Maximizing The New Tax Bill and Navigating Amazon State Taxes w/ Tom Wheelwright #TheOnePercent

Well, because they don't understand it. That's the challenge. And so it's just so important that you have CPAs who understand your business and understand their business. And most CPAs frankly, don't understand either one.

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I got some good news for you. Look, I called up the President and it was like, look, Donny, taxes are too damn high and we need to do something about that. And he was like, ryan, you're fired. But you're right, I'm going to have the most beautiful, the biggest tax cut. Why does he sound like Bernie Sanders in this impression? I'm not sure. Probably because Bernie was behind him going like, there will never be another tax cut. Anyway, listen, I'm obviously in a good mood because as you are familiar, we're now seven months into the new tax law, the new tax code, and there are some really interesting incentives for entrepreneurs, and there are some interesting incentives for, for physical products entrepreneurs. However, there's also some bad news that has come out recently about the way that maybe states are gonna police you and me if we sell physical products on the Internet, even on Amazon. So that's interesting. So look, there's a lot going on, right? There's opportunities for entrepreneurs, there's new write offs for entrepreneurs, and there is some danger ahead for entrepreneurs on the state and local level. So I only know enough about this to talk about how I'm reducing my own taxes. And I'm happy to have that conversation, but there's somebody who is way better at this than me in advising people and he's actually qualified to speak on this topic. And as Tom Wheelwright, he's one of the top CPAs in the country. He sees the tax code as a list of incentives, not a list of rules. He's the only guy I trust on this topic to, to put on my podcast or my stage. I would love to work with Tom more directly and that is why I have brought him onto the podcast to introduce him to some of you. He has spoken on the Capitalism Conference stage. I have had him privately at the back room sharing some insights. He has also been in my home and we have broken bread together. He is the person I trust most on this topic. And if you like keeping money in your pocket regardless of your politics, if. If you like keeping more money in your business so that you can hire people, you can advertise more, you can grow more, and you can grow faster as a result of keeping the profits that you earned versus giving them to some greedy politician in Washington D.C. then you will at least have one BrainGasm. In this episode with Tom Wheelwright, you will also hear what he thinks is going to happen as a result of the Wayfare ruling that happened on the state level regarding physical products and how they're going to be taxed. This is big, it's scary, and there's not a whole lot of good news yet, but we're hoping for some. And you're gonna stay ahead of the curve on both what to do with your taxes and how to take advantage of some of the changes that have already happened, and how to prevent yourself from getting screwed in the future. You're really gonna enjoy this chat with Tom. One caveat. Tom's audio wasn't the best. We decided to do this over the phone rather than on Skype and as a result the could have been better. So I regret the fact that it wasn't the highest quality as you've come to expect, but I think you are still going to get a ton out of this episode. So if you can bear with the subpar audio, you're going to love this episode with Tom Wheelwright.

Tom Wheelwright, my frenemy. How you doing, my friend?

What in the world are we talking about?

I'll tell you're my friend because you're the only person who was more popular than me at my own event at the Capitol.

There you go.

You are the only person alive that can make taxes sexy. I know that Trump can make them great again, but you can make them sex. I've never seen this done. You were probably the most popular person at the event last year, more popular than me. And that's why you're my frenemy.

I appreciate that. In that case, I'm happy to be your friend. I have to admit, I do love taxes. I think it's a fascinating a lot of stuff going on in the tax world these days. A lot of stuff going on in the tax world.

Yeah. Well, Tom, let's start there. We have a new tax bill now. It's been half a year since it has been the law. And so there's a lot of confusion and also some opportunity here, especially for entrepreneurs. There's, you know, the 20% small business tax write off. There's some things that are no longer tax write offs. There are some new forms of depreciation that we could take advantage of. What would you say are the biggest things that affect entrepreneurs now that we have a new tax code?

You know, everybody has the opportunity to form their business any way they want. So, you know, you don't have to be a big business to be a corporation, BSC Corporation and get that 21% rate. So for some people, they're going to switch. They're building their business. They're not taking a lot of money out of the business. They're thinking, boy, for the next four or five years, I'm going to be putting money back in my business. They ought to be thinking about that whole c corp 21% tax rate because they're not going to take a lot of dividends. So I think that's a huge one by itself. And then of course we've got the 20% which we need to talk a little bit more about. But the 20% deduction, basically what that does is brings the top rate for a lot of entrepreneurs, not all, but a lot of entrepreneurs, brings the top rate effectively down from 37% to 30%. So that's a big deal. And then, you know, you mentioned the depreciation rules. I mean, now you can go buy that SUV you've always wanted, that pickup truck you've always wanted. You use that hundred percent in your business and you get to write the whole thing off, even if you borrow all the money for it. So there's a lot of big things in the new tax law. I think the corporate tax rate is actually a really big deal. I think the 20% deduction, which we got because of the corporate tax rate change and the depreciation, those are huge, huge positive impacts to entrepreneurs.

