Navigating Tax Deductions for Nomads and Content Creators from a CPA and RVer

Stuart Doing Stuff: Tax season

can be daunting, especially for

2

nomads and content creators who may

not know what is and what is not

3

deductible and why, and we're going

to cover all that and so much more.

4

We're getting you ready for tax season.

5

That's all coming up on this

episode of the RVDreaming podcast.

6

Welcome to the RV Dreaming Podcast.

7

This podcast is for today's and

tomorrow's nomads who thrive on adventure,

8

embrace an unconventional lifestyle,

and seek life beyond the ordinary.

9

We dive into stories, tactics, and

inspiration that fuel the open road.

10

Hey there, my name is Stuart from

StuartDoingStuff on Instagram.

11

I've been a full time nomad for three

years now, half of which was in a

12

40 foot Super C RV, and now I'm in a

Sprinter van, a 24 foot Sprinter van.

13

I went from big to small, I know it all.

14

And I travel with my two

cats, Camden and Izzy.

15

I'm that, sorry, that was cheesy.

16

Follow me on Instagram for more stories

and videos, but I gotta, I gotta put

17

on my, my serious face right now.

18

Is this serious enough?

19

Nobody likes April 15th, and if you don't

know that date that's not etched in your

20

mind, then you don't have, obviously,

any pain points like I've had in my past.

21

But, , taxes are something

that everybody...

22

Is going to experience what is it?

23

They say death and taxes are the two

things that you just absolutely can't

24

avoid Well our next guest here on rv

dreaming is going to try and take away

25

a little bit of that sting the best

that she Possibly can she is a cpa for

26

content creators and is also On the road.

27

So ladies and gentlemen,

welcome to the program.

28

Penny with E5 FauxFemme.

29

Penny Rose, welcome to RV Dreaming.

30

I'm so glad to be here.

31

CPAs for content creators.

32

And I love

33

Penny Rose from Fe Fi Fo Fum CPA: that.

34

I have been an accountant for 25 years.

35

I want to be the person behind the

scenes, making sure that they're.

36

They're comfortable with their

finances so that they can continue

37

to make this amazing content.

38

Let me

39

Stuart Doing Stuff: kind of just scratch

and itch real quick on some of these,

40

you know, on some of these things,

because I've heard all the rumors.

41

I've owned businesses in sticks

and bricks and, you know, and this

42

and that, and I've gone through.

43

Uh, CPAs in different

states and different areas.

44

I, it's, it's funny when I meet people

who are entrepreneurs and they want

45

to do social media for, for money, you

know, as, as part of their living, as

46

part of their, especially their full

time living, they're confused sometimes.

47

They think that they can just ride

off their, their van, they can

48

ride off their food because they're

cooking, you know, in their videos.

49

So it's like, ah, it's a write off

or I can write off this or, or I

50

don't have to pay for my gas or I

don't have to do this, you know.

51

But they're...

52

There are restrictions as to

what you can and can't do.

53

Do you want to maybe hit on just some of

the bullet points on maybe some of the

54

most common mistakes that influencers

think that they can write off or get away

55

with, where really they really they can't?

56

The

57

Penny Rose from Fe Fi Fo Fum CPA:

most important thing for anybody that

58

thinks that they're going to be able

to write off most of their lifestyle

59

expenses is that you need to have

fantastic records in order to do that.

60

However you choose to make, make

it electronically, make it paper,

61

whatever it is, you need to keep

track of what you did every day.

62

If you are going to a particular

location and all you're going to do

63

at that location is film, Then it's

likely that you're going to be able to

64

use some of the cost of getting there

as an illegitimate business expense.

65

But most of us, when we RV

and we're traveling, you're

66

combining business with pleasure.

67

And that makes it more difficult.

68

To figure out what you can expense,

what's a legitimate business expense

69

and what's a personal expense and

keeping really, really good records

70

is the best place to start with that.

71

Stuart Doing Stuff: What's the easiest

way for people to get started on that?

