much work, probably.

>> Yeah.

>> Okay. Um, see if there's any other questions.

>> There's something, a comment here from Marsha. Do you see she's got a purple icon?

>> Purple. There you go. Is that a question? Capital gains only come into play when you sell shares held over a year. Dividends receive their tax at regular tax rates unless held in a tax-advantaged account.

>> Dividends are received taxed at regular tax rates. Okay. Yeah.

>> So, dividends, I thought it was six months. I don't know. Um, where they're taxed as capital gains. Could be a year, but I'm not sure if she's talking about selling in general or dividends. Well, though.

>> I'm starting to think that now whenever, because you guys know that I've recently moved, um, some quite a bit of money actually, um, into cash, uh, margin cash account and margin account. So, not tax-advantaged. And I'm starting to think that now these dividends I'm receiving in there, I should just automatically be putting 22% aside for taxes.

>> I mean, everyone, it's hard to say. Everyone's different, right? Um, but if, what, again, what I do, I just adjust my, uh, my W2, right? I take out more taxes. And.

>> Oh, yeah. It's kind of forgotten. But yeah, I would not rely on 100% return of capital if that's what you're asking.

>> No.

>> I don't know. I don't know the number either, right? So, unless you're investing in X-pay, which is 100% return of capital, or I know there's some other funds that usually are. It's not, I would just, I would plan to pay taxes on the whole thing, um, on all of it. And what if there's a loss on the shares? That, that loss isn't realized until you sell the shares. So, you're really not claiming, you're not able to claim a loss unless you, and that's, and that only counts if, if you hadn't bought the shares 30 days prior or 30 days after the moment you're trying to harvest the tax loss.

>> Talking about the wash sale.

>> Yeah. Yeah.

>> Yeah. Yeah, tax loss harvesting is, uh, in the fiscal year for the fiscal year, and then you can't re-buy the equity or, or whatever it is, or one that is considered like or similar.

>> And you can't have it, ha, you can't have bought it in the last 30 days prior. Yeah, you have to, to do that. It has to qualify for, um, capital gains, which means it's 31 days on either side.

>> On either side. What a trick, right? Because see, maybe, um, I'm just dripping and everything's going fine, and here we are in October, November, and all of a sudden, a person decides to offload some shares and, oh well, I, it won't count because I just bought it in the last 30 days.

>> That's tricky.

>> Yeah. And then if you take a loss, and you already got paid return of capital, you have to take that into consideration because again, you deferred the taxes on, um, on those payouts. So, there's a lot to consider there.

>> All right. Uh, oh, someone asked about dividends. What if all your income is dividends? Isn't there, if it's actually dividends, isn't there like a no, no tax for first amount, certain amount? I forget. Isn't there a benefit to, you know, actual dividends?

>> Well, there is a benefit to it if it's, if it's qualified dividends. For example, in the T-bill ladders that I have, they're going to be taxed differently and, um, usually exempt from state income tax. Also, if you have state income tax, but those are a different kind of dividend than you're getting from YieldMax, REX Shares, or Granite Shares. Um, they're just qualified differently by the IRS.

>> Yeah. Okay. Good old state tax.

>> None here in Tennessee, my friend.

>> Yeah.

>> Or in Florida.

>> Florida.

>> Yeah, I know.

>> Or Texas.

>> Yeah. Yeah. Yeah.

>> Or Texas. Or South Dakota.

>> Yep. You, or.

>> New Jersey.

>> Montana. Do they.

>> Over first?

>> There's a few questions coming in. Stephen Martin.

>> Uh, is that a question? You know, I tell these people, type the word question and then ask the question.

>> All right, Nikki. Florida in the house. Well, Nikki's a trader. Um, she's another Jersey girl that left for Florida, so, you know, I don't know about that. The first 48K in dividends is taxed at zero. The next 15% and the L.

>> Really? Oh.

>> I mean, I don't know. I mean, I, if you lived off dividend income, I know there was a benefit. I don't know the numbers. That could be right. Um, I remember being 20 something thousand, but that was many years ago. So maybe with inflation, uh, they're generous. So I'll have to look that up after.

>> Okay. So that's interesting. So that's if your income is 100% dividend income?

>> I think. So don't quote me on that, but there's.

>> Right. Not tax advice. Not financial advice.

>> Yeah. Not, nothing. Just, uh.

>> Medical advice.

>> Nope. Just a show about nothing with about nothing advice. That's, uh.

>> But the real question is, are you master of your own domain?

>> Yes. Well.

>> I am king of the castle. I forget what George said, but.

>> On our way for sure. On our way.

>> Florida, too. Everyone's in Florida. Florida. Florida. Florida.

>> Florida is where it's at.

>> You guys in your no state income tax. Hey, and, and there, there's a movement in Florida to get rid of, uh, your, um, tax on your home, too.

>> Yes. I love that.

>> I, if that's the case, I'd even think about moving there. That's ridic, that's just ridiculous. You own your home and you got to pay taxes, which means you actually really don't own your home because if you don't pay, they come and take it from you. It's just, it's.

>> Yeah.

>> Ludicrous. Farcal, redonkulous. Like 8,000 a year now for property tax. Not even 2,000 square feet.

>> Oh, 8,000 a year. Oh my gosh.

>> And that's cheap. Like people I work with, they pay like 20,000. So.

>> Unbelievable.

>> Yeah. It's robbery.

>> It's theft.

>> Theft.

>> Particularly in our, um, you know, our very elderly populations. You know, one income, spouse loss, you know, they were planning on living in that little house until they, you know, as long as their life would allow them to. Uh, New Hampshire, uh, Stephen Martin says New Hampshire just went tax-free on dividends for 2025. Wow, congrats.

>> 4,400 in Maryland. That's not terrible. Yeah, I've got rentals in multiple states and it's crazy the differential between tax, uh, tax rates in, in different states. It's just crazy.

>> Yeah. Yeah. Ours is mainly for the schools. Most of the, the break when I get the breakdown, I always try to look at it and understand it, but it's just school, the schools, and the schools sucked. So, it, it's like, you know.

>> I am a.

>> Yeah.

>> I am a, what's the word?

>> We get it.

>> I'm proof of that.

>> Oh, no. I thought you were gonna say something really off the chain there. So.

>> Not, I'm always keeping it clean. All right. So, uh, any minute now, um, our tax goddess will be approaching, but feel free to type in any questions. You know, ask Parabolic any question you want. Um, she's here. She's here for the Q&A.

>> Well, it's not exactly an AMA, but yeah. No.

>> It's a, whatever.

>> It's great to be with you guys. We look forward to bringing the tax goddess in. Uh, looks like Richard Woollies said, "Still not as bad as Canadians." Clive. Um, the Canadians are taxed. The Americans are taxed.

>> My laptop is like burning. Hopefully it stays on. But oh, she's joining.

>> Great. Welcome our guest.

>> Oh, right on time.

>> Yeah. All right. So, I'm going to uh.

>> In my face.

>> I'm going to welcome the tax goddess to the stage. So Shauna, if you can hear us, just so you know, we are live and I'm about to add you to the stage.

>> Okay.

>> Okay, good. You can hear us.

>> Hi everybody. How's it going?

>> Hello. Welcome.

>> Thanks so much for having me. I'm excited to be here.

>> Oh, welcome. Welcome.

>> Oh, thank you for being here. Um, we were here since one thanks to Jonathan. Um, but, uh, it's all right. Uh, no, it's, we were, we went live early just to, you know, get them warmed up for you. Um, but I, you know, we greatly appreciate you being here. Um.

>> My pleasure.

>> I'm gonna hand it over to Jonathan. He's the world's best, uh, introductory person, um, on any, you know, interview. So, uh, I'll let him do the work from here, but it's a pleasure to meet you.

>> Thank you. You too. Hi.

>> First, I just want to say a private hello. Appreciate you. Hope everything back in Scottsdale is wonderful.

>> Oh, you're a sweetheart. The weather has been gorgeous. Other than the monsoons that came through like tornado, but they're gone and now we get that beautiful patio weather, drinking tea. It's gorgeous. I love it.

