Welcome on back to the Noyack Expert series, where financial education meets real world expertise.
Anna: I’m your producer and host for the day, Anna.
And today we’re joined by Barbara Schreihans. She’s the founder and CEO of Your Tax Coach, where she’s guided thousands of entrepreneurs, high net worth clients to saving millions through smart tax strategy. She’s over a decade of expertise in accounting, tax planning, and she’s made so many courses, helped so many people out. She has her own podcast and she’s dedicated to making complex tax topics accessible and actionable, which is why we’re excited to welcome her onto our show today.
Thank you for being here, Barbara.
Barbara: Thank you so much.
Anna: What got you into this sector of the world? I noticed that you talk a lot about the coaching that you do in general, but what’s drawn you to this?
Barbara: Well, I actually fell into taxes. In college, I got pregnant and I was originally a marketing major, but when I got pregnant my junior year, I went to my career counselor and I was like, OK, I’m having a baby. Like what’s the job I need to go into where 100% on the day I graduate I’m going to have a job. And they were like, go into taxes. And I was like, is there anything else that could possibly work? And they’re like, no, go into accounting. And so that’s what I did. And I just turned it into my passion rather than it being what I wanted to be my whole life.
Anna: That’s interesting. Sometimes you stumble into career paths you end up loving and just by happenstance, that’s where the road has taken you. That’s kind of how I ended up in this position as well. I was just looking around and now all of a sudden I’m in finance and I’m like, I’m not quite sure how this happened, but I’m loving it and we’re just going with it. When it comes to alternative investments, what about that makes you the most excited?
Barbara: Well, there’s great tax benefits to some of them, of course, but also just any way that our clients can not only save money but also make money, really alternative investments is where people can make millions of dollars.
Anna: To someone who hasn’t really heard of alternative investments or they’ve heard of the term but don’t know much about it, whether that be a business owner or a higher net worth individual, how would you recommend they go about taking a look at what’s out there? I know here at NOYACK we have a newsletter that comes out every week where we go over different tax topics, finance topics with a heavy focus on alternatives. But what are some other resources that you would recommend people to look at?
Barbara: Yeah, I would say first look into what alternative investments are and now luckily since today’s day and age you can ChatGPT a lot of things so maybe start with ChatGPT but then from there just start reading. If one of them interests you then just start reading books on it or podcasts if you like to listen to it in the car. Personally I love reading articles and shorter things that I can read within five minutes. So it depends on your learning style but I always recommend people learn in a way that works for them.
Anna: I think that’s big. And I think a lot of us forget that, especially when we’ve been doing something for a while. It’s so easy to forget that there’s still stuff to learn and stuff you can be reading. And if you want to get a handle of your finances, you have a lot of reading ahead of you. There’s just so much out there.
So let’s say for some of these younger people new to alternative investments, real estate funds, private equity, art funds, all of these really interesting things to invest in. I’m sure we have some interesting tax surprises that go along with this as well. What are some of the most common they should be on the lookout for?
Barbara: Definitely start looking up bonus depreciation because some investments will spit out bonus depreciation which in 2025 the tax laws changed to make it better for investors which is great. So in 2025 there’s now 100% bonus depreciation. That just means if in a normal year you could take $10,000 of depreciation, maybe now you can take $50,000. So it just gives you more deductions. Knowing these things is really good. Also if you are investing in things like solar or manufacturing or oil and gas, all of those have different tax benefits associated with them. So I always say partner with the government. Figure out what the government wants you to invest in this year for the tax benefits and then find the investment that can do that for you.
Anna: That seems like a solid start. You know, there’s going to be some tax benefits baked in there. You know, it’s something the government’s looking out for. So that might be a good place to start, whether that be now or let’s say in ten years you’re looking to start. Take a look at what’s going on in the government, in the economic space around you. Find what’s interesting and then go from there. Because the topics people are talking about, they’re going to be around for a little bit.
