Latest / Built by Margin with Laurie Chen / Maximizing Wealth: How to Use Taxes as a Financial Weapon with Tony Hoong, CPA

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Maximizing Wealth: How to Use Taxes as a Financial Weapon with Tony Hoong, CPA · Built by Margin with Laurie Chen

• 0:04
  Welcome to Built by Margin, the podcast where strategy meets the spreadsheet. I'm your host, Laurie Chen, fractional CFO and tax strategist, here to help you make smarter financial decisions, build a profitable business, and keep more of what you earn. Let's dive into the numbers that actually move the needle. Welcome to Built by Margin. I'm your host, Laurie Chen.
• 0:31
  And today's episode is for every entrepreneur, business owner or high income earner who's ever thought, am I paying too much in taxes? The spoiler alert is you probably are.
• 0:42
  And that's why I'm excited to introduce our guest today, Tony Hoong a master tax strategist who helps legally and ethically reduce business owners and entrepreneurs tax burdens, and has saved his clients a ton in taxes, and here to drop some serious knowledge. Tony, welcome to Thanks, Laurie, for having us today. Super excited to chop it up, talk about all the tax savings we can bring to your audience, and then also some sweet Yeah, perfect timing. I'm glad we're having this conversation today. First things first, what's the biggest misconception that people have Yeah, taxes, they're a taboo, right? No one actually likes to talk about them. And you know, the biggest misconception is that you just have to pay it, tax season comes and you know, it's done. That's not the case. The tax is actually going to be like a weapon if you know how to use it. I always say it's like a double edged sword. If you know what you're doing, you can slice your taxes by a lot. If you don't, you're going to be overpaying a ton. So you can actually use it as like a wealth building vehicle, especially, you know, you say, say, 20, 30 grand, I always tell our clients, like, hey, if you save $10,000 for 30 years, and you just compound that at, say, 8% interest, you got 1.3 million before you even know it. Million bucks being tax-free, or not tax-free, but interest-free for your growth, that you didn't have to pay the government, 300K was your own principal that you saved. So everyone Yeah, how did you get into this profession? When Oh, yeah, yeah. So we started in December of 19. I just side hustled this whole thing in December 19. So I did the whole KPMG work there. And then I worked at Uber's tax department. And then I got moved to San Francisco from that time from Minnesota. And I was just like, dang, I had a buddy, he happened to give me crap. And he was just like, yo, dude, you got a CPA license, you're doing nothing with it. And then he just kept on like egging me on as hell. And then the cost of living here is like ridiculously expensive.
• 2:42
  So then I just opened up shop and then I was like, Hey, we'll just do returns. Didn't know better. And kind of just, you know, got some traction along the way COVID happened, which was like a blessing in disguise for the company.
• 2:53
  And I just kept on brewing it up. I've got a lot of real estate clients, I invest in real estate myself, same with my parents. And then in April 21, I went full time into the company. And kind of like what the company did, which was a little bit different compared to like most we saw was, you know, our industry was just really slow at responding to clients. So and then working in tech, and then you're just so used to responding to, you know, people ASAP. And then number two, they just asked, like, how do you save money on taxes? And that's when we went down the journey of like, how do you save money on taxes? Right. They don't really teach you this stuff in school, nor do they really teach you that in corporate. You know, we even worked at KPMG. All I did was this partnership return. So like tax compliance, they didn't tell you how to save money on taxes. So that's when I was just like, Hey, all right, let me go down the journey. So I watched all these YouTube area, Mark Kohler checked out all his stuff. And then, you know, that program we were, we did together for V checked out what they had.