72

Cause a lot of people don't

know what they need to track.

73

What

74

Penny Rose from Fe Fi Fo Fum CPA: you

could do it on a calendar application.

75

Um, you can do it on a paper calendar

or you can do it in some kind of

76

calendar where you're keeping track

of your activities for the day

77

and the locations that you are.

78

In terms of mileage and traveling

expenses, what most of my clients

79

use is a software called QuickBooks.

80

If you have, it's The smartphone,

it's free with your QuickBooks

81

subscription to get an app on your

phone and you can turn on the mileage

82

tracking within that application.

83

And it's tracking your

mileage all the time.

84

What I recommend people do is open

it up once a week and go through all

85

the things that got tracked and you

just swipe personal business, personal

86

business, personal business, and.

87

That's a really easy way to keep

track of it, and you can export that

88

information within the QuickBooks

desktop, like on your laptop.

89

You can open up the mileage tracking

portion, and you can download a

90

spreadsheet, and you can use that

spreadsheet as the basis for you

91

tracking where you are and what you do.

92

Stuart Doing Stuff: That's

great for mileage, personal

93

business, but if I say I'm...

94

I'm a, if I say I'm going to do daily

vlogging and I'm going to go get, go

95

to the gas station, normally a run from

wherever you're at to the gas station

96

wouldn't necessarily be deductible,

so to speak, or business mileage.

97

But if I record it, does it become

automatically or are there still rules?

98

Penny Rose from Fe Fi Fo Fum CPA: It

does if you have, if you need to go to

99

that gas station in order to record.

100

If you're not able to record in

the location where you started and

101

you need to go to the gas station,

then it becomes a business trip.

102

Stuart Doing Stuff: Wow.

103

There's a lot of little

loopholes over there,

104

Penny Rose from Fe Fi Fo Fum CPA: huh?

105

Yeah.

106

And, and what most people

are going to do is.

107

In terms of an expense for

your business, most people are

108

going to write off mileage.

109

There are two ways to have a

business expense for your, your

110

travel expenses in a vehicle, and

the easier one to use is mileage.

111

It doesn't, unlikely that it's

going to make sense for you to

112

have to keep track of every little

113

Stuart Doing Stuff: expense.

114

I can take campgrounds, fees.

115

Mileage, a lot of expenses that I would

be paying normally and I can deduct it

116

from my business, but there's a good

chance that for especially new creators

117

or people getting started, your expenses

are going to outweigh the income from your

118

business from like your paid sponsorships

or from endorsements or from AdWords or

119

views and clicks and stuff like that.

120

It takes a while for all

that to kind of get going.

121

So your expenses are gonna be high.

122

Can I claim a loss?

123

Yes, you can.

124

And, and there's, there's no

requirements on that either, huh?

125

So I can totally, I'm

going to be facetious here.

126

I don't want anyone thinking that I'm

serious with this next comment, but I

127

can show that I make no money at all

and I can never pay tax ever again.

128

Penny Rose from Fe Fi Fo Fum CPA:

So the benefit of having a loss

129

is only if you have other income.

130

So having a loss on your tax

return only benefits you if you

131

have another source of income.

132

So if you, if you have a If you're

a freelancer, aside from content

133

creation, and you have 50, 000 of income

from freelancing, that is something

134

that you would normally pay tax on.

135

If you have a, if you have 25, 000 worth

of expenses for your other business,

136

which is content creation, those two

things are going to offset each other.

137

But if all you have, if you're

independently wealthy, And you have

138

no other money coming in, a 25,

000 loss doesn't do you any good

139

because it's not offsetting anything.

140

Stuart Doing Stuff: Yeah, it's

only going to offset your income

141

made from other, from other areas.

142

That's, it's an important kind of a thing.

143

You can write it off, but

the whole point and sooner or

144

later, you can't do it forever.

145

Sooner or later, someone's going

to come knocking or calling, right?