And people that are looking to invest in alternatives probably make a little more money than the average person. And so if you are one of those people saving money in tax is going to be really important because it’s probably your number one expense so why not make money while saving money as well? That’s something a lot of people, as younger people, you sort of forget. You go from being in college, working hard, maybe having a part time job, not making much, entry level positions, and then you’re still young and all of a sudden you’re in a role where you’re making money. There’s other things you have to consider than just, OK, this is the amount of money I’m making because now you’re in the part where you can start playing the tax game.
When it comes to maybe someone who for the first time is finally making a lot of money, they’re not really accustomed to being in that higher earner category, what would you recommend for them to start when it comes to not just alternative investment taxes, but taxes in general. Where should they start looking?
Barbara: Well, if you’re a W2 employee, and this goes for a lot of my employees as well that I coach them through, at first you really want to get the match for your 401K. So if your company is going to give you free money into your retirement plan, as long as you just contribute some money into it, get your free money first. So if they’re going to match five percent, if you put in five percent, then put in the five because you’re getting five percent for free. So one, get your match. Then I would say max out your HSA if you’re eligible for one. So an HSA is a health savings account. You have to have a high deductible plan in order to invest in one of these. But if you’re young and healthy, you should probably have a high deductible plan anyway so that way your premiums are lower. So let’s say you’re eligible for it. You can put up to $8,550 a year into it. It’s the only thing out there that is like a tax three pointer. Like you get tax savings when you put the money in. You get tax savings as the money grows, and then you get tax savings when you take it out later for medical expenses. And we’re all going to have medical expenses at some point in our life. Even if you’re not using it until you’re sixty or seventy or eighty, it just grew for the last sixty years tax free for you. So max that out.
I think that every single taxpayer should have a Roth IRA. So that is a post tax account. It’s not going to save you taxes today, but it can save you millions of dollars in tax at retirement. So I would start with those three things.
Anna: Those are really good starting points when it comes to figuring out, OK, how do I maximize my taxes with all of this money I’m making? Now let’s say we have a younger or high earner and they’re like, OK, I’m going to start getting into the alternative investment space. There’s a lot happening there and as we discussed, there’s a lot of tax surprises, whether that be good or bad, that pop up that you might not have been expecting. What are some records or documents that investors should keep throughout the year, pay attention to so that their tax prep season isn’t an absolute nightmare?
Barbara: Yeah, great question. So first, always save the first contract that you signed with whatever you’re investing in because that’s going to give you the lay of the land. Like how long are your funds stuck somewhere? What is it? Who’s getting paid out? For a second, last, all of that. So keep those documents always and forever especially because if an investment goes away, you’re going to need that later on for your taxes. So keep that, keep all your bank statements if you’re getting regular distributions out from that investment. So keep all of the records, financial records for it. And then at the end of the year, or really the beginning of the following year, you’re going to probably get either a 1099 tax form or you’re going to get a K1 tax form. And give those forms to your accountants as soon as you get them. Like don’t hold on to them till the end because we can look at them right away and be like, OK, do you have new states that you might have to file in? Or how much money are we looking at? Do we need to do some tax planning? So really just keep everything if possible and I always just keep everything in Google Drive. So have a folder for each investment that you have and just keep everything organized.
Anna: I think that’s one of the misconceptions when it comes to first starting an alternative investment, that OK, it’s just going to be simple. You could file just like you would regularly, put everything in TurboTax, call it a day. But it seems like with these funds, it can be far more complicated than that.
Barbara: Yeah. So you probably don’t want to use TurboTax once you start investing because there’s so many check boxes on your K ones that you’re getting and just in the investments overall like you could be missing out on tax credits, you could be filing as a general partner when you’re supposed to be a limited partner, you could be saying that something’s active when it’s passive. So there’s so many things that can go wrong on your taxes. You really shouldn’t file them on your own. That’s not necessarily a bad thing to get help. Especially when you’re dealing with something that is complicated and you might think you have an understanding of it, but I’ve heard some horror stories of people that thought they knew exactly what they were doing, filed the taxes, and then things went wrong from there.
