Next Level 278: How to Lower Your 2025 Tax Rate Before It’s Too Late!

I think a lot of people start to get scared by the irs. But the tax code was not have you pay the legal most amount of taxes. It was created actually to pay the legal lease.

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 Larsen. If you haven't yet, get a copy of our book for free at our website, Next Level Income.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 episode, we have Davis Oliver of Taxes saved. After earning his degree in economics with a minor in entrepreneurship from UNC Chapel Hill, Davis began a career as an analyst for an oil and gas company in Texas. It was during this time that he discovered bitcoin and bitcoin mining, sparking a fascination with how emerging assets could serve as powerful wealth building and tax optimization vehicles. Recognizing a significant knowledge gap in the accounting industry, Davis began educating CPAs on advanced tax planning strategies involving alternative investments. His work expanded training over 1000 CPAs through collaboration with SAM Technology Tax Software, revolutioning how tax professionals approach wealth building strategies. Today, as leader of the taxes save team, Davis oversees four tax strategists and 22 CPAs. Led by a head CPA with 10 years of Big Four experience, the firm specializes in serving three key client groups. High savers with substantial tax deferred accounts, seeking Roth conversions, successful business owners, and of course, high income W2 employees. So if you're one of these, you need to listen to today's episode. Through strategic partnerships with real estate syndicators financial advisors, Davis and his team have helped untax millions in tax deferred assets, converting them to tax free growth and Roth accounts through the proprietary taxes saved planning process. When he's not optimizing tax strategies, David competes in triathlons, explores roads and trails on his bike, and enjoys walking with his dogs and fiance. Davis. Great to see you again.

Hey, good to see you, Chris. Thanks for having me back.

Absolutely. This is one of my favorite topics, taxes. And a lot of people, you know, they shake their head when they hear anything tax related. But what we're going to do today is we're going to empower you, if you're listening today, to help optimize your tax scenario. And a lot of you, if you're like me, you just filed your taxes in the past week, if you had an extension, I found you know, Davis, I've been filing an extension for about 10 years. As we have K1s from the investments that we do, we typical, typically file an extension. We got to get our business taxes filed. It can be a real headache sometimes. But the part I like about taxes is looking for ways to optimize. Now, I'm not talking about tax evasion. I'm talking about tax optimization. And you're, you guys at your company, Taxes Saved do a phenomenal job. We've, we've had a lot of people that we've, we've introduced to your company for the same reason that I first work with you all was to figure out, hey, how do we, how do we legally save taxes so that we can have more money to put into investments, to donate to charity, to fund, you know, things like our, our businesses. So we're going to dive into all that, Davis. But before we do, you know, I, we, we've, we've hit it off for several reasons, least of all that you are a endurance athlete like myself. But I'll let you go ahead and share a little bit more before we dive in.

Yeah. So here at Taxes Save Chris, we really help, you know, all, all types of people that really have a tax right. So we, we work with clients that are, you know, in their retirement age, that have saved, worked really hard in tax deferred buckets, IRA 401k and them with strategic strategy and planning. Again, like you said, legally, ethically, using the tax code to the fullest benefit, keep more and do more in retirement to help, you know, really successful business owners. You know, I was off a client today. You know, he just, you know, you know, two days after the extension deadline said, you know, it was a tough pill, Davis, when I had to write a check between state and federal taxes of 2 million bucks. And I said, yeah, that's a hard pill to what are we going to do this year about it?

Right?

And that's the key thing. The sooner the better. And here we are, we're going to save them probably 8 to 9 million in taxes this year. Right. So, wow, that's, that's for business owners, right? The business owners, typically the ones that can have the most fun underneath the sun of the tax savings realm. We like to joke and say just in how tax code's written. But then I don't, I don't want to forget about the good old W2 clients that we really serve at Taxes Save. A lot of our W2 clients come to us thinking they're just screwed. There's nothing they can really do. And, and again, we help them implement strategies that they can as a W2 employee and keep more of what they, you know, typically just comes get sucked right out of the paychecks every month. So we serve all types and everyone's situation's different. That's what keeps this job fun. And you know, been in my, you know, been here for going on five years now. The Tax is Safe team. There's always new scenarios and new things. And the big thing here is what's changed in tax code. And the benefit we have with Trump with this big beautiful bill he signed here in July made it a lot more fun to serve clients this year and going forward. So, yeah, it's a little bit about what we do at taxisave, who we serve, a little bit about me. I went to UNC Chapel Hill. I'm economics major, actually got started in as an analyst in oil and gas. That's a tax strategy that goes all the way back to.

