Next Level 254: You’re Paying Too Much Tax! (And How to Reduce It!) with Chuck & Davis Oliver

The biggest scam in life is paying taxes on the money we make, paying taxes on the money we spend, and taxes on the things we own that we already pay taxes on with already taxed money.

Welcome to the Next Level Income show where it's our goal to take your income, your investments and your life to the next level. I'm your host, Chris Larson. If you haven't yet, get a copy of our book for free at our website, nextlevelincome.com. that's www.nextlevelincome.com. just click on the book link and I'll even send you a copy if you put your address in. On today's show, we have Davis and Chuck Oliver. Chuck is a nationally recognized radio host and best selling author, recognized wealth strategist who works with baby boomers, retirees and business owners nationwide who desire asset optimization and wealth preservation planning. Their focus centers around having a written comprehensive plan incorporating tax savings, reducing unnecessary market risk, maximizing income and growth, while securing peace of mind with asset and estate planning protection. Today we're going to talk about how we use the Next Level income strategy, how to make more money, keep more money, which is what we're going to dive in with Chuck and Davis today to ultimately grow your money for you and future generations. Gentlemen, welcome to the show.

Thank you for having us.

Yeah, thanks, Chris.

Absolutely. Yeah. We're doing this just a few weeks after tax day and you know, I, I don't, I, I always like to ask people like, are, are you happy with how much you're paying in taxes? And you know, people say, yeah, I think it's fair. I say, I say, great. Like, how do you ever, like, write an extra check to the Treasury? And you know, it's one of those things, it's like if, if you think you should be sending more money to the government to manage your money, then, you know, you can always write that check to the U.S. treasury. They will cash it, I can tell you that. And we talk a lot about investment opportunities. Our investors club gets investment opportunities and everybody wants to jump to that. But the Next Level Income strategy is very specific. We talk about how to make more money, how to keep more money and how to grow your money and those investments fall into the grow bucket. A lot of people jump over to this key portion and I've been very, very happy and was very excited to get connected through you all through our, our mutual friend Anne. And you guys do a phenomenal job of that second portion. You know, the legal and tax strategies behind keeping more of your hard earned dollars. And we don't, we don't often have two guests on the show. But for those of you that are listening, Chuck and Davis are, are a father son duo. And we've got some, we've got some similarities in terms. Davis actually went to the same high school that my son's going to. Fantastic, fantastic community that we've, we've talked about. But I don't want to steal your thunder, guys. Let's talk about what you do at the Hidden Wealth Solution and a little bit about your background and how you founded it. Chuck.

Sure.

Well, thank you for the opportunity. It's always great to have an impact on, you know, helping people with their, with their wealth. And this can be life changing as you've experienced, as a number of our clients have experienced. So it's, it's. I forget what somebody said, right? You, you never want to work at a day in your, you know, a day in your life, right? You just want to make a difference in somebody's life daily. So I think safe taxes, you know, go such a, such a long way, right? So hidden wealth was actually created because of the void of personally and professionally going through being very blessed, very fortunate to have a, a business. I, I'd been self employed since I was 19. I didn't know an S corp from a C corp, right? So I knew how to definitely overpay taxes. I knew, I knew very little. I just knew I was going to be an entrepreneur. Both sides of my wife's family, both sides of my family, all entrepreneurs. And so finding that, and it was fascinating because it actually goes back to your roots in Asheville, that the biggest scenario that prevents people we find from really becoming wealthy is not paying attention to the things that they actually have the greatest amount of control over. And not just daily discipline, right. But the ability to control their taxes. And taxes became so out of control that that's how I kind of coined the concept of the process of hidden wealth. Helping people to discover and uncover their hidden wealth. And for us it starts with taxes because if we don't get the taxes right, you know, everything else is going to be inferior. Because just as you said, it's in fact it's very apropos as far as where we are in this time of the year. Most of us to this moment will work through the timing of this coming out and pretty much not net a dollar for ourselves, right? We spend pretty much the first four months of the year paying the irs, right. It's only till after we kind of get into May, and after that, people actually end up netting something for themselves. Well, that's silly. And so that's, that's why we took the approach that the thing that was really holding people back, whether it's a high income earner, a successful business owner, somebody that's been a heavy saver in tax deferred accounts like traditional 401ks IRAs, they don't realize the magnitude of, you know, we all recognize the magnitude of compounding interest. Right. We don't really recognize the impact of compounded taxes. And so we ran a couple things, Chris, in anticipation of this, we determined that predominantly, especially for accredited investors, let's say a couple married jointly, let's say have 300,000 or more of taxable income, they'll spend almost $4 million in taxes over, say, an average lifetime just in tax. Right. Four million bucks. And when you think about that, that's a really big number. So we're big on. It's not what you make, it's what you keep. And if people could redirect taxes into things like that, you know, you and Matt and obviously have great access to opportunities and different types of fund structuring and things that people will never get access to, which is very unique unto itself, then that's really where the wealth building comes is, hey, let's, let's get the federal government to subsidize some of our wealth building, not having to work more, pay more tax, and then try to grind out what we can do to get into these opportunities. A lot of opportunities are missed because of the tax drag. That could be taken care of.

