Latest / The Rave Social Podcast / 10 How to Pay Taxes and Build Wealth with Savannah Rowley

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10 How to Pay Taxes and Build Wealth with Savannah Rowley · The Rave Social Podcast

• 0:11
  SPEAKER_00: Hello and welcome back to the Rave Social Podcast.
• 0:14
  SPEAKER_00: I'm your host, Jaden, and today we have the wonderful tax savvy.
• 0:20
  SPEAKER_00: Savannah is so awesome.
• 0:22
  SPEAKER_00: She is uh she has a master's degree in accounting.
• 0:25
  SPEAKER_00: She's an accountant, but she also has some courses that you can take if you're a business owner to understand taxes, to understand bookkeeping, and to just better understand like the finances in your business.
• 0:37
  SPEAKER_00: She is literally incredible.
• 0:39
  SPEAKER_00: She saved me like hundreds of times.
• 0:42
  SPEAKER_00: I would probably be bankrupt without her.
• 0:44
  SPEAKER_00: I don't know.
• 0:45
  SPEAKER_00: I couldn't live without her, and we're so excited to have her.
• 0:48
  SPEAKER_00: So, Sav, why don't you tell us a little bit about what you do and kind of how you got here?
• 0:54
  SPEAKER_01: Okay, hello.
• 0:55
  SPEAKER_01: My name is Savannah, and I'm the owner of Tax Savvy, which is basically an education brand that, or I don't even know.
• 1:08
  SPEAKER_01: My brand that I teach people about taxes.
• 1:11
  SPEAKER_01: Um, and I ba I do taxes, I do bookkeeping, I do all of that type of stuff.
• 1:16
  SPEAKER_01: I love to talk about wealth and all of those different things within um my line of business.
• 1:23
  SPEAKER_01: Um, and the reason why I'm so interested in the more educational piece of this is because I feel that a lot of business owners can really benefit from the education side of learning about taxation and how business taxation works and really developing that knowledge can actually save them for the rest of their life because you're gonna be taxed until you die, basically.
• 1:49
  SPEAKER_00: So nothing is isn't the quote like nothing certain besides death and taxes.
• 1:54
  SPEAKER_01: Yes, there's not yes, that's exactly right.
• 1:57
  SPEAKER_01: There's nothing certain in life except for death and taxes.
• 1:59
  SPEAKER_01: So um, I just think it's so important for people to learn about this, and that's kind of why I took off um in this education space is because I really want people to learn rather than just submit their tax returns to their CPA, have them done, and then you know, that's it.
• 2:16
  SPEAKER_01: And then they're like, I want the strategy, but strategies don't really help people unless they understand taxes, so yeah, I was a really long version of who I am and what I do.
• 2:27
  SPEAKER_00: We love it, we love it.
• 2:29
  SPEAKER_00: Um, yeah, and I feel like you're exactly right.
• 2:32
  SPEAKER_00: I mean, before I was a business owner, I just worked normal jobs and had a W-2 plus some commission stuff, which was the only weird tax thing that I had.
• 2:42
  SPEAKER_00: But now being a business owner, I understand how valuable it is to know about taxes because it will impact like literally your daily decisions that you make with your business and understanding that strategy is just so important, which is why I'm so glad I have you.
• 2:57
  SPEAKER_00: Because I'm like, uh, what's happening?
• 3:00
  SPEAKER_00: What do you what is this?
• 3:01
  SPEAKER_00: Like, I don't understand these things, and you're always so good at explaining it.
• 3:05
  SPEAKER_00: Um, and you're just really good at what you do.
• 3:07
  SPEAKER_00: So we're excited to have you.
• 3:09
  SPEAKER_00: To jump things right off the bat, what is the biggest mistake you see business owners make as far as taxes?
• 3:21
  SPEAKER_01: Okay, that's an awesome question.
• 3:23
  SPEAKER_01: And the biggest mistake, honestly, is just waiting to the last second.
• 3:29
  SPEAKER_01: So many times I see business owners like, oh, it's April 10th, my taxes are due April 15th, I haven't done any of my bookkeeping, I have no idea how much money I made, how much money I spent running my business, and now I need to submit this to my CPA and I'm behind, and I didn't save any money for taxes.
• 3:45
  SPEAKER_01: And that kind of sounds like a crazy situation, but I'm not even kidding you, it happens way more often than not, and that is the biggest mistake I see people make.
• 3:55
  SPEAKER_01: So if they could just do a little bit of planning, a little bit of preparation, that would go so far into helping them each year with their tax preparation.
• 4:05
  SPEAKER_00: I mean, I can't even imagine this.
• 4:07
  SPEAKER_00: Was my first year really having to be like on top of it, and you taught me everything.
• 4:12
  SPEAKER_00: You're like, get quick books, do this, do this.
• 4:14
  SPEAKER_00: And even I like my books were so messy, and I was so glad that I had you because I was like, um, I don't really even know what's going on.
• 4:22
  SPEAKER_00: And if I had waited until the last day, I would be so screwed because I had to do like a lot of work.
• 4:31
  SPEAKER_00: I mean, it took a couple hours to just figure out how to get it all to match.
• 4:37
  SPEAKER_00: So I can't imagine that would stress me out so bad.
• 4:40
  SPEAKER_00: So yeah, be prepared, you guys.
• 4:43
  SPEAKER_00: Also, something that you have taught me about is quarterly taxes.
• 4:48
  SPEAKER_00: So, why don't you tell us a little bit about that and like how to know if you're in the space where you maybe should pay quarterly taxes?
• 4:57
  SPEAKER_01: Sure.
• 4:57
  SPEAKER_01: Yeah, okay, so this is a huge topic for new business owners because I say you need to pay quarterly taxes, and they're like, why?
• 5:05
  SPEAKER_01: What the heck is that?
• 5:06
  SPEAKER_01: Like, I thought taxes were due on April 15th.
• 5:09
  SPEAKER_01: So a huge misconception out there is that taxes are due April 15th.
• 5:14
  SPEAKER_01: That's not actually true, it's just a reconciliation of all of your income and expenses and all of your um taxes that you paid that is due on April 15th.
• 5:25
  SPEAKER_01: So you may need to pay a little bit more, you may get a refund back.
• 5:28
  SPEAKER_01: Taxes are actually due quarterly throughout the year, and a lot of people who have like W-2 jobs or they're employed by someone else, they don't know this or they don't need to know this because their employer is submitting taxes on their behalf every two weeks.
• 5:46
  SPEAKER_01: So it's not anything that anyone who has an employer needs to know.
• 5:50
  SPEAKER_01: So most people who are entrepreneurs come from being employed to now they're self-employed.
• 5:55
  SPEAKER_01: So this is completely new to them.
• 5:57
  SPEAKER_01: Um, because they don't have an employer submitting that tax for them every two weeks or quarterly or whatever it is, they now owe these taxes quarterly to the IRS.
• 6:09
  SPEAKER_01: So um the thing is about these quarterly taxes is if you don't pay them, don't panic.
• 6:17
  SPEAKER_01: Um, the IRS is not gonna like put you in jail or anything like that.
• 6:20
  SPEAKER_01: You may get a little bit of penalty for not for underpaying taxes quarterly, but they're not gonna throw you in jail.
• 6:26
  SPEAKER_01: Nothing crazy is gonna happen.
• 6:28
  SPEAKER_01: You may have to pay a little bit extra money in taxes, but yes, just so you know that April 15th, your reconciliation is due.
• 6:37
  SPEAKER_00: Okay.
• 6:38
  SPEAKER_01: So even if you extend your return to October 15th, you still have to pay as much as you think you owe by April 15th.
• 6:45
  SPEAKER_01: That's another thing.
• 6:46
  SPEAKER_01: Yeah, so it's a little crazy.
• 6:48
  SPEAKER_01: So I want you to change your mindset in thinking, okay, my taxes are due all year long, they're not due April 15th, it's just my reconciliation, which is what your 1040 or your business tax return is that you're sending into the IRS.
• 7:00
  SPEAKER_00: I feel like that's gonna help so many people.
• 7:04
  SPEAKER_00: But that made me think of something honestly.
• 7:07
  SPEAKER_00: I am scared of the IRS, like for real, for as long as I can remember, I don't know what my parents did to traumatize me.
• 7:14
  SPEAKER_00: Just kidding, mom and dad, if you're listening.