So now that the question comes up of for a lot of smaller entrepreneurs, we've always been encouraged to, at least in my circle, we've been encouraged to form S corps to avoid double taxation. But now that the tax rate is 21%, it throws up some confusion. But then that's offset by the 20% reduction. So in your mind, when someone's starting A business, should they be considering a C corp or an S corp and if someone has been an S corp, should they consider moving over?

Okay, so everybody should consider everything. I mean, that's the reality of it. You've got to understand the basic rules so that you can sit down with your tax creditor and ask, okay, so here's my situation, here's what I want to do or what do you suggest? Where people are really going to be benefit from that 21% rate is when they're reinvesting in their business. So here's the challenge. If you are taking all a lot of your money out of your business, you're just spending it right, you're just buying that new Ferrari, then what happens is, is that you're going to get taxed twice. Once you're going to pay the 21%, but then you're going to pay probably 20%. Okay? So that ends up being about a 37% tax rate if you deduct out the 21% tax that you paid up front. So that's obviously a higher rate than if you get the 20% deduction and your rates at 30%. So you really have to look at long term. This is a very long term planning long term, am I going to be reinvesting most of my money outside of the small salary I take, am I going to be reinvesting most of my money back into the business? Because if you are, then a 21% rate makes a lot of sense. The other time that you might want to be a corporation, get that 21% rate is if you think that in five, six, seven years from now you're going to be selling the business and you're thinking that you're going to sell it and you're going to get 5, $10 million for this business. We have this law on the books, been on the books for years and years and years. Nobody's just ever used it called section 1202. And under section 1202, if you form as a fleet corporation, you have to start that way. If you form as a C corporation, you hold that stock for more than five years, you sell it, $5 million of gain is tax free.

That's amazing.

So it's a huge tax benefit. So those are really the two times. And really those two times aren't that frequent. I mean, think about it. There aren't that many people say, well, I'm absolutely convinced five, six, seven years from now I'm going to sell this for $5 million or that I'm Going to reinvest most of my money. Who does that apply to? A lot. It's going to apply to a lot, to the technology companies. Right. Because they're not planning to take money out for the next four or five years, and they're planning to sell at a big gain. So that's kind of the market it hits the most, but it could hit anybody. It could hit somebody selling on Amazon. The reality is that you could be out selling on Amazon. I'm going to build this up. I'm going to sell it off in five or six years at that point. Wow. I mean, that's a huge, huge tax benefit.

Oh, yeah. I mean, that's just about every E Commerce entrepreneur I know is building their business with the intent on selling it, and they're probably gonna be reinvesting everything for at least the first three years. And I did not know about that provision. So I started it as an S corp. I would have saved a million dollars in tax.

Had I formed it differently, which is, you know, I'm obviously smacking myself in the face now. But, you know, I still got my money, so I'm not gonna be too upset. All right. So, Tom, you also brought up the depreciation. So the accelerated depreciation on things like cars, there's certain investments, there's the infrastructure depreciation. A selfish question. Can you go back on old investments and now take the rest of the depreciation, or is it only on new purchases?

Interesting that you ask. I give you two.

The first one is that that new depreciation started on September 27th of 2017. So a lot of people are thinking, well, everything starts January 1, 2018. Not so. The depreciation appreciation started September 27, 2017. So if you bought a building, you bought a car. Because now this bonus depreciation applies to buildings, too, okay? Because parts of the building that you buy are subject to the bonus depreciation. So if you bought something after September 27th of 2017, no question you should be looking at those purchases, because you get that bonus depreciation. Even if you bought something a long time ago, though, a piece of real estate. Now, I'm talking about real estate, not anything else, okay? But let's say you bought your office building three years ago. What you can do is what's called a cost segregation, which is kind of what you have to do with on buildings anyway, which is you go in, you hire professionals to come in, and they break down the cost of what you bought. Because when you buy a building, got to remember that you really buy four things. You buy the land, which you don't get any tax break for. You buy the building, which you get a small depreciation deduction for. But then you buy the land improvements, like the outdoor lighting, like the parking, like the landscaping, and you buy the contents of the building. Right, the ceiling fans and the flooring and all that kind of stuff. Well, the land improvements and the content are depreciated over a much faster period of time. Okay? Much, much faster. So land improvements typically depreciate over 15 years and. Which means you're talking about like a 7% induction instead of like the building, which is three. And then the contents are depreciated over five years. Well, here's what you can do on a cost segregation. This is a little piece of magic. You can catch it up the year you do the cost segregation. So let's say that you've been taking two and a half percent, which is a building, two and a half percent a year, for the last three years. Seven and a half percent depreciation. But of that purchase price, say 20% of it relates to contents of the building. Okay, well, that should have been depreciated, like 60% over the first three years. So you take the difference between the 60% and 7.5% and deduct it in this year. So you get to catch it up. So you don't get the bonus depreciation, but the cost segregation is always, always a great idea.