Absolutely. And you know, you said pay, pay through, you know, may essentially with the, with the irs. And then you got state, you got local taxes, you got your property taxes, you got, you know, sales tax. Most people, they're, they're working into July. I think the, the tax freedom day is, is sometime in like June or July. Now if you add it all up and Davis, you're going to go through some, some case studies here. And you know, I love how you phrase that, Chuck. You know, a lot of people, first off, if you save a dollar in tax, it drops directly to your bottom line. So our goal is if, hey, we can help you save a dollar in tax, that's another dollar that you can put into investments, that's another dollar that you can keep working. And you know, I forget if my, my accountant told me this or I read it somewhere, but, but it's like, you know, it's like Monopoly, right? If you Understand the rules, you can play better. The IRS is like a rule book, and if you play by their rules, they want you to invest, they want you to create and grow businesses, which is why there's a lot of these opportunities out there.

Yeah. And as Davis talks about these case studies, and that's what's great in having a tax wealth team. Right. Where we're focused on the. And there's so many little caveats of not just different strategies, but the way you can actually layer different strategies and really get out in front of it. One of the favorite quotes, he's actually been titled the father of tax planning. His name is actually legal name is Billings Learned Hand. He was a former appeals court judge. They kind of called him the 10th justice. He never made it to the Supreme Court. But what was fascinating is he got labeled as the, the father of tax planning. And I love his quote. Not go through all of his quotes, but his main quote is, you know, there's two tax systems in this country, one for the informed and one for the uninformed. But they're the, the same tax system. It's just to your point, right. If you take the time or work with people that are, you know, focused in an area where that's their unique ability and they can find the areas which, again, I'm the first to tell you how to be an over, an overpaying taxpayer, which is why I was very motivated to find out ways to, you know, legally, ethically, and morally leverage the tax season system to my advantage as their advantage. And I'll leave you with this as we go to these case studies or other questions you have in this case, Chris. But one of the favorite things that a client sent me was this. The biggest scam in life is paying taxes on the money we make, paying taxes on the money we spend, and taxes on the things we own that we already pay taxes on with already taxed money.

Yeah.

I mean, just let that settle for a moment. I mean, taxes are a complete rip off. And so take advantage of taxes, don't let taxes take advantage of you. We like to say.

Yeah, oh, yeah, absolutely. And then you, you, I think you left out the part where I'm, you know, you and I have, in your team have talked about this with, with my stepfather. And then if you don't properly plan, then you pay taxes again on the money you have left over when you die. And it's, it's, it's really, you know, it can really erode that. And again, if you're listening and you Say, hey, I think the federal government and the state and local governments do a phenomenal job with my money, better than I could. Then send them, send them your, your excess money.

Send them more.