Anna: And people maybe can moan and groan about having to hire an accountant this year, but really, we’re there to save you money. So no matter what you’re paying us, we should always be saving you more than that. So really, you’ll actually make an ROI on getting a good tax strategist.
One of the things I heard you mention briefly was passive versus active. How does that come into play with alternative investments and then how does that show up when it comes tax time?
Barbara: So passive versus active income is super important to the IRS. To us, we’re just like, we’re getting income here and income there, but everything has a bucket that it falls into. So anything active you can think of as your W2 income, because you actively have to earn that. Or if you own a business, you’re actively in the business. And then there’s passive income, which is usually your investments, unless you’re a dealer or a trader, those are going to be passive. And that’s important to know because if you have passive losses from your investments, they’re not going to be able to offset your W2 income or active income. There’s some exceptions to that, but just for the ease of the podcast, you really need to know what’s going to be active versus passive because they typically can’t cross each other and it’s really going to dictate their taxes.
So we have tons of clients that come to us and they’re like, Oh, I’m not going to pay taxes this year because I had a huge loss on this investment. And we’re like, well, you’re only allowed to take $3,000 of that per year. And they’re like, that’s going to take me thirty years to take that loss. And I’m like, yeah, someone should have told you this earlier.
Anna: How are there any IRS rules that revolve around passive activity that impact alternative investors more than just an average investor in the stock market?
Barbara: Well, each investment’s going to be totally different, but in the real estate space, that’s when it’s really going to come into play a lot because there’s an election called the real estate professional election. So if in the eyes of the IRS, you are a real estate professional, which doesn’t necessarily mean you’re an agent, it could be like you’re in construction or remodeling or interior design or something. Then you can take your passive losses against other income. So there are nuances and lots of rules, which is why it’s important one to ask these questions when you’re investing into something, but then also verify everything they’re saying with your tax strategist.
Anna: When it comes to some of those strategies that an accountant or a strategist might come and help you out with, are there ways that you can sort of unlock some of those losses or reduce the taxable income when it comes to passive activity, when it comes to alternative investments?
Barbara: There’s always a way that people can save money in tax. It’s just are you asking the right questions? Do you have someone in your corner that’s advising you on this? And do we have enough time before the end of the year to offset it? So passive activity losses, we call those PALs, passive activity losses. More than likely you’re going to want to find a PIG, which is passive income generator. So that way whenever you have PALs and PIGs, you’re not going to pay anything in tax. So you’re still getting money from the passive activity generator, but then you have other investments that are spitting off losses. So then the income you’re getting over here is offsetting from the loss over there, and then you get to pay nothing in tax forever. That’s the ideal scenario.
Anna: That’s the ideal scenario. I guess that’s something that you would have to be able to work with a tax professional to figure out how all of that works, because a lot of that is up to the market or the investments you’re in. And some of these people have been in the industry for a while. They know the general trends. They could help point you in the right direction to find these types of investments.
Barbara: Yeah, exactly.
Anna: And another thing you mentioned that I want to put emphasis on because we’ve had a couple other tax experts on here, we had a great conversation with Carla Dennis, she does a lot of the education stuff and we talked about emphasizing that you need to be paying attention to your taxes and planning for them year round. You can’t just wait until December and all of a sudden think, oh, we have all of this together. It happens, people do it, but it’s so much easier and you can maximize so many more of those benefits if you are doing it year round, paying attention, checking in every quarter.