Yeah.

That is absolutely beautiful. I love that. All right, so we have the C Corp, 21%. We have the 20% bonus for S Corps. We have the accelerated depreciation. Is there anything else in the tax bill that we should be paying attention to as entrepreneurs?

I think there's a lot of, you know, really smaller things. I mean, for one thing, here's an important one, Ryan. If you're thinking about getting divorced, do it this year. Because after this year, alimony is not deductible.

Just know that there are a lot of entrepreneurs out there. They're going, do I stay? Do I go? Do I stay? Do I go? Do it this year. Make sure you're done by the end of the year. Alimony won't be deductible if you get divorced after 2018, so you actually can get divorced this year. You can spend your alimony out over 10 years. You're going to get those deductions so long as you closed that loop.

And that's why they call you Tom the homewrecker wheelwright.

Am I Right, exactly. Actually, I actually presume. Here's my guess, I presume that there is some senator, okay, there's some senator who was getting divorced in the middle of a divorce when this new law came out. And the way they got him to vote for it or her to vote for it is they said, look, as long as you give me until the end of 2018 to get divorced, I'll do it.

Oh, the things that happen in Washington.

D.C. i am absolutely convinced that's the case. But, you know, of course, the big one for entrepreneurs is going to be this 20%. Because what we're looking at right now is the big question is who gets it and who doesn't. It's a really big deal for particularly the independent contractors, what I like to refer to as the solopreneur, because there are a lot of solopreneurs. They're not going to qualify unless they take very specific action and they take it soon. Okay. Where there are other solopreneurs that will get it without doing anything, they don't have to do a thing. But I do think that paying attention to that 20% is.

Going to be really important. That's a lot of money.

Yeah. Tom, would you help us understand exactly how that 20% works? Is the 20% basically that you get an immediate 20% reduction? Is it that your first 20% of profits aren't taxed? Would you help us understand exactly what that looks like?

Absolutely. And it's important to understand how it works because depending on how it works, depends on whether you get much of a deduction or anything. So the first thing you have to look at is who gets it. Okay. Who gets this deduction? And the general rule is that any pass through entity gets it. That means an S corporation, a partnership, a sole proprietorship. That's the general rule. Okay. However, there are certain types of businesses that don't qualify. One of them would be mine. CPA firm. CPA firm does not qualify. Our dues for the AICPA are not going towards good lobbying. Okay. Because we did not get this 20% deduction. Okay. So that's one group. Lawyers. We don't want them to have it anyway, so that's okay. Doctors don't get it. But there's a group of people that we don't typically think of as service professionals that also don't get it. And these are people where their business is dependent on their reputation. Okay. So you think about an independent contractor. Let's take a plumber. Okay. Plumber is out there fixing toilets. Okay. And it's Joe Plummer he's got plastered on his van. Come see Joe Plummer. We're the best, we're the fastest. We don't stink. We'll make sure you smell great, you know, whatever it is, right? So Joe Plummer goes out, well, it's his reputation, guess what, at that 20% deduction. So what we have to do is we have to look at. Alright now how. So the second question is, first is who? The second question is how do we get that deduction? Because there are rules that allow anybody to get it, any entrepreneur to get it, even if your go plumber, doctor, lawyer or even a cpa. And that rule has to do with what your.

Income and not income from the business.