• 3:47
  And then just Brandon Hall, I checked all his stuff and I just kind of like, picked and chose like the pieces that I liked. And then that's how we kind of just formed up our tax strategy. Of course, the filing too. And then sometimes, you know, Okay, cool. I didn't know you started KPMG. I did. I started out Yeah, definitely. Yeah. We all know those days. And then, yeah, it's kind of a big thing of like building company, like no more time sheets, no more formality, Cool. Yeah. And then say, then you went out and did, um, worked I did there. I was in like, Texas. Yup. And I did DoorDash. And then I was just like, all right, I know this is, uh, Yeah. And so who's the ideal client for you? Um, do you, you work with all industries? Do you have a particular niche? Um, you work solely with high income earners. Like how do you, who Yeah, yeah. So from a targeting standpoint, we're really on that more of a mindset perspective. So we're actually always looking for people who are trying to like better themselves each year and aren't just like done like, Hey, I'm just hanging up the towel and call it a day. So a lot of those are business owners, right? Business owners are always trying to like get better at their business. So they kind of embrace the right mindset. And we really enjoy working business owners, say they're real estate investors. So about two thirds of our clients all invest in real estate. We also push them to invest in real estate too. So, but a lot of real estate folks and after a while, like once they kind of get good at it, it also becomes like a game to them, just like entrepreneurship. So those are like our main two bread and butter. And then being in San Francisco though, we do have a lot of high tech W2 people that we work with and have a lot of like RSUs, ISOs. So just like being in the Bay Area, you're kind of forced to work with those folks and, you know, but they're actually always the good candidates. to end up being like, hey, have you considered real estate? Short-term rental loophole. Hey, have you thought about buying a laundromat? You know, starting a fleet of Turros. So as long as they have the right mindset, we'll work with them. But if they're just like, yo man, how much can you save me? Oh, your fees. Oh, and chip away on fees. And I'm like, I'm not, we just, it's fine. We're not the right firm for you. So we're always like joking with new prospects. Like, hey, we're looking for clients we can die with. So it's like, nothing's guaranteed, but death and taxes. So I always like start off our onboarding calls. I'm like, Hey, man, nice to meet you. Looks like we're going to die together. Jokingly, we Yeah, I'm glad you mentioned that quote about death and taxes. I've been thinking about that lately too, from a morbid standpoint.
• 6:24
  I've been researching risk. And so I was just thinking lately that there's three things that are certain in this world. It's death, taxes, and Oh, okay. I like that new one adding on there. That's so true.
• 6:41
  Tell me more about the risk area that you've kind of been researching or checking out.
• 6:44
  Well, so I just recently made an announcement that I am currently working on a book called Riskworthy, and it's going to be published in 2026. Okay. Yeah. So I'm working with a publisher right now and currently working on the research and the writing and the chapters and all that. But the idea behind the book is that It's, I'm trying to put together a framework about decision-making in life decisions, business decisions, financial decisions. And like, how do we have a better framework for understanding risk that's beyond the typical conventional, you know, ideas about risk being about upsides versus downsides to justify make taking decision because, you know, in real life and in entrepreneurship, we've seen a lot a lot of business owners and entrepreneurs take risks despite having significant downsides and not seeing a great return or kind of being in the dumps when they're making a decision about something and they shouldn't make that decision, but they do it anyways. And I'm trying to investigate what is that reason?
• 8:00
  What gave them that mindset to take that? that ultimate risk, even though it didn't make sense at all from the conventional standpoint.
• 8:08
  And so I'm weaving a lot of research about entrepreneurship risk, life risk, decision risk, and putting together a better framework to help you and I, regular people, make those types of hard decisions to move forward.
• 8:24
  Oh, nice. I like that. Versus like a framework to make and air quotes, risky decisions. Versus some people I talk to and they're just get too emotional. I'm like, hey, all right, let's step back. Let's move the emotions away. So I'm excited.
• 8:38
  Yeah, keep me posted once that's out there. And then, you know, once I can actually get my podcast up and live, well, I want to host it back on and you get you Yeah, that'd be awesome. And that's a good lead into my next question. I've been asking all my podcast guests this question as it relates to risk. What is one significant risk that you took in the last five years since starting your business? Was it actually starting the business or was it something else that happened within the last five years that you saw was a significant risk and you shouldn't have taken it, but you did and I would say two areas, probably three.
