Big Beautiful Bill Tax Strategy for Investors with Jim Dew

My name's Jim Doo, and I'm excited to see you here at the Invest Like a Billionaire Summit. I'm a huge fan of Ben and Bob Fraser, of their new book that's coming out, which I got to read a version of it before it's been actually published, and really amazing piece of work and lots of great information. It's going to be a game changer for the industry, and it's really long overdue. So, I'm glad Bob and Ben put that together. As I said, I'm a big fan. Who am I? I'm Jim Doo. I'm CEO of Doo Wealth Management. I've been helping entrepreneurs with their family office-type wealth-building strategies for 30 years, and we've had our company, Doo Wealth, for 26 years. I'm a former public school math teacher converted to advisor. And then again, we've started our company 26 years ago. We specialize in building and running fractional family offices for entrepreneurs. Currently, we're running just over 200 fractional family offices for entrepreneurs in 40 US states. We have advisors in 15 states. We've been Inc. 5000 4 years in a row. We advise on just under $2 billion of assets. We have saved entrepreneurs hundreds of millions of dollars in taxes. Me and my team in the last 10 years, we've helped them give away hundreds of millions of dollars. We also have helped entrepreneurs sell their businesses. In the 7, 8, and even 9 figures. So multiple billion dollars of exits that we have also guided entrepreneurs through. And that's what we love to do. And so today what I'm going to do is share with you what is a fractional family office, why is this structure important to you as an entrepreneur? And then I'm going to go into the One Big Beautiful Bill Act and I'm going to pull out the most important provisions, in my opinion, for business owner entrepreneurs. There's going to be just a ton of information, a lot of detail that hopefully you can utilize or take back to your team to utilize. Again, anything I say, make sure you do your own research, see how it applies to you. Obviously, this isn't individual advice, but here we go. So I'm going to share my iPad so I can kind of make, make notes and so that you can follow along as I give you this information. And please stay till the end. Because I'm going to have a bonus. I know you've already heard about the opportunity to purchase some books, get the online course from the Frasers for the Invest Like a Billionaire. And I'm going to give a bonus tied onto that if you end up taking advantage of that offer, which I think is a really tremendous offer. So, that's me. Look better in pictures, the one big beautiful bill. And first, before I do that, obviously disclosures. This is the problem that we solve and that most entrepreneurs end up having once they have a successful business and they're making money. We call it the financial flat tire. That's because entrepreneurs over their lifetime, what they do is they typically pick up these different professionals, like they pick up an accountant, an attorney, an insurance agent, maybe an investment advisor, maybe a banker. And they create this team of professionals. And guess what? They're usually not all A-players. They're not talking to each other. But the worst part is the entrepreneur sits in the middle trying to manage that team. When you as the entrepreneur, you don't have the expertise in those areas like tax, legal, insurance, and investment, and you don't have the time and the energy to do this. Now, that creates a lot of problems. And in the last 26 years, we've seen many entrepreneurs pay too much in taxes. I'm going to go deep on that here in a minute. We've seen them pay too much for insurance and yet have the wrong kind of coverages in their personal and business insurance. We've seen them not prepare appropriately for exit, leaving millions of dollars on the table, paying too much in taxes. We've seen them not have a good asset protection strategy, not a good entity structure, not good legal help, not good estate plan. All these problems that cause— and the call today, right? Not putting their money in the right places to grow and to thrive and to not just get rich, but to stay rich, right? That is the key. So, this is a problem and the problem that we solve. And really, this is where the family office was created. So, if you go back to J.D. Rockefeller, who we believe is the first person that created a family office in 1888, he was worth about $18 billion. And that was a lot of money back then. And he had the same financial flat tire. So, what he did is he decided to hire all the needed financial professionals legal attorneys, insurance people as full-time employees working for him and his family. He put them in one office building. He said, that's going to be my family office. That's when the term was first coined about 140 years ago. And when he died in 1937, he was the richest person on the planet, in large part because of the structure. Well, every billionaire has followed suit from Musk to Bezos to Oprah Winfrey. Every billionaire builds this structure because it's the best structure you can build. However, very expensive. The very smallest family offices cost $2 million to run and probably $5 or $10 million to set up. So that's out of reach for most entrepreneurs. So what we did to solve this problem, first, we did it for ourselves, my wife Mimi and I, as we founded the company. But this is what we do and what you should be thinking