146

And say, Hey, you have this

business here for four years.

147

It's not making any money.

148

Penny Rose from Fe Fi Fo Fum CPA: Well,

actually the number is five years.

149

Oh.

150

And so IRS, you don't have to have a

profit, but for two out of five years, you

151

have to demonstrate that you were trying

to make a profit, you were trying to run a

152

business, you were doing things that could

have made you money, and that, that's the

153

Stuart Doing Stuff: standard.

154

It sounds like it's a

pretty loose standard.

155

Because how do you show you're trying?

156

It

157

Penny Rose from Fe Fi Fo Fum CPA: comes

back down to what I mentioned earlier,

158

keeping track of what you're doing,

where you are, and your expenses.

159

I mean, if you can't think of anything

right now, but say you, you purchase

160

something and it creates an expense, but

the reason you purchased it was because

161

you plan to use it in your business.

162

You're demonstrating That

you are trying to make money.

163

Stuart Doing Stuff: So like this, this

fancy new microphone I got here from

164

Best Buy, because I was like, Oh, we're

going to launch this podcast and I

165

need a much better microphone than, you

know, just a casual conversation over

166

Skype or zoom or something like Skype.

167

Oh my gosh.

168

What decade am I living in?

169

Even though that the podcast doesn't

make any money, this becomes.

170

An expense.

171

Look at it.

172

It's right here in the

podcast and you can see it.

173

I guess I'm kind of more sensitive to

this thing because obviously having

174

other businesses in the past, I know a

lot of the things that you're talking

175

about already, but people come up to me

and they say, why aren't you doing this?

176

Why aren't you doing that?

177

And I was like, well,

because that's illegal.

178

That's flagrantly like.

179

Defraud, that's flagrant

fraud what you're doing.

180

Yeah, it's

181

Penny Rose from Fe Fi Fo Fum CPA:

funny, those people are, are

182

watching too much TikTok.

183

Stuart Doing Stuff: Oh my gosh,

are you talking about those, those

184

fake, here's my fake screenshots

of fake revenue and bank balances.

185

And there's, there's someone I follow on

TikTok and gosh, I don't remember who it

186

is, but his job is he has this, this jet.

187

I don't know if you've seen it.

188

It's a private, it's like a golf stream.

189

It doesn't work.

190

It doesn't run.

191

It doesn't fly, but he leases out the jet.

192

To creators to create, you

know, artificial scenes where

193

they'll roll out the red carpet.

194

They got pilots and, you know, uniforms

they've got, you know, photos and special

195

lighting inside the jet for the things.

196

It's all Instagram, Instagram, phony.

197

And

198

Penny Rose from Fe Fi Fo Fum CPA:

that's amazing though.

199

I love that business model of like,

you know, if I had the opportunity

200

to, to buy something like that,

I would do the same thing because

201

the content that comes out of it.

202

Is phony, but the business model

that that person has with the jet and

203

renting it out is totally illegitimate.

204

I think the biggest thing, and this is

the reason I bring up TikTok is just

205

because something is a legitimate tax.

206

Tactic doesn't mean it's worth your

effort to go through all the work

207

that it takes to actually apply it.

208

And we're seeing that a lot in the

tax industry because people will watch

209

a tic tac and they're like, Oh, you.

210

It's not good enough for

you to just be an LLC.

211

You have to be an S corporation,

and you have to save your self

212

employment tax, and oh, self

employment tax is the worst thing ever.

213

And we're seeing people that are,

have Revenue that doesn't make

214

sense for them to choose to be an

S corporation, following advice

215

on TikTok and setting it up.

216

And we're, you know, we're having to

charge them to unravel their situation.

217

Can we talk

218

Stuart Doing Stuff: about some of

the dangers of writing off too much?

219

Because here's.

220

The scenario, right?

221

And correct me if I'm wrong,

you're the expert here, but

222

let me kind of nail this down.

223

Um, you have another job and it

pays you, we'll use your example

224

earlier, it pays you 50, 000.