>> All right. So, we'll, we'll go with the official introduction and then when I'm done, you can, you can remind me of anything I've missed. All right. Okay. So, today we're going to be streaming live on YouTube and X. And we're joined by one of the nation's elite certified tax strategists, Shauna. And I think it's Welkerland. Am I saying.

>> Tax Goddess, Shauna the Tax Goddess is perfect with the last name. Not even worth it.

>> All right, Shauna the Tax Goddess. And she's a CPA and one of the nation's elite certified tax strategists ranked in the top 1% of all tax professionals nationwide, featured in Forbes and other periodicals. She has a master's in taxation and over two decades of experience. She's the CEO and founder of the Tax Goddess Business Services with a client track work track record of saving more than, and this is with a B, folks, $2.03 billion for her clients.

>> Yes.

>> She specializes in engineering tax structures which turns high net worth individuals into successful tax-efficient business owners. And I can personally vouch, uh, I've been a client of hers for 11 years and have loved every minute and there hasn't been a penny that I've spent that hasn't been ROI to me at least five to tenfold. So, um, I'm just happy that she's here, that she was willing to give us a little bit of time, and thank you very much. What did I miss?

>> Uh, absolutely nothing. I'm, I'm here to get into the guts of tax strategy. So I'm ready to start when you are.

>> Perfect. Perfect. Okay. So let's get start where most people get struck, or stuck, and that's in structure. Um, you've often said the biggest distinction between success and stress is whether someone treats their investing like a business or like just income. Let's start there. What's the key distinction between personal portfolio and true, a true income business?

>> You got it. So this is all about the IRS's definitions. Okay. So really, you have a choice, and it's very much based on the actual activity that you do. So I'll use myself as an example. So I'm a CPA, I'm a strategist, right? I, I spend the bulk of my day looking at tax strategy. Now, I have a portfolio and I do options trading, but it's on the side. It's not, it's not what I do full-time. That's not, you know, my main source of revenue. That's not how I make my money. So for me, options trading is an investment, right? It's not my primary source of business. If you day trade, if you are looking at building dividends, if you're looking at building investment portfolios, if you're, if that's what you do, that's how you make your money, that's how you pay your bills and eat steak on a Sunday, right? That is your primary business. Now, whichever one is your primary business, will have self-employment tax on it. And that's really kind of one of the keys here as to how does the IRS look at whether you have a business or whether it's an investment. So it can be a double-edged sword because the self-employment tax is 15.3%. So if you're a day trader and, and the investment side is your self-employed business, you will pay self-employment tax, that extra 15.3% on any profits. But that's the entire point of having strategy is once it's a business, our job is to make you look poor. You make all the cash, but you look poor legally, above board for the IRS. So there is no self-employment tax, there is no income tax if you're using all the business strategies as a business. So step one is you got to figure out, well, which one are you really?

>> Okay. So, a lot of the people that are going to be listening to this are participating in, I sent you a little bit of information on it because I didn't know how versed you'd be in, but there's a whole new asset class of ETFs that are options-based and or leverage-based that pay out distributions in excess of 60, 80, 100%. Which means there are people now having income on top of their W2 income that is changing their tax brackets. So for someone earning high yield income, when does it make sense to form an entity and what's, what should come first, doing it or the actual entity itself? How would you structure that?

>> I love it. I'm going to, I'm going to answer the second question first, which is when do you do it? Um, make the money first because you may get into it and I hope it's all amazing and I hope you have nothing but positive returns, right? But it may not on the other side, right? Um, I am not a big fan of setting up businesses and trusts and shelters and all these kinds of things until you have the money, the funds that you actually need those kinds of structures, right? Keep it simple until you need whatever that is. So, a lot of it depends on how big is your W2, how much in the earnings, you know, there are number categories here, right? Generally, you start looking at tax strategies, forming a business because there's, there's costs, right? You have separate accounting, you have a separate legal fee, you have operating agreements. There's all these things that you have to do to set up the business and maintain it. Tax returns, all those things that have to happen. So, we generally don't recommend going down that path until you've made at least about 70 or $80,000 worth of profit on whatever it is you're doing. Now, if Oh, go ahead.

>> No, no, go ahead. Go ahead. I was just going to say, if that's in the first month and you've made $80,000, uh, yeah, get on it now because obviously those numbers are going to skyrocket. But if you're making two, three, $5,000 a month, get into it. Learn, learn all the systems of what you're actually doing first, and then you can start looking at, okay, now it's time to pay the attorney $5,000 to set this thing up. Now it's time to pay the $5,000 for the bookkeeping and getting the tax return done. Right? Those, those kinds of pieces. So.

>> So when you say the 70,000 mark, just to qualify or quantify that, are you saying like if I had combined W2 and distributions that were equitable to that, or just the one or the other?

>> Just the distributions. Yeah. If, if you've got a W2, we really start. So, forget any extra earnings of any kind. If you're a W2, um, having a business and, and not just investments, but a business is the best way to reduce your taxes across the board because you can access all the business strategies, right? That's, that is the perfect combination other than if you're married to a real estate professional. That's the other like golden swan in, in the IRS code. Okay? But having a business is good. Now, if your W2 is making $50,000 and you set up a business and the business is making 50, you're okay, right? I'm still not sure that it would really be worthwhile all the money, effort, extra stress because there's a lot of things to owning a business, right? It's not passive. You're in it every day. You know, it, it is a business. You have to run it and manage it like a business. But if your W2 is 100,000, you're making 100,000, 70,000 on the dividend side, I would go that path. So.

>> Okay. Can you unpack an S-corp compensation plan and how salary versus distribution split, uh, minimizes self-employment tax?

>> You got it. So, let's run the example that this your business is making $100,000. Okay? That money, the $100,000 you're making is going to hit your S corporation account because the account is owned by the S corporation. The way that the regulations work for an S corporation is there's two ways to get money out of an S-corp. The first one is distributions. The second one is salary. Okay? Now, distributions have no self-employment tax on them. There's no 15.3%. Even though you're an active trader, active business, all the thing, there's no self-employment tax on distributions. So, as a business owner, you want all of your money to come to distributions. Guess what they did? They pit the IRS against you, right? The IRS wants 100% of your money to go through wages because on wages they get the self-employment tax.

>> So the general rule of thumb is if you're taking at least 30% in wages and 70% in distributions, the IRS will generally leave you alone, right? You can never promise something like that. Those, that's the general rule of thumb. The other way to do it, and this is when your numbers start getting much, much bigger. So, when you're making 200, 300, 400, $500,000 of profit inside the S-corp. The other way to do it is your wages can be tied to something called reasonable compensation. So, you can go to salary.com. Um, you know, they have companies that do wage compensation studies and you say, listen, for my business, right, for my S-corp, I am a day trader. How much money does a day trader get paid for a little, you know, you're not working at at one of the big brokerage houses, right? You're a little tiny day trader. So, how much money does a day trader get paid? Well, maybe the wages are a h 100,000. Reasonable comp is 100,000. So, out of your $500,000 portfolio, even though it's only 20%, it's tied to reasonable compensation. You don't have to run 30% in wages. So, you can pick one or the other of those two rules and, and be pretty safe with the IRS.

>> All right. So, let me give you a quick scenario and then could you tell me which entity I might be leaning towards? Okay.

>> So, let's say I have a $180,000 portfolio in, uh, this distribution kind of machine or this income machine. And from that $180,000, I'm anticipating maybe getting $120,000 worth of distribution, uh, over the annual year. Am I looking at an S-corp, C-corp, LLC? What is your, which, which direction are you pointing me in?