about for your own situation. So you don't make mistakes and you take advantage of opportunities and you don't waste your time. It's what we've trademarked, the Entrepreneur's Fractional Family Office. And quite simply, what we do is we come in and we evaluate the current team that the entrepreneur has. We get rid of anyone who's not an A player and replace that B or C or D player from our Rolodex of over 500 professionals that we've amassed over the last 26 years. Then we get the team of A players, but we put ourselves in the middle to manage the team so that the entrepreneur becomes like a pedal where they're the visionary, they're the owner, they can set the direction, but they're not stuck in the weeds with all of this planning. So this helps them save money and also helps them benefit tremendously. So this should not be a cost. This should be a return on investment. What you pay to have someone create and run your fractional family office should come back to you in multiple times, multiple ROI. Now, whether we're doing this or not, you should think about this structure and think about how can you have some sort of firm in the middle managing this team. And what you don't want to do is have a firm that gets referral fees sells life insurance and other products. You don't want an asset gathering firm. This is a firm that says, oh, move all your investments to us, we'll charge you 1%, and then you get these services. So, the model that the billionaires created and our fractional family office don't subscribe to that. Our model subscribes to a monthly fixed fee on a month-to-month contract for our entrepreneurs to run this for them. So, very clean. So, think about that and how you might run that for your own situation. Now let me go into the one big beautiful bill. This was signed into law July 4th, 2025. Very new, very detailed. It's about 900 pages. So please, anything I tell you, make sure it fits into your situation. And the most important thing is not a tax tactic. It's a tax strategy. In The Art of War, one of my favorite quotes is tactics without strategy is the noise before defeat. So don't just do tactics that you hear about or someone tells you or a friend or your CPA gives you one or two things. You should have a tax plan that's putting all of this stuff together. So the first thing is I'm going to really focus on you as a business owner. So there's all kinds of stuff in the bill. There's things I'm not going to cover that wouldn't apply to most business owners but could apply to you. So let's dive in. The first thing in the one big, beautiful bill is 100% bonus depreciation. Now, this was made permanent. Now, I must say, when someone says they make something permanent in the tax code, when Congress and the president say that, they don't mean that it can never change. They mean that it will stay that way until another Congress and another president changes the law. So that's what they mean by permanent, as opposed to things that sunset, like, for example, the Tax Cuts and Jobs Act of 2017. Had they not done anything, that was going to sunset at the end of 2025, and then that would revert back to a bunch of other things and would have been a huge tax increase for anyone in America paying taxes. So that's good news. So now the 100% bonus depreciation was made permanent. And just so you know, when this took effect, this is anything after January 19th, 2025. Huh. Interesting why they picked that date. That's Inauguration Day, right? So there's a lot of political little snippets throughout this bill. So anything after that, you get 100% bonus depreciation. It had gone all the way down to 40% for this year. So that's really fantastic. Now you can couple that with Section 179, which also improved in the, in the one big beautiful bill. And the way that changed is before, the limit on the deduction was $1 million. And now after the law, the deduction has jumped up to $2.5 million. So you can deduct up to $2.5 million of one section, of Section 179 for things like equipment you would buy for your business. Now, if you buy a 6,000-pound vehicle or, or heavier and you use it for business purposes, you can use between Section 179 and the 100% bonus depreciation to write off that entire vehicle. So that's really exciting. Now, the phase-out also changed. So the phase-out went from $2.5 million to $4 million. So what does that mean? That means once all those expenditures are more than $4 million in your business, you start to reduce the amount you can deduct. That's what that means. So the most you can deduct is $2.5 million. Once all of your expenditures for 179 are more than $4 million, then it starts reducing that deduction that's allowed. Let's talk about tax brackets. So really exciting, tax brackets are set to be— are now permanent. And so these tax brackets that are permanent that were passed in the Tax Cuts and Jobs Act are 10, 12, 22, 24, 32, 35, and 37. Now, the highest bracket was going to go back to 39.6%. Ouch. And by the way, that 37%, in case you're curious, single taxpayers go into that for this year when they reach $626,350. And for married filing jointly, you fall into that category in $751,000— what is it? $600,000. So that's the 37% bracket when you fall into that. And that's important for something I'm going to talk about later in this presentation. So huge win for everybody in all these brackets. Index for inflation every year. They gave a slight adjustment to the 10% and