In this episode, I am joined by Amanda Han. As a CPA, tax strategist, and real estate investor, Amanda Han combines her passion for real estate investing with her expertise in tax tactics. Her goal is to help investors with tactics designed to supercharge their wealth-building using entity structuring, self-directed investing, and income offset opportunities to keep more of what they make.

Amanda begins by giving us a little bit of her background. She talks about how both her parents and grandparents were real estate investors but encouraged her to follow the more traditional route of getting an education, followed by a good job. She began her accounting career at Deloitte, just by chance, in their real estate specialty group. She realized very quickly some of the tax benefits her investor clients could take advantage of, increasing their income while not necessarily working a ton of hours.

Amanda explained that the majority of real estate investors are not aware of the tax strategies available to them. She pointed out that it isn’t necessarily anyone’s fault but that the tax codes are written in a convoluted way. Reaping tax benefits requires very specialized knowledge for each and every industry.

I asked Amanda to explain a little about what is going on with the tax situation during the current COVID-19 pandemic. She said as part of the Cares Act pandemic relief package, the new filing deadline is July 15th. Most of the states are following these guidelines, and Amanda recommended getting more information from AICPA State Tax Filing Guidelines.

I wanted to find out Amanda’s recommendations for newer or smaller investors on when a good time is to begin working with a CPA and employing tax strategies. She said it was important for even brand new investors to consult advisors in order to form proper legal entities necessary for both tax benefits and protection, and also how to use them effectively.

I asked Amanda to explain a strategy that I have recently become familiar with which is cost segregation. She said first that one of the things that is so attractive about real estate investing is the depreciation that can be claimed no matter how much is put down on the house or other factors. Cost segregation is just the next level of this type of tax advantage. It involves defining all of the components of a particular investment property, not just the building itself. Some of these components may be eligible for an immediate deduction, providing the possibility of taking a higher deduction upfront rather than having everything depreciate over the standard timeframe.

Amanda went on to explain strategies that could benefit some types of real estate investors but not others, giving specific examples. She also gave some great, practical advice on how to determine whether an individual’s tax advisor was helping employ these strategies.

I then asked Amanda about the charity that she and her husband and business partner, Matt, formed named Animals for Armed Forces Foundation. The foundation helps to place shelter animals with current or retired servicemen and women. Normally on Memorial Day and Veteran’s Day each year they will work with local shelters to place animals in military homes for free, while the foundation pays for any necessary fees. Amanda talked about how rewarding it is to receive pictures of these pets in their new homes with their forever families.

We then talked about the two books they have written on tax strategies for real estate investors (see links at the bottom). She said that she and Matt read a lot of books about taxes benefits for investors and found them difficult and dull to read and wondered how people who were not CPAs would get any useful information from them, so they wrote their own books to help people find strategies that could help them. The first book is story-based about specific successes and mistakes made by investors and provides actionable, easy-to-understand advice about various tax schemes.

If you are like me, you may not know much about taxes, but please join me for this interesting, motivating, and believe or not, fun interview with tax expert Amanda Han!

Notable Quotes

“I think there is a misconception that investors think they only need to work with a CPA or an attorney when I have ‘X’ number of rentals.”

• Amanda Han

“It is more transaction-focused rather than a number of rentals in terms of who could benefit from tax planning.”

• Amanda Han

“In the tax world, there is never a one-size-fits-all strategy.”

• Amanda Han

“In the spirit of Michael Scott, now say it like I am a four-year-old.”

• Mike Simmons

“Flipping burgers - not nearly the upside of flipping houses.”

• Mike Simmons

“Our firm specializes in proactive tax planning.”

• Amanda Han

“We have people whose tax preparer is their father-in-law… you can’t fire your father-in-law.”

• Amanda Han

“We always recommend this team-of-advisors approach, where we are all working together.”

• Amanda Han

“I like talking to people that do good things, good people who aren’t just business, business, business, cutthroat - people who care.”

• Mike Simmons

“I don’t like not knowing, but I just don’t know, so thank you for telling me your book is basically for dummies.”

• Mike Simmons

“Our goal in writing the book was to show people what can be done.”

• Amanda Han

Links:

7 Figure Investor

Level Jumping: How I Grew My Business to Over $1 Million in Profits in 12 Months

Keystone CPA Facebook

Keystone CPA Website

AICPA State Tax Filing Guidelines

Animals for Armed Forces Foundation

The Book on Tax Strategies for the Savvy Real Estate Investor

The Book on Advanced Tax Strategies: Cracking the Code for Savvy Real Estate Investors