• 9:15
  Here's my top three. So my first one would be starting the business. It's just like, I think when I was working W2 at DoorDash as a tax manager, I think I had 165 grand as a cash comp and 135 grand as RSUs. So it was like a 300K package. And I was like, Did I walk away from this or not? But then I was just like, I calculated the hours. I'm like, yeah, it's not worth it. So I peaced out. It was kind of a risk, kind of not, you know, being an accountant, right? You kind of calculate everything that you can. So I was like, I had my food, a car, my house pepper. I'm like, all right, just do it, dude. Worst case scenario, you just struggle for a bit. So that's like the first one. The second one was actually a new AI software. So I was using a different portal and tax organizer tool in our industry. I'm not gonna name names, but that the grass is greener on the other side. And it was actually in the six years, five and a half years that our firm's been alive. That's probably actually the worst. decision I've made for the firm, like a lot of unhappy clients, a lot of unhappy internal employees. So grass is not always greener on the other side. Never believe what's out there. I always say, as the industry term says, trust but verify. Definitely verify.
• 10:29
  And in hindsight, because they didn't allow us to have a free trial, I probably should have never used that tool. But that's the second one. And third one, risk-wise, that's paid off fully, was all the personal development programs. So up until the last couple of years, I never really did any type of personal development.
• 10:46
  I was like, all right, dude, just work 12 hours a day, take care of your clients, everything else is gonna flush through. And it got me pretty far, I'm not gonna lie. But then I think I was just always too frugal and to be like, ah, mindset, now you're fine, you just suck it up and work. And I never really like invested into those programs. So the programs, so like the more like conference type of items I invest into. So, you know, I invest into like that Corby coaching program. that was good. I think I learned some great sales parts from that side, which was amazing. But it was like, that's like 36 grand.
• 11:19
  I'm like, dude, I don't know if I'm ready to invest 36 G's. And I was like, okay.
• 11:23
  So I made that leap of faith and it paid off within like the first month because I, you know, learned how to sell. And then that second one was I went to Formosi's like little workshop out in Vegas that acquisition.com one last year. And then I was like, I've never done anything of the sort. And I was like, all right, I went to that. And then I was like, okay, cool. I think I really learned how to hire more as that's really been the unlock for our firm, like getting great talent and setting better expectations. And then now in like Dan Martell's program, like his elite community, I never thought I'd do it. But then like one of my clients, she recommended a book. It was like, you can buy back your time. And then I was on a flight down the Paraguay last December. The plane had no wifi. And I was like, what am I supposed to do for like 20 plus hours? So I read the whole book, and I was like, all right, cool. And then next thing you know, you follow a dude on Instagram, next thing you know, you're like, shit, it's Community. I joined in like, February, but you know, that's been really great also. So just now, that personal belief that you can pretty much do anything, it's kind of crazy. So I never bought into the woo woo stuff. I'm just like, too black and white. My parents are like, not about that life. But that's another risk that paid off.
• 12:35
  Yeah. Oh, great. I'm glad you mentioned that. Investing in coaching programs. Yeah, definitely. It's also been very helpful for me as well. You know, it is a risk because it's a financial risk because you're investing a ton of money. You know, these people don't charge little, right?
• 12:53
  You're paying quite a bit of money for premium coaching. And the idea is that you're supposed to get a return on your investment. And, you know, like Dan Martell's group has been awesome for me as well. I joined around December and it was actually a result of going to one of the conferences in San Francisco with Cor V. Yeah. So I was talking, yeah, I was talking with another CPA and yeah, he was like, you should, you should get on Instagram. And so I was like, yeah, I should get on Instagram more. And, you know, I followed Dan Martell as a result of that. And then, yeah, and then that led me to joining Elite and which has really been mindset changing for me. And it's really cool to meet all the people that I have through that group. But yeah, I love how you talk about, you know, taking the risk, getting return in coaching, because it's really about It's a lot about return on investment, but it's also about creating your best self. You're getting the knowledge and the mindset that is transforming you to be a more elite producer of whatever it is that you're skilled in. So yeah, I'm glad we touched on that. Can you tell more about some powerful tax strategies that your clients are currently using? What are some that are very popular that you would recommend to your typical client? Yeah, I Yeah, real estate for sure. Like, you know, the bread and butter just because we have a lot high W-2 people has always been the short term rental loophole.