Yeah, but you know, if you, if you feel like you can grow your money, if you have other things that you can invest in and grow that money and be productive with or, or donate, you know, that's one of our big things is, is to give people that, you know. Davis, your dad Chuck here shared a little bit, talk a little bit about your background, why you, why you chose to go work with your dad. If you don't mind. I, first off, I got to say I so admire you know this because I have two boys as a lot of the listeners know. So it's, it's, it's awesome to see, you know, that you guys have a family business in this.

Oh, well, thanks, Chris. Yeah, most clients just seem. I've been drinking the Kool Aid forever. But no, I have a background economics major from UNC Chapel Hill. Go Heels.

And great school, great school.

Gonna watch him play Duke in lacrosse Friday night at 8 o'. Clock. So I'm excited.

There you go. There you go. Yeah, hopefully the Heels win. But no offense to Duke, but I do too saying all that, right. I got started as an analyst in the oil and gas space, right. So I really seeing the private markets, right. It's kind of like, you know, my dad just quoted there, right? There's really two kind of tax systems. One's the understood, one's just not the understood, right? And you know, realizing that, right, as I started seeing, you know, you can, we're not going to talk about oil and gas today, but that, that's an oil a deduction, a tax saving asset class that goes back, you know, all the way to 1913 in tax code, right? Where these IDCs, intangible, intangible drilling costs you can write off against active income, right? So from that, right, we, you know, what we've done over the years is, you know, paying taxes ourselves. You know, it's really. How do we find ways to get rid of this active income? And you mentioned a few, Chris and my dad here today, you know, where is that coming from? If you're a business owner, right? It's that 1099 income that you're paying quarterly taxes on and you don't really know what you're going to make and you know, you don't want to, you want to avoid penalties and interest that might hit you there, right? So you want to make sure. You get them in.

Right.

But there's strategies to avoid that.

And. Yeah, and I'm sorry to interrupt, Davis, but a lot of people, especially W2 owners, you know, business owners tend to be a little more savvy, you know, know, because they, they, they have control over, you know, do their expenses go through their business like a car, for instance. Right. So I just, I just drove last weekend to Wilmington, North Carolina. We have a property in, in Leland. Do a property visit. You know, that's a, that's, that's a, that's a business deduction. Right. I have opportunities to write that off. You know, if you're a W2 owner, a lot of people say, well, I, I just don't, I just don't have these options. You know, I just, I got a. I shoot. My taxes are taken out before I even get my paycheck. So. You know what I'm excited, Davis, is you're going to share some strategies where, whether you're a business owner or W2 owner, there are options out there if you're proactive, if you work with an accountant, and by the way, you guys can work with any somebody who brings their own accountant along. But if, if you work with your accountant and you just send them your, you know, the proverbial shoebox of receipts at the end of the year and they file your taxes, and you're probably not going to get anything in that scenario. So we're going to talk about how to be proactive.

Yeah, no, I'm glad you brought that up, Chris, because right next is, you know, the W2. You know, working in corporate, wherever your industry you're in as a W2 employee, kind of think you're helpless. Right. It's kind of like, like you just said, it just comes out of the paychecks.

Right?

Yeah, I'll go ahead. And if it works for you guys, I'll dive into these case studies because I think, and hopefully audience will be excited to see that he here. And the first one we'll even cover is a W2 comer. Right. So I'll pull this up here so we have some visuals.

Yeah. And if you want. What if you're, if you're watching on YouTube, Davis is going to share some information here on the screen. If you're listening on the podcast, we'll make sure that we have a link here. So you, you can check this out if, if you're just listening here today. But we're going to go through it so you can listen along in the car for, for Those of you that are out there listening and we're also going to have it up here live.

Yeah. So I'll try to get some good auditory here so you know people that are just not visually seeing. But are you able to see my screen, Kristen and Dad?

Looks great.

Perfect. Okay, so this is a great case study. This is, we'll talk about just two, two strategies. You know, there's a lot out there. Again, we're looking for strategies, like I said, to help reduce our active income. Right. Then for Chris's point, right. We want to take that active income and, and you know, do some like things that Chris has of investments and his team. Right. And ideally take what we've saved in tax and we'll show you what these tax savings are and what we do and put them over in passive investments that generate more deductions, more tax savings and more cash flow to really ideally eliminate that active income and have things working for us more passively.

