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- [00:00]
Candy Valentino
This episode is brought to you by Progressive Insurance. Do you ever think about switching insurance companies to see if you could save some cash? Progressive makes it easy. Just drop in some details about yourself and see if you're eligible to save money when you bundle your home and auto policies. The process only takes minutes and it could mean hundreds more in your pocket. Visit progressive.com after this episode to see if you could save Progressive Casualty Insurance Company and affiliates. Potential savings will vary. Not available in all states.
- [00:37]
Vince Colonnades
Welcome to the Candy Valentino show, the podcast for founders, investors and entrepreneurs where we have honest conversations about what it takes to grow your business, build more wealth and create financial freedom.
- [01:03]
Unknown Speaker
Hey guys, welcome back to another episode of the show. Thanks for tuning in with me today. And we've got a banger for you. If you follow me on social, on Instagram. I just shared behind the scenes that we were going to be dropping this episode and if you don't follow me on Instagram and you follow me on TikTok or found me on TikTok, because that's the biggest platform and the one I was most active on. I haven't been active on TikTok for over two years, which is so crazy when all the security concerns started. Now, if you follow me over there and that's how you originally found me, I will be coming back. There's talk right now in September that the US Is going to control certain accounts. If that happens and it is safer, then I will be back on TikTok. After that, they tell us that we can retain our handles and our following and all the stuff, that it'll just be under the guidelines and control of the US and if that happens, I'll be back because I really do miss my TikTok fam. But for today's podcast episode, I couldn't wait to jump into this. 887 pages of the one big beautiful bill. And believe it or not, that is actually what it's called. I thought it was kind of just a. A joke, a punchy name for the media. But no, that's actually what it's called. If you go to congress.gov that is the name. And so, so many of you are asking, is it good? Is it bad? Is it going to wreck the economy? Is the world going to end? Or is everything going to get better? We're going to. Well, it's a little bit of both. Like most things in government, in politics, a lot of things are not one or the other. It's a little bit of both. And this is no exception. The thing I want you to remember is, as I get into this is the number one theme, the principle that I want you to learn more than any of these specifics. And it's this. There's nothing that's happening in the White House that's more important than what's going on in your own house. Just like there is nothing going on in the economy that's more important than what's going on in your own personal economy. There is no white knight. There's no course. So this bill is not going to change everything for anyone. We just want to make sure that we understand it and leverage it. But always know, regardless of who's in the White House, regardless of what's going on in the economy, you have the power to control how much you make, how much you spend and how much you invest. So I want to make sure that that principal theme is what we remember as we're going on. I think I said that quote back in 2022. It's been shared over and over. It's one of the most viral quotes. I said it on Ed Mylett's podcast. And it still rings True today. In 2022, everyone was worried about the recession today. There's still talk of how is this going to affect the economy. And so let's get into it. Let's break it down. Let's start with the good. One of the really great things that happened is, is the 2017 tax cuts were made permanent. That's huge. They were going to run out. So the main impact is so many things, not only for just business owners, but also the standardized deduction because so many people do not itemize. A lot of Americans take the standard deduction. So this saves families a lot in federal income tax. It also is increased by another fifteen hundred dollars in 2025. That's not for 2024, but for 2025 now there's a lot of things for business owners that came back or became permanent. So one of the big ones is the R and D credits. For seven, eight decades, the R and D credits was always a deduction that existed for business owners to take. If you are making under $31 million in revenue now those are back. They vanished for a couple years, I think because of congressional inaction. I think is why they vanished, which is bizarre and crazy to think about. But they're back now. Another thing is the bonus depreciation is restored. 100% of expensing new business buildings, new asset, new equipment. The permanent deduction of the QBI qualified business income Deduction has also been extended permanently. Business interest deductions have also been increased. So there's a lot of wins for small business owners and entrepreneurs. And then, of course, there's some of the new ones that were campaigned. Promises like no tax on tips and overtime. That was obviously a promise early on that came into the bill. It got stuck in the bill, which was kind of surprising. There are limitations to it. This bill allows for $25,000 in tip income to be tax deductible, and that is for 2025 through 2028 and also on overtime. So remember, it's not a tax credit, meaning it's not just $25,000. If you owe 25,000 in tax, it's a $25,000 tax credit. It's a deduction. So you get to reduce your overall taxable income and not pay tax on that. So let's just use broad numbers. $25,000, if you are paying 20% in income tax, you are going to save then $5,000. So you can save a few thousand dollars with that. So every little bit counts if you happen to be one of those industries, of course. I kind of feel like, wow, it would have been great to have it a little more fair and maybe have that excluded in other types of industries, too, like people who are doing landscaping and house cleaning and. And home services and a variety of different places that we really need. We certainly need our staffing at restaurants and other places that. That gets tips. And so I do think that that's helpful. I just would have loved to have seen it expand, expanded a little bit for other types of workers. No tax on overtime. That's up to 12,500 for individuals, 25,000 for couples, and then both of these phase out for incomes that are over $150,000 or over $300,000 for a couple. Now, one