• 7:16
  SPEAKER_00: But I don't know what they did, but I'm like, the IRS is so scary.
• 7:20
  SPEAKER_00: And so my question for you is what can you do that will make you go to jail?
• 7:28
  SPEAKER_01: Okay, so I have to be careful here.
• 7:31
  SPEAKER_01: Um, I mean, basically just be super dishonest.
• 7:36
  SPEAKER_01: Okay, okay.
• 7:37
  SPEAKER_01: That's gonna throw they're gonna throw me in jail, just kidding.
• 7:40
  SPEAKER_01: I mean, I see very little people actually go to jail for tax product.
• 7:44
  SPEAKER_01: I've never seen anyone in my career just because I mean, I haven't been in it super long, and also I usually don't work with that kind of people.
• 7:51
  SPEAKER_01: But the thing is, is so little of people get audited, and then the people that do get audited, like generally what happens is the auditor will say, Hey, I want to see this information, you send it to them, they approve it, you're good to go.
• 8:07
  SPEAKER_01: If it's legit.
• 8:08
  SPEAKER_01: Yeah.
• 8:09
  SPEAKER_01: So if you're running your business honestly, you have true deductions, you have all that type of stuff, if you're basically just being honest, that's all it comes down to.
• 8:16
  SPEAKER_01: You're working with someone that can help you take advantage of all your um deductions and stuff like that, you're gonna be just fine.
• 8:23
  SPEAKER_01: It's usually the people who start being too greedy and too dishonest or just flat out don't file tax returns that usually run into trouble.
• 8:31
  SPEAKER_01: And I've seen a little bit of that.
• 8:34
  SPEAKER_01: Um, one of the biggest things that people that I feel like that's a big fear of people is virus.
• 8:41
  SPEAKER_01: I'm scared of the iris, I'm scared they're gonna go take me and put me in jail, they're gonna take all my money out of my bank account.
• 8:46
  SPEAKER_01: And the truth is, is as long as you're just doing your best to make sure that everything is legit, you're gonna be just fine.
• 8:53
  SPEAKER_01: You go under audit, you submit the stuff, it's gonna be okay.
• 8:56
  SPEAKER_01: Um, it's only if you're being blatantly dishonest that it's going to you know, hurt you, screw you up.
• 9:05
  SPEAKER_00: If you do go through an IRS audit, is it they're not gonna like they don't like audit you, say they need every single piece of information.
• 9:16
  SPEAKER_00: They'll just audit like sections, like they'll be like, what about this or that?
• 9:20
  SPEAKER_00: Is that true?
• 9:21
  SPEAKER_01: I mean, it completely depends.
• 9:23
  SPEAKER_01: Yeah, it completely scary.
• 9:25
  SPEAKER_01: Sometimes they'll look into every little thing, and sometimes they'll look into just a few things.
• 9:30
  SPEAKER_01: It just depends on you know how big they think the discrepancy could be.
• 9:35
  SPEAKER_01: Yeah, um, and this is maybe a plug to a few people out there who are running side hustles and aren't reporting any income or anything like that.
• 9:44
  SPEAKER_01: The IRS can confiscate your bank accounts, they can look at the money going in and out, and that can be scary as long as you're doing everything right.
• 9:55
  SPEAKER_01: That's not scary at all.
• 9:56
  SPEAKER_01: Because you're like, Yep, this went in, that one out, look at my QuickBooks, it matches exactly, we're good to go.
• 10:02
  SPEAKER_01: But for people who are not like reporting anything, it can be really scary.
• 10:06
  SPEAKER_01: There was this lady in down here in this town where I live that was a photographer, and she didn't report any of her income for five years.
• 10:14
  SPEAKER_01: The IRS figured it out.
• 10:16
  SPEAKER_01: They went and looked at all of her bank accounts.
• 10:18
  SPEAKER_01: She owed like thousands and thousands of dollars in back taxes because she didn't file anything.
• 10:24
  SPEAKER_01: That is the biggest like situation I've heard of in my career, but that's because she just flat out didn't report anything.
• 10:32
  SPEAKER_01: So as long as you're reporting stuff, you're good to go.
• 10:34
  SPEAKER_01: And I really don't think the iris is as scary as you think it is.
• 10:37
  SPEAKER_01: It's just one of those things where as long as you're honest, you're gonna be okay.
• 10:42
  SPEAKER_00: Yeah, okay.
• 10:43
  SPEAKER_00: I don't know where that trauma came from, but to me, the iris is scary.
• 10:46
  SPEAKER_00: Also, I I feel like everyone feels this way, but it's like, hey guys, if you know all of this, why don't you just tell us how much we freaking owe so we can move on with our lives?
• 10:56
  SPEAKER_01: I know, right?
• 10:57
  SPEAKER_01: I mean, and I really don't know the answer to that because the IRS receives transcripts, they know who's paid you, they you know what I mean, they know how much interest you paid, they receive all that information.
• 11:09
  SPEAKER_01: You can order a transcript from the IRS to see what they have on you for income for the year, you know.
• 11:14
  SPEAKER_01: So who knows?
• 11:15
  SPEAKER_01: I don't know why they do what they do.
• 11:17
  SPEAKER_01: Our tax dollars are strange.
• 11:20
  SPEAKER_01: They are what they are, I guess.
• 11:22
  SPEAKER_00: Yes, they really are.
• 11:24
  SPEAKER_00: Okay, that's actually really helpful and leads me to another question.
• 11:27
  SPEAKER_00: So, what can business owners do to save money on taxes?
• 11:33
  SPEAKER_00: And I feel like there's also this misconception that like you should never pay taxes, but that's not actually true.
• 11:39
  SPEAKER_00: So, why don't you tell us about that?
• 11:41
  SPEAKER_01: Okay, I love that you bring that up.
• 11:43
  SPEAKER_01: Um, to answer your first question, what can business owners do?
• 11:46
  SPEAKER_01: I think mainly it's just the awareness aspect.
• 11:49
  SPEAKER_01: What can I write off?
• 11:50
  SPEAKER_01: You know, am I keeping good records?
• 11:52
  SPEAKER_01: Am I keeping meticulous records of the different things of all the income I've earned, all the income I've let go of, or sorry, all of the expenses I have.
• 12:00
  SPEAKER_01: Um, that's gonna be the best way to help you reduce your taxes is just your record keeping.
• 12:07
  SPEAKER_01: Um, for example, like I had a client a year ago that they had their QuickBooks ready to go, and they're like, hey, will you just look at it with me real quick?
• 12:16
  SPEAKER_01: But I think it's ready.
• 12:17
  SPEAKER_01: And I was looking through their QuickBooks and they had missed like seven months worth of their credit card statement.
• 12:23
  SPEAKER_01: Like that just was not there in their QuickBooks.
• 12:25
  SPEAKER_01: And I'm like, you guys are missing like seven months.
• 12:27
  SPEAKER_01: This doesn't reconcile, this doesn't pan out.
• 12:29
  SPEAKER_01: They're like, Oh, will you put it put it in there for us?
• 12:31
  SPEAKER_01: I put that in there, that gave them 17 grand extra of tax deductions that they were gonna miss out on.
• 12:38
  SPEAKER_00: Oh if they did not.
• 12:40
  SPEAKER_00: Not me.
• 12:41
  SPEAKER_01: Right?
• 12:42
  SPEAKER_01: Right?
• 12:42
  SPEAKER_01: I know it takes a different kind of personality, but that was I just think that's the biggest thing is I'm just gonna plug bookkeeping and record keeping here for sure.
• 12:53
  SPEAKER_01: That's gonna be the biggest thing as far as making sure you're maximizing your deductions.
• 12:58
  SPEAKER_01: And one other thing I want to say right now is tax avoidance is legal, and what I mean by that is avoiding as much tax as possible, right?
• 13:08
  SPEAKER_01: You want to do that, you want to maximize your tax deductions to the fullest extent in most situations, however, tax ear oh my gosh, you're fine, we can't.
• 13:19
  SPEAKER_01: Tax evasion, tax evasion is illegal.
• 13:24
  SPEAKER_01: That's when you truthfully go and evade taxes, so you're literally just not even reporting your income.
• 13:32
  SPEAKER_01: So that's something I want to make you aware of.
• 13:34
  SPEAKER_01: It's okay to find as much deductions as possible.