the 12% bracket for this year, but most of you won't care about that. The SALT deduction. So this is a state and local taxes deduction that became famous in the Tax Cuts and Jobs Act before this bill was passed, it was $10,000 was the limit. So that meant that your state and local taxes, state income taxes, property taxes, anything above $10,000, you didn't get a deduction on. And that would be painful because then that means you're going to pay the full freight on the federal tax. You don't get the deduction against your income for the federal tax bracket. So that $10,000 was increased. If you're in a high tax state, or really any state, and I'll tell you why in a second, to $40,000. So the SALT limit is now $40,000. This is not permanent. This goes from tax years 2025 through 2029. So that's for 5 years. After the 5 years, guess what? It reverts back to the $10,000 cap. Wah wah. Okay, so the $40,000 gets phased out though when you're between an adjusted gross income, by the way, I may say adjusted gross income or modified adjusted gross income. And for almost all of you, it's the same number because for the tax bill, modified adjusted gross income just adds in some foreign income tax credits, stuff like that. So it should be pretty much the same. So adjusted gross income between $500,000 and $600,000, and at $600,000, you've dropped back down to that $10,000 SALT deduction limit. That's pretty powerful. So if you end up in that range between $500,000 and $600,000, for single taxpayers, you're in the 35% bracket. And married filing jointly, you're also in the 35% bracket between $501,000 and then up to the $751,600 I just mentioned. So, pretty much everyone's in the $500,000 to $600,000 of adjusted gross income is in the 35% bracket. Well, because this phase-out is happening, guess what? For every dollar you earn over $500,000 or for married filing jointly, $501,000, Every dollar you earn over, because this is phased out $30,000 over $100,000, that means that every dollar you make in income, you're taxed like you earned $1.30. So, what that means is in that range, your tax bracket on the federal is actually 45.5%. Think about that. So, make sure if you're in between that $500,000 and $600,000 and you have a lot of state and local tax deductions, get yourself down below the $500,000 because it's a huge number. Now you might say, well, Jim, wasn't this thing— there this thing for small business owners? There was this thing called the PTET, the Pass-Through Entity Tax, PTET. So they didn't touch this. So what does that mean? That means that on your state income taxes, you can still pay it from your entity and get the deduction. Let me give you a quick example. Let's say your income from your business was $1.5 million. Okay? And let's say you had to pay $110,000 of state income tax, okay? Well, under the old, under the pass-through entity tax, well, let's just say if they did away with it, 'cause they were talking about that, if they did away with it, then you'd have to pass on the entire $1.5 million to your 1040, and then you could be limited. You're either limited to $40,000. In this case, you're making way too much money, so you're limited to $10,000. Which means you only get a $10,000 deduction if they had repealed this, which means you'd pay an additional 37% tax on $100,000 or $37,000. But because they kept this, you can pay that directly to the state. And what that means is instead of $1.5 million going to the 1040, $1.39 million shows up on the 1040. And then the federal tax on that is 37% less on that $100,000 because you still have that come across as income. So in essence, you're saving $37,000 because they kept the PTIN, right? Now, if you have property taxes and other things, then you still have to worry about this deduction that's gone up to $40,000. And if you're over that $600,000 of adjusted gross income. QSBS, small business stock, they had a great change to that for you. This is Section 1202, if you're curious. In the tax code. And what it used to be is you would get, if you had a C corp and you held for 5 years and you qualified for qualified small business stock, then you would get either 10 times basis or $10 million excluded at sale. Well, guess what? They improved that a lot. So here's what they did in the new bill, in the one big beautiful bill for the QSBS now. And this is, by the way, any QSBS stock issued after July 4th, 2025. So if it's stock issued before then and you're C corp, you're under the old plan, 5-year cliff, etc. So under the new, if you get qualified small business stock, if you qualify for that, now there's a different vesting schedule, right? So after 3 years, you get 50% of the benefit. After 4 years, you get 75% of the benefit. And if you held, hold for more than 5 years before you sell, you get 100% of the benefit. What's the benefit? Well, as I said, 10 times basis, or now it's $15 million instead of $10 million. So if you hold for 3 years, you get $7.5 million. That you don't pay taxes on, on the sale. If you hold for more than 5 years, you get $15 million off of that sales price. And so, you know, $15 million, if it's a 20% tax rate, that's $3 million you just put in your pocket. Now, there's a lot of reasons to do C-corps and not to do C-corps. So don't just do it because the QSBS. But if you're really building it to sell this and you don't need the cash flow because S-corps and other entities can be better for lifestyle businesses and