Right.

So that's kind of the end goal. But how do we get there? Right. So here you'll see on the screen. Right. Just we got a tax return and kind of a little bit of slide deck to kind of walk us through this client situation.

Right.

So this, this client happens to have some solid income, W2 earner. In fact, this client's out of the state of Colorado. Right. And so I'll walk kind of through this tax return. He's making about 303,000 is, is, is W2 salary here, right. Active income. He's got some interest income, some dividend income. What he really had a lot of, you know, we mentioned other active income and kind of doing the long term planning, which is a big thing we help clients with. Chris is he did about a million dollars, $989,000 of Roth conversion. And that's simply moving money from a tax deferred environment, a tax free environment, which is a Roth account to grow and compound tax free from, you know, when you reach over 59 and a half to take out of that 100% tax free and what it's grown to. Right. So this client, he's two and he's getting closer to retirement the next three to four years. So he wants to start doing some of that proactive long term planning. So that was some of what we took into account for his situation.

But real quick, Davis, my apologies here, but just to underscore that for our listeners. Yeah. So if, if this would be, if. So if you've been putting money into a 401k through a bit through, you know, W2 income and doing that a lot of people have phased out of. I remember when I had my Roth and my boys have Roth IRAs. A Roth IRA is great because you pay tax on it and then it grows and then you don't pay tax when you take it out. So, you know, this is taking a 4.1k or an IRA that would be taxed when you take the money out and converting it.

Yep, yep. So the kind of. And then here we're going to show you using a tax deduction strategy, right. To show that. That that income we've taken out, that's now we're taxed on reports less, we're paying less in tax. So I'll walk you through that here. So his client being the state of Colorado, has federal and state tax.

Right.

So unless you're in Nevada, Florida, Texas, New Hampshire, why? Right. You're paying some state tax, most likely for those that are listening. So this client all combined, the 303 of W2 income, the $989,000 of Roth conversion, he also had a cap gain here, you'll see factored in about 161,000. All combined, we had about an annual income of 1,457,506 bucks. And he owes a tax bill, federal and state of $517,000, $333. And this is before any strategy has been implemented. Right. He's at a 35 and a half percent effective tax rate. So the fun stuff, how do we help him?

Right.

So this is kind of the first introduction to Chris, an actual tax deduction. Existing tax code, it's called section 81A.

Right.

Internal Revenue Code 181. Right. It happens to be behind film investment movies. Right. So for the audience out there that likes, you know, all the streaming and TV shows out there, this might be up your alley and, you know, can happily share some of the. The films clients and ourselves have invested in some of these. You probably have heard of or at least heard of the actors and actresses. So with this, how does it work? Most. Where's 181 come from? It comes from most, you know, films back in the 90s, early 2000 were produced in Canada, Mexico, other countries outside the United States. So United States all kind of the incentives and all the stimulus that were going behind those films that are being produced outside the United States say, hey, let's bring this back here and get more job and things of that nature. Right. So in 2006, they passed this Internal Revenue Code and it's been there since, right, that you can invest in films. And by investing in the financing of film, it generates a deduction.

Right?

So what the deduction happens to be and what this client did you see on the screen, he invested $225,000.

Right?

This is important, Chris. Right. You know, we're writing a check to uncle Sam for 500, $517, or in this client scenario, we're outlaying $225,000. It was. He received a $959,000 deduction. Now, there's some things. And what's great about working with our team, Chris, is, you know, as you work our tax team, Candice with New Way Accounting, she knows exactly how to take these deductions. And in this client scenario, using our taxi mechanis's prowess, he was able to use, with loss limitations, about $769,000 this year of 20, 24 of that 959,000. He'll get to use the whole deductions. Get me wrong there, he'll use the rest of that for 25 planning, but that's what he got to take. And so as you see down here on line eight, right, that loss of $769,000. Again, we say this a lot, but I think it's important for your audience to hear not about what you make as much as what you take home. Right. Right here.