>> Absolutely. There's a million and one questions that have to be answered before we can answer you. So the first one is, and, and let me split this out just so everybody understands. There's the legal side and there's the tax side. Okay? And these are different, even though some of the names are the same. So in the legal side, you have nothing, right? You're, you're just, there's no entity of any kind. There's an LLC, a partnership, or an INC. Okay? On the tax side, the, there is no LLC tax. An LLC is taxed as an S-corp, a partnership, a C-corp, a sole proprietorship. You can have partnerships separately, that legal partnership that's taxed as a partnership, or an INC on the legal side can be taxed as an S-corp or a C-corp. So the very first question is, we've got to get the lawyer into the conversation because until we know what kind of legal entity you are, and the legal entity will be chosen by, are you married? What state are you in, right? Certain states have better legal laws than others. Delaware, Texas, right? All those kinds of things. Um, is this sole and separate property? So, if you're married, is it only yours or is it all like 50/50 between you and your spouse? So, depending on the legal structure will then inform what options do we have on the tax side. Now, most people end up forming an LLC, right? It's the most flexible out of all of the entity types in the US. And an LLC can be taxed in any of the different partnership, S-corp, C-corp, or nothing disregarded. Which one to choose is based on how much money you're making. So you said 120,000, right? On the profit side. Okay. So we're not going to go disregarded. That's too much for disregarded.

>> Then the next question is, is it you and your spouse? If it's you and your spouse, you can choose any of the three. If it's.

>> When you say you and your spouse, are you talking about how you file? How the business itself is owned.

>> Okay.

>> That's that legal, going back to that legal question, right? So, if it's you and your spouse, you can be a partnership because there's two people, right? So, you could be a partnership. Partnerships are the most flexible in the tax code. So, for example, if it's a 50/50 ownership, um, and the husband, you know, wants to buy a new car, but the wife wants to leave her money in, she doesn't want to take it out. The husband can take out a distribution. The wife doesn't have to. In an S corporation, if they both, if one takes a draw, the other one has to take a draw. So, a lot of the question of which type of entity you choose for tax purposes is not only dependent on how much money you're making, but what kind of flexibility do you want? You know, do, do you want the ability to change, one person does one thing, one person does another. And then the third one, the C-corp, is honestly dependent on your total portfolio of income. So, if your W2 is 100,000 and you're making 120 on the dividends inside the business, the total is 220. You're probably sitting at about a 20% tax bracket at the individual side. But let's say your W2 is a million dollars and you're making 120,000. Your tax bracket on the personal side is 37%. You might choose a C-corporation, which has a maximum of 21% tax rate. So, there's a lot of pieces here and it's one of my favorite questions because everybody says, "Shauna, right out the gate, tell me what I'm supposed to be." I'm like, "We need like 20 answers before we can answer you to to make sure that it's right." And, and this is a key when I talk to people and say, "Listen, I can tell you the general, but you want to have somebody strong that that can at least understand what I just said that they can kind of talk about the differences to be able to work with like feet on the ground because you don't want somebody, if somebody says, 'Oh, every single one of you should be an S-corp.' Why? Like that doesn't make sense, right? You want somebody that's going to ask you questions before just putting you into something." So.

>> Okay. So, I, if, if we're in that place and we just don't know enough, how do I know the right questions to ask? Where do I go? How do I figure that out so that I can, I can at least start, you know, at square one that's going to benefit me and my loved ones?

>> Absolutely. And, you know, the one thing everybody's kind of a little nervous about the AI. This is a perfect question for AI. I am about to go interview a CPA. I'm about to go interview a tax strategist. And I'm about to go interview the lawyer, the three people that like would work together to make this decision. What are the questions I need to ask them that are kind of give me four easy questions and one tricky question plus the answer? Because my favorite one, and I know we're not talking about real estate here, but for my real estate folks, if you ask the CPA what a cost segregation study is and they give you that blank look, run away, okay? Because they don't know anything about it and you need to find a CPA that knows what you're doing, right? So also give the, give the AI the industry, the category, like this is what this is what we're doing. This is our business model. Um, what, what are the questions I need to be asking? So.

>> Okay. So, for, because I want to make sure we have some practical giveaways here for people to walk away. So if I am that person that has that 180,000 and I'm going to make $120,000 in distributions because we're already into October and I know what's my, what's my step? What do I do when I get off this this live here? What, what do I do first?

>> Absolutely. Um, do, do we have a business? Don't have a business. What? Give me.

>> Let's say I don't have a business now.

>> No business. Okay. So, it's just you. You're an individual. You're not at the business level yet, right? You're just, you're just getting payouts.

>> Your taxable, your taxable income is going to be about 300,000. The 180 plus the 120. Very first thing I would do is call my CPA and say, "Okay, I'm going to have $300,000 worth of income this year. What strategies can you implement that will help me reduce this?" And a good CPA, you really have three, in my mind, three different categories of CPAs. You have the first CPA who says, "Yeah, we'll look at that in April." No, we won't. I'm, I'm leaving that CPA because in order to do tax strategy, you need to do it before December 31st, right? So, if that's your CPA, you run away. You find a new CPA. Okay. If your CPA says, "Oh, that's great. Thanks so much for calling me." Yeah, we can, um, buy a car. We can put the kids on payroll. They, they give you some basic maybe strategies, things that we can look at. Um, let's max out that 401k at work, right? Any, any of what we would call the low-hanging fruit. That's a good CPA. Talk to them. See, get everything you can from them. Implement what they tell you to do. Okay.

>> Um, just, can I interject? Is this the idea or the concept of what you're talking about making yourself look poor?

>> Yes, absolutely. 100%. Because what you're trying to do is get really to pay no tax, you have to look like you made zero, right? So, if you made 300,000, how do we get from 300,000 to zero, right? Now, that might be, uh, buy a rental property and set it up for Airbnb. It's November. You may not have enough time for that at the end of the year, right? So you're really, what you're doing is you're trying to look for strategies that can help you before the end of the year. Okay. Now, what I talk about the three levels of CPAs here, right? That the second level, they will give you things that they know, but they don't necessarily know what else to give you, right? So, let's say they get you from 300,000, they get you down to 250. You're still going to pay tax on the 250. The third level is where you find a strategist because if you're not happy with however much in tax you're going to pay on whatever's left after the CPA did their thing, that's when you find a strategist, right? So.

>> Okay. So, let's say we're there and we are agreeing and we're, we're, we're tracking so far. Um, and I have the action plan. So, now I've, I've, I have an accountant. Um, they're not, they're getting me to the 250, but I want to get down to say.

70,000. So my tax bracket is not overwhelming, and I'm not keeping the distributions that came to me in the fashion that I want to. Okay.

Um, what are the, what are the few high-level write-offs that business owners can take, but individuals can't, that would make it worth my while to become a business? I love it. Okay. Uh, the high- So, let me, I'm going to repeat it back. Make sure we're on the same page. So, this is now, I am an active trader. This is my business. I'm, I'm active in the business. Well, can I, can I, can I say that? That I'm not sure that those of us who hold these ETFs would be considered active. They are passive events, meaning we, we purchase an ETF, it distributes because it is active selling calls, puts, doing options on it, and it distributes the income that they've earned either on the underlying synthetic that moves and or their actions themselves. They're giving us a distribution of the of the income they have earned.

Yes. Can this be categorized as a business?

No. If you're not for you, right? If you're passive, if you have this other W2, and this is a passive investment, this is a passive investment, not a business.

And so, what we have to look at then is we're looking at passive tax strategies because they exist, right? Passive tax strategies exist. What you might want to look at then is also investing in oil and gas, solar, historic preservation easements. Uh, there's other types of investments and, and it's still an investment, right? It's not a business. There's other types of investments that where you can put some of that profit and get massive tax write-offs to offset the the profit that you're making, these distributions that you're making.

So, that would be something to look at. So, can I, can I just qualify that for my, my PE brain so that perhaps somebody else is having the same question? So, if I do not have a current business entity set up and I just wanted to start one because I'm holding some of these funds, you're saying, "Nuh, uh-uh." But if I were to have a business entity already set up, I could open up an investment account for that business entity that would hold some of these, and it would then, those, those distributions made would be part of that business?

