My name is Dave Dennison and welcome back to the latest episode of “The Freedom Formula for Physicians” podcast. Well my friends, you might be sitting there, it is almost tax time, maybe some of you’ve already gotten it done, and you may be wondering, how the heck can I be less in taxes this year? Well, if you’ve been grappling with this question or if you’re just simply curious about taxes, you’re going to love our next guest. Our next guest has expertise that lives in the area of tax planning. So his goal, he wants to make sure doctors like you all across the states are paying the least amount of income taxes that they pay. He is a Certified Tax Coach. He is a CPA, he is a business owner and he is a former NYC Police Officer with 17 years of experience on the force, and now today he’s a Certified Tax Coach. He belongs to a select group of tax practitioners throughout the country who go through all kinds of training and techniques and strategies to be certified. Of course and on top of that he has authored an Amazon best seller book, “Secrets of a Tax Free Life”. As a matter of fact, I ran across him because he was recommended by a listener of the podcast here, so I know we’re going to learn a lot from him today. Please help me welcome Craig Cody. Welcome Craig.
Dave, thank you very much for having me.
Hey, it’s my honor, my friend. Well first I would love for you to let us know our Listeners a bit about you and get familiar with you. So tell us about you and your journey a little bit, Craig, and give us a thumbnail sketch of how you got to your starting accounting. I mentioned you were a New York City police officer at one point.
Yes, I was a New York City police officer for 17 years. I followed in my dad’s footsteps. I retired in 2000 as a Lieutenant of police and I was really, it was time for me to move on and do something different. I was always into taxes, so I had gone back to school towards the end and I got my degree, went to work for a firm, kind of went through the motions to get my experience, became licensed, worked for another couple years and then went out per diem. And then about eight years ago I started my firm and at first it was your typical accounting firm and then we were hit with the typical economy and we needed to change something up. And I’ve always loved tax planning, which in the old days that was kind of done by estate planning and we started looking at what we saved clients during estate planning and thinking we could do the same thing with tax planning. And that’s where we are today. What we do is we show people how to keep more of what they make.
Well, I think the taxes and I don’t want other frustrations that, that I’ve had with a lot of CPAs is that they prepare the taxes, but they truly aren’t involved in proactive planning. So I’d love to hear from you what you–what do you see as the difference between a bean counter and someone that is proactive? How can someone know that ahead of time?
Well, one way is, I ask people when was the last time your accountant or your CPA came to you with an idea of how to save taxes and typically I get that glazed over look and and the answer is never. Most CPAs are very good at putting the right numbers in the right boxes, recording history, but they don’t help you make history and what we do is we help our clients make history.
What do you think that should look like then? I mean, should that be meeting twice a year, then three times a year, four times a year? What, what should someone expect, you know, from a proactive CPA?
Very, very good question. It really comes down to communication. You need to communicate on a regular basis with your CPA because you know as a CPA once said to me, “The doctor doesn’t call you up and ask you if you’re sick”, your clients, they can’t expect you to know everything, so you need to communicate with them and when you communicate things come up and people talk about things that they are looking to do and you’re able to then steer then in the right direction to do it in the most tax efficient way.
Sounds good to me. Well, it sounds like what, as people meet with a tax preparer or a CPA, they should really be thinking about–meaning once a year probably isn’t enough, right?
No, I mean that’s not nearly enough and you know, we will have a lot of clients, they’ll come to us and they’ll want to work with us this time of year and we explain to them that if you want to work with us, you need to work with us throughout the year. If you only work with them during tax season or at the end of the year when the typical tax planning is to figure out how much money you’re going to owe and you need to make this payment. That’s what most accountants think is tax planning. Looking in the rear view mirror, I like to look forward and see what we can do and how to minimize your tax bill.
I think this is a great segue. Now in this podcast, we’re all about helping doctors slash their taxes, slash their debt and live a liberated lifestyle and focus on this topic a lot and we’ve talked about, and I kind of call it skimming the cream off. We’ve talked a lot about side hustles, and S corporations and LLCs but Craig, for you today, I’d really love to dig into your depth of knowledge and just go over some unusual deductions that folks may not be aware of. So I have a few notes of some stuff that I thought might be good to go over, but I’d love to hear from you since we’ve covered some of the basics here in the past. Let’s really dig in to some good stuff. People should be aware of whether their W-2 or they’re paid 1099 or however they get paid by cash truck or railway. What do you think, Craig? What are some good ways that folks may not be aware of a ways to slash their taxes?
Well, not all strategies work with every type of entity. So most of the strategies do not work with a plain vanilla W-2 person, but let’s talk about a medical expense reimbursement plan.
Medical expense reimbursement plan allows you to hire your spouse and the reasonable compensation that you are paying your spouse is basically a medical expense reimbursement plan. So there’s no 1099 or W-2 to provide that person with and then you get to deduct your spouse and her families expenses. I’m using the word our family, their medical costs. So that may be braces for your kids, that may be cosmetic dentistry, that can be eyeglasses, contacts, anything that’s out of pocket, and it’s typically going to be an excess of what you’ve already taken in your eight page essay.
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