of the other new things was the Trump account for babies born from 2025 through 2028. And I have heard several people talk about this on social media and on YouTube and even in just my own research for this episode. And I've heard a lot of misinformation about it from even some of the financial experts. So I thought, of course, I thought, well, maybe my research is wrong. So I really dug into this bill, and you can actually view this bill yourself by going to congress.govbill, 19th Congress, I believe. Or you can just go to congress.gov and put in one big, beautiful bill, and it'll probably come up for you. So if you want some fun, light Reading one Friday night, instead of catching up on the latest trial or true crime, you can check out the Congressional site to see what's all going on and get all this information. So I really dug into this to make sure I was correct and that some of these platforms with millions of followers were incorrect. And lo and behold, my research was right. So, yes, the government's going to give you $1,000 as a deposit. And they're saying that these funds are managed by the Treasury. However, you have the ability to invest them and into a mutual fund, into an etf. So I think there was a lot of confusion on that. The other thing is, it's not just the thousand dollars. Hang on, I got a rogue hair here. It's not just the thousand dollars. Parents, relatives and others can contribute up to $5,000 annually into this fund until the child turns 18. And employers can even contribute up to $2,500 and possibly even get a tax deduction. So let's take this for the entrepreneurs. You have a child, you get one of these accounts, you can now max this account out $5,000 annually. There's also a potential possibility that if you own a business, you could also contribute. If you are an employee of your business, say an S corporation, then you can potentially contribute $2,500. Again, these, and I always say potential broad strokes, generally speaking. Cause it always depends on your specific case, your specific business structure, if you're able to get the tax deduction, but it's a possibility. And then those investments can be held in a mutual fund, an etf, other types of similar accounts. So there's been a lot of back and forth on that, even in the expert space, which I was kind of surprised to see. And then I also heard someone say that it needs to be withdrawn by the age of 31. And we did not see that in the actual bill that was accepted and passed. We saw that there are, there are no requirements of when you need to take that money out so that it can technically grow until they reach retirement. Which as we know, if you fund something like that, you know, obviously if you just keep the thousand dollars in there at an average rate of return of about 8% compounded until they're 18 and you don't touch it, maybe they'll have 8 grand, 7, 8, $9,000. But if you contribute the maximum and you put more money into it, that's going to compound to probably something close to $200,000. And if you're able to leave that money in and just roll it until Retirement. Well now you could have hundreds of thousands if not at least a million or so into that account just working off of an average 7 to 9% of an average rate of return. And so there's a lot of benefits to that that I think people are kind of sleeping on now. If you're not having a baby between 2025 and 2028 doesn't really apply to you. But there are other things that, that you can still leverage. Things like the HSA which is one of my favorites, the Triple Tax Advantage vehicle where now it can cover even more expenses like gym memberships. You also have the 529 plans that have been extended which is now covering tutoring, dual enrollment as well as workforce training like for the trades. This is a huge win for the skilled labor. This should have always been allowed. Why you could only use 529 for colleges and universities and not using them for the trade schools is beyond me. It should absolutely be something that we can use. I am so glad to be seeing that in the bill. We've also got an increase in the child tax credit, charity deductions, so many other things. The SALT deduction increase which raises the cap on state and local tax, SALT state and local tax deductions from 10,000 to 40,000 that goes through 2029 and then reverts back. There's changes of course to Medicaid that you'll hear people demonize. Basically just adding some able bodied restrictions that if you are able to work that you are going to be required to continue your Medicaid and some other food stamp and SNAP programs. So there's a lot of changes, a lot of good things, a lot of not so great things. One of the things for the the auto loan industry, American made new vehicles. You can deduct up to 10,000 dol in auto loan interest annually. Phases out above certain income requirements. Why only debt? I'm sure that had something to do with lobbyists and the banks. But I would have rather rewarded some sort of maybe rebate to those people that bought a car or so that it wasn't rewarding. Those people that take out bad debt. Like at the end of the day taking out a car loan is still a bad idea because it is a bad debt depreciating asset. You always want to make sure that you're buying things like toys, cars, boats, quads. Those should all be cash payment. Just like you're going to buy a shirt or a purse or sporting event tickets. Right. You never want to be using credit cards or Taking out loans for things like that. There was also a massive student loan overhaul to the graduation plus loan programs to the parent. That's a mouthful. Parent plus loan programs, the total amount of federal student loans that someone can take out. There's a lot of those changes that have happened. If you have someone that's obviously going to college wherever they are going, that university or that college would have a lot of this information or you can even google it. There's been changes to the Pell Grant which again now cover job training and certificate programs, which is going to help a lot of lower income students attend trade schools and community college. So that was a really great thing.
- [13:24]
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- [14:06]
Ryan Reynolds
Ryan Reynolds here from Mint Mobile. With the price of just about everything going up, we thought we'd bring our prices down. So to help us, we brought in a reverse auctioneer, which is apparently a.
- [14:16]
Candy Valentino
Thing Mint Mobile Unlimited Premium Wireless get.
- [14:19]
Unknown Speaker
30, 30 better get 30, better get.