Nope, let me back up. I, I misexplained something somewhere. So, great question, and thank you for asking me. So, let me back up. It, it doesn't matter if the business holds the investment. It doesn't matter if, like, the, the, the thing producing the 120, right? Doesn't matter if the business owns it. Doesn't matter if you own it. It's about your activity and whether you are an active participant, right? A professional, and it brings it to the level of being a business, or whether it is truly an investment. So, if it's truly an investment, you put your money in, they do whatever they're going to do, they spit out money, then it's investment, and it's considered passive, and the only way to do anything with it is to also get passive deductible strategies. If, on the other side, you rise to the level of a business owner, like a day trader kind of level, and you are actively managing, and you're actively working the file, and you're actively finding new investments, and you, and you know, there are requirements, it's probably a lot more than we can get into here, but there are specific IRS almost flowcharts about whether you qualify as a business or don't, whether you're an investor or business, right? Um, if you qualify as a business, that's where all the, the tax strategies live. And that's what you want. That's what you want to fight for is to have and to be qualified as a business, because that's where you can write off home office, and you buy the Hummer, and you write off your dogs for security, and you, you know, all the things you have to be a business owner. Have to.

I was just going to ask too, kind of mentioned it. What defines active? Because you could say, "Oh, I'm active." Right? But it sounds like there's predetermined definitions that you have to prove.

You have to prove that you're active, and, and there's really three levels. There's an investment, there's active, and then there's true business owner, right?

So, if, if you are receiving, if you, you know, there's this other, sorry, this other company over here, and they're doing everything they're doing, and you're receiving payouts, you are not a part of any of their activity. You don't sit on their board. You don't make day-to-day decisions, right? You're just receiving the income. Is that, am I understand that right? You're just receiving whatever payouts they decide to send you.

Can I?

So,

Could I paint a scenario and then you could, you could fill it in for me?

So, let's say I, I start an LLC because I'm a, um, a media influencer, social media influencer. I have a YouTube channel. I get paid by the YouTube channel. I'm on X. I get money from X. I also do, um, affiliate stuff, and I'm making money. But at the same time, I also have an account where I'm selling options and making some, some premiums from selling options actively. And then I also hold some of these funds that pay me passive. Are those funds that are coming from the passive, are they going to be able to be included in this whole, whole kind of, uh, package of a business?

It's a great question, and this is where facts and circumstances will always, that's what the IRS calls it, facts and circumstances, whether or not the IRS will allow it. Okay. Um, so, and, and I'm not an auditor, right? I don't work for the IRS, right? I'm an independent. So, the, if I were an auditor, the first thing that I would look at is, well, how much money are you making from each location, right? And how much work are you doing? So, you know, you would ask, well, what, what are the, a 100 hours a year? 500 hours a year? There's kind of these like limits, right, that you have to track. How much work is being done? Um, if you know, what it sounds like, YouTube and X is active. You're on it every day. You're posting, like, that's where your activity is. And this sounds like a passive activity, right? You're, you aren't doing anything. You, you put money in, and you're receiving income from it. So, that sounds passive. Now, the other investments, because you also said there's a third bucket of investment over here. Uh, those are you spending an hour a week on those? Like, those two may be able to offset each other, but if both of them are making profit, there's nothing to offset, right? They're both positive. So, having it just because it's all under one umbrella, even inside, like an S corporation, for example, you may still end up with active business XY YouTube income and passive income. And both of those will flow through to the personal return as either active or passive. So, you may or may not be able to offset expenses against that.

Um, Rod, did, did that answer the question, or did you want to follow up?

No, that answered the question. Um, I was going to say, in your scenario, were you me?

No, not at all.

Okay. I mean, I, I think the biggest thing, you know, when we look at, if, if these investments are really the primary source of your money, what you want to be looking at to make them active, to be able to write expenses off of that, is how do I get qualified as the status of a day trader? That's, that's should be the focus. If that's, if that's where the bulk of your money is coming in, what, what kinds of things do I need to do to qualify as a day trader? And, and if you think about, like, just even the term day trader, they're at their computer eight hours a day trading, right? They're like, that's what they actively do. When they are out, the IRS has used this in court cases. They'll ask the neighbor, "Well, what does that guy do for a living?" And if the neighbor says, "Oh, no, he's a general construction manager." Well, you're not a day trader. Your neighbors don't think you're a day trader. How are you a day trader? Right? So, they use almost circumstantial external kind of evidence. What, what title do you put on your tax return, on your personal tax return? Do you say general construction or YouTube star, or do you say day trader? Right? So, it's all of these little kind of things that the IRS will try to pick it apart. Um, and, and you do have to consider the other side of this, guys, right? Because let's back up. If you are a day trader and you have profit that you can't write off, right? Like, you've done everything you can. You've done even tax strategist specialty level things, and you can't get to zero, you will pay 15.3% extra on top of income tax on that. If you are just an investor, you're going to pay whatever your tax bracket is, right? So, you do also want to run those calculations. You know, if you're making 10,000, 15,000, an investor is probably better. Leave it alone, right? But once you hit, that's where that 70,000, right? Once you start getting bigger numbers, and, and that starts to become your full-time business, active, this is what you do. You are a day trader. Now you have a business, right? Now you've got self-employment tax if you can't get it to zero. So.

Yeah, most people here, I would say, if they're not just getting the passive income, they are options traders. So, when you say like day trader, options trader kind of has the same classification. Is that correct?

Yeah, as long, you know, and, and this is where it's so, I wish I could give you like, this is the answer, but it's absolutely facts and circumstance-based, right? And, and so again, I go back to myself. I, I trade options. I check my portfolio three times a week, an hour each time, right? But that's three hours out of like 40 or 50 that I spend doing tax strategy. So, I would never, even though I am an options trader, that would never be considered my primary, my primary source of revenue, my primary job, my primary anything, right?

I love that. You're an options trader, by the way. That's true.

Thank you. I was very happy with ASNL recently. Somebody stole one of my long options. I'm like, "Oh, I have to make a gain. How terrible." So, um, that, thank you. That was that was.

Okay. So, final question for me at this, and then I want to make sure that we get some, some, uh, audience listeners questions in because this really should be for them. But I do. So, if you were talking to somebody in the audience who was of that scenario, meaning they've got $180,000 in this and they're, they're expecting 120, what are you recommending or what can you tell them or how should they approach it to be able to try to not cheat anything but keep as much of that as they possibly can? Are there things that they can do to benefit themselves in a way that they're not paying the 37% or, you know, the tiered amount and the most amount of income based on it being qualified as, as regular income?

You know, and, and I hope y'all don't take any, any offense at this, but the thing that people miss the most, and, and I hope it's okay if I'm a little, can I be direct? Can I just be very direct? Get off your ass.

Get, get on it. Okay? Because what happens, no doubt, no fail, is we as strategists, we get a telephone call December 30th. I made 120. I don't know what to do. There's nothing. I'm already drinking champagne and eating cookies, honey. Like, there's nothing we can do in the one day that you left yourself. And so, here we are, you know, October 22nd. If you have not already started talking to your CPA, and, and if they can't get you strategies, start talking to a strategist. Like, you're, you're behind. You're way behind. Way behind. So, the most important thing you can do is start, start making calls. Pick up the phone, call your CPA, tell them what's going on, see if they can help you with planning. And if they can't, um, I, I know not everybody. We work, Tax Goddess works specifically with business owners, right? But there's lots of, do you see all the qualifications after my name? CTC is the, the type of person you're looking for. They are certified tax coaches. CTC. Um, each of us specialize in different things, right? So, we specialize in business owner specifics, right? So, if you are a day trader, and that's your thing, call us. We'd be happy to help you, okay? Um, but if you're not, if you're the W2, and this is, this really is kind of more of the investment, and you're trying to figure out some strategies, if you go to the AICTP, um, so, um, American Institute of Certified Tax Professionals, you can look for people that have the same qualification, the CTC qualification. Start making calls, right? Just talk to them, interview them. This is what I have. This is what I do. What can you do for me?

Right?

Okay. And, and if I did make that call on this now for next year, what, what things would you be, or what things would I be doing to try to, to, to get ahead of the game?

