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- [00:00]
A
If your tax strategist can't tell you before you hire them how much money they're going to be able to save, you walk away. Because we work for all of our clients for free. I know how much I'm going to save you before I pay you. So I'm an investment more than I am a client?
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B
Yeah, I always say that. I say the best attorneys and accountants should save you money, not cost you money.
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A
It's an investment.
- [00:19]
B
So if someone's listening that's in that income bracket, they're maybe doing a mil or 2 a year growth and they're taking home 3, 4, 5, 600k. What are some other more advanced things they're not thinking of?
- [00:30]
A
Spending money for deduction is just. But investing money to get deduction is even better. Another strategy that I think is big in today's space is.
- [00:41]
B
My name is Rudy Moore, host of Living the Red Life podcast, and I'm here to change the way you see your life in your earpiece every single week. If you're ready to start living the red life, ditch the blue pill, take the red pill. Join me in wonderland and change your life. What's up, guys? Welcome back to another episode of Living the Red Life. Today we're going to talk about your favorite, favorite topic. Taxes. I'm here with my friend Carter. He is one of the top tax experts. You've probably seen him on social media with the viral reels. But here we go. Let's talk taxes. Welcome to the show, buddy.
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A
Happy to be here, brother.
- [01:14]
B
So, fun topic.
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A
Yeah, super fun, right?
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B
Yeah.
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A
Yeah.
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B
I don't actually mind it because I've learned it. Right.
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A
Yeah.
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B
Your job is to educate entrepreneurs like me 10 years ago that had no clue what the heck to do with taxes. Right. So how did you get into this?
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A
Well, so it was funny because we all want to make money, right? And then, so. So when I started working in corporate America in the tax field, our clients were making a lot of money, but they were really upset because they were paying a lot of money in taxes. So I learned very early on that it's not about how much money you make, it's about how much money you keep. Right? And so I decided I want to leave corporate America and start a company where I can just help entrepreneurs save on taxes. Because we work, the harder we put our butt on the line, we do everything. And then a silent business partner says, hey, you made a million. I want to take 50% of that. So. And that's not fair. So I found out we can do two things. We can get upset about it, or we can get smart about it. So that's what I decided to do.
- [02:12]
B
Yeah. I think there's this, like, general misconception of taxes, that they're all bad, terrible, blah, blah, blah. But it's just like. It's kind of the famous saying. Right. There's two parts of life that are for sure. Death and taxes.
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A
Right.
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B
So once you accept that you're going to die and pay taxes.
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A
Yeah.
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B
Then you just got to figure out, how do I legally maximize, you know, my tax strategy.
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A
That's the thing. One of my favorite quotes is that we should all pay what we legally owe in taxes. Let's not leave a tip.
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B
Yeah.
- [02:40]
A
Right. You know, a lot of people are tipping the IRS unwillingly or unknowingly because they don't have a tax strategy. And that's where I come in. That's where me, my team comes in. Because there are strategies that we can implement to make sure you minimize your tax bill. And that's what our goal is.
- [02:54]
B
Yeah. I learned, you know, I kind of. I think I'm pretty good in business at, like, hiring experts.
- [02:59]
A
Yeah.
- [03:00]
B
And the right people. So as soon as my tax bill started getting over, like, six figures.
- [03:04]
A
Yeah.
- [03:05]
B
Okay. I gotta go see someone. Yeah. And, you know, I'm lucky because I've been in masterminds for 8, 9 years, teaching Facebook and marketing. So you. You always meet a lot of really successful people there and they intro you. And. And I learned so much in the last few years. Like, I went down a rabbit hole, studied it a little, and now, you know, I know how to. To really navigate it. But if someone's listening and they've not done that, what are a few just, like, intro tips on, like, understanding taxes and entrepreneur?
- [03:34]
A
Yes. Intro tip is understanding that the IRS is any expense that is both ordinary and necessary for your business. You get to deduct. So it's up to you to define if something is ordinary and necessary for your business. So if you buy a drone, a lot of people, that's a personal expense. But you as a marketer understand that a drone is a perfect way to shoot amazing content for your business. So now we are in this position of shifting personal expenses from our personal books to switching up the business expenses, which IRS gives us a tax deduction for these expenses. So I think the simplest level is, what am I already paying for personally that I can turn into a business expense so my business can start paying for it versus me having to pay for it.
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B
Yeah.
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A
So I think that's the base level for people to understand.
- [04:17]
B
Yeah, yeah. And I've seen that, like with members and stuff. They tell me what they're paying and buying. I'm like, yeah, I mean, you're using. Are you using that for business? Yes or no?