• 13:36
  SPEAKER_01: It's not okay to not report income and evade taxes.
• 13:40
  SPEAKER_01: So, to answer a question about um sometimes it's okay to pay taxes, is a lot of business owners just think, oh, I'm a business owner now, I get right off everything, I'm not gonna pay taxes.
• 13:52
  SPEAKER_01: I'm like, that's not exactly how it goes, right?
• 13:54
  SPEAKER_00: I've never paid more taxes in my life, I feel like.
• 13:57
  SPEAKER_01: I know, and that's totally true.
• 14:00
  SPEAKER_01: Because as a business owner, you are now, you know, subject to self-employment tax.
• 14:05
  SPEAKER_01: If you have employees, you have to pay payroll taxes, there's so many different things.
• 14:09
  SPEAKER_01: But the thing about paying taxes is a everybody has to do it, and there's gonna be some CPAs that are listening to this out there and be like, oh, that's such a cop out to say.
• 14:19
  SPEAKER_01: But I'm like, it's true, everybody has to pay taxes if they're earning money.
• 14:23
  SPEAKER_01: Yeah, and the second thing about it is if you're paying taxes, you're earning money, and that's a good thing.
• 14:29
  SPEAKER_01: We want to have a lot of ordinary income, we want to see that money flowing in because the truth is, is you can't invest your money into other passive tax activities without having your ordinary income.
• 14:44
  SPEAKER_01: Okay, so you can't invest in real estate, you can't invest in stocks, you can't invest in other businesses without that ordinary income stream, and it makes it really difficult if you don't have the ordinary income coming in to maybe shift it over into those more passive things.
• 15:03
  SPEAKER_01: So that's another plug for you want to maximize your business, right?
• 15:07
  SPEAKER_01: I want people to make and earn as much money as they possibly can in their business.
• 15:12
  SPEAKER_01: But to do this, one of the caveats is you have to pay taxes.
• 15:16
  SPEAKER_01: So it's just one of those things about being a smart business owner and really leaning into that education piece and working with their CPA to understand how much I need to save, why I'm paying these taxes, and what I can do to minimize them if possible.
• 15:30
  SPEAKER_00: Yeah, and that's where I feel like what we were saying at the beginning, as far as like tax strategy, it's like important for you to know that because something that I learned through talking with you and another CPA was like if I want to buy a house, I need to pay myself more money, which means I have to pay more taxes, like through payroll tax, um, because I want to show that I make enough money that I can qualify for a mortgage.
• 15:56
  SPEAKER_00: And that's totally a tax strategy because then after I buy that house, I might dial back my the income that I report on my W-2 for my business to save more money on payroll taxes, right?
• 16:08
  SPEAKER_01: Right, exactly.
• 16:10
  SPEAKER_01: Yeah, a lot of people forget that piece of it too, is they want to pay the least amount of money in taxes, but then they want to go get a loan.
• 16:17
  SPEAKER_01: And loan officers don't necessarily like to lend money to people who show no income at all.
• 16:22
  SPEAKER_01: In fact, they don't like to do that at all.
• 16:25
  SPEAKER_01: So, like uh nope, you don't make any money.
• 16:28
  SPEAKER_01: Yeah, yeah.
• 16:29
  SPEAKER_01: So it's it's important to be very strategic about your tax situation, especially when you're trying to make big, smart purchasing asset moves like that, like buying a house, maybe you're funding a new portion of your business, maybe you're buying a vehicle, all those types of things.
• 16:46
  SPEAKER_01: You just have to be very aware of your strategy um going into it as you, you know, also try to avoid as much tax as possible.
• 16:54
  SPEAKER_00: Yeah.
• 16:55
  SPEAKER_00: So what advice would you give to business owners as far as their tax strategy goes if they are looking to like buy a house or to make a move like that or invest in real estate, even if it's not their primary residence?
• 17:06
  SPEAKER_00: What would you say like as far as tax strategy goes?
• 17:10
  SPEAKER_00: Sure.
• 17:11
  SPEAKER_00: Yeah.
• 17:11
  SPEAKER_01: So the first thing I would do is I would work with a loan officer who primarily works with self-employed individuals.
• 17:18
  SPEAKER_01: Um I've worked with a lot of loan officers with different clients, and some are better than others, just like with everything out there.
• 17:26
  SPEAKER_01: You're gonna find some that are really um educated in some aspects and some that aren't, and some that don't understand the self-employment thing, and some that do.
• 17:34
  SPEAKER_01: So just make sure you're working with a really good loan officer that understands self-employment and people who are self-employed and have self-employed income.
• 17:42
  SPEAKER_01: So that's the first thing.
• 17:43
  SPEAKER_01: Number two would be to analyze your situation.
• 17:46
  SPEAKER_01: Um, what I guess what I mean by that is what kind of house are you trying to buy?
• 17:50
  SPEAKER_01: Like how much money are you trying to qualify for?
• 17:53
  SPEAKER_01: That would be the next thing, is then to talk to your loan officer and say, how much income do you need to see for me to qualify for this amount of money to put down on a house or whatever it is?
• 18:02
  SPEAKER_01: Say the house you want is a million dollars.
• 18:04
  SPEAKER_01: What does my income have to look like to buy a house for a million dollars?
• 18:08
  SPEAKER_01: And then you can have that in your head, and then you can start to plan, right?
• 18:13
  SPEAKER_01: So you can start to increase your business activity so that you can have more revenue coming in, so you can shore more income, you can start to um maybe you've found that you're doing like you have certain expenses or softwares that aren't serving you anymore but are providing you a deduction.
• 18:30
  SPEAKER_01: Maybe this maybe this is time to let go of them, you know, so we don't have a write-off anymore, so that reduces our write-offs.
• 18:36
  SPEAKER_01: Um, another thing to be really careful about on this one too is not reporting write-offs is also not legal.
• 18:44
  SPEAKER_01: And I know that sounds weird because the iris is like, what the heck?
• 18:48
  SPEAKER_01: Like, just pay us as much as you want.
• 18:50
  SPEAKER_01: Yeah, like the IRS, weird, right?
• 18:52
  SPEAKER_01: Yeah, but it's true.
• 18:54
  SPEAKER_01: You that is very odd, but you you honestly you have to report all of your deductions, you have to report all of your income.
• 19:01
  SPEAKER_01: Um, so that's another thing to be aware of.
• 19:03
  SPEAKER_01: Is so so don't just like write off random deductions just because you're trying to lower your income.
• 19:09
  SPEAKER_01: Be very strategic about that.
• 19:11
  SPEAKER_01: Or I'm sorry, I said that wrong.
• 19:13
  SPEAKER_01: Don't try to write off deductions just to increase your income.
• 19:16
  SPEAKER_01: You have to be really strategic about that in that aspect.
• 19:21
  SPEAKER_01: And then work with your CPA once you know how much money you need to earn, work with them, you know, as far as your deductions go.
• 19:28
  SPEAKER_01: Maybe you were gonna buy a piece of piece of equipment, but maybe we're gonna shift that to next year so that we can show more income this year.
• 19:35
  SPEAKER_01: Maybe you were going to prepay a whole bunch of different things, but we're gonna shift that to next year.
• 19:40
  SPEAKER_01: Different stuff like that that would normally give you a deduction in that year will shift to the next year, which will help increase that income.
• 19:47
  SPEAKER_01: So there's um a couple different ways you can do that, but I think the most important is working with a good loan officer, knowing how much you need to qualify for what you want, and then working with your CPA to get there or your bookkeeper.
• 19:59
  SPEAKER_01: A bookkeeper is a really awesome person if you have a separate bookkeeper that can help you meet these goals as well.
• 20:06
  SPEAKER_00: Yeah, okay, that's all very, very helpful.
• 20:09
  SPEAKER_00: And what role does like being an S-corp or not being an S-corp, which, if you don't know what that is, we don't have to dive way into it because it's a little bit complicated.
• 20:20
  SPEAKER_00: But what kind of benefits are there?
• 20:22
  SPEAKER_00: Like if you are trying to buy a house, should you be an S-Corp or does that not really matter?
• 20:28
  SPEAKER_00: Okay, that's a good question.
• 20:30
  SPEAKER_01: So it kind of just honestly depends because someone who so for example, I guess I should explain what an S-corp is for people out there who aren't really sure.