Absolutely. Step one is any good strategist is going to ask you a million questions. Our questionnaire to, to figure out what strategies you should do, right? Again, because are you married? Do you have kids? Do you have another business? Uh, do you have dogs? Like, I mean, there's so many little factors that build into which strategies are going to work best for you and your family. So, really, what you're looking for is somebody that is going to gather a ton of data, right? Because, and, and I think I don't know if you can see her or not. I think her head's cut off by my little name tag, but one of my security deductions is sleeping right there on the floor. Right. I have two German.

I remember. I remember.

Yes. All, all the good bits. So, you know, if you have a larger dog, right? If you have a dog where its shoulder is taller than the height of your knee, and they've got a purpose, right? I have client files on site here, nobody's going to mess with two German shepherds, right? These are security write-offs. So, a lot of these little tiny bits and pieces and factors will change which strategies are going to work for you. So.

Okay. So, it's going to be individual based, but what I, what I want to do now is kind of turn it over to, to, um, Parabolic. There, there have been questions that have been in the feed today that I want to make sure get answered because you, the people who are here listening, it's really important for them to be able to, to get some understanding. But before we end, I want to make sure that we touch on return of capital, because it is, it is a huge dialogue within this community, um, and things. So, I want to get it from your opinion, but, um, uh, Parabolic, if you have people with questions, or I've seen them pop up, would you go ahead and and share those so that we, and have the goddess, uh, give us some answers?

Yes, thank you, Shauna, and thank you, Ambassador. Uh, we have a question from A1, and it is, if on SSDI, does the distros received as income, is it not still passive income as all dividends and distributions are?

I'm, I'm going to try to repeat that question. Oh, thank you so much. Let me, let me try and read that. If on SSDI, does the district received, is it still not passive? I, I think you're asking me if it is passive or not passive. Social Security income doesn't really play into this from that standpoint. Like, you yourself are either an active or business owner, or you're passive. So, whatever, whatever you are is what would determine the taxation of the dividends and distribution. I hope that answers the question.

Awesome. Thank you. And, um, and he did say, "By the way, I drip everything, um, distributions and dividends. I drip it all back."

Okay.

Okay. Um, so, question here from Smitty. What are the differences between an escorp and a CC corp if my business generates 60,000 a month and I want to establish an LLC partnership with one corporation?

Okay. So, an S corporation is what's called a flow-through entity. So, whatever amount of profit after expenses is left, you know, so let's say you made 120,000, you had 60,000 of expenses, you have 60,000 of profit. That 60,000 will flow through to your personal tax return and be taxed at the personal tax return. Right? A portion will be wages, and a portion will be distributions out of the S corp. In a C corporation, there is no flow-through. So, that $60,000 worth of profit will stay at the C corp level. It will pay, the C corp itself will pay at the moment a 21% tax, um, plus whatever state taxes, you know, depending where you live. So, it'll pay the 21% tax, and if you want money out of the C corp, you either have to take it as a salary, or you have to take it as a dividend. So, C corps are often known as what's called the double taxation entity because the C corp pays the tax, and then if you want the money, you pay again, right? You pay either wage tax, or you pay dividend tax. So, there are ways to play it. So, for example, you said, if I want to take my C corp and establish a partnership between the C corp and the LLC, I presume, um, the partnership would give it flexibility, and so it's just a question of how the money flows through the system. So.

Very good. Thank you. We have ETF Inspector. The video question is for the average trader, not setting up a business, what's the most tax-efficient type of account to trade in if you want access to the money?

This is one of my, one of my favorite questions. Uh, sigh. Okay, so basically, here's the deal. The IRS, anytime the IRS gives you something good, they also give you something bad. There's, there's always a balancing act here, right? So, tax efficient type. Okay. Well, if you do it inside your Roth IRA, obviously there's zero taxes. No, ever, right? And that's fantastic, but to get the money out, you have to be over 59 and a half. You know, it's distribution, right? Like, I mean, then it depends on your age, right? So, Roth may or may not be a good idea. Um, if you go with a traditional, like 401k, IRA, any of those kinds of things, uh, you don't pay tax now, you pay tax later, but you have the same problem, right? 59 and a half, you can't access the money. Um, so, a lot of people, to be honest with you, will just not really even trade in the retirement accounts because it's kind of a pain, and not many brokerages will let you trade. I mean, there's quite a lot of regulations and issues. A lot of them will just trade in a regular day-to-day brokerage account, and then at the end of the year, they will go sell things to gain negatives, right? So, for example, we were talking about options trading, and I went, "Oh, darn, I made a gain. I'm going to be buying back a whole bunch of my options to create losses to offset that gain." So, I get to keep the cash, but I don't have any gain to pay tax on. So, um, again, I, I hate to say it, guys, but it's very dependent on your age, on where you are, on how much cash you need to live, right? If this is play money for you, do it in your Roth IRA. Build it, build it, build it, build it, build it, and then you never have to touch it, right? Accessing the money is always the hard part.

Yes. Thank you. Thank you for your question.

Can I, can I just edge a question in there?

Yes.

With the wash rule, um, how distinctive does the, does the equity have to be when you repurchase it, um, after 31 days? I mean, if I, if I have one high-yield income fund that is in one equity, is it considered the same if it's another high-yield income fund if it's on a different equity? I mean, how different does it have to be?

Right. So, I'm going to tell you my understanding, and then what I would absolutely do is call your specific brokerage, okay? Because E*TRADE trades it differently than Schwab trades it differently than TD. They, they all seem to have their own, the way they look at it. Um, I, I am an E*TRADE girl, right? So, um, if you're, if you're doing options and stock, those are the same. If it's high yield, but they're two different symbols, typically those are different. Uh, but I would absolutely double-check it with the brokerage before you make any assumptions. So.

So glad you asked that. Thank you, Ambassador. Um, okay. So, Wolf is asking, "Is there a website that you or we will also throw in AI, chat, whatever, um, that you can research on how to file taxes based on your personal finances?"

Oo, that's a great question. Um, I can give you some of my favorites. I, to be fair, I have not used AI specifically for this. What I use AI for is a general base of knowledge because I've run into too many cases where I ask something specific and it spits something back and it's a lie. It's hallucinating. It's, you know, whatever. It's doing weird AI stuff, right? So, um, I like NerdWallet. They're pretty good. Um, my brain is dying. I was not prepared for that question. There's another one that I can't remember right now, and I will have to find it. So, we can, we put it in, I don't know if we could put it in the show notes or something later. Um, sorry. But that's pretty good. Um, I would absolutely, the way we use AI from that standpoint is we ask the question and we tell it to bring us like the top 10 websites for this specific thing, and then we go look at them ourselves.

Nice. Thank you so much. Yeah. Okay. Smitty is asking, um, but if we form a partnership with escor and run that as an administration escor that I pay a fixed fee along with a percentage of the profit, would that work?

Okay, hold on. Let me try and read that again. If we form a partnership with the C corporation and run that as an So, I'll be honest. I don't know what an administration C corp, I don't know what that means or what that is, but I pay a fixed fee along with a percentage of the profit. Would that work? I am so sorry, Smitty. Would you mind trying to retype your question?

I, I'm sorry. I'll be honest. I don't know what you're trying to ask me.

It does look a bit tricky there the way it's worded. Um, yeah, Smitty, go ahead and put, put it at the bottom of the thread. We'll catch up with you. Um, Wolf is now asking, um, most of my in Oh, I'm not sure if that's a question. Excuse me. Let's see. We have a question from Sunita. Uh, Sunita asks, "If you're retired with no W2 and then will make upwards of 300 a year, um, from investments, should one start a business to reduce taxes? Um, she may get a social security, a pension, and RMDs."

I am in love, and this is a fantastic question. Yes.

Yay, Sunita.

Great, great question. Great question. Yeah, because if you have no W2, right, you really don't have, I mean, yes, you're getting money from other sources, social security and the pension and the RMDs, but what do you do all day, right? If, if you're day trading, if you're actually active, if you're paying attention, if you're going in and out of different investments, I'm, I'm in, I think that is an argument you could win in front of the IRS because there is no other job competing for your time. That is your job is to make more money off that. So, yep, I'm, yeah, I agree. Double thumbs up to that one. I think you're probably.