And our listeners understand that through real estate. So if you're listening, you're like, wait, how does that work? You know, these are, these are paper losses, right? So real estate, you have depreciation, you know, you can make money, but you can, on, on paper, according to the tax code, you end up losing money. And a lot of people became very familiar with this when Donald Trump stood on stage and Hillary Clinton was chastising him, and he said, hey, I'm, I, I'm just doing what I'm taking advantage of the rules that are out there. And I think. What did he say? Just like all your, all your friends and the donors that are out there, too.

Look, I'm just, I stood up, I stood up and cheered, right? Because she chastised him for. She said, what you reported like, making $750? And he said, yeah, that's right. Right. I used.

Because I'm smart.

The full law. Yeah, because I'm smart. That's exactly what he said. Yeah, because I'm smart.

So, yeah, here, like you were showing you, it's about being smart. Right? So this client they're after that deduction their tax bill and their taxable income. Again, a deduction takes what you make, right? And it minuses by that deduction amount, right? So a lot of you experienced the standard deduction. If you're married this year, it's about 30 grand, right? So if you make a hundred, you minus that 30,000. Now you're paying tax on 70,000. Right? And so now that's understood, right? What this client did after that $769,000 deduction, he now has a taxable income of 642,000. He took his effective tax rate and went from 35.5% to 12 and a half percent of 23% on his tax rate, making his new tax burden $182,000. Right. So what was his ROI? Right, because again, remember, we talked about an outlay here, Chris, and I think it's important, right. I'd love to tell you.

Yeah, like, I like the, I like this slide here.

It's a good one, right? Because I want to know what the ROI is, right? And this is what I love about tax planning and tax savings is, you know, you go to the stock market, right? You know, people would lose their license if I told you, hey, Chris, I can guarantee you in Apple stock, I can make you 149% the next year. You look at money because you're like, no way. You can, you can, you can promise me that with tax savings tax codes written as plain black and white. It's just how you understand it, right? And so this client is going to be receiving $335,000 of tax savings. He, remember, outlayed still 225. He got that back, right? Made 335 plus another 110,000 of tax savings he gets to keep that he never had before. 110,000. You can reinvest in opportunities to grow as well, right? And so that's why we like to start off the tax, right? And this is just one, one case scenario of getting there, right? So hopefully the tax returns understood and that understood. But this is the main, main concept here is you're able to put as little minimum for this opportunity is 50,000 to generate a $218,000 deduction, right? So again, you don't have to be someone with $225,000 of capital, right? Everyone has their cup of tea and that's really where the planning comes in that we help most clients with. Number one, understanding what this tax code is all about. Number two is what makes sense for their own situation, right? It's not one size fits all.

Absolutely. Yeah, yeah, yeah. So quick, quick question here is you is. I know because you got another, you got another example. So, you know, is what's kind of the, what's kind of the point where this makes sense? Because I remember very vividly sitting with my accountant about 10 years ago and he said, he, he grabs a bottle of bourbon and he pours me a drink. This isn't, this is like late in the day, it's like five o'. Clock. And he sets it in front of me and I'm like, what, like what's going on? And he goes, Chris, what, what, what do you, what number were you prepared to hear when you came in here today? And I knew that the number was going to be substantially higher. I got, I got hammered. I had a significant six figure tax bill that year and it's when I said, wait a minute, like I've got to start looking into things. And that, that's when my, my journey began down, down this path about 10 years ago. So, yeah, so what, at what point, you know, I mean, if you're making 100 grand, 200 grand, 500 grand, like who, who are most of your clients that, that you're working with to help with these strategies?

You want that one, dad? I'm happy to answer that.