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A
Yeah, yeah.
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B
Yes, you are. Okay, well. Well, then it maybe should be a business expense. And I think the other thing that I learned, like over the years with taxes is, you know, a couple of tips like splitting bank accounts, obviously, first thing, and then just being smart with cards and how you're spending stuff, like being conscious of. Okay, I'm on ebay to buy this MacBook that's going to be for my office, but streaming live content. I'm going to use the business card. And then, okay, now I' buying a, you know, blah, blah, something for my house, a pair of trainers for me to wear personally. Well, that's personal trainers. But now next week I'm buying red trainers for a photo shoot. Well, they're just intended for this photo shoot for my business. That's an expense.
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A
Yeah. So you have to. So I love what you said because you determine on the front end right. Before you spend the money, is it a personal expense or is it a business expense? And then use that car for it.
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B
Yeah.
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A
Right. So now that we understand the basics, we can, you know, expand to get a little bit more creative. So one of the most profound examples that we've seen in our company recently of somebody turning a potential personal expense to a business expense was the following. So our client was in the coaching space, high ticket, mastermind client, and he wanted to purchase a yacht. And it was expensive. Yeah, it was going to be about 3 to 4 million. He came to us, he said, is there a way that I can write this off in my business? We say, yes, if you're buying the yacht for the pursuit of income, you can't. So he. So his Mastermind program, I think, was 50,000, and then he added a monthly yacht experience to it. So he took his price of mastermind from 50,000 to 75,000 just for adding the yacht.
- [06:00]
B
Yes.
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A
And that's literally the pursuit of income going from 50 to 75. That is why he's buying the yacht. So he purchased the yacht and he ended up selling like 10 tickets to that new mastermind immediately.
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B
Yeah.
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A
So that's $750,000 of income. And he takes his clients out on a boat every single month, has the log, and now he's able to write off a portion of that yacht.
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B
Yeah.
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A
And all the expenses that come with it. So that was, that was a million plus dollar tax deduction for him getting that yacht.
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B
Yeah. And I mean, just to add to that, like, what I started to learn is a lot of it is common sense and segmentation. So common sense is am I using it 70% of the time for business? And can I prove that? Great. I can write that amount off. Right. And then also segmentation, like, you know, if you want to be really clean, my understanding at least is, well, if that's in a new LLC bought by the llc or the yacht, like if you were doing yacht rent.
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A
Yeah, exactly. That would, that would be the cleanest.
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B
Way to do it. Right. But we as entrepreneurs don't always know that. So we buy with our personal car and we have to try and justify. Then we get audited on the back foot.
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A
Yeah.
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B
So. And I have been audited. I paid zero in. Fine. Fine.
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A
Really?
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B
Yeah, yeah, yeah.
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A
So your stuff is tight.
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B
I spent 30 grand with attorneys, you know, explaining it all in six months. But yeah, I paid zero in fines.
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A
Yeah.
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B
But that actually taught me like a lot because there's so much to prep when you get audited too.
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A
Yeah.
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B
And we had most of it, but it's like hunting it down.
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A
Yeah. So now you get, you get, you get on the front end so that the back is a lot easier.
- [07:34]
B
Yeah, yeah, yeah, yeah. But the first time we weren't. So if you're listening, I think, wow. Rudy's a tax expert. He's like an expert in the school of hard knock knocks. Right.
- [07:42]
A
You know, sometimes a really good school.
- [07:44]
B
Yeah. Especially a young 33 now for the next 20 years of business. I know, but, but yeah, I think it's so needed, especially once you're, you know, once you're earning over half a mil or even 2, 300 grand net.
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A
Yeah.
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B
Like, that's when you can get more creative with, you know, tax strategies that are of course legal. But I think it's so important. So if someone's listening that's in that income bracket, they're maybe doing a mil or 2 a year growth and they're taking home 3, 4, 5, 600k. What are some other more advanced things they're not thinking of?
- [08:16]
A
Maybe. Yeah. So I love that. So two things I like to let our clients know that's in that price range is that, you know, spending money for deductions is okay, but investing money to get deduction is even better. So we tell them the more you invest, the less you pay the ira.
- [08:32]
B
Yeah.