• 20:40
  SPEAKER_01: So I'm sure if you've dove into some tax strategies and stuff like that, you've seen the term S-corp places.
• 20:47
  SPEAKER_01: And what an S-corporation is, is it's a tax selection that you can make on either your LLC or your C corporation that allows you to be taxed as an S corporation.
• 20:59
  SPEAKER_01: Okay, you can't just set up an S corporation, it doesn't work like that.
• 21:02
  SPEAKER_01: You have to make a tax selection, and what this allows you to do is many people who are self-employed are familiar with self-employment tax, that ugly, dreaded 15.3%, right?
• 21:16
  SPEAKER_01: Disgusting.
• 21:17
  SPEAKER_01: So, what this S-corp allows you to do is you get to avoid that self-employment tax when you become an S-corp.
• 21:26
  SPEAKER_01: So you no longer have to pay that 15.3% on your net income at the end of the year, like you would as a Schedule C.
• 21:34
  SPEAKER_01: Such a slay.
• 21:35
  SPEAKER_01: And it's a huge strategy for a lot of people who are making about more than 30 grand of net income.
• 21:41
  SPEAKER_01: I usually don't recommend it for people who are less than that because the cost of filing for an S Corporation and the payroll fees and all that type of stuff usually outweigh the tax benefit if you're not making more than that.
• 21:52
  SPEAKER_01: However, um, one caveat to having an S Corp is that you have to pay yourself, the owner.
• 22:00
  SPEAKER_01: A fair wage for doing your job.
• 22:03
  SPEAKER_01: Okay.
• 22:05
  SPEAKER_01: So you're doing that by the way.
• 22:08
  SPEAKER_01: So you have to pay yourself a W-2 wage from your S Corp for doing your job.
• 22:15
  SPEAKER_01: And the reason for that is because when you become an S Corp, you get to avoid that 15.3%, right?
• 22:23
  SPEAKER_01: But when you have to file payroll for yourself and issue yourself a W-2 wage, you have to pay that 15.3% or that FICA Medicare Social Security on that portion of your wage.
• 22:37
  SPEAKER_01: Wow.
• 22:37
  SPEAKER_01: So there's that caveat with the S Corporation.
• 22:41
  SPEAKER_01: So say for example, you are in 100 grand and you take a$50,000 wage, you don't have to pay the self-employment tax on$100,000 like you would with a Schedule C or a single member LLC.
• 22:55
  SPEAKER_01: You only have to pay the self-employment tax on 50% of it.
• 22:58
  SPEAKER_01: That portion you take as a wage.
• 23:01
  SPEAKER_01: And let me be clear here: self-employment tax is the same as FICA taxes that are payroll.
• 23:08
  SPEAKER_01: That's why self-employed people have to pay self-employment tax because they don't have to pay FICA tax because no one's paying them money, no one's withholding payroll for them.
• 23:16
  SPEAKER_01: So that's where they link, that's where they come together.
• 23:20
  SPEAKER_01: So S-corporations are a huge strategy.
• 23:22
  SPEAKER_01: But to answer your question about if it's going to help you out with a loan, it doesn't necessarily help, it doesn't necessarily not.
• 23:29
  SPEAKER_01: So if you have a huge amount of money coming in as a Schedule C owner, you have a hundred grand, which is not smart, you should be an S-corp.
• 23:37
  SPEAKER_01: But if you have that, a loan officer is going to see that and say, Great, okay, you have a hundred grand coming in of net income.
• 23:42
  SPEAKER_01: That's a good amount of money.
• 23:43
  SPEAKER_01: However, with an S-corp, you do have that wage piece, that W-2, which is a lot more.
• 23:51
  SPEAKER_01: I want to say that loan officers like to see wages more than they do like just self-employment income because self-employment income is very volatile, and your net income that they base things off that can change every year depending on a whole bunch of different factors.
• 24:05
  SPEAKER_01: But a W-2 income is usually not a lot more steady, so they do like to see the W-2 income.
• 24:11
  SPEAKER_01: So for that reason, having an S-Corp can be beneficial.
• 24:15
  SPEAKER_01: However, I don't recommend just like setting up an S-Corp randomly just to get maybe a loan on your house.
• 24:21
  SPEAKER_01: You know what I mean?
• 24:22
  SPEAKER_01: Yeah.
• 24:22
  SPEAKER_01: We just gotta be a little bit more strategic with that.
• 24:24
  SPEAKER_00: So okay, I love that.
• 24:28
  SPEAKER_00: Um, what would you say is something about taxes that most people just don't understand?
• 24:35
  SPEAKER_00: Like they just don't get it.
• 24:38
  SPEAKER_01: That's awesome.
• 24:39
  SPEAKER_01: Um I think the biggest thing that people just don't get is why they're paying the taxes itself.
• 24:47
  SPEAKER_01: Like everybody got that, yeah.
• 24:51
  SPEAKER_01: And to be honest, like whether or not you agree with it, the reasoning is because the government has to fund itself, right?
• 24:58
  SPEAKER_01: Yeah, the government has to fund itself, it has to pay its employees, it has to pay for its programs, all those different types of things.
• 25:06
  SPEAKER_01: That's why down to the core that we pay taxes.
• 25:10
  SPEAKER_01: However, whether or not you agree with that or believe taxation is theft, that doesn't matter because you have to pay it anyway if you live in this country.
• 25:18
  SPEAKER_01: But another thing, yeah, I guess.
• 25:21
  SPEAKER_01: I mean, we have lots of freedoms here, I guess that's the caveat for living in a free country.
• 25:26
  SPEAKER_01: But um, another thing that people just don't understand is I would say the income bracket system.
• 25:33
  SPEAKER_01: So a lot of people, you know, your home, you'll hear them say, Oh, I'm in the 20%, 24% income bracket, and they're like, I pay 24% of taxes on all of my um income.
• 25:45
  SPEAKER_01: And I'm like, that's not true.
• 25:48
  SPEAKER_01: The income bracket system that we have here in the United States is actually a step.
• 25:54
  SPEAKER_01: It's like you gotta think of it as like stairs, okay?
• 25:56
  SPEAKER_01: So you're climbing these stairs up the income bracket system.
• 26:00
  SPEAKER_01: So at the very bottom, you have your 10%.
• 26:04
  SPEAKER_01: Um, and I think I believe that's like it's usually like whatever,$11,000 or something like that.
• 26:11
  SPEAKER_01: Don't put me on those people.
• 26:12
  SPEAKER_01: I feel like I don't know in my head.
• 26:14
  SPEAKER_01: Something like this.
• 26:15
  SPEAKER_01: I'm gonna use examples because I don't remember them off the top of my head, but you're gonna have this 10% bracket, okay?
• 26:21
  SPEAKER_01: And you're gonna pay 10% of taxes on your income that fits within that bracket.
• 26:28
  SPEAKER_01: So if you've made$100,000 and the 10% bracket's ten thousand dollars, you're gonna pay ten percent on ten thousand dollars.
• 26:35
  SPEAKER_01: Yeah, okay.
• 26:36
  SPEAKER_01: Okay, and then you're gonna move up to the next bracket, which is like oh my gosh, I said I should have.
• 26:43
  SPEAKER_01: We'll just know it's twenty-five thousand.
• 26:45
  unknown: Right.
• 26:46
  SPEAKER_01: We'll just make it up twenty-two percent.
• 26:50
  SPEAKER_01: That's the bracket.
• 26:51
  SPEAKER_01: Oh my gosh, twenty-two percent bracket, and then whatever amount of your income fits within that bracket, you're gonna pay taxes on at that percentage, and then you move up to the next percentage.
• 27:03
  SPEAKER_01: So, say that's you know, your clear up to your 32% bracket.
• 27:08
  SPEAKER_01: That's whatever income is between the bracket before it and the 32% bracket, you'll pay 32% on that income.
• 27:16
  SPEAKER_01: And it's kind of hard to explain without showing visual visuals and stuff like that.
• 27:21
  SPEAKER_01: You just kind of have to think of it as like you're climbing stairs.
• 27:24
  SPEAKER_01: You're never gonna pay, like if you're in the highest income bracket, 37% on all of your income.
• 27:29
  SPEAKER_00: Like, one thing I've seen like on TikTok is people will be like, you don't want to get a raise because if that pushes you into the next tax bracket, then you're actually losing money.