225

But you have this content creation

company and you took a 25, 000 loss.

226

So now on your tax return, it

shows that you made 25, 000

227

because you took this big loss.

228

Now, granted, you don't have to pay that

tax, you know, because, you know, the

229

income tax, because you took a loss.

230

You want to go out and buy a new RV.

231

You, you want to go out and, and buy

something that you need a loan for.

232

Now all of a sudden...

233

The tax return only shows

that you make 25, 000 a year.

234

No one's going to give you a

loan on a 100, 000 van or car

235

or an RV or anything like that.

236

So there's dangers to having too many

deductions and not showing enough income.

237

Yeah,

238

Penny Rose from Fe Fi Fo Fum CPA:

that's an excellent example.

239

I'm glad you brought that up.

240

The other thing is if you want to start

saving for retirement, I mean, saving

241

for retirement is based on your income.

242

And if you write, if you are only

running a business and you try to,

243

you know, reduce your income to

the lowest possible amount, you're

244

also reducing your opportunities

to invest in your retirement.

245

Stuart Doing Stuff: So there are a

lot of dangers into taking too many

246

deductions, too many write offs.

247

You've got to really kind of identify,

and this is where I think a financial

248

planner or someone at a higher

level, like you were talking about,

249

like you do, um, comes into play.

250

It's like, well, what's your short

term and your long term strategy?

251

You know, because if you're saying that

I'm going to want to buy a new rig in

252

two years, You need to start a paper

trail that shows that you're a good

253

investment or that you're able to do that.

254

So maybe taking extensive write offs

isn't the right time for you right

255

Penny Rose from Fe Fi Fo Fum CPA: now.

256

Yeah, that's a really good point.

257

So prior to becoming an accountant,

I was a loan officer for, um, be a

258

major bank if I still work there now.

259

And we, Look at two years of tax returns.

260

So you can't just start a business

and start have, you know, your content

261

creation, income rolling in, and

then go out and get a loan and two

262

years of profit, two years of enough

money coming in that's left over

263

in order for you to make payments.

264

I mean, we use, and this is probably

antiquated because I've been out of.

265

loan, loan work for a

long time, but we use 40%.

266

And so if your paycheck is 100, 000,

you're only going to be able to make a

267

total of all the money that you have going

out, you know, your mortgage, your car

268

loan, you know, what your student student

loans are going to be a big part of that.

269

Your total payments for a

year can't be over 40, 000.

270

And so if you are not thinking ahead,

exactly as you mentioned earlier,

271

you're just trying to nickel and

dime every bit of income out as an

272

expense, there will be consequences.

273

I always

274

Stuart Doing Stuff: say it's good

to start with the end in mind.

275

You know, you just really have to

kind of know all that and you need

276

a good financial advisor, especially

if you've never done this before.

277

If you've never been self employed and

you're not sure how your, you know, your

278

self employment income combines with

your W2 income, which affects this, which

279

affects that and your goals here and your.

280

thing there, you know,

it all comes together.

281

Having a long term strategy is

282

Penny Rose from Fe Fi Fo Fum CPA: helpful.

283

I work a lot in tax strategies, which

is very popular in personal finance.

284

And what we look at is we'll make an

estimation, a conservative estimation of

285

how much money we can save somebody based

on looking at their two years of Prior tax

286

returns, and we'll set our our fee that

they're going to pay us and show them.

287

Hey, you know, this is going to make

sense because we are, you're going to

288

save X amount of money, and we're going

to charge you this amount of money

289

to be able to implement that for you,

because, you know, as I mentioned earlier

290

about keeping really good records.

291

One of the things that you have to

do for tax strategies is to keep Keep

292

really good records and if you, if

you have a CPA helping you, they're

293

going to help you keep track of those

records and make those records for you.

294

And that's part of what you're paying for.

295

You know,

296

Stuart Doing Stuff: Penny, you've

been doing this for quite a while.

