Craig, welcome to the show.
Thank you very much for having me.
Can you please share a little bit about your background and journey with my Listeners?
Oh, sure. I’m a Certified Public Accountant, a Certified Tax Coach. I’m a business owner and I’m a former New York City Police Lieutenant for over 17 years. In addition to being a CPA, I’m a Certified Tax Coach, and as a Certified Tax Coach, I belong to a select group of practitioners who are throughout the country. And we undergo extensive ongoing training. I do about 10 days a year in just tax planning training. I’ve coauthored an Amazon best seller, “The Secrets of a Tax Free Life.” And my most recent book is “The 10 Most Expensive Tax Mistakes that Cost Business Owners Thousands.” I married, for about 28 years I think it is and I have three children, 22, 26 and 27.
Fabulous. Well, what an interesting background. So, how did you go from transitioning–and by the way, as I mentioned in our pre interview, who better to fight your battle with the IRS than are former law enforcement officer in New York City, but how did you make the transition over and what interested you in the tax field?
I’m really enthralled by Wall Street and finance and stuff like that. And at some point, I started looking at taxes and getting involved in just doing my own taxes and I kind of liked it. And in the police department you have a 20 year retirement, or they had a 20 year retirement at the time and I decided to go back to school for my accounting degree to kind of start planning on what I was going to do in the after life. And I’ll tell you the adrenaline rush I get by doing a tax plan and saving somebody $20 or $30,000 is far better than the adrenaline rush I would get chasing a perp down the street.
Sure. Sure. It’s the rush. Can you share a little bit about your philosophy around taxes?
It’s all about mindset, right? People can be scared of this, are afraid of this and very conservative, but it isn’t the IRS code technically a blueprint of guiding you of how to reduce your taxes? You just have to do what the code allows you to do. If it says you can do it, you could do it. And too many people fail to plan so they could take advantage of what the tax code allows them to do. So most accountants are very good at putting the right numbers in the right boxes, but they’re looking in a rear view mirror instead of being proactive and looking forward with their clients.
That’s a very important point there. Being proactive and planning, this isn’t something that you rush over to an accountant to help you file your taxes, you know, come April of every single year. Can you talk about strategically planning, and preparing throughout the year, especially for investors and business owners, and the importance? Well that’s the biggest mistake people make is failing to plan. So planning takes some time. It doesn’t take a whole lot of time but you can’t plan for the year before when you were in February, March and April. So you need to speak with your CPA and sit down and figure out how you can do it. And most people, they do a lot of research when it comes to buying a car. I’m making a big purchase at home, but if you figure out the percentage of your income that goes to income taxes, maybe you should spend a little bit of time.
They’re planning to see how you could keep more of what you make.
Exactly, and the investment of not only in your time, but the financial investment. I mean the returns at the end of having a great tax advice and a strategy in place is enormous.
Oh yeah. ROI is 300-500% typically the first year. So if you went to a broker and he said, I could give you a return of five percent on your money, guaranteed the first year, you’d take everything you had and you’d give it to them, but he can’t say that.
Right, right. Exactly. So, so important. And I mean this is a topic which I’m pretty passionate about as well because tax is truly—are, I mean, it’s the greatest wealth destroyer that’s out there and if you are not strategic and proactive about your taxes, it’s going to become extremely difficult for you trying to build a legacy and generational wealth for your family. If there’s continually somebody just sucking this cash flow leak out of you for taxes.
I mean, the more you’re able to keep today, the more that money can grow for the future.
Exactly. Now, let’s jump into a couple of mistakes. Now you’ve mentioned the one of not planning. What are some of the other most expensive tax mistakes that cost business owners thousands of dollars?
The wrong business type. Are you set up as a sole proprietor, a single member LLC, a corporation, an S corporation or partnership? You know what? What kind of thought went into that entity formation? More times than not, there’s no thought. You call the attorney. The attorney says, okay, well form an LLC or we’ll form an S Corp and there could be big tax benefits, depending on how you’re set up. Depending on what your particular situation is and what may work for me in the same business may not work for you in the same business because we may have different–other things in our lives going on.
And I mean some of the other things there too. And you mentioned that the entities which is very, very important and that’s also really important that your CPA and your tax strategist is on the same page as your asset protection specialist and advisor.
Everybody should have a team and that team should be able to communicate when they need to, whether that’s your financial advisor, your attorney, whomever else you have going, working with you and your team. You should all be communicating.
And what is the frequency of that communication that you would advise? What’s the type of relationship? This isn’t something, as we’ve mentioned earlier in the interview, that you just give Craig a call in April and March saying please help me. What should that look like and what that involves is planning to be strategically positioned for your taxes.
Well, we work with all our clients throughout the year, so I like to speak with them or email back and forth at least, once a month. At the very least you should be talking with your CPA or advisor on your team quarterly. But we might want to discuss things once a month and it could be a quick short discussion. It can be what’s going on. It could be going over the P&L depending on what the situation we’re talking about. But somebody who’s looking to buy a piece of real estate, do we need to do cost segregation? What do we need to do? What’s the cash flow going to be, et cetera? It’s always best to do that before you purchase it then after you purchase it.
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