• 27:39
  SPEAKER_00: But it's like that's literally just not true because you're only paying that higher percentage on a very small portion of your total income.
• 27:49
  SPEAKER_01: That's exactly right, yeah.
• 27:51
  SPEAKER_01: Whatever portion of your income fits in that bracket rate.
• 27:54
  SPEAKER_01: So say it's ten thousand dollars, you get a ten thousand raise, that pushes you into the the 37% bracket.
• 28:00
  SPEAKER_01: You're only paying 37% on that 10 grand, not everything below it.
• 28:05
  SPEAKER_01: And so you're totally right.
• 28:06
  SPEAKER_01: There's a lot of misconception out there around that subject.
• 28:09
  SPEAKER_00: I feel like I just thought of another misconception.
• 28:12
  SPEAKER_00: People, I've heard this is all stuff I hear on TikTok.
• 28:15
  SPEAKER_00: I feel like TikTok, we can't trust no tax advice.
• 28:19
  SPEAKER_01: We can't trust tax advice on TikTok.
• 28:21
  SPEAKER_00: One thing that they said like, you should never pay more than 10% of your total income in taxes.
• 28:33
  SPEAKER_00: That can't be right, is it?
• 28:35
  SPEAKER_01: I mean, no.
• 28:37
  SPEAKER_01: Because you can take so there's something called the marginal tax rate, and that goes along with your effective tax rate.
• 28:45
  SPEAKER_01: So your effective tax rate is going to be your tax bracket.
• 28:48
  SPEAKER_01: Okay.
• 28:49
  SPEAKER_01: Yeah, in the 24% bracket, that means the top of my income is landing in the 24% bracket.
• 28:54
  SPEAKER_01: Okay.
• 28:55
  SPEAKER_01: But my marginal rate of tax could be like 11%, which means I take my total taxable income and I divide it by my total amount of tax.
• 29:07
  SPEAKER_01: That could be like more like 11%.
• 29:09
  SPEAKER_01: Because, like I just explained, you're in this, you know, it's stairs.
• 29:13
  SPEAKER_01: You step up, it's not just like here and then here, you get taxed so much, depending on how much you make.
• 29:19
  SPEAKER_01: So, generally, I mean, I've never heard of that advice before, and um, I would say that if you're aiming for that, then you're probably not getting raises, you're probably trying to cut profits or something like that to make it fit in that little um square of 10%.
• 29:38
  SPEAKER_01: But generally, I've seen people marginal tax rate rates from you know six percent up to 24%.
• 29:44
  SPEAKER_01: It totally just depends on your individual situation.
• 29:47
  SPEAKER_00: And like what happened that year, like maybe you sold your homes or like you had a kid or you got getting married change it?
• 29:55
  SPEAKER_00: I feel like it does.
• 29:57
  SPEAKER_01: I mean, yes, I mean getting married, you're in a whole different graph um bracket group.
• 30:01
  SPEAKER_01: There's different brackets for married filing jointly and married or in single, so yes, anything like that can totally change it.
• 30:08
  SPEAKER_00: Okay, another misconception.
• 30:11
  SPEAKER_00: Just because it's a freaking tax deduction doesn't mean you can afford it.
• 30:16
  SPEAKER_00: We've talked about this before, but I'm like, even I know this, and I don't know that much about taxes.
• 30:23
  SPEAKER_01: I mean, yes, I will I mean I could screen this one from the rooftops, like people all over.
• 30:30
  SPEAKER_01: I hear them say, Well, I'm just gonna buy it because it's a tax deduction.
• 30:33
  SPEAKER_01: I'm like, great, well, that's still money out of your bank account, but you can't afford, you know what I mean?
• 30:38
  SPEAKER_01: Like, and you don't necessarily need this.
• 30:41
  SPEAKER_01: Um a lot of people are just like, well, it's a tax deduction, so it gives them an excuse to spend their money.
• 30:49
  SPEAKER_01: So a lot of the tax advice you'll see out there, especially at the end of the year, is just you know, buy a vehicle or buy a piece of equipment because that's a big expense for your business, therefore a big write-off, so you'll pay less taxes.
• 31:02
  SPEAKER_01: And that's great if you need that vehicle or if you need that equipment and if you can afford it.
• 31:08
  SPEAKER_01: Okay.
• 31:09
  SPEAKER_01: A lot of people are just out there buying random crap for the tax write-off.
• 31:14
  SPEAKER_01: And I'm like, that is still money you had to spend.
• 31:16
  SPEAKER_01: If that piece of equipment is five thousand dollars, that five thousand dollars is eventually going to leave your bank account.
• 31:23
  SPEAKER_01: I mean, it could if you pay for it in cash, if you pay for it in a loan, even more than because you have interest on top of that.
• 31:28
  SPEAKER_01: And maybe your tax bill is only gonna be ten grand.
• 31:31
  SPEAKER_01: So now you have fifteen thousand dollars leaving your bank account, you know, and you can't afford it when you were just trying to save taxes, and maybe you saved like a couple hundred dollars, and that's great.
• 31:43
  SPEAKER_01: But if you don't need that piece of equipment, it's generally not worth it.
• 31:48
  SPEAKER_01: So I would say if you're trying to make fast tax decisions, I would never, I guess the thing is, is I would never make decisions based on tax, and that's kind of weird to hear from a CPA, is a lot of people will make their business decisions based on how it's gonna affect them tax-wise.
• 32:09
  SPEAKER_01: And I'm not talking about like making an Selection, that's completely different.
• 32:13
  SPEAKER_01: That's smart.
• 32:14
  SPEAKER_01: You want to do that, and that will affect you tax-wise.
• 32:16
  SPEAKER_01: I'm talking about spending money, so you don't want to go out and buy a rental for the tax benefits because chances are there is no tax benefits for you if you're not a real estate professional.
• 32:28
  SPEAKER_01: You don't want to go out and buy this G-Wagon that you can't afford just for the tax benefits.
• 32:34
  SPEAKER_01: So, what I'm trying to say here is think through this like financially first.
• 32:38
  SPEAKER_01: Like, is this gonna benefit my business?
• 32:40
  SPEAKER_01: Is this going to increase profits?
• 32:42
  SPEAKER_01: Is this gonna make me more efficient?
• 32:43
  SPEAKER_01: Is this gonna help me eliminate expenses?
• 32:45
  SPEAKER_01: If you meet all of those things, then absolutely go out and buy that vehicle, buy that equipment because you need it.
• 32:52
  SPEAKER_01: It's going to help your business thrive.
• 32:54
  SPEAKER_01: If it doesn't meet those situations or those, sorry, if it doesn't meet that criteria, then you don't want to purchase this equipment or this um vehicle because you're just doing it for the tax write-off.
• 33:09
  SPEAKER_01: So my biggest plug here is don't make decisions based on taxes when it comes to spending.
• 33:14
  SPEAKER_01: Make it can be part of the decision-making process, but it's not gonna be the main reason you make decisions.
• 33:21
  SPEAKER_00: Yeah, I'm just on a freaking roll with misconceptions right now.
• 33:26
  SPEAKER_00: So I feel like another one people have is like they will write off like anything.
• 33:32
  SPEAKER_00: Like I've met people and they're like, Yeah, we like what on this vacation, like it's a tax write-off.
• 33:36
  SPEAKER_00: And I'm like, wait a second, is it?
• 33:40
  SPEAKER_00: Like, I don't think so.
• 33:42
  SPEAKER_01: Okay, so that's it's great you bring this up because here's the thing most things are write-offs only if they benefit your business, or they are exclusively used for your business and they're ordinary and necessary.
• 33:59
  SPEAKER_01: Okay, ordinary and necessary is straight on the IRS website, that's what they say about expenses.
• 34:05
  SPEAKER_01: So if you are going on a trip and it is ordinary for you to travel for your job and it is necessary to make a profit, then that's a write-off.
• 34:14
  SPEAKER_01: However, if none of those business criteria are being met, it's not a write-off.
• 34:21
  SPEAKER_01: So a lot of people, so here's an example.
• 34:23
  SPEAKER_01: I'm a CPA, I have no reason to be writing off my trip to Florida.
• 34:30
  SPEAKER_01: None, no reason whatsoever because it's not gonna benefit my tax and it's not my tax practice, it's not ordinary and it's not necessary for me.