Yeah, I'll take it. We get that question quite a bit and we always try to, to reiterate, right. You know, who's this for? Who benefits the most? Uniquely enough, there's really tax saving strategy for, you know, a lot. I mean, predominantly for almost everybody. But as it relates to kind of the significance of tax savings, I'd say again, high income earners. So if you're single, maybe 200,000 or more, married, filing jointly, maybe 300,000 or more, I'd say that's kind of probably the kind of the base camp area. But at the same time, somebody may have an unusual liquidity event. Selling a business, selling a property, maybe they have some restrictions, restricted stock units or stock options they're exercising. You kind of take it on a case by case. But I will say this, Chris, that what I love is we actually work with a lot of retired CPAs as clients. It's kind of fascinating because there's, as you, as you put out, right, There's a significant difference between tax preparation and tax planning, right? One's just to your point, you know, pouring you bourbon and reporting the damage and then, you know, gives you the invoice. Then there's others that would sit you down and Say, hey, look in preparation before, like that triggers itself. You know, let, let's identify where you are. Right. One of my favorite quotes is, all progress begins with the truth. So here's the truth of where you are. We like to say, here's the tax road you're on, and then here's the tax road you could be on. And that's the significant difference kind of between an archeologist, as I joke, and call tax preparers. Right. Just recording history, versus an architect, which is obviously helping you build, you know, your tax savings. So I'd say high income earners, but you hit it on the head. We've got 124 trillion. Great wealth transfer. I'll make this because I don't want to miss this other case study that is going to change hands from generation to generation over the next 20 years. And people should be looking at doing advanced tax planning. Let's say somebody listening say, you know what? My, my dad or my mom have, you know, high required minimum distributions. The government's forcing them to take money out. We had a client just this week that saved a significant amount and said, you know, Chuck, I was listening to your podcast or I was listening to your radio program. I didn't even know what a requirement of distribution was. So some of it's looking out for your own taxes.

Yeah.

Some of it may be because you're building your business, you're building your income, and yet, you know, you're going to get faced with a pretty big tax burden because of parents, and you can do tax planning for another generation. So we think it's a multigenerational approach. So I think high income, heavy savers and tax deferred would be a starting point.

That's a great point. And I think if you're listening, I want you to hear this. A lot of people, I have a lot of investors, they're in their 60s, early 70s. They say, Chris, I'm getting hammered because I'm forced to take the required minimum distributions, the RMDs out of my qualified retirement plan, and then I have to pay tax on that. And they said, I don't need the money because I have money coming in from my passive investments. Maybe they still own a business or maybe they're consulting or doing something like that. So, and that's an excellent point. You can help work around that. Davis, I want to, I want to make sure we share this next example as well, because it's very valuable. But I'll let you kind of wrap up any thoughts on here.

No yeah, for the sake of time. Love talking tax especially we can save in tax. So this next example I'd say is even more exciting. Right. So a little bit different scenario we have here. So this, you know, this client has less in. In kind of the, the Roth conversion game than the last one being about a million. This one has some really high W2 income. So let me pull this up here. All right. And so with client rights, we used a really unique strategy that we'll get into here, but to kind of break down his client profile first. Right. So he's a. In fact, he just retired. This is last year, right. As a really tenured airline pilot. Right. So he was making about 800 grand a year, as you see here on the 1040 that, you know, he had an in reportable income. It was actually his like kind of highest earning income year. Right. You know, he's worked hard. They start really giving a lot bigger payouts the closer he gets to retirement for these airlines. And so again, if, you know, this could be anyone, whether you're a business owner or W2, you know, the scenario really holds true. And so again, you know, being a W2, he didn't have a lot of ways to generate deductions. Right. Because, you know, you did not without businesses. That's kind of the, the creme de la creme of how we can generate deductions, like you said, writing off mileage, things like that. So we did a unique strategy where we actually helped the client create a business. Right. Something he didn't have before. But again, he's busy being a pilot, he's in the air, so he didn't really have as much time to go out and manage a business.

Right.

So how do we do that? So this, this strategy is really unique in that. And it's a unique one for sure. What we call our 10 times tax deduction. So for this client scenario, income added up, you'll see here, if you add all this up, we get about $925,000 of income in the state of Virginia. So again, another state income tax state. And on that, about a 33.4% effective tax rate, paying about $309,000. Right.

That's a good, that's a good income right there.

Right.

300K in tax.

