More unnecessary tax is paid from bad accounting than bad tax planning. 🫳🎤 Bad structures or missed elections can cost a few percentage points on the tax paid on the income. But bad accounting can create phantom income or missed deductions that become unrecoverable - it's something no level of tax planning can help you with. 🤷 To illustrate - today we're digging into a few real life examples I've seen over the years: Losing Money on Real Estate Owned When you build or improve assets yourself,...
10 days ago • 5 min read
Just. Start. Doing. It. That's the best advice for any small business owner who feels like they don't know what's going on in the finances of their business. 🫨 When scaling a business, an owner usually obsesses on the following in this order: Sales Quality of Delivery Hiring Anything else Accounting While new sales, quality, and hiring will get you a nice paying self-employed living - good accounting will always hold you back from breaking through and building a business. And good accounting...
17 days ago • 8 min read
Growing a business with acquisitions of competitors (horizontally) is additive ➕ - increasing profit through increasing market share and sharing costs. But growing a business through acquisitions of customers or vendors (vertically) is multiplicative ✖️ - it collapses gross profit making every dollar spent on sales that much more valuable. Today, we're talking about how business owners use the tax code to do the same thing - turn expenses into assets or tax deductions and lower their overall...
24 days ago • 4 min read
Tax Stacking: A Powerful Strategy for High-Income Taxpayers When most high-net-worth individuals think about trusts, estate planning comes to mind first. Moving assets out of your estate, protecting wealth for future generations, avoiding probate - these are the traditional reasons wealthy families use trusts. 💰 But trusts offer another powerful advantage that many overlook: income tax benefits through a strategy called "stacking." While the IRS phases out many deductions and exclusions for...
about 1 month ago • 5 min read
Early in my career, I audited the financials of an energy trader. The line the CEO always repeated was, "no such thing as a bad trade - you just run out of time." In other words, if you don't get the timing right, nothing matters. 🕰️ I see this all the time in taxes. A young taxpayer reads a few subreddit forums on taxes, follows some influencers and before he knows it has 5 trusts, 1 S-Corp, and 10+ Wyoming LLCs to maintain. They may all be good ideas, but most of the time it's way too early...
about 1 month ago • 5 min read
[Welcome to our new subscribers from the most recent webinar on the One Big Beautiful Bill - remember that any time you want to unsubscribe, there is a link at the bottom of every email. But this email brings practical tax and accounting alpha, so we hope you stay and enjoy.] I don't consider myself a fast learner - if I need to learn something I have to obsess over it until it makes sense. So when I changed career paths from being an audit partner to learning tax, I had my work cut out. It...
about 1 month ago • 3 min read
Okay, so I had planned on a third part to our Energy Trader Tax SNAFU series. But the biggest tax bill in (checks notes) 5 years 🙄 was signed on July 4. So we'll deviate from the plan and run through the provisions. 📺 But first - with 100% bonus depreciation back on the menu, loss allocations will be easier than ever to screw up. If you prepare or approve K1s for investors, you need a professional to review your operating agreement and K1s to get them right. Reply to this email or visit...
about 2 months ago • 5 min read
This is the kind of story you get to tell when you're gathered around with other CPA firm partners - how you got out of $40,000,000. It sounds cool now that it's done, but everyone hearing it knows all the brain damage that must have gone along with it. But here's how it all went down (see last week's edition for Company background). Problem #2 "Roger, it's [junior accountant] at [client]. I just got these notices and haven't shown them to [CFO] because I wanted to check with you that they...
about 2 months ago • 4 min read
My largest client at a previous firm was an incredible learning experience. The type of stuff you can only learn by being so close to big mistakes. The next few editions, I'm going to walk through the technical lessons I learned - which will help explain how we got them out of $40 million of interest and penalties, including a call with Chief Counsel (big dogs at the IRS) who convinced us not to file a PLR because it would set precedent they didn't want set. 📺 Advertisement 📺 I've read...
2 months ago • 5 min read