- [08:33]
A
So setting up some, some specific self directed retirement plans. Solo 401k is my favorite. If you don't have any full time employees in your business, you can put up to 70, $69,000 and you can invest that money and you will get a $69,000 tax deduction for doing so. You bring your spouse into the business, it doubles. Now you get $138,000 tax deduction for investing $138,000. If you don't like the stock market, cool. We can do a self directed version now we can invest in crypto. Now we can buy other businesses. Now we can do whatever we want. That's like Peter Zillow.
- [09:05]
B
That's such a good one because I learned that a few years ago. So it's like basically just to break that down. If you're listening, you Finish the year 400k in profit. You have 200 grand sat in your bank account. You can put some of that money into an investment fund that you still own and control. And then you can now use that money to then go and invest in a new business or something that you were going to do next year anyway, but now because you're doing it as an investment vehicle versus leaving it in your personal bank account, which most of us entrepreneurs do, we would just take the money back out next year.
- [09:39]
A
Exactly.
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B
But now we've lost 40% of it because we paid tax. Exactly. So it's so important that one, once I learned that one. That's a great one.
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A
Yeah. So that's a self directed solo 401k strategy. Another strategy that I think is big in today's space is a lot of companies, especially in the consulting and coaching space, they need to have some type of media for their company if they want to grow. So this strategy is called the self rental strategy. We did this for our company. If you were to purchase a building, let's say it costs a million dollars, I'm using that for math purposes. And we bought a building to turn into a content studio and then we lease that building to our business. You call it the self rental strategy. We can do a cost segregation study and write off 30% of the value of the building in year one. So we went about $1 million property for our company and we get, we got 30, $310,000 tax deduction for a studio that we already had to use. And we were able to put like 10% down. So we exchanged 100,000 for a 310,000 tax deduction. And then now we're going to obviously next year rent out the studio to other content creators and things like that.
- [10:45]
B
So I think, and I think the key that, because people have missed it, but I learned this too is you get a million dollar place, you get a 300, you know, K cost and write off. But the key part that you brushed over is you only put 10 down.
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A
Yeah.
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B
So you're putting 100k in to get a 300k deduction. And if you pay 40% in tax.
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A
Yeah.
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B
You're actually making saving about 40 grand physically. Physical taxes plus that 100k went into a property that you now own that's.
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A
Going to go up in value. Yeah.
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B
Right. So, so, and we've started doing that and now I'm married, my wife's a real estate.
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A
Are you serious? Can you explain that? You want to. That, that's, that's, you know, that's the Trump strategy. Yeah.
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B
I learned that too. So, so if you. Again, I'm not a tax expert, this is not tax advice, etc. Speak to them.
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A
Yeah.
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B
But if you're married and one of you is spending over 50% of their time, as in real estate and full real estate professional. And I mean you have to log minimum 15 hours a week or something. We log in a spreadsheet and track what she does. Again because I've been audited. Yeah.
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A
What's happening? Dude, you're buttoned up, brother.
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B
Then you know, and now we buy real estate, then we can do a cost seg. And because you're a full time real estate professional, you get like increase what's called accelerated depreciation. So you can write off more in advance versus a normal person is my understanding at least.
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A
Absolutely right. And I think that the biggest part about having the wife be the real estate professional status is that if that wasn't the case that you were to buy a long term rental.
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B
Yeah.
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A
Well, they would cap your write offs at 25.
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B
Yes, exactly.
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A
But now there's no cap on your write off. So you can buy two or three properties. Let's say you got $3 million property, that's a $900,000 tax deduction and you're building a real estate portfolio at the same time. So that's huge.
- [12:42]
B
Yep. And another good one that we've used a lot is I rent very, I own or rent very expensive places to live on the ocean, you know, penthouses and we run mastermind events there, VIP days there, staff days there. So we do what's called the Augustus. We use Augustus rules. So we get, I mean 11 or 14 days 14 days a year. And basically we do comps against the Hyatt hotel next to us and nearby and we get a quote from them that say $3,000 a day rental. We save that and then we bill 14 times 3000 and then we can actually write that off as an expense too. So that's a big one because a lot of people don't know that.
- [13:21]
A
I don't know who's teaching this, me or you, man. But yeah. So the Augusta will just clarify so people know how to do it at home. You can legally rent out a property that you own to yourself for business. And the key part I wanted to just harp on is that you $3,000 a night times 1445 or something. Yeah. So let's call it 45,000. That's tax free income to you and that's also a tax deduction for your business. So it's a double. It's a double win.
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B
Yep.
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A
And I got one more. Okay.
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B
Yeah. And I would just add to that if you're going to do it again, not a tax expert, but my advice, or what I've at least done is log the days in a spreadsheet and then we film each Mastermind day. So we have plenty of proof we ever need to prove on that day what happened. We're filming the hour Mastermind event. So we can say, yeah, here's the.