It's crazy. Yeah. And so what do we do for this client? Right, because you'll see here, there's a $620,000 loss. Well, how do we get that? Right, so I'll give you a little background on the tax strategy. We Used here. And this is called section179 for you business owners. You've probably heard of this before. I know, Chris, I'm sure you've before use that.

We've used that frequently.

Good.

Yeah. You're familiar, right? So this is a unique way to play it and use it. And we use this ourselves. And so here you have an active business for this year of 2025, right. And you have a business equipment expense of up to 1.25 million. You can write all that off against active income. Right. So what do we help this client do? Right, with this program? Right. I like to kind of, you know, explain clients like this.

Right.

Since a lot of your clients have familiarities with real estate, I'll use that as kind of a starting example.

Right.

Imagine Airbnb. I'm sure everyone on this call, or majority of us know what Airbnb is. We've used it.

We've got. We've got two Airbnb units ourselves, so.

Exactly. So take the same concept, right? And so as you know, Airbnb doesn't actually own any of the real estate. You own your short term rentals on the platform, right? You just use the platform itself. Take that same concept. Now, it's to the $80 billion a year of short term equipment leasing industry here in the United States, right?

80 billion a year.

80 billion.

80 billion. It's a big. So companies like United, Sun Bell Equipment share, those are, you know, here we're getting to tap into the sixth largest equipment share that are about seven and a half billion dollars large equipment domestically here in the United States, about 240 locations, one of the fastest growing and partially because of this program itself. So what this client did, right, he wanted to kind of do some planning for this year of 24. And now here we are in 25. Right. And so what he did was in this program, we can put as little as $80,000 down, right? And that's what he did. He bought $800,000 of equipment. Well, how do you do that with $80,000 down? Just like most of your clients if they acquire real estate, I'm sure you've done, Chris, you don't put 100% down most of the time, right? Maybe 10, 20. Here you can put as little as 10% down, right. And borrow through commercial lenders. We help clients get approved with, in this program, borrow the 90 loan to value, right? So in this program we can do as little as $30,000 down to borrow 270 to get $300,000 of equipment, this client obviously did a larger amount because he had a larger amount of income he offset. So Here he borrowed 720, took down, you know, put down 80,000 of his own capital. That was his outlay.

Right.

Well, the big thing, a lot to ask, Chris, is I'm sure you being in real estate, would ask, okay, we just borrowed $720,000. Am I responsible to pay back that $720,000? Right. That's kind of like here. Sounds, sounds great, but exactly right. And so this is, this is the nice piece to why we all do it. And a lot of our clients love this program. And this is a key point. And I'll reiterate, you are at risk your business and you are at risk for the loan, but you are not out of pocket to pay back the principal and interest payments that are due every month with the lender. You get approved by.

Yeah, repeat that, Davis, because I don't think everyone's going to grab that.

Right. Every month. Right. You put that 10% down, that $720,000 you borrowed. In this case scenario, for this client, he's going to receive from his equipment business, like clockwork, the principal and interest payments due. So for this client last year, the principal and interest payment was about 8%. Right. So that's going to come into his business account from his equipment business and it's going to go right back out to pay the lender, like clock. Sure. Yep. Awkward. So again, you are at risk for the loan and have to be. No risk, no tax savings. It's a key part of tax savings. Have to have some risks materially. But he is not out of pocket. Right. Not quite frankly. I wouldn't do this if, you know, I had to, you know, pay the principal interest myself. It's just not as appealing. Right. So that's, that's the big attraction now. Kind of keep a high level here. There's also some other great benefits with this program. That 80,000 is going to cash flow for him as well, taxable income to the business. Right. And that's really actually a good thing. Right. One thing to save tax. We also want to make money on our money. Right?

Absolutely. Yep.

And so that this client here, they got to use of that $800,000 deduction. Right. That they put $80,000 down for 620,000 with loss limitation rules. Because this is his first business.

Right.

