Income Taxes and Your Land Business (LA 1585)
Transcript:
Steven Butala:
Steve and Jill here.
Jill DeWit:
Howdy.
Steven Butala:
Welcome to the Land Academy Show, entertaining land investment talk. I'm Steven Jack Butala.
Jill DeWit:
And I'm Jill DeWitt, broadcasting from the valley of the sun.
Steven Butala:
Today, Jill and I talk about income taxes and your land business.
Jill DeWit:
Yay. I tell you I was losing sleep over this. I am so excited, it's one of my favorite topics.
Steven Butala:
Kidding aside, you don't have to lose sleep over it, because I do. And it turns out a lot of Land Academy members do, too. And so this is a big topic. We just completed the most recent Land Academy career path program, this was a big topic at the end. And so I did a whole presentation. So I figured I'd do a five, ten minute synopsis here. And really, my whole point being, and we'll get into it in detail here in a minute, you can't just let this happen. You can't let taxes happen to you, like I did when I had a W2 position forever. It's a completely different scenario. You just let taxes happen to you when you have a job.
Jill DeWit:
I know, because someone else dictates how it's going to go, kind of thing. You get to say what percentage you want withheld, but that's about it.
Steven Butala:
Now that you have your own entity, however it's structured, you have a lot of choices and a lot of control.
Jill DeWit:
I understand. It's a funny progression with our members like, "Oh my gosh, holy cow, I made so much money." And then at the end of the year you're like, "Holy cow, I made so much money."
Steven Butala:
I made a ton of money and I got to give 50% of it away.
Jill DeWit:
Shoot. What do I do? How do I plan for this? Uh-oh.
Steven Butala:
That's what we'll talk about. This is prompted by Jill sitting on the floor, Indian style-
Jill DeWit:
Crying.
Steven Butala:
... in a puddle, writing checks a couple of years ago. We didn't have to do that last year, fortunately, because of good planning. But two years ago there were crocodile tears.
Jill DeWit:
There were some tears.
Steven Butala:
And I hate that.
Jill DeWit:
Thank you.
Steven Butala:
I don't want to see you cry ever. Before we get into it, let's take a question posted by one of our members on the landinvestors.com online community. It's free, and don't forget to subscribe on the Land Academy YouTube channel, and comment on the shows that you like.
Jill DeWit:
Eburton wrote, "Newbs. How do you know you have a good deal? Like, how?"
Steven Butala:
I love this question.
Jill DeWit:
I do too. You want to go first?
Steven Butala:
Nope.
Jill DeWit:
Oh.
Steven Butala:
I have a lot to say.
Jill DeWit:
How do I know I have a good deal? It comes in, I hang up the phone, I pull up the map and I glance at my five A's on the sticky note that's on my monitor. Access. Yep, it has that. Acreage. Yeah, wow. It's exactly what I wanted. Attribute. Oh my gosh, look how close it is to the water. Alive. Yeah. I just talked to the guy, now I'm confirming it's him. This is his name. And here he is, he's the only one on here. And then affordability. He's signing this thing and sending it back. Oh. And then, I take it one step further, because I'm assuming I did all my work going into it right on my pricing. I'm going to keep going with this here.
Steven Butala:
Yeah, you should.
Jill DeWit:
And then, now I'm going to go, "I'm going to go double check. Okay. This is all going too well right now." Now I'm starting to, like, I can feel the butterflies. I'm sweating, my pulse is racing a little bit. Did I screw something up? Now I'm going to jump into some land selling sites, even just Zillow, and look around on the MLS postings and see, all right, what are the other five acres selling for? And then I pull it up and I see, and I'm like, "Okay, don't get excited yet. Let's see what's sold. Holy cow. I can't find anything wrong with this. I need to get this in.