297

I'm curious.

298

Do you have anything that you've

come across where you just go?

299

Oh, my gosh.

300

I can't believe that you're trying

301

Penny Rose from Fe Fi Fo Fum CPA:

to get away with this.

302

I went to a personal finance meetup and

I met somebody who's a virtual bookkeeper

303

and it, and it really changed my life.

304

I also met up with a husband and

wife who were in trouble with IRS

305

and I met with them and asked them

to provide two years of tax returns.

306

And I, I went through their

information and I ended up not.

307

Choosing to work with them.

308

I didn't bring them on board.

309

So we can't, so I can't say I fired them,

but I said, I'm not a good fit for you.

310

And that's mostly because in the situation

they were in as the CPA, I would be

311

representing them in front of IRS.

312

And that's a higher standard

than just helping somebody with

313

a tax plan or, or a strategy.

314

And I was not able to reconcile their

belief that they should screw the

315

government every way they possibly can.

316

And I ultimately said, you know, you'll,

you'll need to find somebody else.

317

But what I saw in their

tax return was shocking.

318

And we talked about

something similar with that.

319

You do when you initially said,

Hey, I, you know, can I just

320

create a lot of permanent loss

and I'm never paying tax on it.

321

And what they had done was they moved out

of their house, moved into another house.

322

And during COVID.

323

They said they were landlords for

the old house that they no longer

324

lived in, and they created 30, 000

worth of expenses, and they never

325

actually tried to rent the property.

326

And I think that's one of the.

327

craziest things that I've seen

that I can actually talk about.

328

So they, I'm not sure who did their taxes.

329

They probably did their own taxes.

330

So they created, you know, the form

that you fill out for rental property.

331

And it, all I had was expenses on it.

332

It didn't even have a dime.

333

And I said, you know, how many one

of the questions that's on that form

334

is how many days of the year was

the property available for rental.

335

And they said, you know, 365 and

I said, Well, did you do you have

336

any records that you tried to.

337

Did you list it for rent?

338

Did you, did you do any of these

things that IRS is going to ask you

339

that indicate that you're trying?

340

And they said, no, because it was COVID.

341

Stuart Doing Stuff: For people who

have questions and they want to find

342

you, they want to follow you, they say.

343

I've been looking for a CPA that

specializes in content created

344

because I'm making some money.

345

I'm doing some things.

346

I just need a guidance and my CPA

doesn't know anything about my lifestyle.

347

How can people find you?

348

How can people reach out

349

Penny Rose from Fe Fi Fo Fum CPA: to you?

350

The best way to contact me is on Instagram

and I'm at fee5fo from personal CFO.

351

And hit me up in the DM if you have a.

352

So if you have a specific question

that you've been struggling with,

353

I love to get into the details with

people and meet other RVers as well.

354

RV content creators are, are really my

jam and the DMs are the, in Instagram

355

are the best way to get in touch with

356

Stuart Doing Stuff: me.

357

Okay.

358

Then we will link that Instagram

account to the show note.

359

Thank you for joining us on RV dreaming.

360

You have anything else before

we, before we sign off?

361

Penny Rose from Fe Fi Fo Fum CPA: So

anybody that is just new starting a

362

business, I have a financial setup guide.

363

So if you want to pick that up, if

you just DM me and say, Hey, I heard

364

you on this podcast and I'd love that

PDF, go ahead and do it and I'll, I'll

365

Stuart Doing Stuff: hook you up.

366

All right.

367

Thanks, Penny from Fee Fi Fo Fum CPA.

368

Man, I learned a lot in this

episode, and I hope you did too.

369

That's it for today.

370

Enjoy your travels.

371

Make them safe, make them

fun, and make them memorable.

372

We'll see you later.

373

Thanks for listening to

the RV Dreaming Podcast.

374

See the action on Instagram.

375

StuartDoingStuff.

376

Hear about it on the podcast.

377

Be sure to subscribe.

378

We'll see you in the next episode.