cash flow, then the QSBS can be a huge advantage for you. Let's talk about Qualified Opportunity Zones. So this is a big thing in the Tax Cuts and Jobs Act. Now we're going Qualified Opportunity Zones 2.0. So let me first talk about 1.0, and that is if you deferred your capital gains tax and you're going to owe tax in 2026, you still have to pay the bill. So there was nothing in the new bill that affected the old QOZ. So if you're under an old QOZ and you owe your capital gains tax in 2026, Sorry to tell you, you're going to have to pay that tax. So I'm just going to talk about the new bill. And this really starts in 2027. And this QOZ, it's pretty cool. What they're doing is if you invest in a qualified opportunity zone or qualified opportunity zone fund, then if you hold for 5 years, you first of all get to defer the tax for 5 years. And if you hold for 5 years, you get a 10% step up if it's a, a qualified opportunity zone in an urban area. But if it's a rural area, you get a 30% step up. So you get to defer and you get the step up. And then after 10 years, any further appreciation, no tax. They also have a limit that once you get to 30 years, they set your basis. In other words, they're going to say we're not going to keep— if you sell after 30 years, you know, if it's 35, 40, 50 years and you sell, we're not going to let you keep all the appreciation. We'll let you keep it up to 30 years. So let me give you a quick example. I'll just kind of go higher on the page and let's say you had a million-dollar gain and you put it into a rural opportunity zone, qualified opportunity zone. Okay. So that means on that you're going to owe $200,000 of taxes. I'm just going to say 20% to keep the numbers simple. So you're going to defer the $200,000 that you owe for 5 years. After 5 years, because it's in a rural— remember, 10% step-up for urban areas, 30% step-up for rural. So in this case, you get a 30% step-up, which means on that $1 million, instead of paying tax on $1 million, you only pay tax on $700,000. So 20% of $700,000 is— yeah, 20% is $140,000, right? So if you compare that to the $200,000, you just saved $60,000 and you got to defer, use that money for those 5 years. Now, after 10 years, let's say that million-dollar property or the million dollars you put in is worth $2 million. That second million, when you sell it, there's no tax. So you sell the $2 million asset after 10 years, no tax. Pretty powerful what they did with Qualified Opportunity Zones. The R&D tax credit was broken for a long time. This is Section 174 expenses. And what happened in the Tax Cuts and Jobs Act is it made it where if you had R&D tax credit expenses that you were getting, you were putting on your tax return, you had to amortize those expenses for at least 5 years. So if you're amortizing those for 5 years and you're trying to take the tax credit, you actually end up in a worse financial position in many cases. So both sides of the aisle have wanted to fix this for many years, but it always was being stuck in some bill they couldn't pass. So now it's been fixed. And now under Section 174, you can expense those same research and development expenses that you're using to get the the tax credit. So very powerful, important to know. Also on the R&D tax credit, if you've been amortizing these in the past and you're less than $31 million of gross receipts, in other words, revenue, gross receipts, then you can actually go back and restate tax years 2022, 2023, and 2024 to get those expenses actually counted, written off, as well as getting the tax credit, you know, or if you should have been taking these the last 3 years, right? If you do have R&D tax credits, you can go back and amend. Now, if you're more than $31 million of gross receipts, you might say, well, Jim, what do we do? Well, you can't go back and restate past tax returns, but what you can do is expense off any of those things you're amortizing in 1 or 2 tax years. And that's really up to you. So really powerful in the R&D tax credit. Another one, this is new, very exciting, Section 168-N. This is allowing entrepreneurs to expense or depreciate the entire cost of building a manufacturing or domestic production facility. So if you're building something or doing substantial improvements, it has to be a commercial type building and it has to do production or manufacturing in the United States. If you do that, you can write off the entire cost of that, which is super powerful. Right. And so just to give you an idea, this is for construction. Construction starts— I apologize for my bad handwriting. It has to start after January 19th. 2025. I already told you why that date, right? That's the inauguration date and it has to be placed in service. So I'll put in service by December 31st, 2030. Okay. Now, one thing you have to remember is this has to continue to be a production or manufacturing facility for 10 years. If not, there is depreciation recapture. You don't want to fall into that. And it only applies to the actual part of the building for production or manufacturing. So if you have a building where 80% is for manufacturing, 20% is offices, offices don't count for this. This is huge. This is a game changer for any of you who might want to get into that, that world, or in case you want to build a production or manufacturing facility. The qualified business income deduction. So this is the Section 199 Cap A. They kept this pretty much the same, although they