• 14:34
  So that's, you know, if anyone's not familiar with that, that's just like where you have a house on Airbnb. And the couple hoops you have to jump through is have an average stay of seven days or less. Also show material participation. Generally, we just tell our clients like, hey man, strap in, work on the property for the first 100 hours for the year, no one else work more than you. And that way they can just turn all that passive loss into an active loss and reduce their W-2. So that was always been like our go-to for a lot of our clients. Also from a real estate side, it's like one of the highest cash on cash investments you can make versus midterm or long-term rentals. So that's kind of like our area for that. If they qualify for real estate professional status, we may talk about that, but that's way more difficult for most clients to do it the right way. So that's kind of like our first one. The second one, in terms of our business owners. So we have a lot of more service-based business owners, like single member S-Corps, that's generally who we have a ton of.
• 15:30
  And, you know, we'll usually just kind of just do like the, you know, the core workforce, you know, your S-corps, the Augusta rules, the home office, the accountable plans, and then juicing up 401ks.
• 15:41
  So we try to like get as high as we can into the 70,000 into the solo 401k. We try to push them towards that. And then if they go beyond that, for the higher income folks that we have, we kind of start getting into like defined benefit plans. So we kind of like push and defer a ton of income. and then do some income shifting if they have kids and they can qualify for it. We're trying to push more on that. But the bigger part actually, and this is actually, I learned this from the Chormosy workshop, is just to reinvest in your own business. If you actually understand what your net income and your net margins are, It's the best, depending on how well your business is doing, but obviously that's where you come in. And you can tell anyone where, hey, if you come to Laurie, she'll tell you, hey, for every dollar you put in this business, you're going to get 42%. And that's what the thing I had to pay someone to tell me to know as an accountant. Dude, stop investing in real estate, stop investing into securities, like real estate, 8%, securities, maybe 12%. I was like, what's your net market on your business? At that year, we're about 33%. I'm like, well, duh. Dude, put every dollar you can back into your business, because you'll get 33% more.
• 16:59
  You can't put that anywhere else in the market or real estate to get that return. But I feel like you really need dialed in financials. And, you know, that's where I think you, you, you know, that way more than I do of like understanding how powerful these dollars are in your business. So we, we've been telling a lot more clients to like, just pour all back in the business is their business owners. And then lastly, like if they're high W2, there's not much they can do. We've been the people in tech that have a lot of RSUs and capital gains. We found a new partner to create capital losses using this long short strategy. And I was like, wow, I was not aware about that. It was just actually one of our clients, he had $3 million exit. And he was golfing with his wealth advisor and he was just like, Hey, let me save you the $3 million on capital gains. And then he looped us in altogether just to verify it.
• 17:50
  And it was legit on that side. So exits for capital gains, long, short strategy, and then also like some be simple donations. If people have the risk tolerance for it, but not a lot of people have risk tolerance for it. We always tell people like, Hey, on a scale, like zero to 10, 10 being like Vegas, zero, the church, like, where do you fall on this scale? It's all legal. but what's your risk tolerance and preference? So those would be our bread That's great, yeah. You touched on a lot of the strategies that I would typically recommend. You know, we talked about GUSTA rule, retirement stacking, family employment, hiring your kids, right? To get shifting income into a lower bracket. Also like the fact that you touched on reinvesting your business and how that's a good investment. That's not talked about enough. So I'm glad you brought that up. What are some common mistakes that you see people making when it comes to Yeah, the first one is actually books. We'll like start a return or start up an engagement. I'm like, all right, cool, just send over your P&L. And they're like, I don't got one.
• 19:01
  I'm like, what are you talking about? I'm like, you're a business. And these are like six, seven figure earners. We're not talking like the side hustle business where you're making like five figures. Like we're talking like big time businesses here and financials. So I'm like, I can't plan. So, you know, obviously that's, you know, where you can come in for sure. It's just like, Hey, we need some financials. That's number one. Like they can track top line just by any pulp stripe.
• 19:25
  They pull the dashboard, how much total revenue you have. They always know that.
• 19:28
  They just never know all the in-between. So that's like mistake number one. Mistake number two is folks that before they become a client with us, they only know tax filing. And it's actually, I wouldn't say it's their fault. It's probably actually a lot of the tax industry's communications fault, where Bob goes in to HR block, they're like, hey, they do my taxes. What does do my taxes mean?