Even if the investments are all the ETFs that pay the distributions, which is passive?

Fair. And I guess the question is, so if, if all you did, let's back up. You're right. If all you did was take $300,000 and put it into the thing and you did nothing, you didn't touch it, you didn't look at it, you didn't whatever, it's still probably passive. But, and what you had asked earlier was, well, what if I'm like, you asked about wash rules. Well, what if I'm changing in and out and I'm deciding which one to give me? If you're doing this kind of stuff and going in and out and trading and moving,

You are actually doing a job, and that is what you're trying to earn money from. So, it goes back, tax and circumstances.

And with these in a weekly distribution, if you're dripping or putting into a tax fund or something else, you are being active with it at least once a week.

Yeah, is active. She's always selling.

I love it. It helps. It helps. Right. So, a lot of this, and this was, is what makes the question so hard to answer, right? Is that, well, it, it depends, like, what are you actually doing physically doing, right? If you never look at it, don't even try. You're an investor. Okay? But if you're in there and you're trading, and you're attending, uh, presentations, and you're learning, and you're reading, and you're making moves, and you're constantly, I mean, that's what people do for a full-time job. So, think of, maybe that's a better way to think about it is if, if you did this for somebody else and you were making money, would they pay you as a W2 employee full-time job?

You're probably pretty good that you're a business from that standpoint. So.

And so, one could argue that the, you know, like a halftime, like let's say they were getting ready to approach retirement and they're working part-time hours. You're, uh, doing this part-time and working your part-time W2. You could probably pretty easily convince that argument.

Well, that's, you know, now we're up to the IRS agent that audits you that comes in. Do they like you or not?

I see.

And, and this is the hard, because it's all, well, side note, they just laid off a bunch of people on their own furlow. So, you know, whatever, right? But, um, yet, this is all about what, what kind of story can you tell, right? So, it might be different, like, let's say you were working 40 hours a week for the W2, and you were working zero on the investments, and you started doing this, right? Like, I'm getting more and more and more and more involved, right? If you're, if you're heading, if there's a trend, if there's a path, track your hours, write this down, have it in a, in a day planner, have, have it on a spreadsheet. I spent six hours looking at whatever today. Okay? Um, make sure you're tracking all of that because if it ever, all of this, all of this is all based on if you get audited.

All of it.

Okay. A Schedule C sole proprietorship or an LLC taxed as a sole proprietorship has an average rate of 6 to 8% of being audited. An S corporation is like 0.4% of being audited. Okay? So, all of this is, I mean, this is the truth. These are the rules, right? If you get audited, and you did the wrong thing, they will ask you for penalties and interest, right? Like, for sure. So, um, you want to do it right, of course. Um, but yeah, it's, it's all facts and circumstances, and what that auditor believes when you speak with that auditor. So.

I, I have a Oh, go ahead, Ambassador. Oh, did you have a follow-up in this? Because it's 1:45, and I kind of wanted to make sure that we got to the rock question, ROC question, and then if there was time afterwards, we could come back to questions unless you had a follow-up.

Um, my follow-up is actually just a personal question, and it is not a topic. Um, I have about a 50,000, uh, Roth conversion this year. About a $50,000 Roth conversion. And I'm considering purchasing some Bitcoin miners that are operated offsite where I'm just receiving, um, you know, the electric bill and the cost of the equipment, but it is for the purposes of making money. And so I'm wondering if I can use this as a way to offset my, my income and, um, you know, you, uh, write off 100% of the equipment before the end of the year, or for.

So, so the IRS, when it comes to any business, you have to have some income to be able to write stuff off.

So, this again is kind of a timeline question. If you were to do that today and buy the miners, buy the equipment, buy the stuff today, as long as you make money before December 31st, I mean, it could be $10, right? But you were, you were in service. It's, you have to be placed in service. So, as long as you were in service, you're probably good.

Okay. Thank you. Go, uh, baton sharers, Ambassador. Thank you.

Oh, of course. I just wanted to make sure we got to the rock question and, and the return of the capital, because it is, it is the hottest topic in this area, because what we see from the, the emails and the announcements from the ETF providers indicate a, a certain estimation number, which isn't matching necessarily matching up with the year-end estimation number, how it affects our taxes, what happens. So, if you could, if you could just kind of first of all, just kind of explain ROC, or return of capital, in a general sense, and then maybe whittle that down into the type of investments that we're talking about here, and how that affects us. I would appreciate that.

You got it. I, I will do my best. Let's go with that. So, return of capital, and this is one of the ones that the IRS looks at, right? Because, so let's say you put in 100,000. It's your capital, okay? And it's starting to pay you out. Some people will say, uh, okay, the first h 100,000 that I get out is pure return of capital. I'm not paying tax on that at all. Okay, that's not the way the IRS looks at it. And the hard bit is, is that the IRS, and you have no idea what your total estimated payout is supposed to be, right? Because it could go, instead of a hundred thousand payout, it could be a million dollar payout, or it could be a $60,000 payout. You don't get any of your, you know, you don't even get all your capital back, right? So, what's supposed to happen, what you're supposed to do is, when you make the investment, you're supposed to determine what do you think is the total, the total amount that you're going to earn, right? So, how you do that, the IRS has said, base it on a reasonable formula. Well, what's reasonable to Rod versus Best Day Ever versus Parabolic? Like, who knows? Okay. Right. It's, it's all based on what you think, and again, we talked about the IRS agents, what you think you can defend in front of an IRS agent. Okay. So.

Can, can I just, we wiggle in here for a second?

Of course. Yeah.

So, so when, when, um, let's say, um, a company, organization like YieldMax pays its distribution.

Okay.

On their, on their flyer that they send out, they'll say, "Okay, your distribution was an X amount."

Okay.

And that is qualified as of right now, 86% return of capital. So, we get that information, but it, but we are told, and, and everything I read, is that's an estimation, because the real return of capital on the whole year-end isn't tread up until after the fiscal year is over and the brokerage gets a 1099.

Yep.

Is that accurate from your understanding?

We are saying the exact same thing. Okay.

Yeah, they can give you an estimate, but until it's done, they don't know, right? You don't know.

So, and it makes it terribly hard for planning purposes, because it's like, well, what if it's really 10%, not 86%? Right? Like, right? So, at least with our clients, when we're doing strategy, we assume 100% of everything you receive is going to be taxable. Period. No, no return of capital. We always assume 0% return of capital, because if we over plan and you get more deductions, great. We just carry them over to next year. If you under plan, right, if you assume it is 86% return of capital, now maybe you have a tax bill you weren't expecting. So.

So, going back to the person with a scenario with an anticipated 120,000 a year, um, should they be submitting and paying quarterly on that estimation and that thought process that it's all going to be taxable income?

You're not going to like my answer, but yes.

Yeah, it's a great question. I mean, there's two really, this. Okay, technically, yes. Right. Technically, if you received $30,000 a quarter, you're supposed to pay tax on $30,000 a quarter on quarterly estimates. Okay. Uh, but you also have a reasonable basis that maybe it's not all taxable. I got a letter saying 86% of it is supposed to be a return of capital. So, if, again, if the IRS ever came back, charged you penalties and interest, you could write a letter back to the IRS saying, this is, this was my knowledge at the time, 86%. So, I only paid quarterly estimates on the 86%. I paid the rest in April, you know, when it was due, April 15th of the following year, when I knew what the numbers were, and I knew what my returns were, that's when I paid the rest of it. So, you could get out of penalties, penalties, not interest, but penalties, uh, doing it that way. So, now, there's, there's one caveat I want to add here. That's if you're on the investor side. Okay? If you're on the business side, and you have an escorp, and you're paying yourself wages, you're going to know that typically, what we tell our clients to do is run payroll for themselves like December 15th, like right before the end of the year, and pay in whatever you think you're going to need to pay via withholding, because withholding has zero penalties, zero interest, zero anything, as long as it's done by December 31st. So, there's, depending on which side you're on, you can look at it that way as well. Can I just draw out that scenario again so everyone understands it? Um, so you're an investor. You buy high-yield dividend ETFs. You make $120,000 a year. The first quarter, all the 19 A1 notices, which are the return of capital notices, they said 100% return of capital. So, normally, if you don't provide a quarterly payment to the IRS, you could get penalized, I believe. Right?