Barbara: Exactly. Taxes are a year round thing, not April 15th. And you should be thinking about it honestly, every single week. Like how can I be lowering my taxes? Because taxes, if you look at it as a whole throughout your entire life, they are the number one expense you will ever have. So why wouldn’t you spend fifteen minutes a week just thinking about how can I save money in taxes this year? Because I promise you, if you just spend fifteen minutes a week and you’re sending an email to your accountant or you’re looking up this tax law, you’re going to save way more money than the person on April 14th being like, no, I owe $50,000, what can I do? And it’s like, the year is over. There’s not a whole lot we can do other than maybe a retirement account that we can backdate and that’s about it. So how much is fifteen minutes of your time worth?
Anna: Speaking of retirement accounts, one thing I’ve been seeing in the news a lot recently is the potential for alternative assets to be able to be invested into in a retirement account. How would that work from a tax perspective?
Barbara: Yeah, I hope that these are more widely implemented with the bigger banks, but you can still have what’s called a self-directed retirement account. So that means that you can self direct where it goes. So you can invest in alternative investments. You can invest in gold bars or cryptocurrency or real estate or buy a franchise. Literally whatever you want, you can direct where it goes if you have a self-directed retirement account. But just be aware because there’s a lot of people out there that will say that they have a self-directed program for you, but you have to get their approval to take your funds out or there’s just bureaucratic stuff and it’s like, are you going to approve that? Because how am I self directing if you’re still approving or disapproving? And then there’s also ways you can trip that up too as the taxpayer. So you want to be careful.
Anna: What are some of the most common benefits and pitfalls to having alternatives within a retirement account that come out when taxes start happening?
Barbara: Well, some people just don’t like the stock market, so they don’t want to be stuck with, if you’re a business owner, you can put up to $70,000 away into your retirement accounts. And if you don’t like the stock market, if you’re in a regular retirement account, you’re kind of stuck. So if you can open a self-directed then you can really put it in whatever you want because maybe right now the market is really up and you’re like, I don’t want to invest in all these stocks that are really high right now when I know they’re going to come down. And so why don’t I invest it into this alternative? And there might be a really good opportunity right now for a certain investment that’s not going to come up again for a few years or even next year. And so you want to have the flexibility to invest in what you want to invest in.
Anna: What are some of the pitfalls to having this option?
Barbara: Well, if you’re a passive investor in the alt space, there’s not too many cons to it other than you’re putting a lot of trust into the people that you’re investing with. But I see a lot of people have problems when they’re investing in real estate with it. So let’s say you put like $100K into your self-directed and you want to put $100K down on a property and then you finance the rest. Well, let’s say the toilet broke and you had to call a plumber in the middle of the night, but you’re half asleep and you pay the plumber with a personal card. Well now you just broke the self-directed retirement account because you paid for something personally when it should have been paid from the retirement account. So the IRS could come in and say that whole investment is illegal and now you have to pay taxes on all that money. So it’s very easy that you can mingle the funds so just watch out. You have to be careful, know the rules, keep track of everything.
Anna: Yeah, because I have seen, it’s coming up a lot, there’s new regulation and legislation surrounding a lot of this too. So I think that’s something people certainly need to be aware of. Another thing that you mentioned earlier was state lines. We mentioned it a little bit when we were talking about the complexities of just having alternatives. Our alternative funds often are invested across multiple states, sometimes even multiple countries. That sounds tricky from a tax standpoint, doesn’t it? I mean, you might have to file in a bunch of states the more you start investing.
Barbara: But if you hire the right person, you don’t really have to worry about any of it. That’s just on us and it’s going to take us longer to prepare your tax return. But for example, at my firm, I have employees in twenty states and I have clients in all states. So I have to file my tax return in like thirty plus states. And so it can get complicated, but as long as you have someone preparing your return, it’s kind of like who cares? And if you are paying taxes in another state because of your investments, your state should give you a tax credit so you’re not paying double tax. You just have to know where are you getting the state tax credit so that you’re not overpaying to all the states.
Anna: What are some of the other key things that you look out for when you have a client who has a bunch of alts invested everywhere? What are some of the things that you look forward to help guide that return process to be as smooth as it can?