And unfortunately, without him having a high reportable business income, he doesn't get to use that full, you know, if he had $800,000 of business income, he got to use the whole deduction. Fortunately for him, there's some loss limitations. Again, that we can educate clients on if we are able to serve you. So here, that's why you're seeing the $620,000 loss. Right. So what it did for this client, Right. What is the impact? Right. We went from a 33.4% tax rate down to a 7.4% tax rate. He went from paying $309,000 in taxes to 68,000, saving him $241,000 in taxes. He made 302% return on his, on his investment just in tax savings alone. Forget anything else. So that's the excitement, right? What do you do with $241,000 you just saved in tax? The options are obviously endless. There's a lot of exciting things. You can go from there. Yeah, yeah.

Love it. Yeah.

What a lot of our clients will do, Chris, is they'll just recirculate. You know, it's kind of like brush, rinse, repeat. Right. Kind of like, you know, getting accustomed to that formula.

And they'll fly.

One of my, yeah, One of our favorite, one of our clients, wife's a cpa and, and he, he contacts us usually about this time of the year and he's like, if he's not on extended, we'll say, hey, what, what, what did, what did my net come out to? Because I, I want to use that tax savings to do this year's tax savings. Right. So circulate process.

Absolutely. And yeah, and what I love is when we first got connected, you know, we're, we're big fans of cash value life insurance. And I know you guys, you know, that's, that's a whole other thing. We need to do another podcast talking about, you know, the legal and the proper structures to set up with, with respect to that. But this is how the wealthy do it. They, they have their business and their, their income that comes in. They use the right legal, tax and insurance structures to maximize their after tax income. And, and then they reinvest it and create this giant flywheel effect that ultimately continues into the next generation, which you guys kind of alluded to a little bit earlier.

Yeah. The thing that costs us the most, ironically, it's fascinating, ends up being the thing that gets the least amount of attention and it's tax. And it's unfortunate because I think some people just give up because it's like, hey, my cpa, surely he or she would know. They don't know. And I always kind of give this, as is kind of a point of emphasis, a lot of people we work with make way more than their accountant or their cpa. So the CPA or the accountant doesn't have the same, you know, motivation, save taxes. Because maybe some of you listening, maybe your tax professional doesn't pay a lot of tax, but don't think for a moment they're going to bring you a strategy unless they're, they're versed and trained. There's not one course of curriculum in the CPA on tax planning. It's all on tax accounting. So you, you got to be careful that just as you said, you got to kind of know whose audience you are. You know, know whose audience you are. Because if you're paying a lot of tax, can save a lot of tax.

Absolutely. Well, I can't, I can't believe we're, we're already to the end of our time here. But if you're listening and you say, wait a minute, like, yeah, this is me, I want to learn more. We're going to have a special link here in the Show Notes for you guys. Also at the email if and in the show notes of this podcast, you can check out the webinar that goes along with this. And what I love about you guys is that a client can call in and you guys can do a free strategy session. You can look and explain to them what would work. And there's no, there's no cost to that on the, on the front end. Is that right?

Yeah, it's just a, it was a very, very simple four step process. We'll go through it in the webinar. But it's, it's just a tax discovery conversation. Easy go to if somebody wants to request what we call a saving tax optimization plan. The acronym stop in a book I'm finishing. But it's just go to taxes saved.com. that's taxes saved.com and there's a place to click analysis request and it's a complimentary analysis and we actually show the client where the tax risk road is they're traveling and then where the reroutes are to save.

I love that Chuck Davis. This is one of my favorite topics and you know, love to help people make more money, keep more money as you guys do and ultimately help them grow their money. If you have some interest, click on the, the link here in the Show Notes. Also check out our webinar if you missed it live. We'll have a recording here for you that you can request as well. And gentlemen will surely have you back on to share more hidden wealth solutions.

Thanks a lot Chris.

Thanks Chris. Hey Chris here again. I hope you found this episode valuable. Now I have one more thing to gift you. We have a page for my coaching clients where you can get a free copy of my book as well as much more from previous guests on the show. Just check out nextlevelincome.com coaching to get a free copy of my book, audiobook and much more. I'll send you a copy of my book and cover all the shipping costs as a thank you for listening to the podcast. Also, please like share and take just 90 seconds to give us a rating on Apple Podcasts.