Yes. Penalties and interest. Yeah. Mhm.

But if technically, all of those notices for the funds that you own said 100% return of capital, if you save that documentation, that can save you from the penalty down the road.

Big caveat, assuming the IRS agent that's auditing you isn't a.

You know what, a, you know what, right? So, because you know the IR, good or bad, I, I wish you could say it's black and white. It just isn't. Everything to do with the IRS is the story, the documentation, the backup paperwork. It's what can you attempt to provide to prove that what you did was a reasonable choice. So, is it reasonable? So, absolutely, you keep those letters. You stick those in the file. You never scan them, do whatever, right? Um, but yeah, you know, if, if the letters all say 100% return of capital, how am I supposed to know any different? There's zero way for me to know any different until the year is over. So, do I believe that it's a reasonable argument and it should get you out of penalties?

Yes.

Can I promise it will? No. So, yeah.

Right. So, with, with return of capital, the understanding is, in a general sense, that if it is return of capital, what that does is it changes your personal cost basis on whatever it is that you've purchased.

Correct. Um, I think we all understand that, or at least it's, it's a generally accepted thought process. Can you let us know what happens when that cost basis gets to zero? So, let's say I bought something at 20, over the period of time it's returned, done a return of capital of $20 for me personally, maybe not everybody else, and now my cost basis is zero, but I continue to receive distributions. How is that going to be taxed? And what do I need to understand?

Uh, it's 100% taxable once your basis hits zero. It's, it's taxable. So, it'll either be taxable as the investor side, whatever your tax bracket is, potentially with the 3.8, um, NIIT, additional net investment income tax on top, right? Uh, or if it goes to your business, and you have the business write-offs, then you can see what other kind of write-offs you have to get the net profit to zero. Now, not a pushback, but when I'm asking ChatGPT these questions, it's telling me that that's going to be taxed at a capital gain because it's more than one year. It's going to be taxed at a short-term capital, I mean, a long-term capital gain, because I've held the equity for more than a year, and the distribution is being paid off. Is that inaccurate then?

That's a good question. That's a really good question. I don't know the answer to that. I'll be honest with you, right? I was looking at it more as these are dividends, not not cap. They're not, because you didn't sell the underlying stock, right? And so, to me, you don't get long-term capital gain until you sell the, the thing, right? So, if I invested in fund A, if I'm still holding fund A, anything I'm being paid out is, in my mind, a dividend, right?

Okay. Is there, is there any chance that you could, like, maybe email me back if, and when you discover something different than what you said?

I will. If you email me, I'll get to it, and I'll email you back. You got it.

Yeah, you, you've always been great about that. I, in the 11 years that I've known you, you've always been wonderful about that. What did I miss asking about return of capital, ROC, that you think would be important?

I want to follow up real quick on your question.

Yeah, go for it.

Because you're, so you're thinking once you get a taxable cost basis of zero,

You're thinking because you held it for at least a year that those distributions would be taxed as long-term capital gains. Is that what you were saying?

Well, the, the theory behind it is because you now your cost basis is zero. In essence, what they're doing is paying you back some of if it's still return of capital, not, not if it's regular distribution, but if it's still return of capital, they're paying you back the, the equity that you purchased.

I misunderstood your question. If it's still return of cap, if they're still calling it return of capital, which, side note, would be super weird, because if they've already returned all your return of capital, why are they giving you more return of capital?

Well, because they're qualifying it from an overall standpoint from their their vantage point and not necessarily mine.

And to me, that's the key. If I have no more capital, I, I mean, I know that I have no more capital. I know that I've already gotten a zero, right? What they tell me has nothing. And that one, I can tell you an IRS agent will say, no, it doesn't matter what they told you, it's what you have in reality, right? So, if you have no more basis, then you have no more basis.

So, then it would just be all earned income from that point.

I, I believe it's all earned income.

Okay.

Awesome. All right. I think I covered return of capital unless somebody else had a question there, but I wanted to make sure we got back to, because we are up against a hard cap, right?

I, I am. I've got three. Yes.

Okay. So, um, uh, Parabolic, if there's any other questions that want to get asked, we got three more minutes. I do want to leave the last 30 seconds for a big fat thank you. But, um, if you've got, uh, if you got some other questions, please let's, let's rapid fire them as best we can.

Okay. Uh, quick question for you, Shauna. Uh, is there a package or an offering or any type of product, um, where one could get in touch with you who's sort of that under under $200,000 a year distribution investor?

We are, Tax Goddess is not going to be the right choice for that. So, Tax God, we work with people making a million dollars a year or more. Um, so, if you have any of those, taxgoddess.com, super easy to find us from that standpoint. But, um, we do have referral partners and other people we can send you to. So, you're more than welcome to always send it, you know, go to the website and just say, "Hey, I need help." There's an info@taxgoddess. We have a strategic partnership manager, and she can hopefully find you the right home.

Thank you. And we did put your website, your email, your Twitter account, and your YouTube channel in the thread so people can get a hold of you. Um, here's a question that might hit home for a few of, um, our followers. Um, let, let me see. Oh, I've lost it. Oh, where is he?

That is blowing up. I love it, guys. Thank you, by the way, for the interaction.

Oh, it's the one where he said he sold, he sold, "I sold if I sold all of my ETFs, if I sold my ETFs at a loss and then bought them back ASAP, can I use the, can I use the loss as a tax write-off?"

That's going to be the wash sale rule, right? So, you want to make sure you're calling your brokerage, and which, which ones are you buying back? Because if you had A and you buy A, you don't get it, right? Within 31 days. So, it's always 32 days and you can buy it back, right? But if you have A and you go to C, maybe that's where you want to call your brokerage, whoever you're working with. So.

And, and your broker is going to be able to give you that answer definitively.

They should. Yeah.

I think they put the little W up there, too. If I sold my ETF set of laws and then bought Oh, that's the same repeat. So, sorry. Can I form a partnership between LLC which generates entirely passive income and a CC corp where the C corp handles all administrative needs for the LLC? That's the followup to that.

Oh, that was the follow. Okay. So, can I form a partnership between my LLC, which is totally passive, and a C corp? CP handles administrative.

And, and what's the? I'm so sorry, Smitty. I'm not sure what the question is. Many s such as managing profit and loss statements, taxes, and other operations. So, if so, would this allow me to access the tax deductions and benefits available to a C corp?

If, as long as the C corp and the work you're doing for the C corp is active and, and rises to the level of business, then yes, right? Could pay a management fee. Now, the management fee would not be deductible generally against your passive income. So, maybe, I mean, you might get some of it, some of it'll get capped on your Schedule A for itemized deductions if, if the investment side is personal.

Thank you. And then the best way to track, um, your activities. Well, one of the best ways is to keep track of the time.

Absolutely. Absolutely. What did you do? When were you doing it? Who were you talking to? You know, and that's why I always use a day planner because it's always the five W's, right? Or whatever. Who, what, where, when, and how. Like, what were you doing? What were you talking about? What kind of work were you researching? Re-watching a, a great podcast, you know, that, that kind of thing, right?

Thank you. Thank you so much, Sha.

Well, I think we've come to

the to the two o'clock mark. You've been so very gracious with your time and your treasure. We're we're thankful. Um I know that we probably raised more questions than we've answered, but that's a good place for everybody to start. Um and and hopefully we can we can uh maybe if not with you with somebody else that you refer do this again and be helpful to the community because it is an area that people just don't know what they don't know and and that's that's a sad thing for a lot of people because they wind up um giving up more than what they need to uh from that standpoint.