• 34:39
  SPEAKER_01: However, if I was going to Florida to maybe just attend a conference about taxation and get more knowledge and networking, that's a completely different situation.
• 34:49
  SPEAKER_01: But I think what you're talking about here is people who just travel for vacation and write it off.
• 34:54
  SPEAKER_00: Um I think they just think in their heads like the business is gonna pay for it.
• 34:58
  SPEAKER_00: But it's like if the business is gonna pay for it, the business just needs to pay you for it.
• 35:03
  SPEAKER_01: Just because your business pay for pays for it doesn't mean it's a write-off all the time.
• 35:08
  SPEAKER_01: I think that's the key here, right?
• 35:10
  SPEAKER_01: And just because you pay for it with your business account doesn't mean it's a write-off, it still has to meet the test, it still has to be ordinary and necessary for your business.
• 35:19
  SPEAKER_01: However, to spin another um example in of the other direction, so say you're a photographer, okay?
• 35:28
  SPEAKER_01: You have a client that is getting their photos done in Florida, same thing.
• 35:34
  SPEAKER_01: You have to fly there to take the photos for the wedding, and you have to fly back.
• 35:38
  SPEAKER_01: Is it ordinary necessary for a photographer to travel for business?
• 35:43
  SPEAKER_01: Absolutely.
• 35:44
  SPEAKER_01: Was it necessary for this photographer to fly over to Florida to get that profit?
• 35:48
  SPEAKER_01: Absolutely.
• 35:49
  SPEAKER_01: So that's a complete write-off, right?
• 35:52
  SPEAKER_01: I mean, and there's other nuances as far as like how many business days and all that type of stuff, and we won't get into that here, but um I just really think that business owners need to sit back and think, is this ordinary and necessary for my business?
• 36:06
  SPEAKER_01: And if it is, then it's generally a hundred percent of the time a write-off.
• 36:11
  SPEAKER_01: If it's not, then it's probably one of those gray area ones that you'll want to talk to your bookkeeper or CPA or accountant about.
• 36:19
  SPEAKER_00: Yeah.
• 36:21
  SPEAKER_00: Okay, what about if I okay, so another one?
• 36:27
  SPEAKER_00: I can't talk right now.
• 36:29
  SPEAKER_00: Um, another one I was thinking of is this.
• 36:33
  SPEAKER_00: Actually, it's just a problem with me, I think.
• 36:35
  SPEAKER_00: So in my head, nothing is ordinary.
• 36:38
  SPEAKER_00: Or I'm like, do I need to fly to Florida to photograph that wedding?
• 36:41
  SPEAKER_00: Couldn't they just come to me?
• 36:43
  SPEAKER_00: So I feel like you can't be psychotic like me.
• 36:47
  SPEAKER_01: You can't overthink it.
• 36:48
  SPEAKER_01: Like, don't overthink it.
• 36:50
  SPEAKER_00: Me, queen of overthinking.
• 36:52
  SPEAKER_00: So I'm always like, um, I don't know.
• 36:54
  SPEAKER_00: Like, there's things that I'm like, I guess I could write that off, but like, ooh, I don't know.
• 36:59
  SPEAKER_00: Did I need it?
• 37:00
  SPEAKER_00: I don't know.
• 37:01
  SPEAKER_01: But I think other people are a little bit more like, yeah, it fits, it fits, and they'll put it on their taxes, which and I think maybe to speak to that a little bit is what I see mainly in that area that gets a little bit concerning is the personal stuff.
• 37:18
  SPEAKER_01: So I'll see people say, Well, I am constantly in front of cameras, so I need to be able to write off my hair, my makeup, all that type of stuff.
• 37:27
  SPEAKER_01: I mean, it is ordinary to want to look good on camera, but it's not necessary in the eyes of the iris.
• 37:34
  SPEAKER_01: I mean, I agree with you.
• 37:35
  SPEAKER_01: I think it's necessary, my taxpayer, but unfortunately, the iris doesn't.
• 37:41
  SPEAKER_00: So it's I'm gonna go to I'm gonna go to court with them and be like it is necessary because listen, how you look on camera literally changes your brand.
• 37:51
  SPEAKER_01: It's true.
• 37:52
  SPEAKER_01: It's just true.
• 37:53
  SPEAKER_01: So it's necessary.
• 37:54
  SPEAKER_01: Here's the thing is the the influencer landscape, it's kind of changing this whole thing with IRS because before um only celebrities were able to write off their hair, their makeup, their nails, that type of stuff, because that makes sense for a celebrity, like that's who they are, right?
• 38:13
  SPEAKER_01: That's a brand image.
• 38:14
  SPEAKER_01: Yeah, exactly.
• 38:14
  SPEAKER_01: Their face, everything.
• 38:16
  SPEAKER_01: However, for some of us that are more like, I'm on camera a lot, but it's not my main job, or maybe I'm an influencer, but um I still get this stuff done because I just like it, that's where it gets a little gray.
• 38:28
  SPEAKER_01: And out there in the influencer industry, it's hard to say because there's some CPAs that are like, yeah, write all that off.
• 38:34
  SPEAKER_01: You're an influencer, you have to have that.
• 38:36
  SPEAKER_01: And there's some that are like hard, no, you're not a celebrity, and there's not really a fine line written there yet.
• 38:44
  SPEAKER_01: So I think that's one of those things that you just have to work with your accountant on what you feel comfortable with as the taxpayer.
• 38:53
  SPEAKER_01: Um it honestly comes back down to the taxpayer.
• 38:58
  SPEAKER_01: I can advise people all I want on things and what's deductible and what's not, but at the end of the day, it's up to the taxpayer for them to decide what they want to write off and what they don't.
• 39:09
  SPEAKER_01: Yeah.
• 39:09
  SPEAKER_01: Of course, me as a CPA, I can use my discretion and say, okay, that's blatantly illegal.
• 39:14
  SPEAKER_01: I'm not gonna work with you, I'm not gonna put my name on anything you do.
• 39:18
  SPEAKER_01: But there's some situations where I say, you know what, here's my advice, but it's up to you to decide, and I'm okay whatever way you go because you're the taxpayer, you go under audit, you're gonna have to prove that.
• 39:30
  SPEAKER_00: Yeah, like you're the one that's on the hook.
• 39:32
  SPEAKER_00: You're the one that has to hire the lawyer, right?
• 39:35
  SPEAKER_00: But I feel like also a lot of tax law is just based on like precedent, right?
• 39:38
  SPEAKER_00: Like it is based on kind of what happens in a courtroom.
• 39:41
  SPEAKER_00: Like, I think there was a there was a celebrity or a music group.
• 39:46
  SPEAKER_00: Sorry if you know who I'm talking about, I can't think of the name.
• 39:49
  SPEAKER_00: Uh it's not queen, but it's in that genre.
• 39:52
  SPEAKER_00: And I think they were like writing off their their like outfits for their shows, and it went through this big process, and they were like, no, that is legal.
• 40:02
  SPEAKER_00: Like their lawyer was like, it is legal because they have to wear these costumes to perform their songs, whatever, blah blah.
• 40:08
  SPEAKER_00: And I bet you we're just gonna see that in the influencer world where yes, it is, and like I mean, obviously, in my opinion, I'm like, yeah, all of that stuff is tax deductible because I could literally show you examples like on TikTok, I could be like, look, this account is like not performing because they're they don't their image is not like cohesive with their brand or whatever.
• 40:31
  SPEAKER_00: Like, I could totally explain it to you.
• 40:33
  SPEAKER_00: But it's like, is that gonna win when there's a judge?
• 40:36
  SPEAKER_00: Like, we'll have to see.
• 40:38
  SPEAKER_01: Yeah, I bet it will come up.
• 40:40
  SPEAKER_01: I'm sure it will, and especially in the future, definitely that's gonna come up.
• 40:44
  SPEAKER_01: But another thing that the IRS says about stuff like that, and maybe the IRS doesn't say this, maybe I've heard it from other people or court cases.
• 40:51
  SPEAKER_00: I gotta be careful like IRS, if you're listening, don't sue us.
• 40:54
  SPEAKER_01: Yeah, please.
• 40:55
  SPEAKER_01: Um, one of the things that they say is like especially for like clothing and stuff like that, is if you're going to wear that clothing outside of that photo shoot or outside of that video or whatever it may be, then it's generally not tax deductible because you're gonna wear it outside for another reason.