What's your overall income as a household? So you and your spouse, so if your income, you and your spouse, your, what we call adjusted gross income, that's bottom of page one on the, @ least on the old forms. New form, you know, is on a postcard, right? So bottom of the old form, if that's under 315,000 as a married couple, you get that deduction no matter, no matter what your business is. If it's under 315,000, if you're a single person, it's half that, 157,500. So you go, well, I don't want to earn less money. We never want to earn less money just to get a tax break. Never ever, ever. However, there are things we can do to bring our adjusted gross income. Even though it doesn't reduce our cash flow, there are things we can do to bring our adjusted gross income below those thresholds. And that's the type of planning we need to be doing. I'll give you a simple one. You know how I feel about 401k. I hate 401ks, right, because you're just deferring your tax to a later year where it's going to be more painful. On the other hand, what if you're at this deduction phases out between 3, 15, 14 phases out, let's say that you're at $415,000. So you're going to get none of this 20% deduction which is worth by the way, about $25,000 to you at 315,000, that 20% deduction is worth about $25,000. So you're going man, I could use that $25,000. Well okay, now maybe what I want to do is I want to consider setting up a pension plan or a, or a self employed plan where I can put away 50 to $100,000 and actually that money's still mine. But I get a deduction this year. So now I qualify for that $315,000 threshold. So planning for that, bringing your income down for tax purposes has always been a good thing. Let me give you another.

Example. Well, before you give us another example, Tom, I want to make sure I understand because this is a little confusing and it's a lot of numbers. Okay, what I'm hearing you say is that if it's under $315,000, all businesses qualify for the 20%.

Discount. That is.

Correct. But if it' over 315,000, then you have certain qualifications where if it's like a personal professional service, you might lose that. So in some cases it might make sense to bring down your income or increase your write offs in order to get below that threshold. Or you could have multiple businesses, I assume, and spread the income over multiple.

Businesses. Well, you couldn't because it's still going to their pass through business. Remember, they're all going to end up on your personal tax. Talking about the business income, we're talking about the personal.

Income. Got.

It. Okay.

Okay. But let's go back to our depreciation. This depreciation reduces our adjusted gross.

Income. So just buy more.

Cars. So you go out, you go, oh, maybe I really do want that suv. So, okay, so you go out and go, I'm looking at this $80,000 SUV, right? And assuming that you're going to use 100% of our business, so it's 80,000. Well, because of the deduction, I'm going to get 40% of that anyway. So the government's going to give me a 40% of $80,000 or $32,000 right off the bat. Okay, so they're sharing 40%. I pay 60%. However, let's say that that brings you down below that threshold. So now you've got, say, an additional $60,000 deduction because you came down to that $300,000 threshold. Okay. That additional $60,000 deduction is worth another $24,000 to you. Okay, so now, now, okay, 24 and 32. I know I'm doing a lot of math here, but $56,000 off that $80,000 SUV, that puts your SUV cost at $24,000. You bought an $80,000 SUV, you paid 24 for it. That's the impact that taxes have. I'm going to get the government to pay 60% of the cost of my.

Car. Yeah, that is.

Beautiful.

I love.

It. Tom, you just gave me permission to go buy another Tesla, thank you very.

Much. Okay, Now I'm going to give you a caution on that Tesla though. Tesla is not a truck, so.

It would need to be a commercial.

Vehicle. And I get the whole price of that Tesla. You're gonna be limited on that. You get like 18 grand. That's.

It. Got.

It. So this only applies to.

Those. Only applies to SUVs and.

Trucks. And isn't the threshold on that actually a weight thing based on it is 6,000 pounds. So if something weighs over 6,000 pounds, it's a commercial vehicle, which means that you can write the whole thing.

Up. No, it's not. It's actually commercial vehicles are considered 12,000, but it's over £6,000. It's clearly a workhorse. That's what it is. They're looking for. The pickup trucks is really who they were after on that. But the SUV is interesting. So of course I bought a new SUV in December. Of course I did. Right. Because I get the deduction right for the car. So I buy a new SUV in December and I look on the weight and it's 6,004 pounds. I'm not kidding you. The car manufacturers have this.

Damn.

Wow. Okay. Basically you're looking for a full size. Okay, so I bought an X5. BMW X5. It's over £6,000. An X3 is not. Okay. So it can't be one of these little pretend SUVs. It's got to be a real.

SUV.

Hey, guys, you know that my.

Financial strategy is to build businesses and to invest the profits. And when it comes to investing the profits, I look for cash flow. I look for it to be backed by something real. And I look for tax efficiency. It's why when I recently sold a business, I called the good folks over at Four Peaks Capital Partners. And today's episode is brought to you by them. You've heard them on the podcast before when I interviewed Mauricio Rauld on the topic of Mailbox Money and why investment funds could be a source of passive cash flow for some entrepreneurs. I use investment funds like Four Peaks as part of my long term strategy. And I'd encourage you to go listen to the episode called How Rich People Generate Mailbox.

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Them out if you're looking for opportunities.

Right now with asset prices as high as they.

Are. I am mostly looking at cash flow opportunities, which is why I had them on the podcast. So make sure you check out that episode on Mailbox Money with Mauricio.

Raul.

Tom, I want to switch gears at this point and I want you to comment on.