• 19:59
  And I think they think they're helping them plan and strategize and everything and making sure they get all their deductions. But we all know past 1231, the clock strikes 12, it's done, besides maybe a SEP IRA and HSA. But after that, there's nothing left you can do. So the mistake is not planning throughout the year, thinking like doing your taxes or TurboTax is actually going to save you money. All of this is reporting and doing compliant. Don't get me wrong, it's important to do it the right way, but you lose everything. So tax plan, you're still half a year left.
• 20:32
  to go make damages into your tax bill. But once the clock strikes 1231 at midnight, it's done. So I'd say that's like the second biggest mistake is like they don't have the conversations. And then three is just not investing like to this date in life. You know, I have not found anything that's a steal with like high quality. Like I think that phrase, like you get what you pay for. The older I get, I'm like, literally, that's so true. Like if it's a steal, there's probably something kind of wrong with it. And I'm just not saying that like in almost in any world. So like this, for example, I start my firm first hire 15 bucks an hour.
• 21:14
  I was just like, Oh, sweet. You know, they wrap 15 bucks an hour.
• 21:18
  But then what I didn't know was it was going to take all my time to train that person up. and I didn't value any of my time at all during that moment about the firm, like, oh, versus if you just pay someone 60 bucks an hour, they are very confident and you almost can do anything that you want them to. So, you know, you literally get what you pay for. So people not willing to invest in anything. I don't care about tax services, vehicles, whatever.
• 21:48
  Yeah, that's a good point. What do you think about those kind of commodity tax planning services. You kind of mentioned H&R Block, TurboTax type service. They're not really doing any tax planning, tax strategy for you. They're just doing compliance, check the box returns. What do you think about something like, I don't know if you've seen Kevin O'Leary from Shark Tank. He was promoting some kind of tax planning Yeah. So those like productized, commoditized services, I would say they're hit or miss. So you can probably find some really good ones and you can find some really bad ones. And it's also what stage and what fits for you. Like the joke in our industry is like, what's the answer to this?
• 22:35
  And it's always, it depends. It depends on every other factor there is. And from a general rule perspective, H&R Block, Jackson-Kiwit, those are good if you just need your taxes prepared and done, and you don't really want anything to do with it. Maybe if you're making $200,000 as the W-2, that's the only thing you have, and you just don't want to go on the website and do it yourself, and you just want to talk to a human for 500 bucks? Sure, why not? It's not a bad tool, but if you're a business owner or a high income earner, high income, even at $350,000 W-2, you can start to do some damages or like a real estate investor, those tools are not right. In terms of Kevin O'Leary's products, it was very interesting. Once he got in the market, I actually was just curious, so I funnel hacked it for fun, just to see what's up.
• 23:26
  And there, they have, he and true Kevin O'Leary or wonderful, he has turned that portion into a business in terms of heavy sales, high-pressure sales, closing parts in, guarantees. But then as I read all the reviews and whatnot, the churn was, oh my goodness. I probably would have given up or cried if I saw that much churn or that much bad review at our company. I take every person super personally still. Anytime anyone leaves the firm, I actually hit up the client and be like, Hey, man, sorry. How can I do better? Here's your money back. And just understanding. So I think when it becomes too productized, you just lose that connection. And I've been telling my team this, like, AI is here to wipe us out. I'm going to say that now. Literally demo the tool. It takes all the documents, prepares it, puts it into the ProConnect, the tax software, and reviews the first layer. So I told all our preparers, I'm like, everyone, we have no more tax preparers at this company. Everyone, you're turning into a tax associate now. And what your job is, is to review returns. But actually, the number one focus now is like, we need to go build relationships even more. Like we know our clients pretty well. But now I'm like, I want you to know what their kids, how many kids they have, when their birthday is like, don't follow up on Instagram, go see what their life is like. Because I think with AI gear sister relationship left and what's like you just rewind 20 years ago. It's really a relationship, right?
