Adam Torkildson
speaker
77 appearances
1 recordings
1 series
first heard Jan 2025
last heard Jan 2025
Adam Torkildson’s voice in public audio — every appearance, attributed to the second.
Trend
recordings per month · last 12 monthsNo recordings in the last 12 months.Older appearances are listed below; set an alert to hear about the next one.
Appearances
Awesome. Yeah, I think that's a great point. Whether you're donating your time or just straight cash, give back. That's the principle. And thank you for that awesome clarification. Absolutely. So I wanted to jump in to the first tax strategy. And this one can work for anybody who has an LLC. It doesn't matter if you have lots of employees or it's just you.
And this is going to be one that the one other caveat is that you must own your residence, whether it's a townhome or single family home, whatever the case may be. You've got to own it or at least be on the title. And this is something called the Augusta strategy. I'm not going to go into the history of why it's called the Augusta strategy, but that's what it's called.
If you want to go Google it for more information or ask your CPA, they'll know what this is. But essentially what you're doing is taking advantage of an IRS tax code that allows your business to rent your home from yourself. on a monthly basis and your business pays your personal bank account the equivalent of one month's rent, essentially.
Even though you may not actually use the space for anything, you do need to make sure you take some notes and use it in some specific ways that the IRS has burbage around. Anyway, It really boils down to the fact that you transfer money from your business bank account to your personal bank account. That money is not taxed on your personal income taxes.
Additionally, whatever you're spending there is a tax write-off for your LLC. And the max amount I've ever seen anybody write off using this strategy is is around $100,000 a year. And you can do this annually. So it starts to be a significant amount of money the more valuable your home is.
Because what you're able to do is take the fair market value of what you could rent your home for, and that becomes your basis for what you can write off each month. So this is, again, the Augusta strategy. This works for anybody who's got an LLC. I believe you need to be taxed as an S corp, but that's some very simple paperwork. And there's a lot of advantages to being taxed as an S corp.
Sometimes it's better as a C corp, but if you're like a gig worker or a freelancer, or it's just, you're a solopreneur of some kind, get an LLC and register as an S corp. And that's going to give you a lot of these tax benefits. Did you have anything else?
Well, I don't know specifically all those details, but a scenario that I believe will work is if company A owns house A and company B rents that house from company A, as long as you have two separate entities you're working with, then it's basically a one-to-one ratio. And so multiple companies, you will need multiple entities that own those properties.
But again, I've never been in that specific situation, but I've got to imagine if the tax code works the way that it does for one entity and one personal residence with that one-to-one ratio, you should be able to extrapolate that to multiple entities and multiple companies.
Second one, this also is for people who have at least one LLC taxed as an S-corp. And this is going to apply to you if you have kids that still live with you under the age of 17 or under the age of 18, I should say. So there's a really cool entity type called a family management company. And you can do all kinds of cool things with this entity.
And it's literally just an LLC that has its own EIN number and its own bank account. That's all you really use it for. And I think what may have happened a long time ago is a lot of criminals started to use this entity to funnel money outside of the United States. But it's still on the books, this entity. this entity type, the family management company.
Talk to your CPA about it if you want to know more. And what I use it for specifically is to pay my kids out of. So the actual flow of money goes like this. I have up to, I think it's like $1,300 a month per kid that I can pay into the family management company. And then the family management company distributes the money into each of those kids' bank accounts.
And as with most IRS rules, there's a couple of caveats. Essentially, you have to be able to prove that your kids are doing work for your company. And fortunately for me, I've got teenagers, and I've been having them work for me since they were really young. And I've taught them how to do all these things.
on the internet that they never would have learned at school, but that are fairly basic things you have to know if you're at a corporate job. Things like how to respond to emails. So one of my kids, that's all they do for me is respond to customer support emails. And there are principles with how you do that, like the tone of voice you use when you send emails.
And you can teach kids these things. They're not idiots. And so I can literally prove my kids are working for me in my business, doing valuable things, and I pay them a decent wage. But the cool thing about doing it this way, as opposed to making them a W-2 employee, is that I'm not paying them any. I don't have to pay state taxes. I don't have to pay FICA taxes.
I don't have to have health insurance on them. And I just take money from my main LLC, transfer it to the family management company, and then the family management company is the entity that pays them out. And we can use that money in their bank accounts for all kinds of stuff. We can use it for family trips. We can use it for braces.
We can use it for stuff that you typically wouldn't be able to write off when you're paying for family needs. You can use that money. in that way. And it has become a write-off through that process.
Yeah. And once you two down, one of my favorite principles, I love working based off principles. So another principle that I really love to live by is When you're setting up systems or processes, you should be able to set them up once and then have them keep working for you without having to reset them up constantly.
So these two systems of tax savings that I've talked about, you don't have to keep redoing things every year or refiling this paperwork or that paperwork. Once your Augusta strategy is in place, you can just count on it working. Once your family management company is in place, you just count on it working. Yeah, it's a set it and forget it idea. Exactly.
I think that's one of the more undervalued ideas in business is the ability to just set it and forget it.
Showing 21–40 of 77 · page 2 of 4
← Previous
Next →