Barbara: Yeah, one, it’s figuring out where do they have to file in because a lot of times even though you have K ones maybe in a bunch of states, it doesn’t mean that you have to file the tax returns in those states. But then also do we want to file in those states because there could be some that you don’t have to but we want to because you could have massive losses every single year, adding up so that when there is a big sale in the investment, you’re able to take the losses to help the taxes later. But if you never filed in the state, they’re not going to let you take those losses. So it’s this fine line of where do we want to file? Where do we have to file? Do we file anyway? So that way maybe later on it helps you in taxes? And also making sure that you’re getting the right tax credit for taxes paid in those states. And then different states might incentivize different alternative investments, but you also have to have an accountant that knows what each state is incentivizing as well. And then if it’s international, are you getting the foreign tax credit too. So there’s a lot of balance happening between where you file, when you file, what the rules are in different places and just finding someone that’s able to walk that tightrope.
Anna: So if you are considering, OK, I have all this money now, I think I want to start investing in some of these alternative opportunities, it might be smart to try to find a tax professional that works a lot in those areas and sort of specializes more in a bunch of these intricacies because it seems like there’s a lot of room for mistakes. A big mistake we see people make is they want an accountant in their small hometown, but I’m telling you, if you live in the middle of nowhere Alabama and you want the accountant down the street, they are not going to know about these alternative investments in other countries, in other states. They hardly are even going to know what an art fund is or a litigation fund. Like they’re not going to know these things. And so it’s going to hurt you on your taxes later. So find someone that knows these things. I always say too, if you’re a real estate investor, ask your accountant do you own real estate investments? Because if they don’t, they’re probably not the accountant for you. If you’re big into crypto, ask your accountant do you own cryptocurrency? Because if they don’t own it, how do they really know how it works in a professional relationship?
Barbara: Yeah, that’s a great point.
Anna: What are some things that you think are important to be very aligned on between a client and the tax professional that they choose?
Barbara: I really think it’s an energy thing. Like, do you vibe with them? I know that might sound funny because it’s accounting, but this person is going to know the most about your life than anyone else. I mean, we have to know everything. We know when people are getting divorced before they’ve told their spouse. We know exactly how much money you have in every single bank account, every investment. So you have to vibe with them, you have to trust them. And is it someone that you think is going to go to bat for you if the IRS comes knocking? There’s so many accountants out there that are afraid of the IRS and you don’t want that person. You want the person that can stand in front in court and defend you.
Anna: I think those are some really good things to keep in mind because yes, it’s important to have a lot of the technical boxes checked and we do focus on those technical boxes. These are things you should ask, these are things you need to know, but that general sense of if it’s a good working relationship between a client and their accountant or other tax professional, those less concrete bits are also important when it comes to figuring out what makes sense for you and your life.
What has been the most interesting alternative investment scenario you’ve come across from the tax side?
Barbara: I don’t know really necessarily from a tax perspective because from our end it’s active or passive, but I just like seeing when people invest in cool things like different art funds or lately a lot of our clients have been investing in litigation. Where a lot of people don’t even know what this is, but a lot of law firms need money at the beginning of a case in order to take the case through trial. And so to do that, they have to raise money. So it’s essentially hard money lending for real estate, but to attorneys. So that’s been really interesting to see.
Anna: I’ve also noticed the rise and we’re actually doing an addition on it just about what even is this and how people can access it. So what would the tax side of that be? Very similar to the tax side of just other alternative investments. So they’re all pretty similar even though you’re investing in vastly different things.
Barbara: Yeah, they’re all pretty similar except for the tax laws in the years you’re investing. Like what are they incentivizing? So like right now with this presidency, they’re incentivizing manufacturing. They’re kind of getting rid of solar. So less people are investing in solar, more people are investing in manufacturing, more people are investing in oil and gas because in order to have all the solar that people are wanting to invest in, you have to have oil and gas. And so a lot of people are investing in that. So it does change. The trends change, but the tax laws are kind of all the same.