• 25:02
  Before all these tools and everything blew up, like as cliche as it is, it's like, why do all my clients kind of look and speak and talk like me? Like, why is my clientele all these bros, right? Like, this is because that's the relationship they value, right? So I just tell everyone else, I was like, hey, AI, use it, it's great. But build that relationship, because that's the only Yeah, absolutely. I was just on a podcast recently talking about how AI cannot replace CFOs and because they can't replace the relationship or the professional judgment of that human person. And so I think in a lot of ways, AI can replace tax planning, but it can't replace the actual relationship because part of it is having someone knowledgeable and skilled to be able to walk you through your tax strategy is very much different from putting your tax situation into chat GPT and getting a tax plan out of it. So I like how you're really focusing in on the relationship building and how that human connection, that human aspect of working between the client and the tax strategist or tax Oh, yeah, for sure. And then the other part on that too, is like, even from a CFO perspective, the way they just, the ordinary consumer does not know what the input into ChatGBT. ChatGBT is great, right? However, how you prompt it and what you input it, they will never know all the things that you would ask, Laurie. You know where to ask and point at the right directions to go find where the gold is at. But like the normal consumer, that's why they hired pros, right? They don't know what they don't know. That's the issue too. So AI doesn't know what it doesn't know. The output is only as good as the input. If the inputs suck, the answer's gonna be mediocre, right?
• 27:01
  So it's like, you have all these expertise for years. AI Yeah, good point. So how many touch points per year do you have with your typical client? Is it annually? Is it quarterly? What is your take on Yeah, we just redid our model again. So it used to be quarterly.
• 27:27
  And then we downsized it to let people pick and they can go from like once, twice, four times, three times, four times a year. So one to four, some could go every month if they wanted to, but it wasn't a very scalable service. So we're up to 28 people now. So it's like trying to get 28 people to do the same job. It's kind of hard. So now we've just productized our services even actually, and we're going to quarterly if they purchase it.
• 27:51
  So we'll do a big tax plan, kind of like a bootcamp in the first 90 days.
• 27:56
  Then afterwards, they can move down to a maintenance mode. I was just compared to like fitness, like, hey man, all right, we lost 10 pounds. Now, all right, we'll just maintain you every quarter now going moving forward. So the general typical engagement is one monthly call for first Yeah. Yeah. Just cause we just seem like there's a lot of upfront work that needs to get done. And I'm just like, dude, as long as you don't like quit your business and start a whole new career on me, this tax plan should last. If not, if you change your career, we need to talk again, but I'm like, Hey, this is built for the next like Yeah, exactly. Well, good. It sounds like you've backed into a good model that works for most of your clients. So kudos for that. Let's talk about the big, beautiful bill, because that just passed recently. One change as a result of the bill is for my clients that made a huge difference is the reversal of the Section 174 capitalization of R&D expenses.
• 29:02
  So one client that I've been working with for many years, they had hundreds of thousand dollars in taxes due, even though they were at a cash loss, they had to add back all the expenses because they have a ton of R&D engineers and working on new processes engineering. So even though they were at a cash loss for several years, they had to pay a ton of taxes and get on a payment plan, essentially. And now with the reversal of that, they're going to be able to get that back, which is huge. That's a couple hundred thousand dollars of cash back, right?
• 29:41
  Or decreased liability. What are some changes that you've seen that are going to affect your clients in Oh, yeah, no, I like that example, even like that, our research and development, like it, that's a massive swing for your clients that you're serving there. So it's good for us. We don't do a lot of R&D at all, but it's always like, Oh, cool. If you do see it, now you're aware and it's bad. So yeah, the, yeah. Cause I remember when they changed it, I'm sure you saw how bad their work was. And I guess I'll put them, not on blast, but just calling it out because it was so annoying to fix their shoddy work was they didn't amortize it. Then the client messed it up. We had to amend it to fix it. So yeah, it's great to actually have like real pros again to do this. So that's great for your industry. Our biggest one is that 100% bonus appreciation coming back. Like it was phased down to 40% this year. And it was not looking good for 2 3rds of our clients. And I was like, Ooh, but this one came back, it was kind of like a hail Mary. So that's massive for us. Um, I'm really digging that. And then the second one was just really that salt cap. Now me being in California is just, it affected a lot of the high W2 folks. You guys couldn't do anything. I mean, state and local taxes, easy 20,000. And then you have property taxes, easy, 12,000. So they were losing out a lot already. So it's exciting to see their couple thousand dollars back on that side. And then there's that one... It's going to not make a massive difference, but it's cool that they did it. It was the 1,000 or 2,000 if you're married. that above the line, the induction for itemized charitable contributions cash-wise. So kind of like in COVID, when they had that 300 bucks, if you donate 300 bucks in cash or more, you could actually take that deduction even if you didn't itemize. So now it's like, cool, you can take 1000 bucks, even if you don't itemize. So that's actually kind of exciting, because sometimes I feel bad. And I'm like, hey, man, it's great you donated. Because they'll ask me like, hey, did my donations help? I'm like, Yeah, don't shoot the messenger, but they didn't help at all, dude. And it's just like, at least for the goodness of your heart, like you helped out that organization. So at least the first 1000 bucks will help if you're single 2000 bucks if you're married. So I liked seeing that one too. And then the last one that's not going to be in our clients favor. are the solar part. So with the solar going away in like... Yeah, that's right. Yeah. And then I'm in California. So there's a lot of solar out here. And it just helps, right? Not only did you get bonus depreciation of those investment unit, you also got that 30% investment or the energy credit. So that going away is not as good for our clients.