The new legislation that came out that was really scary to a lot of E commerce entrepreneurs. The whole wayfair decision. You catch us up to speed and tell us what the heck is going on.

Here. I would be happy to, Ryan, because this is a really big deal and it's not getting nearly enough press. Not nearly enough press. And this is actually one of my specialties. So it's very interesting me because this is what I used to teach at Arizona State University, multistate tax law. So sales tax in particular. So what? We used to have a law, up until last week, we had a law that said that if the only connection you as a retailer, the only connection you have with the state is that you have customers there. That's it. And you have no physical presence. So you don't have an office there, you don't have employees there. You don't keep your inventory there. If that's the case, what the U.S. supreme Court said back in 1992 and before and up until yesterday, they said, look, you're not going to have to collect sales tax. What the Wayfair case decision said is that states now this is a South Dakota law. And they said South Dakota law works because we're no longer going to require a physical presence test. What that means is South Dakota, if you sell, have over 100 transactions with residents of South Dakota, or I think it's, wait a minute, 200 transactions or $100,000 of sales, 200 transactions or $100,0000 of sales, whichever comes first. Right. If you have that much activity in our state, we're going to be able to tax you. And we're not really taxing you though, right? We're taxing your customers in South Dakota, but we're going to require you to collect the tax. And if you don't collect the tax, we're going to extract it from you.

So think about this. Most retailers, their net income is not more than 10% other gross fit. Okay. Some have really low product costs, etc. So it could be. But let's say your net income is 10% of gross sales and you have a 7% sales tax. Well, now your net income is 3% of gross sales. That's like a 70% tax on your. That'd be equivalent to a 70% income tax. It's not all bad. We have a little coming here. Okay. And the reason is because most states followed the old constitutional law, they were actually doing what they were supposed to do. And they said, we're not going to tax you. Our law says you don't have to pay tax unless you have a physical presence. What's going to happen, though, is that every single state, unless the online retailers are able to lobby incredibly well with them, I think every state is going to go and pass a law in the next 12 months that says, okay, retailers, if you have 200 transactions or $100,000 into our state, you have to collect sales tax. And if you don't, we're going to be able to audit you and come after you. So I know that Washington already has this. South Dakota already has this. There are a few other states that already have this on their books. I think Hawaii does. So actually, if you are not collecting from those states, you are now out of compliance. You were in compliance technically a couple months ago. Now you're out of compliance. So the amount of money we're talking about is staggering. I've actually never seen anybody go out of business because they didn't pay their income tax. The IRS works with them. They're very nice and everything. I've seen multiple companies go out of business because they didn't pay their sales tax. Because what the state looks at is this is a fiduciary obligation. In other words, it's like employment taxes. It's not your money. You are required to go collect that. And if you don't collect that and pay that over, then we're going to penalize you by charging the tax to you. It's a huge, huge amount of money. And it means that pretty much every, I think in any state, any significant amount of business, you're going to have to be collecting and paying sales tax. And guess what? Oh, it gets better. Every state has their own report requirements. So you're finding actually a different return in every state. And for most of them, it's monthly, not.

Annually. Oh, my.

Goodness. So the compliance costs of this are.

Significant. That's absurd. So what do you project is going to happen here? Because the way usually Tom brings me good news, he shows me where I am saving a lot of money, or I could be saving a lot of money. But here I'm just seeing how darn expensive and crazy difficult this is going to be to enforce. So what do you think is going to happen here? What do we need to.

Do? I don't think it's going to be as difficult as you think, Ryan, because there are really, really good software packages out there. Really good. And what you ought to be able to do is you ought to be able to go to your shopping cart. You ought to be able to get the sales tax software integrated with your shopping cart so that the software automatically collects the tax, automatically remits the tax, and automatically files the report. In fact, this is why. This is why they changed the rule. This is why the Supreme Court overturned the previous policy. The reason back in the 90s that, look, you can't require a company to do that is that it was too hard to do it. I mean, everybody would have had to do that manually. And they said, that's too hard. You're asking too much for just, you know, allowing them to sell to your people. That's way too much. You're asking way too much. Now they're saying, look, technology so good that it's not that hard. Now for a small retailer, is it going to be a pain? Yeah, it will be, because you start to set it up, still got to get it done. But the software is really, really good. So this is something that technology should handle for you. And I would just suggest that, boy, you go out there, I think everybody who's a online retailer ought to be sitting down with their C8 or just looking online for the software packages and say, okay, how do I integrate this with my shopping.

Cart? Tom, is there any good news to this ruling? Is there anything that we could look forward to? Is there any silver lining.

