We have a great guest. His name is Craig Cody, double c. He’s a Certified Tax Coach. Don’t let this scare you. He’s actually a really exciting guy and has an incredible past to share with us, including being a cop in New York City. How many accountants do you know that have also been police officers in New York City. I’m sure he’s got some great stories for us. Craig, good morning. How are you doing?
I’m doing great. Thank you so much for having me.
Hey, thanks for having us on the show. I want to read your bio, and then I want to have you give us behind the scenes a little bit more about who you are and what you do. Everything from walking the streets of New York City to now helping people do their taxes. That’s quite a range of possibilities we could talk about. Craig, here’s your bio. Craig Cody is a certified tax coach, certified public accountant, business owner and former New York City police office, with 17 years experience on the force. In addition to being a Certified Public Accountant for the past 15 years, he’s also a Certified Tax Coach. As a Certified Tax Coach, Craig belongs to a select group of tax practitioners throughout the country who undergo extensive training, and continued education on various tax planning techniques and strategies to become, as well as remain certified. With this organization Craig has co-authored the Amazon bestseller book, Secrets to a Tax Free Life. We like tax free.
Craig, we’re going to talk about a lot of stuff. Really, you’re going to help us not only tell us about your journey, but you’re also going to help us learn about how you can help small business owners with minimizing their taxes. Sharing some of the big mistakes that you see small business owners make. How can they use CPAs to their advantage, and how often should a business owner communicate with CPAs? Why is it so important? Really, you’re going to give us the full court press on how to keep our finger on the pulse of number one, how to maximize your relationship with your CPA. Number two, how to pay no, or as little taxes as possible.
All right. With that intro, how can people not want to listen to this whole podcast? Right?
We make accounting exciting.
I like that. That should be your tagline. I like it. I like it. Remember, did you used to watch Cheers, ’80s and ’90s?
You know how Norm was a CPA. Did you see the one where they had their company Christmas party at Cheers, at the bar?
I don’t remember that one.
You have to see it.
Those were my college years.
Yeah. It was one of the first or second year, but it totally depicted the serial type of accountants, because there was about 200 people at the bar having their company Christmas party, all CPAs. Nobody was talking. It was like pure silence, everyone just standing around looking at each other, nothing to say. It was so funny.
Tongue in cheek, I like to say, they set the bar very low for me.
There you go. There you go. Craig, give us the scoop from walking the streets as a police officer in New York City, and then how did your journey lead you to becoming a CPA and Certified Tax Coach?
Oh, great, yes. Well, I was lucky. I had 17 really good years in the police department. I did a lot of very interesting things. Met a lot of interesting people. I learned how to really communicate and deal with people from the executive, to the person living in the most depressed areas. It was really great experience to all of sudden go into accounting and being able to communicate with people. The journey was, my dad was a cop. I was in college. I was an economics major. Something made me say, you know what? I want to do this. I became a cop. My goal was to become a chief. So many years into it, civil service being the way it is, you have to wait for tests, etc. There was a period of time where I waited about seven or eight years for a test. Took a few career changes, decide to go back to school. Kind of fell in love with taxes.
Then, I decide I wanted to be a different kind of retired cop that goes into financial services. I figured, how do I set myself apart? Let’s get my CPA. Okay, a little crazy, but so I got my CPA. I worked at a firm. The more and more I did it, the more and more I enjoyed it. Financial services became something that was no longer what we wanted to do. I retired. I went to work for a firm that did a lot of international work. Learned. Accounting’s a great thing where you can kind of work for somebody and still build a business on the side. That’s what we did.
Along the way, I got married, had three kids. My son is actually a third generation New York City police officer.
Oh wow. Very cool. Maybe he’ll become a tax coach someday.
I’m sure he will.
Take over the family business. That’s great. So, tell us about your book, Secrets of a Tax Free Life. When did that come out? Maybe you could give us the overview.