But on a personal level, I want to thank you for what you've done for me, my family, and on a community level. We know that your time is so valuable and and we we're appreciative of you spending it with us. Thank you so very much. Is there anything that you want to say or that that I miss that would be important before you head out?

>> You know, the only thing really go and thank you. I mean, that's so sweet of everything you've said. The only thing going through my head, guys, is t never let the tax tail wag the dog. Your job is to make money, right? And then you find the team that helps you keep the money. So, find the right team, make the money, and then we worry about everything else. So awesome. Awesome.

>> All right. Bye. I appreciate >> you so very much. >> Thank you very much for having me, guys. Have a great day. >> Bye. >> Bye. >> All right.

>> Oh, my head is spinning. And And I thought I knew most of this stuff, but my head is spinning. >> Did you write all that down? >> Wonderful. Oh my gosh, what a great guest. Do you guys want to pick up the um pick up the baton with some of these questions then that we didn't get to from the listeners?

>> If I can, I I certainly would be happy to try. >> Okay. Um so, let's see. We stopped at Smitty's question and um Sunita gave a thumbs up is exactly um why she's constantly watching you guys on YouTube and getting her information from your great content.

>> It's a tax write off. Yeah, there we go. Um, ETF has another question here. Video question. If you're making money on the side, like YouTube and X, what dollar amount or percentage should you consider starting a business? I think she said around that 70 80,000. Is that what you picked up?

>> I think she she's had 70,000 was her was her benchmark for when you really should be considering and thinking about it from a from a a tax advantage standpoint. >> Yeah. Um and that was that was actually in relation to the passive uh the passive div distributions. >> Yeah, it would be the the the nonW2 side of it. So if it was nonW2 income >> uh in terms of incorporating but um forming a business was kind of like the golden the golden egg, right? Because that gives you the tax shelter. So maybe maybe ETF you're already in the you know in the opportunity of starting a business so that you could have some write offs of some of your income.

>> Well, the thing to remember is an LLC can can then be taxed or take advantage of taxes in the different categories. So you can have an LLC that that winds up doing taxes like an S corp, CC Corp, or just a partnership, >> right? And in his case, if he didn't necessarily want to pay uh you know the 5,000 to to incorporate or the 5,000 to you know get the um the tax um management or the um the bookkeeping management side of it taken care of. He could just have a I think I feel like everybody should have a a business a side hustle so they can have you know a tax shelter of their W2 money.

>> Yeah. I will say that Shauna does work with with highvalued people. So, their business entities are going to be set up and be much more complicated. Um I I am living proof that you can do it for a lot less than $5,000. >> Yeah. Yeah. Thank you. And um if anybody has a question for ambassador about how to do it for less than 5,000, please feel free to reach out to him. >> Yeah. Ask Rod. He's doing it right now. >> Yes. Congratulations on your incorporation, Rod. Congratulations. I for >> Rod knows nothing. So >> Rod has 10 other emails you can you can contact him at as well. Okay, let's see. Um and we we've got a comment from Michael Smith saying good question or Grahamwood. Good question, Michael Smith. Um let's see. Does safe harbor rule apply? Oh, and I would like to scroll up because there were some up top that I know are perfect for you, ambassador, but um does safe harbor rule apply for your first year in this scenario? I'm not sure. That was TT WT. I'm not sure.

>> Um go ahead. >> Some of these questions are probably for her, so I don't know. I mean, I I definitely probably can't answer any of these. I don't know if Ambassador can or even wants to, but >> yeah, I don't know a lot about the safe harbor rule. I do know I'm just looking it up right now. Um, yeah, I don't think I'm qualified to to comment on on that. I >> Okay, >> I think I would I would probably muck it up. >> Thank you for your question. Thank you for for your question. Um, here we have Richard Woolly. If you are just a beginner at investing, can you file your taxes once you get your W2 in January? I don't >> looking for the question. >> Yeah, I don't know. >> 3 p.m. >> starting out as an investor in the W2 would be would I'm not sure I understand the question.

>> Uh, if you're just a beginner at investing, can you file your taxes once you get your W2 in January? Probably. you will need to um if you're investing, you will want to make sure you've gathered all of your reports from your brokerage um that break down um you know that return capital and what your what your actual income was on on your investments and different in the different accounts that you hold. Do you have anything else to add to that?

>> Maybe he's asking if he has to pay if you're a beginner, do you have to pay the quarterly, you know, taxes right away or can you wait till the end of the year? Maybe that's what he's asking. I'm not sure. Um, but it depends like when do you start? Do you start in October? Right. So, I mean, um, and how much money too. I know there's a there's a limitation or a certain amount. Um, but I think once you become, um, well, he says W2. I assume he means 1099, by the way, not W2. But if >> if he's talking about W2, that's a employment. I I don't know. I guess I'm lost with this question now that I'm looking at it. Yeah, you bring up a good I shouldn't be answering these.

>> No, no, it's all all value. We're just trying to entertain and add add a little value to the day here. But um you do bring up a good point on the >> Oh, he did say he did say he did correct it. All right. 1099, not W2. >> There we go. >> Okay.

>> So, yeah, as far as the quarterly payments, that's important uh point to bring up um because it is something that I'm just now getting used to as well. Rod is actually um taking out um you're having extra withholding from your paycheck to cover taxes. And when you do that, I think there is some uh some kind of loophole with the IRS where you're not um you're not charged for um uh penalties for when you >> for that actually. That's a good point because again I'm assuming I don't know, right? Um but this is the way I've been doing it. Um, but they're getting their money sooner. That's the way I look at it. They're getting money sooner, right? Um, so and people have told me, why are you doing that? Right? But again, it's just a way to to spread it out and not even notice it essentially. But, you know, I don't know how much of a pain paying quarterly is or not. But,

>> and I have heard too that uh just recently actually um this came to my attention that if you if you're having withholding come out of your your paycheck, your actual W2, um that that um kind of wipes out any penalties you might have incurred for not paying quarterly taxes prior. um earlier earlier in the year if you start doing it within the taxable year. But follow up on that with your tax advisor if >> we um I kind of got to go. Um but um plus we're getting into the the danger zone, so let me just make sure everyone knows uh myself, Ambassador aka Best Day Ever and Parabolic Code are not tax professionals. None of this was tax advice.

>> No, it wasn't. Um, obviously Shauna is a tax professional. Um, so when she was on speaking, but um, also none of this is financial advice. We are not financial advisors. Uh, we're just here to uh, look entertaining, you know, be entertaining and, uh, you know, have some fun. But hopefully everyone enjoyed this. I, uh, thank you very much, Jonathan, for setting this up and allowing me to host this on the channel. Thank you, Parabolic, um, for hosting it. And of course, Shauna, if you're still listening or listen later, thank you very much for your time today. Uh, I'll let uh both of you close it out. If you have any final comments,

>> uh, no, just thank you very much for doing this. I know that that it got to a lot more people by doing it this way. I'm grateful. Um, I I hope that it was helpful. Uh, not just entertaining because I know it was entertaining. All I got to do is look at these mugs right here and know it's entertaining. But Exactly. But I hope it was helpful and um and I hope to try to be able to set up uh more in the future whether it be with Shauna or somebody she recommends or she can coersse into doing it with us.

>> Oh gosh. I hope you do. Um get one of those referral partners or even a few like even one a quarter would be so amazing. Um and um you know it would give us access. It would give us all access. The majority of the followers are probably not in that 1 million or greater category. So um that would just be amazing. Thank you both for inviting me and it was the pleasure was mine.

>> And uh ask to the community, let us know what you thought of this. Maybe we have a new series going, right? Maybe we'll have another guest on and the three of us uh can interview that person. So, uh feel free to give feedback. I'm not sure if Jonathan Parabolic want to come back, but of course they're always welcome and uh we could do this with other people, right? Other uh professionals or anything anyone. Um maybe even Liz >> something like >> but uh just a thought. All right. Um thank you very much. Thank you the comm you to the community for being here live and so I apologize for the time delay but I appreciate you all being here. Thank you for the people that watched after and uh feel free to le leave some feedback uh down below. All right. End it there. [Laughter]