Here? Yeah, there is, actually. So is it okay if I'm a little geeky on this? Because it's kind of fun that.

There'S. That ship has sailed on being geeky about.

Taxes.

Awesome. I'm glad. I love it. Okay, so the states, they said a long time ago, they said, look, that law that requires you to have a physical presence doesn't apply to income tax. So what that means is that there are a lot of states, California, for example, that have a law that says if you sell so much in the north state, you have to file income tax returns. And so now they're saying, okay, you gotta file income tax return and you have to collect sales tax. You think, oh, this is really bad. However, there's a federal law that says if you sell tangible personal property and.

The only activity you have in the state is soliciting sales, you cannot be required to pay income tax. State.

So that means that all these states that are collecting sales tax from you, if you still stay out of the state, don't have to pay income tax in those states, which is, by the way, a way more difficult filing requirement than sales tax. Let's say your online business is educational products or software, something that you can't touch and feel. Okay, you don't send out CDs. You know, it's a download, right? What you're selling is a download. Well, here's what the states have said when it comes to sales tax. They said, well, we're going to consider that tangible property. We're going to say this is tangible personal property because you could deliver on a disc and it takes up, you know, it's, it's something that's tangible. Well, if they say that and require you to collect sales tax at the same time, it's pretty hard for them to argue that you're not selling tangible personal property. So you are for sales tax, but not for income tax. See, because. Okay, and I know this sounds complicated, but I presume that you're recording this and that people can listen to this over again. So that's what I would suggest. So what happens is that it's only tangible personal property that's exempt from income tax. Right? So if you sell services or you sell intangible property, that the states can still collect the income tax from you. But if they call it intangible property for income tax, they're hard pressed to call it tangible property for sales tax. So they're not going to be collecting. For those of your listeners who are selling something other than a physical product, you know, like shirts, okay, That's a physical product. You sell shirts, you're not going to have a requirement to pay income tax. If you sell software, you probably are not going to have a requirement to pay both income tax and sales tax. It's probably going to be one or the other. So all I can say is that I think there's some good news in there. It's just that what you're really going to have to do is you're just going to have to sit down with a professional and walk through it, make sure that you know you're getting absolutely the best result you.

Can. So in other words, everybody just needs to buy a whole bunch of SUVs so that we don't have to pay any taxes. We just need.

To. That helps you for income tax. That doesn't do anything for you.

Right? Yes. Right. This seems like a real kick in the. Where the sun don't.

Shine. This feels like it is. It is for the. For Internet sales. It is. It absolutely. It may be a kick. You know, you think about Amazon, of course, Amazon itself, when it sells something, it's been collecting tax in all the states, but of course, most of the resellers on Amazon, it doesn't collect tax for you, Right? So now there's a question in my mind. What's Amazon going to do for its.

Resellers? That's my question as well. And I predict that they're going to make this easy for all the resellers. But in the meantime, it seems like we're left scrambling to figure this out on our own. And there's a lot to navigate here. And it's not like it's an insignificant tax. It's a very, very significant.

Tax. It's a huge amount of money. Honestly, if you're an Amazon reseller and you have confidence in Amazon that they're going to come in and make this easy, I probably wouldn't worry too much about it. First of all, you don't have very many states that are requiring this now anyway. It's going to be next January, February, before you get these new laws. What I would be doing if I were an Amazon reseller is I'd be. And asking the question, so what are you going to do? How are we going to deal with this? Because I think that easy answer, Amazon, it would be a hugely positive thing, wouldn't you say? If Amazon said, okay, all you have to do is click here and you can subscribe and we'll take care of the.

Salary. Absolutely. And I think that will be the case. But I'm predicting, and I tend not to be a very good.

Predictor. Remember, this is always a business decision, right? I mean, they're not going to put you in jail for not collecting sales tax. They might bankrupt you, but they won't put you in.

Jail. Okay, good news.

Tom. Good.

News. Obviously, there's a lot going on in the space. You're the one guy who can make it sexy, and you're the one guy that is constantly on top of things. I know you've launched a new initiative at wealthability, which is a big shift for you, and I wanted to kind of give the floor. And I had a couple questions for you about that platform. So tell us a little bit about.