- [14:13]
A
Is the eight hour proof. You want to go through all of it. And another tip there is that if you strategically do your Masterminds around high season.
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B
Yeah.
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A
You can go from, you know, 3,000 weekends. Exactly. So the days matter. So we tell our clients to do is look at the days in your city that a big event is coming. So we had a client do it in Phoenix when the super bowl came.
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B
Or all baseline Miami this weekend.
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A
Right. Or that. Or that. So. So absolutely. So those are some huge strategies, a way to increase that.
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B
And I learned this. The person that taught me it a long time ago told me a funny story. I don't know if it's true, but basically all the politicians in Benedict because they owned houses on the Augustus golf course and they wanted to rent it out in Augustus. So they created this tax rule for.
- [15:01]
A
Yeah, most tax rules are for people of wealth that have stature to actually get things done. So they were, yeah, they were getting $100,000, you know, tax free income because the properties in Augusta go absolutely crazy.
- [15:12]
B
Yeah. Good. So we took some sexy, you know, advanced strategies. I think they're super cool. And of course, you know, they should all Be done legally, correctly. Don't make it up or scam. We're not obviously suggesting that. And it should be for genuine purpose.
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A
Attack strategy. Done 50, done. 50% right is 100% wrong, period. We do a half ass.
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B
Yeah.
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A
It's not going to work.
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B
Yeah.
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A
So it's either done 100% right or it's 100% wrong. I want to be clear on that.
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B
Yeah. And we always, you know, for me at least personally, like if I want to buy something or write it off or understand it even before I buy it, if it's a big purchase, like a boat or something. Right. I'll say, hey, this is what I want to do and how I want to use it for my business. And I'll go to my tax expert or whoever, accountant, I'll say, how do I do this the right way to make it clean? And again, you know, I sound very organized, but for four or five years I wasn't as organized and I had to go back and catch it all up and hire, spend a lot more time cleaning it up. So I've just learned from people way more successful than me that get it clean up front, it's going to be a lot safer and easier and more efficient.
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A
1000%.
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B
So next couple of questions for you, people are listening. They're like, holy cow, there's a lot to this.
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A
Yeah.
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B
How do they fight? And you know, for a few years, I hired terrible, cheap people, messed it all up, had to redo it, refile. Absolute nightmare. And I know most people listening and going through that. How'd you find someone good?
- [16:43]
A
Well, you can just reach out to our company. If you find me on Instagram, Coalfield Underscore advisor, shoot me a dm, Let me know that you need some help. We have a team that will get you on a call with our team to hire us. But I mean, if your tax strategist can't tell you before you hire them how much money they're going to be able to save, you walk away. Because we work for all of our clients for free. I know how much I'm going to save you before, before I pay you. So I'm, I'm an investment more than I am.
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B
Yeah. I always say that. I say the best attorneys and accountants should save you money, not cost you money.
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A
It's an investment.
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B
Yeah, absolutely. Yeah, yeah, yeah. And I think another, like, general vetting practices. I would love your opinion, but like, I actually, obviously I know a lot about it now, but I'll quiz them on a couple of These things.
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A
Yeah, right. I'll say.
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B
So if I'm using my house for. Yeah, I've had my guy a long time now, but I guess if I was approaching it again, I'd be like, if I was using my house for a few weeks, a couple of weeks for business and events, can I do anything with that? And if they say no, I'm like, okay, yeah, yeah. So I think it's like, what Some good questions to ask.
- [17:46]
A
I guess you have to have some background and tax. Tax strategy or whatever you're trying to hire for because educated answers only come from. Educated question.
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B
Yeah, yeah, yeah.
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A
So the better the question, the better the answer. So I would ask them what are some strategies I can, I can use save on taxes by. With my family, there are so many tax strategies. Hiring your kids, hire your spouse, the spouse of loophole. So I would ask them how can I leverage my family to save on taxes? How can I leverage my home to save on taxes? And what are some tax strategies that I'm not currently doing that you think you can help me implement? Yeah, that's all. These are open ended questions to make them fill in the gap.
- [18:21]
B
Yeah. And one good one too is I always ask, what's your biggest client net income? Because if you're the biggest client. I moved a canon one time because he, he literally said to me, oh, you're the highest earner out of all my clientele. And I was starting to ask him to do these advanced things. I was learning from other people.
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A
Yeah.
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B
And then I was like, that's a bad, that's a big problem.