increased the phase-out for this. So, the phase-out for this year is if you're single and you make more than $197,300, you start to phase out that benefit. It phases out at $247,300. And for married filing jointly, it phases out from $394,600 to $400,000. $94,600. And you notice the difference here is $50,000 and the difference here is $100,000. So starting in 2026, these things are going to get indexed, but this is going to go up to $75,000 for that spread and this is going to go up to $150,000. What that means is more entrepreneurs are going to get the qualified business income deduction, the 20% deduction that was put into the law because they lowered the corporate tax rate to 21% to help S corps, LLCs, partnerships. Many of you on the phone they made this change. So that's exciting. Now, once you're above these phase-outs, if you're a specified service, endow, or trade business, you're out of luck. But if not, it becomes either 50% W-2 test, and that includes if you're an S corp owner, what you pay yourself. So there's great things that you can do with that to maximize your tax savings, uh, or it's either that test or 25% of W-2 and 2.5% of unadjusted basis in property used for the business. Right. So these are the two tests. Once you're above those thresholds, again, those thresholds are going up next year. So more entrepreneurs will qualify. Very exciting stuff. Let's talk about the charitable contribution changes that go into effect in 2026. This is really big for everyone, but especially high-income earners. So there is now a charitable floor. Again, this starts in 2026. A charitable floor of 0.5%. So one half of 1%. What that means is if I use simple math, let's say you make $1 million, one half of 1% of $1 million is $5,000. That means the first $5,000 of any charitable contributions you make next year are not going to count. Now, can you roll that forward? No, unless you go over the thresholds. The 60% of adjusted gross income of a cash gift, for example. So if you made $1 million, if you gave more than $600,000, then that $5,000 could roll forward. But then next year, the same test applies. At any rate, if you make $4 million, that's $20,000 of your deductions that you don't get any benefit for. And by the way, this is for all income earners. So if you itemize and you make $50,000, right, it still has that floor. However, they did make a provision that if you don't itemize, you can, as a single taxpayer, give $1,000 to charity and you get it as a deduction. If you're married filing jointly, $2,000 to charity, you get that also if you don't itemize. So this is a big deal. And one other thing is in 2026 also, they're going to limit your benefit if you're in the 37% bracket, which I said earlier, if you're a single taxpayer is more than $626,350. if you're married filing jointly, it's more than $751,600. If you're in the 37% tax bracket, they're going to limit your deduction to 35%. Now, it's a little more complicated how they calculate it, but I don't want to go into that and make your eyes glaze over. So just think about next year, your donation, if you're in that highest tax bracket, is only going to count as 35% instead of 37%. So these two things mean that if you give a lot of money to charity every year, this might be a year, 2025, where you front load it. You do something like a donor advised fund where you can pack that this year, get the full deduction this year when there's no floor and no 35% limit, and then give out to charity over the next 1, 2, 3, 5 years as much as you want to front load it to get more of a tax deduction. Now you need to go to your team and have them model this out to see what makes the most sense as far as your charitable giving. But that's a big opportunity. So what did I not cover today? There was a lot I didn't cover. I didn't cover the no tax on tips, the no tax on overtime, the new car interest deduction, the green energy credits phase out, the Trump accounts, the over-65 new deduction, the 529 improvements, the gambling loss versus gain, etc., etc. A lot. But I don't have time today. By the way, here's your bonus. If you buy the book's masterclass that the Frasers and Invest Like a Billionaire Summit is offering you, then guess what? I'm going to give you a bonus. For free. And here's the bonus from DoWealth. We're going to give you, because we have a new book coming out. So my best last book came out in 2019. My new book that I co-wrote with my managing partner, Bryce Keffler, it's all done. It's being edited, but you're going to be the first to have any access. We will send you the tax chapter, which includes all the new tax law of the One Big Beautiful Bill Act, other tax planning strategies for entrepreneurs. You know, we talk about going deeper, defer, eliminate, arbitrage, pay now, none later, or reduce your taxes. All that's in the new chapter of the book. We're going to send that to you for free from our new book, Billionaire Wealth Strategies for Entrepreneurs: The Fractional Family Office. So, please take advantage of the offer that they're giving to you today. And if you do that, we're going to send you our tax chapter. Well, it's been a blast spending a little bit of time with you today. Hope you got some value out of it. There's a lot out there that you can do as an entrepreneur. Think about how you can have a fractional family office structure and hope you have a great rest of the summit. Good to see all of you and take care.