• 41:15
  SPEAKER_01: For another reason, a personal reason.
• 41:18
  SPEAKER_01: Yeah, if it's literally a uniform and you only wear it to do your job, that's different.
• 41:25
  SPEAKER_01: So there's a little help that way with some people out there that are trying to decide like is my clothing deductible or certain things like that.
• 41:33
  SPEAKER_01: And generally the hard line is is this required to do my job?
• 41:37
  SPEAKER_01: So a good example would be like nurses, they have to wear scrubs, so yeah, um, you know, stuff like that would be a write-off for them if they are a self-employed nurse or whatever, like something like that.
• 41:48
  SPEAKER_01: But for me, like I don't have to wear just I can wear whatever I want while I work, you know, behind my computer, so none of my clothes will be tax deductible.
• 41:56
  SPEAKER_01: So you just think of it that way.
• 41:58
  SPEAKER_01: So maybe that can help some of you and point you in the right direction.
• 42:01
  SPEAKER_00: Totally.
• 42:01
  SPEAKER_00: I feel like people listening to this will way use that advice.
• 42:05
  SPEAKER_00: That makes a lot of sense.
• 42:06
  SPEAKER_00: Oh my goodness, taxes.
• 42:08
  SPEAKER_00: You know, it's funny because, like I said, I've always been scared of the IRS.
• 42:14
  SPEAKER_00: Honestly, I think my worst fear in life is like being sued.
• 42:16
  SPEAKER_00: Like, I honestly don't know where that came from.
• 42:19
  SPEAKER_00: If you're a therapist, please help me.
• 42:21
  SPEAKER_00: But I'm so scared of it.
• 42:22
  SPEAKER_00: I'm so scared to get pulled over.
• 42:24
  SPEAKER_00: Like, I don't know what it is, but taxes fall in that same bracket for me for whatever reason, probably because part of it is legal stuff.
• 42:31
  SPEAKER_00: I don't know.
• 42:32
  SPEAKER_00: But honestly, you've helped me get so clear, and your course is so good.
• 42:37
  SPEAKER_00: I can tell everyone this because I got to see all the inside of it when I was helping you with some content.
• 42:42
  SPEAKER_00: And it's really amazing, just knowing and feeling confident in yourself that you have the tools and the knowledge to understand your tax strategy, and at the same time knowing when to get more professional help, you know, talk to someone that does it for a living, um, is just so valuable because it at the end of the day, like it is your finances, it's your money that we're talking about, and that's so important in your business.
• 43:09
  SPEAKER_01: Yes, yes, and it's so true.
• 43:11
  SPEAKER_01: And a lot of times when I work with people, like and some people are funny, but money is such like a topic that is so difficult for so many people, and it's such so emotional, it's so emotional, which people say it's not emotional.
• 43:29
  SPEAKER_01: Oh, it is, it totally is a hundred percent, and it's so emotional, it causes divorces, it causes business partners to split up, it causes a whole lot of issues, it causes a whole lot of goodness in the world too.
• 43:42
  SPEAKER_01: Like money just is what it is.
• 43:45
  SPEAKER_01: Um, but I think that's the hard part that people have with learning about taxes or educating themselves that way, is it's just like it's such an emotional thing for them.
• 43:57
  SPEAKER_01: And like when I tell people what their tax liability is.
• 44:00
  SPEAKER_01: Like, I have to say, so neutral.
• 44:02
  SPEAKER_01: I mean, explaining how like how much people owe taxes is almost like telling them, you know, that their dog died or something like that.
• 44:10
  SPEAKER_01: Like it's this horrible situation, and I'm sorry for those who have had their dogs die.
• 44:14
  SPEAKER_01: It's terrible.
• 44:15
  SPEAKER_01: But it almost feels that way when you are telling someone their tax liability because it is so emotional and it's so connected to everything you do.
• 44:25
  SPEAKER_01: You know what I mean?
• 44:26
  SPEAKER_01: Yeah.
• 44:26
  SPEAKER_00: So yeah, I was just thinking about that for you.
• 44:29
  SPEAKER_00: Like how scary it is to like even just like when you're quoting someone for anything.
• 44:35
  SPEAKER_00: Like when I'm sending someone a bill for social media, I'm always like, I'm concerned about like their feelings about money, and you just can't be because I'm sure you've given people a tax bill that's like a hundred grand.
• 44:47
  SPEAKER_00: Oh my god.
• 44:48
  SPEAKER_00: You owe this, it's as much as a mortgage.
• 44:51
  SPEAKER_01: Yes, and it like I have to detach myself from it just like a healthcare professional would.
• 44:56
  SPEAKER_00: And if you're not prepared for it, it can feel very scary and detrimental.
• 45:00
  SPEAKER_00: And yes, like, how am I ever going to get through this?
• 45:04
  SPEAKER_00: Which is how you feel when bad life things happen.
• 45:07
  SPEAKER_01: So it's a hard thing because people are so like emotional about their money, they save so much, or they don't save it all, or you know what I mean?
• 45:16
  SPEAKER_00: I don't think those difficult things you're wrong about that at all because, like, I mean, I was just reading The Psychology of Money, and he talks a lot about how like when the stock market crashed, like people were actually suicidal, trigger warning.
• 45:30
  SPEAKER_00: We'll put a trigger warning on it, but they actually were, or because of just money.
• 45:37
  SPEAKER_00: And that's exactly what I'm saying about taxes.
• 45:39
  SPEAKER_00: It's like that's why it's so important, is because it is your money and it is your livelihood, and it's your ability to pay your mortgage and drive the car you want to drive and live the life you want to live.
• 45:51
  SPEAKER_00: And if you're not paying attention to your taxes and your tax liability, that can completely mess that up.
• 45:56
  SPEAKER_00: 100%.
• 45:57
  SPEAKER_00: So it is, it is scary.
• 45:59
  SPEAKER_00: It's it's not just something silly that doesn't need to be worried about, but also you can plan for it, and there's a way to do it where like you aren't gonna get yourself into a situation that feels life or death because you've prepared and you understand it.
• 46:14
  SPEAKER_01: Yes, I I mean I absolutely a hundred percent agree with that.
• 46:19
  SPEAKER_01: Um, and I've read the psychology of money, by the way, since you've said that.
• 46:23
  SPEAKER_01: So I totally know what you're talking about and how people are so connected to their money.
• 46:29
  SPEAKER_01: Um, and one thing I need to mention, and one thing I've learned from The Psychology of Money, which is such a great book, me and Jaden will both plug that book for anyone who's read it.
• 46:41
  SPEAKER_01: Um, is you have to detach yourself emotionally from your money too.
• 46:46
  SPEAKER_01: And that's kind of like a wealth thing that I like to talk about a lot, is you have to detach yourself from that money because when you do lose your job, you have to be in a safe emotional state to say, okay, what's next?
• 47:00
  SPEAKER_01: You know what I mean?
• 47:01
  SPEAKER_01: What do I do from here?
• 47:02
  SPEAKER_01: Not sit there and you know, go into depression or whatever it is that some people will do.
• 47:08
  SPEAKER_01: And then on the flip side, if you earn tons and tons of money and it's some miraculous lucky streak that you hit, you can't be so prideful to think that you are untouchable because anything can happen.
• 47:22
  SPEAKER_01: So there's both sides.
• 47:24
  SPEAKER_00: They talk about that so much in that book about how people he says, Oh, I wish I could remember the quote.
• 47:30
  SPEAKER_00: Dang it.
• 47:31
  SPEAKER_00: But he says something like, People, oh no, I'm never gonna get it.
• 47:36
  SPEAKER_00: But it's essentially on the thing of just like people think they're better off than they're going to be, and they also think they're worse off than they're going to be.
• 47:44
  SPEAKER_00: Like we tend to do it in both directions.
• 47:47
  SPEAKER_00: And it's like, yeah, learning how to manage your money in a non-emotional way sets you up to be protected in both areas so that when things get really bad, you don't fall completely off.
• 47:58
  SPEAKER_00: And when they're really good, you know what to do and you know how to plan for that instead of just like spending it all or investing it into something bad and then losing it all.
• 48:08
  SPEAKER_00: Absolutely.
• 48:09
  SPEAKER_00: So, yeah.
• 48:10
  SPEAKER_00: Okay, I have one last question for you, and it is if you could give yourself, your younger self, a piece of advice, what would it be?