Anna: Are there any alternatives that you see that I know the trends and the cycles? There’s going to be obviously some difference in that, but are there any alts that are pretty steady with people’s interest in them, no matter what the trends or political landscape looks like?
Barbara: I think real estate funds kind of stay the same. The tax benefits definitely change because right now, bonus depreciation is really going to help with real estate investment trusts and funds. But yeah, real estate is kind of always steady.
Anna: If you could give one piece of advice for someone who’s thinking of adding some alternative assets into their portfolio this year within the next couple of months, what would you recommend to them to do to make their April 15th a little less painful?
Barbara: One, which has nothing to do with taxes, but just do all of your research, all of your due diligence, and keep always learning. So read as many books as you can, listen to the podcasts, read the articles, all of that. But then to make the tax side a lot easier would be to start talking to a tax professional now. So that way you know that they have your back between now and April 15th to start strategizing like how you can save in tax. Because the more you save in tax, the more money you’ll have to invest in alternative investments.
Anna: Would it be a strategy to talk to a tax professional before choosing an investment? If you’re not quite sure what exactly alternative investments you want to get into, but you know you want to do something other than just crypto or the stock market, you want something a little more interesting. Would it be smart to talk to a tax person first before going into that just to get a better idea of the options?
Barbara: Yeah, for sure. So we have consults all the time with people that are not necessarily our tax preparation clients or our tax strategy clients, but they’re like, hey, I’m thinking of doing this thing. Can you walk me through what it looks like from a tax perspective? And so it’s just an extra layer of assurance and knowing because I think a lot of the sales people and the marketing, they’ll kind of feed you some tax advice, but sometimes it’s not always right.
Anna: What can you do to ensure that the tax advice you’re getting is in fact correct?
Barbara: Ask a tax professional. I know it sounds boring but don’t look it up on ChatGPT. ChatGPT is like five years behind on tax knowledge so even if you asked it today like what’s the retirement limit this year, it’s going to give you the limit from like five years ago because I don’t know if they’re doing that on purpose because they don’t want people building out tax plans with ChatGPT. But yeah, just ask a professional. So even though ChatGPT might seem like it’s coming up with something, seems legit and valid, it could be incorrect and seem to check all the boxes but might not be.
Anna: That’s big because especially when you’re doing a lot of this work and doing a lot of the additions, I sometimes type in things, make up some numbers, put it in GPT just to see what happens. But yeah, one thing I did notice is when I was doing that, it made it seem as oh yes, as of 2025 this is the case, and that’s interesting that it might not necessarily be the case.
I will say at NOYACK, we do have an AI model that’s like four for financial literacy and understanding of topics. But if any of you out there are looking at that right now, also consult a tax professional if you’re looking at it for tax because the rules are constantly changing and it’s the people that have been in it day in and day out for years that sort of understand how to help push you through that before it gets into all the models.
Are there any last bits of information that we didn’t touch on regarding alts, alt taxes, anything like that that you’d want to share with anybody?
Barbara: Just in a year that there might be a big sale or a big gain on any of your investments, like don’t think that you have to pay taxes on it. There’s always a way to save money in tax. So just if you think that’s upcoming, consult a professional and see what else you can invest in that year that can offset maybe the taxes from the other investment.
Anna: Well, thank you so much for coming on. Is there anywhere you’d like us to send our listeners to check out you and your work at all?
Barbara: Yeah, yourtaxcoach.com has all of our information, services. We have so many free resources on there, so definitely download our free guides or master classes and it’s me in the DM. So if you go to Your Tax Coach on Instagram, I’m happy to help you answer any tax questions.
Anna: Well, thank you again so much for hopping on and sharing your really valuable insights with us. We do really appreciate it. And we will see you on the next episode of the Noyack Expert series.
Barbara: Thank you.