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A
You're the experiment. Now he's like, I don't really know.
- [18:47]
B
About, I'm teaching him like the conservation easements. Yeah, yeah, yeah, yeah. These things. Right. So I love that. So last couple of questions we wrap up today. We've talked a lot about taxes and all the tax stuff. But you've built big companies too, right? Big successful companies. I would love a couple of tips, more on the building of the business side. You, you know, hundreds of thousands of followers and views per video and the social media side. So two questions. Business tip, give us a top business tip and then top social tip.
- [19:17]
A
Okay. Top business tip is if you want to go fast, go alone. If you want to go far, go together.
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B
Love it.
- [19:22]
A
Right. And I had learned that the hard way. I was a hard nose. I can do everything on my own and I have to find the right team of people that can support me to build a bigger vision. You can get to $1 million a year kind of on your own, but you're trying to get to eight, nine figures. There's no way you're going to do that without a team. So hire the team. I think the best personal advice I got was, if you do what is easy, your life will be hard. If you do what is hard, life will be easy. Right. Let's shout out to Les Brown, because so many times early on we start a business, they were like, this is hard. This sucks. I don't know what I'm doing. I'm stressed out. But that's okay because if you take care of the hard stuff now, the rest of your life is going to be so much easier later. So that's one thing that I really harp on. And then if I could add a bonus. When it gets hard, get happy. And I'm always said this, you said, because when it gets hard, after you get through it, you're going to look back and anybody who wants to have what you have, they have to go through that gauntlet too. So it goes from poor me to poor everybody else try to catch me. You know what I'm saying?
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B
The way I always explain hard things, like I used to compute a game a lot as a kid and I always say the hardest thing you're facing is like the end boss at computer game level, you know, in play.
- [20:36]
A
Yeah, yeah, yeah, yeah, yeah, yeah.
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B
You have to kill box the next level. Right. That's how I've like learned to consume business.
- [20:42]
A
Yeah.
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B
And I think, I think successful people have coping strategies like that that are different for everyone. Right. Like that's your one. Yeah, you just said, my one's like, okay, I'm facing the big boss at the end of the level now to get to the next part of the game. And it's true. You know, I always say boxers are used to getting punched in the face every day. And you have to learn in business, it's just the same.
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A
Yeah.
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B
Right. So last question. On social media, too.
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A
Yeah.
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B
You get millions of views on your content. What are some social media tips?
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A
Show up every day and I'll give you a story on that. Because I didn't take social media seriously to. My good friend of mine gave me this analogy. I said, she posts. She posted every single day, three times a day, and went live every day for a year.
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B
Wow.
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A
I said, why do you commit so hard? She said, okay, Carter, if you. If it was the NBA playoffs and you turn on ESPN and they weren't playing a replay, how would you feel? I feel upset. She Said, okay, what about day two? You missed the game. You're working. Did they have the replay? Said, I said, no. She said, how would you feel? I said, really upset. She said, what about day three? You go to espn, they don't have any of the recounts. I'll probably stop watching espn. And she said, that's how your followers feel when you start showing.
- [21:47]
B
That's good. That's good. Yeah.
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A
And I was like, wow. Especially as a sports junkie. So, like, if you stop showing up for people, like, they will stop following you. They will stop consuming your content. So that's how it made me show up every single day.
- [22:00]
B
Yeah, we're pretty good at that. Like, probably not as good as you, but it's funny because I have a big community and they will ask me this. And then you pull up their profile and they posted three times in the last month, right? And they're like, how do I go viral and get following? And it's like, guys, it's foundations, right? You can't be the next LeBron if you play basketball three times a month, right? Like, they're playing three times a day and they're the best players in the world. And, you know, so there's so much in business, I think that. So last actual last. Last question. How do they find you if they want tax help? Tax advice, see more of what you do.
- [22:34]
A
Yeah. So our company's name is Melanin money. So on YouTube is where our main focus is. We put out content three times a week so they can go melanin money on YouTube and they get in. My social media personal handle is Cofield Underscore Advisor, where I give out three tax tips every day.
- [22:49]
B
And if you don't see free a day, make sure you call it.
- [22:52]
A
Call, call me, call me, let me know I'm slacking because I'm showing up every day.
- [22:55]
B
Yeah, Good. Love it. All right, guys, well, that' a wrap. Hopefully you got some inspiration there to learn more about this side of business, which is often ignored and so important. And some good tips and hopefully you can make tax year a little better next year. Until next time, keep living the red life. I'll see you soon.