• 48:19
  SPEAKER_01: Okay, so I think the same advice that I would give myself now is what I'd give myself when I'm younger, and that is you're not behind, you're just comparing yourself.
• 48:30
  SPEAKER_01: And I know that's so cliche, like everybody says that, but it is so true.
• 48:35
  SPEAKER_01: Once you only people say it because you need to hear it.
• 48:38
  SPEAKER_01: Yes, once you truly internalize that, I think it can make a world of difference in how you feel about yourself as an entrepreneur, how you feel about yourself as a partner, a friend, a wife, a mother, all these different things that you may be a father, son, I don't know if there's my mother.
• 48:56
  SPEAKER_01: But um I think that if you were sitting there constantly comparing yourself to others in the entrepreneurial place, you know, there's so many people out there screaming from the rooftops about how much money they made, how much money they don't make, it's just so hard to look both ways and not stay in your lane.
• 49:16
  SPEAKER_01: So I think the biggest advice I would give myself is stay in your own lane because there's so much you can learn from other people, but if you start comparing yourself, that's when it tears you down.
• 49:28
  SPEAKER_01: If you use other people's experiences and livelihoods to learn, that can bring more of you forward, right?
• 49:36
  SPEAKER_01: Because that can give you good something good to look forward to, or something, you know, put in the work or the effort that you need to get there.
• 49:43
  SPEAKER_01: However, once you start comparing yourself to these people, that's when it starts to damage you and your your self-worth, your your thoughts about money.
• 49:53
  SPEAKER_01: And I even had an experience with this like two days ago.
• 49:56
  SPEAKER_01: There was someone that I follow, and they were talking about how much money they made and how fast, and I was like, oh, that's so lame.
• 50:02
  SPEAKER_01: Like, what am I doing?
• 50:03
  SPEAKER_00: And then I think about it makes you feel like you're doing something wrong.
• 50:06
  SPEAKER_00: Exactly.
• 50:07
  SPEAKER_00: Like, I'm smart, how come I can't do that?
• 50:09
  SPEAKER_01: And that's exactly right.
• 50:10
  SPEAKER_01: Like, that is such a dumb thing for me to think, but it's like, okay, like I have a master's degree, I have a CPA license, like I could figure that out.
• 50:18
  SPEAKER_01: Like, why haven't I?
• 50:18
  SPEAKER_01: You know what I mean?
• 50:20
  SPEAKER_01: But I just have to chalk it up.
• 50:21
  SPEAKER_01: Like, I can't compare myself to that person because I'm also in the meantime, I've also been married, I also have two kids, like I also like there's so many different things that I have centered my life around, other than my business that people don't know about, or that this person hasn't, or you know what I mean?
• 50:38
  SPEAKER_01: Yeah.
• 50:39
  SPEAKER_00: So there's just you don't see all of that on social media, and you don't you shouldn't have to, it's totally fine, but then you also have to remember that like that's not the full picture, and you don't know how much debt somebody has, you don't know how much like help they have from family, or you don't know what job they had before that, you don't know how much they're able to save, or how much their rent is, or why they need the car that they have.
• 51:05
  SPEAKER_00: Like, you just don't know any of these things, and so when you compare yourself, you're just you can't even compare yourself.
• 51:13
  SPEAKER_00: You can't even because you just don't have the information to compare yourself.
• 51:18
  SPEAKER_00: That's so true.
• 51:18
  SPEAKER_00: And one thing I learned recently was like when you're feeling jealous, instead of being like, Oh, I'm like jealous of this person and beating yourself up for feeling jealous, just understand that like that jealousy is either showing you something that you want or something you don't want.
• 51:34
  SPEAKER_00: So you get to decide.
• 51:35
  SPEAKER_00: Like, if you feel jealous, you can be like, Am I jealous?
• 51:39
  SPEAKER_00: Because I wish I was doing that.
• 51:42
  SPEAKER_00: And if so, how can I do that?
• 51:45
  SPEAKER_00: And then just make a plan to get to that place where you can do that, and then you don't have to feel jealous anymore.
• 51:50
  SPEAKER_01: Yeah, absolutely.
• 51:52
  SPEAKER_01: Or on the flip side of that, decide that that's not actually a priority for you if you have other things.
• 51:57
  SPEAKER_00: Yeah, just be like, Am I jealous?
• 51:59
  SPEAKER_00: Like, do I actually want that?
• 52:00
  SPEAKER_00: And then maybe you don't actually want that.
• 52:02
  SPEAKER_00: I've done that so many times where I'll be like, I do it when I see people traveling.
• 52:06
  SPEAKER_00: I'll be like, I'm so jealous, like they went here or there.
• 52:09
  SPEAKER_00: And then I'm like, I've traveled enough to know that every time I travel, I get home and I'm like, that was rough.
• 52:17
  SPEAKER_00: Like, do I like that?
• 52:18
  SPEAKER_00: You know?
• 52:19
  SPEAKER_00: And I totally still love traveling.
• 52:21
  SPEAKER_00: I I do love it, but it's like maybe they're just making it look way more glamorous than it actually is.
• 52:28
  SPEAKER_01: Yes, and one more plug for this.
• 52:30
  SPEAKER_01: Um, I have an insider review to so many people's financial situations, hundreds of people's tax returns, and I can tell you that some of the biggest spenders and the richest looking people out there make nothing.
• 52:46
  SPEAKER_01: Don't have a lot of money, they leverage their whole lives, you know what I mean?
• 52:49
  SPEAKER_01: And then some of the actual wealthiest, richest people out there, by in terms of tons of money coming in, you would have no idea.
• 52:56
  SPEAKER_01: It's just all about how people choose to portray themselves and live their lives exactly like you said.
• 53:02
  SPEAKER_01: So you just have you have no idea what other people are going through, how much money they make, what they're doing in their lives, outside of their business.
• 53:09
  SPEAKER_00: And like they they they might be happy living their life with all that debt.
• 53:15
  SPEAKER_00: I think we like shame people too.
• 53:17
  SPEAKER_00: We're like yes, yes, they don't they're in so much debt, and it's like, I don't know, do they like it?
• 53:21
  SPEAKER_00: Okay, like sure.
• 53:23
  SPEAKER_01: Are they happy and great, I guess?
• 53:25
  SPEAKER_00: Yeah, like are they on the brink of bankruptcy?
• 53:27
  SPEAKER_00: Maybe, but they're vibing, so like whatever.
• 53:31
  SPEAKER_00: It's just hard not to want to like be curious and be interested in everyone else's like sure finances and stuff, but like at the end of the day, it has to like be this is my favorite part of the psychology of money.
• 53:41
  SPEAKER_00: He was he says at the very end, you have to make decisions with your money that make you sleep better at night.
• 53:48
  SPEAKER_02: Yes.
• 53:48
  SPEAKER_00: So if having a huge savings account makes you sleep better at night, do that.
• 53:53
  SPEAKER_00: Um, you know, if if driving the most awesome car ever, but you have no savings account makes you sleep better at night, like do that.
• 54:01
  SPEAKER_00: It has to be like for your health and your mental health.
• 54:05
  SPEAKER_01: So and I really love that advice too, because sometimes that goes against the grain of normal financial advice.
• 54:10
  SPEAKER_01: Like totally.
• 54:12
  SPEAKER_01: Sometimes if you have a really low interest drone, people will tell you not to pay that off because that's free money or not free money, it's just cheap money that you can use somewhere else.
• 54:19
  SPEAKER_01: But because it provides you peace of mind to pay that off, pay it off.
• 54:23
  SPEAKER_01: Like it's exactly like you said, do what makes you feel better and sleep better at night with your money.
• 54:28
  SPEAKER_00: Yes, I love that.
• 54:30
  SPEAKER_00: Oh my gosh, thank you so much for coming on this podcast.
• 54:33
  SPEAKER_00: It was so helpful and so awesome.
• 54:35
  SPEAKER_00: And I feel like we're gonna have to have you back and talk about wealth next time because we didn't even really get to touch on that till the end, but um, you're so awesome.
• 54:43
  SPEAKER_00: We're gonna link her course and all that in our show notes so that you can take Savannah's course.
• 54:48
  SPEAKER_00: It's so awesome, and we will see you soon on the pod.
• 54:53
  SPEAKER_00: Thank you so much for having me, Jada.