That. So very, very exciting. So wealth ability is really a major expansion of what we've done in the past. You know, we've always been about education and providing good tax advice, et cetera. But what we can do now is we have a much broader platform. Our whole goal in life is to help you learn how to pay way less taxes while you're earning way more money. So that's our, you know, two Things we do teach you how to make a lot more money, teach how to pay less tax at the same time. And that's kind of the fun thing about what we do is that you actually, the more money you make, the less tax you should pay rather than the other way around. So what we've done is we've launched website, we've got courses, we're continuing to develop new courses, new education. And they're really, really, they're fun education, they're interesting, they're simple that anybody can do to help you reduce your taxes and build your wealth. So that's step number one is, I mean, there's just tons of educational content. Okay. And ways to learn how to really understand how you can develop your own ability to create wealth so you don't have to give your money over to somebody else and hope they can make money for you, but you can do it yourself. Second of all, we've developed and are developing an Entire network of CPAs around the world to help you make way more money, pay less tax. Because what I've learned over the years is that the person who's going to have the biggest impact on your finances outside of yourself and your spouse, is going to be your tax advisor. So very, very important that you have somebody who understands these principles. The other thing we've done, which I'm very excited about, is we have a second edition of Tax Free Wealth. So it just came out on Amazon last week. Okay, so big deal for Tax Free Wealth. It's a new edition. It's got all the updates for the new walk and even has an ebook with it, a companion ebook that gives 10 of the most amazing tax benefits from the new.

Law. Very cool. You will probably see that in an upcoming edition of what I'm reading this weekend, which is my weekly newsletter about what I'm feeding my brain. So, Tom, you also have a feature in there about like, finding certified CPAs that are like within your stamp of approval.

Correct?

Yes. Would you tell us a little bit about that? The reason I ask is because I know CPAs disagree with each other a lot. And you have what some people call conservative CPAs, which to me just means, like, they never work as hard to save you money as they should be. And then obviously everybody wants to stay compliant. So how do you go about certifying the people that would be within your recommended network? And what should people look for when they're saying, should I keep this guy or gal or should I get a new.

One? Well, I expect that the first thing you'll look for is certified Tax Free wealth network member. You're going to want to make sure they're a certified Tax Free wealth network member. And the reason is because my mission in life is to change the CPA profession. I think we have a lot of smart people in the CPA profession, but like you said, you know, they think the conservative means that they don't take deductions that you're entitled to. Conservative, you know, for most of these people, you know, conservative you can equate with uneducated. Because if you think about what conservative means, conservative means that you do something that you're comfortable with. You're within your comfort zone. Well, if you don't know much about the law, then your comfort zone is going to be really small. But if you know the law inside and out, your comfort zone is really big. I feel personally that our members are much more conservative than any other CPAs out there. It's not because they do less, it's because they know more. Because the more they know, I mean, we can do things. If you read Tax Free Wealth, I've never. Ryan, in six years, I have never had one CPA call me and say tax free wealth is incorrect or there's something incorrect in Tax Free Wealth. Not one time in six years. Okay, so why are you doing it? Well, because they don't understand it. That's the challenge. And so it's just so important that you have CPAs who understand your business and understand their business. And most CPAs frankly don't understand either one. And that's what we're doing my training and we're just creating course after course. We just held a three day course in our office here in Arizona. 30 CPAs came and literally the building was rocking. There was so much excitement in there. You don't think of CPAs as exciting people, right? I know I wrecked. And yet, and yet there was at least as much energy per person there as there was at capcon in.

December. Oh man, you're up in your.

Frenemy tag there, I gotta tell you. I'm just hoping. I'm throwing the gauntlet down. Just challenging me there, pal. That look you can have. What I'm saying is, wouldn't you like to have a CPA that has as much energy as you have? That's what I'm saying. And that's what, that's what we're training. Because what the CPA world is missing is they're missing any kind of how do I be a better person, how do I Be a better entrepreneur, how do I be a better business owner? When we can teach them that, which is what we teach, what we were teaching them week ago. When we can teach them that, they become such better advisors because they understand their business. Most CPAs don't even understand business at all. They don't understand their business. How are they possibly going to understand your business? We got to start with a lot of poorly managed raw material here. But we're finding these people, we're finding these diamonds in the rough that are. They're just waiting for this. They're just dying for it. And it's just, it's very, very.

Exciting. Well, Tom, you know how I feel about the government, you know how I feel about taxation. And so I love that there's somebody in the world who is excited about saving entrepreneurs money and keeping it in the hands of productivity rather than bureaucracy. So keep on changing the world. My man. Thanks for all that you're doing at Wealthability at the Capitalism conference and for entrepreneurs everywhere. I appreciate.

You. Well, thank you. And you know what, thank you for letting me share the message. You've done such an amazing job with your members and with the people that follow you and I appreciate that. I appreciate your integrity and thanks for being my.

Frenemy.

Thanks so.

Much.

Tom.