It came out about three years ago. I co-authored it with I think, nine others. It’s really about different strategies that people can use to lower their tax liability. My tagline is kind of like, hoping people keep more of what they make. That’s what the book is all about, just different strategies out there that people are not using. It was an Amazon bestseller. It came out about three years ago. About six months ago, I came out with my second book which is actually, The Ten Biggest Tax Mistakes That Cost Business Owners Thousands. That I wrote by myself. It’s kind of all about starting the conversation. What are the different things people could do? It just leads into a lot of different things.
And that’s on Amazon.com too, your …
Yes. That’s at Amazon. It may currently be out of print. Last time I checked, it was out of print. The Secrets of a Tax Free Life. They kind of print a whole bunch and they hold them, and they get out of print. The group that I’m part of that I wrote it with, they’ve kind of come up with a couple different books since there, so it’s kind of maybe off the shelf right now.
Well, I know when you go to Amazon, even if it’s out of print, because I’ve had a couple books too. You can still buy them used. People are always selling them used, so I’m guessing you could still get it. That’s great.
I’m sure you could. I’m sure you could. Yeah. Used.
Critical. Tell us … Give us the scoop on, how can you help other entrepreneurs with their tax planning. I guess number one, what is proactive tax planning, and how can it minimize your taxes?
Okay. What proactive tax planning is, most people used to working with an accountant, there’s not a whole lot of communication. The accountants are really good. They put the right numbers in the right boxes, but they’re kind of recording history, versus making history. What we like to do is we like, when we get a new referral or a new client, we like to analyze their tax situation. We look for missed opportunities and missed deductions that could save them money. Things they’re already doing, or maybe things that they can tweak a little bit and that qualify for deductible items.
All of sudden you have somebody that you’re communicating with and you’re saving them an extra $20,000 a year in taxes, that was formerly going to the government that now can go to something they want, whether it’s a vacation home or-
… college tuition.
Exactly. All that other fun stuff that we all have to take care of.
Right. Very cool. Very cool. You probably see a lot of business owners, they’re go, go, go, making sales, making products, networking, etc., and not spending a lot of time doing tax planning, like you are, being proactive about it. What are some of the biggest mistakes you see small business owners making when it comes to regarding their taxes and tax planning?
Like you said, the biggest mistake is go, go, go, and thinking of accounting and tax planning as an expense item, when it’s really not. It’s more of an income item. They don’t want to deal with it. We all have ADD. We’re doing all these other things, and the next thing you know, it’s February, March of the following year. It’s time to do something, and it’s kind of late.
But, the biggest mistake we see is people creating the wrong entity type when they form their business. Typically, the accountant and the attorney are not communicating. The attorney’s looking at typically legal liability. What’s the best way for this person to operate for legal liability. Nobody’s looking at the tax aspect. It’s an afterthought. If people communicate with the accountant and the attorney, a lot of times from the beginning, they could choose the right entity structure for the business that’s going to be good liability wise, and also tax wise. Fortunately, there’s a lot of times we could fix those mistakes, going forward. There’s different things in the tax code where you can make late elections to correct those kinds of things, and save taxpayers a large sum of money.
That’s great. I have a CPA, love her. She’s wonderful, very nice person, very smart. But, I kind of get a pit in my stomach when I got to meet with her because I’m a typical entrepreneur. I want to make sales. I want to make new products, new ideas. I want to be out and about. I have to sit down and get gritty with the numbers. It just doesn’t excite me. It’s just not my thing. I know we have to do it, right? I kind of get a pit in my stomach even though I like her and I know we need to do it. How can I not have that feeling? How can I best utilize my accountant, really to her advantage, and I guess, enjoy the experience a little bit more as an entrepreneur?
Right. The way we work is typically, we take over all of the accounting, bookkeeping aspects for the client, that lets them go and do the things that they want to do. Then, those conversations aren’t as kind of, pit in the stomach conversations. They’re more of a back and forth. Okay, what’s going on? Tell me what’s happening. Okay, you’re doing this. All right. Maybe you want to do it this way. We’re a little bit more involved in the business and the ongoing operations, versus that quarterly meeting where you’ve done all these things and, how is she going to react to this? It’s not her fault. It’s just, there’s lack of communication. Like I said before, really a lot of it comes down to communicating.
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