How, would you like to write off all your student debt as a tax write-off
Yeah i know it's a unique question and i get asked that question
All the time and so i thought i got to shoot a video on this and addressed, what the options are they're
Not great but at least you're going to get the straight answer
My, name's mark kohler i'm a cpa, attorney best-selling author radio show host blah blah
Blah, but i help small business owners and taxpaying americans around the country
Save taxes better live their dream
Well going into college debt is a huge part of a lot of people's dream and there's a lot of people
thousands of
Americans with six-figure student debt, well we need to talk about how, to maybe get a tax write-off
When you're, starting to pay it down, and some ways to attack it but let
Me just say right off the bat straight answer there's, no way to just get a tax write-off for paying off your student debt
Now you can write off the student loan, interest but it phases out
Now i'm going to get creative with, some other options here in a minute but you can't generally write off your student debt as a
Expense there's old line item for that on your tax return without a little bit of creativity
But you can write off the student loan interest yeah up to a whopping twenty, five hundred dollars worth of student interest
But the bad news is to it phases out if you're single and make more than 80 grand no write-off married
Filing, joint more than 160 grand no write-off so if you, went to school to make a lot of money
In a profession that required a lot of student debt now
you
Can't even write off the student loan interest to pay off your student debt
Now as you can see already this video is not about, how
To get out of the student debt whether through bankruptcy or a negotiation with, the bank or
Some other credit counseling procedure and i highly recommend you look at all your options for that and there's a lot out there a
Lot of research you can do on that topic but i want to talk about, again, how
You might be able to write off that student loan debt in some creative
Ways let's go to the whiteboard now for those of you that have already watched a lot of my videos hopefully on my
youtube channel you've already subscribed, any tax strategy, you can, think of i'm trying to do a video on it
Well small business is a huge part of that and i'm gonna show
you, my
typical structure on my whiteboard of how it would look and
If you came out of school and got student debt to start a small business as a
Professional maybe as an architect a doctor a dentist a lawyer an engineer i don't know
Maybe you're working for a, big firm with the w-2. Right now but if you, don't have a small business your options
Completely piron for the most part unless you're trying to write off your interest but here's a couple ideas you might like
Now this is where the first creative option comes into play
And that's for those of you that are parents that might be helping your kids
By, paying for some of their college debt and then that's going to play into
Some other strategies for you that have a small business that came out of school with student debt so hang with
Me here so, what i do as many of you know
Is divide your life into two sides you've got opps over here and you've got assets over here now
This, would be things like a rental property business in an llc
or maybe an operational business
Internet marketing sales services product restaurant
Dentist doctor engineer lawyer accountant real estate broker real estate flipper right all that that's ops and you're, gonna generally be in an s corporation
Now if you're paying taxes and then paying for your kids student debt there's no write-off you know
That so what i want you to do is change the methodology, here what i'd like to do?
is make sure that your kids your adult children that are now out of college are on your board of directors
And if they're on your board of directors and they're helping you with, maybe, some marketing business management
Office duties maybe just give me an advice and sales support, maybe they're helping manage your rental property in the town
Where they live if you can coordinate your rentals, where your kids are going onto their careers and you're
Still helping with student debt they're on your board of advisors something, we do when, we set up, llc's for clients?
That's why, i want you to set up llc's at a real law firm because we're
Gonna, think outside the box to help, you get tax write-offs rather than click click with a mouse and set up your
Own entity call, me we'll save you 10 times that so i want you to have a, board of advisors in your llc
Which could, be your kids and what you?
Want to say is hey if i'm gonna pay your student debt you can help you out in my business
So i'm only on the board of directors on what you're doing, some meetings with, you i want you doing
Some financial analysis and support, some help, some bookkeeping or something and maybe even manage, my own rental property now
you're, going to give your kids a 1099 for helping you which is going to be used to pay that student debt
So that student debt becomes a write-off. Because you're paying them to help you in your business
Helping, you manage the rental properties so that 1099 becomes a great tax write-off what
You, weren't getting before and your kids are gonna probably be in a lower tax bracket than
You, and with the new, standard deductions being doubled
They, may, not pay any tax on that 1099 generally they, may be paying tax on their
Own business but not on this right you could
Finagle a way to pull this off but this is where you use family planning to shift
Income to a different family member in a lower tax bracket
Now in no way shape or form right am i alluding to a scam or some sort of sham or a
nes
Worth it where you're ripping off the irs this is your kids
Legitimately helping you and your business and for legitimate pay you're
Gonna 1099 them in at christmastime they love it they get a 1099 in their christmas stocking and they're like
Oh, this, is great what is this?
Well they'll find out soon enough but
The beauty here is you are now getting a tax write-off for paying them to pay off student debt
Rather than you just paying taxes at your bracket and paying student debt that's creative option number one now
Creative option number two for those of you with paying your own student debt which most of us are probably doing right
What can, you, do here let's think of that family shifting of income again, now, let's say legitimately, again i don't
Want any irs agent or otherwise watching this thinking marks coming up with, this you know, some sort of top ten
Scam to ripoff the irs what i'm seeing is maybe your mom or dad?
That are helping you on the board of directors run your new. Business
Your parents, may be retired and you've just got out of college with, maybe graduate school and you've now
started your dental practice and you've got a huge student debt and
Your mom or dad are retired during a much lower tax bracket than you and you say
Hey, mom and dad i'm gonna pay you to serve on my, board of directors
And would you pay off my student debt for me a little you know
Maybe you give, sorry, don't use the gift word from your direction you're
Gonna 1099 them for them being a subcontractor and then they're
gonna gift you money by paying down some of your debt
Well in 2018 the gift exemption is $15,000 per person so you could literally pay mom and dad
$30,000 on a 1099 serving legitimately on your board of directors or in your business and
then they could turn around a gift you money by paying down your student debt and
Thereby, you've shifted income in to their tax bracket to help them with with their taxes you might give them
Some money but you're paying down your student debt in a more creative manner hi guys i know, some of you?
May hate that some of you that are tax professionals may go mark that is really pushing the envelope that's a little too sneaky
But hey
We got to get creative here the student debt in america is a crisis
It's not getting forgiven there are some
Negotiation tactics in bankruptcy but it's tough and i want people to pay off their student debt i mean it's a?
Crisis that could affect us taxpaying americans if we have to did you know
barry unbury this and dig people out of their holes but i
Wanted to just talk, about, some creative options, where you really should have your parents or your children
Serving on these board of directors or board of advisors and you could be taking a tax write-off to pay them
Who then turn around a gift you, some money to pay down that student debt payment every month run the numbers look at
Your options talk to your tax professional have them watch, this video and you tax professionals out there, don't be mad at
Me i'm trying to think outside the box of ways you can legitimately get a tax write-off to some help back
Door in some payments under that student debt bucket
Thanks so much for watching that video and i want to be your source for tax and legal
strategies it's hard enough to live the american dream without being out on the web on google trying to find answers to complex questions and
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