Did you know that it was possible to make taxes sexy? I didn't. And then I met Tom Wheelwright, so I hope you enjoyed that as much as I did. I've been very public about the way that I have maximized my write offs under the new law. For example, the accelerated depreciation that is now possible under the new tax law, I have taken advantage of that by buying websites. I use Income Store to be able to automate that. We've had them on the podcast a couple of times. They've been on my stage several times. They're who I trust. In order to automate that side of my investment portfolio, I have invested into real estate through syndications. I recently invested in the new Raise at Four Peaks, which is a cash flow fund that is backed in real estate, specifically mobile home parks. So I've been very aggressive, as aggressive as I know how to be in terms of placing my chips. To be able to take advantage of this new tax law, I personally think it makes the most sense to spend money versus giving it to DC versus giving it to politicians. Now I'm not giving any advice, I'm not giving any legal or accounting information. This is just what I do. I look at where can I maximize my roi and sometimes that means buying more assets now under the new tax law so that it doesn't go to D.C. because that means that I'm going to be able to literally put half that money back into my pocket because it's not going to the government. And if it's a write off, that means that I'm really getting the government to pay for a good amount of it. And if it's an asset, then it's going to pay me more dollars over time. So I would rather spend the money, take the write off, take the depreciation, get the value from the asset and make my money that way. Make my money in cash flow versus make my money in savings. That's really the way that I should phrase it. I invest in things that are going to cash flow versus things that are savings and then I'll do things later to try and offset the taxes on that cash flow. I'm geeking out about this. I would love to spend some time with you going through my entire investment strategy. It's something I'm considering. I'm considering doing some workshops at my new lake house here in Austin, Texas, which might be all about investing for entrepreneurship. It's something I've wanted to do for years and I should really just do it. So if that's of interest to you, let me know. Shoot me a message on Instagram I'm Ryan Daniel Moran. Or on Facebook. I'm also at ryandaniel Moran there. If you found this interesting, if you found the speculation on where things are going, feel free to post it in a Facebook group where you hang out with other entrepreneurs. Hey, thanks for listening to the show. I love and geek out on this stuff. Thanks for even entertaining my thoughts on this topic. Let Tom know that you appreciate it. You can tag him on Facebook or on Twitter. I'm sure he would appreciate it. Thanks everybody. I'll see you on the next.

Episode.

If you've been listening to the last few episodes of the show where we featured entrepreneurs who have crossed the seven figure mark and are on their way to eight figures, then you undoubtedly have heard us talk about the Backroom. The Backroom is a group mentoring program where we cast the vision for getting to $10 million a year and beyond and being ready to sell your company because ultimately that's where the big payday is going to come from. We also open up investment opportunities so that you can put your profits into places that give you more wealth and potentially more cash flow or even help you save on taxes. We have some pretty cool places where we Put cash that give you sometimes all three, plus you're in a room with people who are the best in the world at what they do. We bring in my team of advisors that help people get into retail. They help people clean up their systems, they help people clean up their books, they even help them reposition their companies so that they can be sold for more money. We also talk about what's working right now on Amazon and on other channels, but the focus of the group is on casting the vision to get to eight figures and beyond and clearing all bottlenecks that stand in your way while also opening up other opportunities for you to enjoy a life of freedom. Because that's what we're after here. We're not just after this to work hard and work 16 hours a day. We're doing this so that we can have freedom. And we get freedom by making enough money so that we can invest into places that allow us to never have to work again and then building empires with people that we love doing business with. And that's what we're doing inside of the back room. And I could also tell you that were looking to buy and buy into some of our students businesses through something else that we're doing pretty cool in the back room, but I will save that for another day because that is still in process. But if you have an idea that you're not sure how to bring to the marketplace, if you've got an audience that you know could be the fertile ground for a really profitable seven figure physical products brand, or if you're selling enough product to be able to say, you know, I could step on the gas here if you've got that million in sight, or you're beyond the million and you know that it's time to accelerate the process to get to that eight figure mark. Because you're playing the review game, you're playing price wars, you're tired of sacrificing profit margins, you're working way too long for too little result and you want to clear those bottlenecks so that you can grow faster and have a sellable company. So one day you can have that ideal for freedom lifestyle. We can help you inside of the back room. It's one of the more expensive things that we do. It's also the highest ROI thing that we do. So it is application only. You need to be ready for it and you need to be ready to move when you join. So you can go to freedomfastlane.com, click on backroom and see the application, see all the pricing details from there. Working with me one on one starts at about $100,000. Joining the back room is a little bit less than that. So just know going into it that it's a serious investment and it is only for people who either have funding, have sales and are ready to go once they join. So if that's you, go over to freedomfastlane.com, click on the back room, and you'll see the application and full details there.