• 32:32
  But I guess it is what it is, sadly.
• 32:37
  Yeah, I was able to take advantage of that solar credit for fiscal year 2024. So I'm happy. I'm happy with my timing. Yeah. And That is the tough part. Yeah, because depending on what company you're working with, maybe they have really bad contractors, subcontractors are not able to get out and install your system in time, right?
• 33:05
  So I would say if you're even thinking about solar, do it as soon as possible because it's about when that system gets installed and when it gets billed to you, right? And so the fact that that credit is going away, that's a shame.
• 33:21
  Yeah, it's a massive shame. Cause like, you know, when I viewed the returns, I'm like, these are like anywhere from 40 to 60 grand systems.
• 33:29
  So if you just take a 50 K system, that's $15,000 tax free or not talking about $15,000 as a tax credit. So your true out of pocket cost of the system is only 35 grand. So it's, it's a bit disappointing, but I don't know. There's always these other suspicions of, well, why did they do that? But it's, All right, well, let's zoom out for a second. What is the one mindset shift that you want people to Yeah, my biggest mindset shift is use that as a weapon and go find out if it can be a weapon. It is, it can be a weapon for you. So just go find out, like, you know, talk to Laurie, talk to me, talk to your local CPA, talk to anyone, like, or your friends, like, hey, how are you using your taxes as a weapon? So start the conversation, have it, financial literacy is bad, tax literacy is even worse. It was actually, it was like a CNBC article. It was really interesting. It said that people are more willing to talk about sex than they are willing to talk about money. So that's how taboo money, taxes, finances of the conversation is like, wow, really? I was shocked by that.
• 34:38
  So just go have the conversation. It's not that awkward. And just stop overpaying. Like my parents, dude, I wish I was a CPA when they had their Chinese restaurant. they paid bill repeats like over a decade. And I'm like, dude, you, I've talked about a trust fund, maybe if they just wouldn't taken that taxes compounded in S and P 500, it'd be a much different discussion, but Hey, here I am today. And I'm a CPA. So, but yeah, just have a good mindset. Like your taxes can be a weapon and just go ask anyone. Don't don't stop sitting on the sidelines about it.
• 35:13
  They were so prop for a bit, a C corp for a little bit. I Okay. Yeah. Cause that's the one thing that we haven't mentioned as in terms of strategy is a lot of business owners use the S corporation entity election as a tax saving strategy.
• 35:33
  Oh, massive, massive. Yeah. That's one of the biggest Yeah, absolutely. And then you have to make sure that you have reasonable compensation, right? Because that's increasing in audits at audit rate from the IRS. And so people really make sure that they have defensible compensation to back Oh, yeah, yeah. That's half the time that's the shift we have to get our clients. I'm like, hey, just pull the bandaid off. ADP, you Well, Tony, this has been awesome. Where can people find you Yeah, for sure. I appreciate that. And so the cpadude.com, that's our website. Really simple there. If you want to inquire, you know, talk to our team, we'll cut it to you straight if we work, if we can help from the side. And then Instagram's the cpadude, TikTok's the cpadude. So Okay, awesome. Yeah, that's awesome. I love that branding. All right, well, thank you so much, Tony, for joining us on Built by Margin.
• 36:42
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