- [14:20]
20, 2020 better get 2020. Everybody get 151515 15.
- [14:23]
Candy Valentino
Just 15 bucks a month. Sold.
- [14:25]
Ryan Reynolds
Give it a try@mintmobile.com Switch upfront payment.
- [14:29]
Unknown Speaker
Of $45 for three month plan equivalent to $15 per month required new customer offer for first three months only. Speed slow after 35 gigabytes of networks busy. Taxes and fees extra.
- [14:35]
See mint mobile.com but we can't talk about all this about the big blinking red light that is not so great, which is that this is adding $3.5 trillion. As of now, that's what they're estimating. $3.5 trillion to the deficit, raising the debt ceiling to an all time high. And you know, things like investing $100 billion into the border wall, to increasing the detention centers, to hiring 30,000 new ICE officers, terminating a lot of the clean energy initiatives, which was not just affecting ev, but a lot of other types of green energy. And again, depending on where you fall on both sides, I'm not taking a position on whether green energy is bad or that we need or don't need a border wall. It's more about just the spend of it all. I mean, we are talking about all of this elimination that we're doing in trying to spend less and reduce the size of government. But then on the flip side of all of these savings that we're coming into and all of these great things with the tax code, we've got massive spending. I just don't know over the next 10 years how well that's going to fare for our country. Now, are we going to, in the short term have a lot of increased money in our pocket? Are business owners going to be able to save and invest and pay their people more? Yes, those are all true things. But in the long term, what is this really doing? Now, I know that this is part of an overall holistic plan that we're not just reducing taxes, we're not just increasing spending, we're also collecting additional money from outside of our own population, outside of our own American people, with the trade deals and with the tariffs. Right. That's why this is all happening at the same time. I just don't know that the juice is worth the squeeze. I, I don't know that the short term benefit of all of these tax cuts and all of these great things that are happening are going to be worth the massive spending in a $5 trillion debt ceiling increase. There are a lot of great things in this for Americans and working class Americans and entrepreneurs, but I just don't know how the massive spending bill is going to play out over the next 5, 10, 25 years. This bill is definitely not the golden horse riding in to save the day. It is definitely a mixed bag. My hot take is always to take advantage of what you can when it's available to you. Meaning that if you're not in a position that you're trying to sell your company, if you're not trying to get big loans for expansion and you can leverage some of these tax deductions that are now permanent and the ones that have been restored or brought back and, and we know they're only going to last for a certain period of time. Leverage them now if you can, so that you're paying the least amount of money in tax. But here's where people mess up. I saw this with the PPP money days during COVID Everyone got the PPP money and they spent it. Everybody got EDIL loans or eid. Yeah, Eidl loans. They spent it. When you get a savings like this invested in your future, don't buy another house, another boat, another car and invest it into your retirement so you can stop trading time for money so that eventually you can own your time. So often we see these tax cuts happen and people just spend right through them. Do zero based budgeting. Make sure that you're not spending more than you need. Make sure every single expense is earning its position in your P and L and make sure that if you are getting a massive tax savings that you didn't know that you were going to get. Make sure that the White House is not affecting your own personal house. Take control of your own economy so that no matter what happens in the world or the country's economy, you and your family will always be safe. That's what I want you to walk away from. And if you want to learn more about this, go to congress.gov and take a look at the 887 page big beautiful bill. All right guys, that's all for today's episode. Thanks so much for tuning in and spending this time with me today. We have a new series coming up called Understanding youg Numbers and it was a fan favorite from a couple years ago. It's one of my favorite. As you know, I love all things business, finance and we also have a really cool thing happening in the fall that you get an opportunity to be a part of the show. So make sure that you check out candyvalentino.com for the updates or follow me on Instagram or Facebook. Thanks again for tuning in and spending this time with me today. We'll see you next time. Hey guys, thanks for tuning in to this episode and if there was something that you loved or you had a specific takeaway, share it and tag me at Candy Valentino. And if you haven't already, grab a copy of my latest book, the 9% Edge Life Changing Secrets to create more revenue for your business and more freedom for yourself. You can pick it up anywhere books are sold, Amazon, Barnes and Noble, or your local independent store. And once you do, head over to 9% edge.com and claim $1,500 in pre order bonuses, including a chance to join me on this very show. Thanks so much for tuning in and spending this time with me today, guys. We'll see you next time.
- [20:10]
Vince Colonnades
Vince Colonnades is redefining News Talk.
- [20:13]
Unknown Speaker
Hi, I'm Vince Colonnades, host of the Vince Podcast. These conversations where we can air all of this out without the filters, without the sensors, without people, with judgment. That's how you get a healthy country, adult, reasonable, sober conversations. That's all I want.
- [20:26]
Vince Colonnades
In depth interviews, live caller interactions, and a front row seat to the most important conversations of the day.
- [20:32]
Unknown Speaker
That's why I'm so grateful that we get to do this every day. You are really the best damn audience in media.
- [20:36]
Vince Colonnades
The Vince Show.
- [20:37]
Unknown Speaker
Follow and listen on your favorite platform.