Love that one too, right? Yeah.

You know, now learning different alternative asset classes and investments out there made me realize that there's a really big way you can start keeping more of what you make. You don't have to, you know, hand it over to Uncle Sam. Right. I think a lot of people start to get scared by the irs. But the tax code was not have you pay the legal most amount of taxes. It was created actually to pay the legal least. And that's really what we do here at Taxes Save is help clients understand that and how it works for their own certain circumstances.

I love how you said that. You know, I, I've told this story before on the podcast where about 10 years ago I sat down with my accountant and I'll never forget, I like, I like bourbon. He pours me a bourbon. Now this is like 4, some 4:30 in the afternoon and. And I'm like. He slides it across the desk to me. Now, he didn't pour himself a drink. And he goes, yeah, what number are you prepared to hear today? And I was like, this is bad because, you know, it's one thing to like share a drink with a friend and celebrate. It's another thing when somebody hands it to you as something to, you know, kind of mitigate the pain you're about to experience. And we had already paid a large amount of taxes that year. We had, we had some exits with some of our properties and I ended up having to write a check for the almost the same amount that I'd already paid. And I was, I was like what, like, what happened? I was a W2 earner, and I said, there's gotta be a better way. So we sat down together and we said, how can I structure my businesses and look for different things from a tax perspective to save more money and put into investments? And that was kind of the start to my path towards becoming a real estate professional. I did some oil and gas investments the following year that you mentioned, which made a big difference. But ultimately, what you said. I can't remember if it was he that said it, but I heard, you know, don't view the IRS as a threat. View them as your partner, and don't view the tax code as something that's, you know, penalizing. Look at it as a guidebook. Because really, the government. And we've seen this. We've seen it with the EV credits, we've seen it with oil and gas, we've seen it with opportunity zones. The US Government wants economic growth. They want economic investment, and they incentivize businesses. They incentivize us as. As citizens to make investments so that we can grow our businesses, ultimately grow our. Our revenues and our income, which means they. They should make more taxes overall and.

You know, keeping the business running. Exactly.

Yeah.

Stimulus to the economy, no doubt.

Yeah. So I guess let's start, you know, for those of us or for those. Those out here listening, you know, like, if. If someone's listened today and, you know, you just mentioned this Davis, they say, well, I'm a W2 earner. My accountant said, or I've heard that there's really nothing that I can do. Why is that wrong?

Yeah, it's. It's wrong because the reality is there is things you can do. Right. The CPAs, though, Chris, and I've worked with thousands that, even in my short career, believe it or not, is that most CPAs, there's not a course of curriculum in the CPA designation on tax savings or planning. It's filing. They want their job and what they've been trained to do. And that's why they, you know, why is my CPA not bringing me tax strategy? Right. Is most likely they're trained to tell you what you owe, not what you can do to save.

Right.

So it's no, no insult against your cpa. Right. If I had a dollar for every time a client said, yeah, my CPA is just not being proactive. They're not. Put strategies in front of me.

That's just their job.

Yeah. That's not what their job is. That's not what their business model Is right. So we help people do again, we of course CPAs are still vital to it. And every strategy a client would, you know, employ or look to employ with us has been not only approved by cpa, but we take it a step further. Taxes saved. Our CPAs also use the strategies.

Right? Yes.

So you get that understand that that's it's not going to be done and understood correctly. Be filed correctly and they'll stand behind what they're filing. And that that's a big thing.

Right.

Another thing clients always ask, especially the W2 earners. To your point there, Chris, well, is this going to get me audited? No, no, it's not get you audited. Right. Because we're going to teach you how to compliantly follow it.

Right.

And so to your point, what can people do? Right. Especially as W2 employee. Right. Like I said at the beginning, really having a business or an investment in a business that really where the tax benefits come from.

Right.

Some of those tax codes, you know, I'll name a few. Right. Things like 179, 168K. Right. Which is bonus depreciation. I'm sure you, you know, you've been using heavily Chris, with your real estate portfolio and helping clients understand that. And so that's where a lot of the W2 clients, right. We, they're busy in their, in their day to day. They don't have time to go, you know, go a second job. So we find the legal laziest ways to. But the legal correct ways to save the most in tax right. To follow. Follow. Maybe it's implementing a business, an equipment leasing business, maybe it's implementing a software as a service business. Things are depreciable things that also can have maybe some benefit leverage. Right. But the key for us is the numbers have to make sense. Right. My thing, you know, getting started in oil and gas industry people especially this time of year will just start throwing money at something, some tax.

Yeah.

We joke. We don't want the tax deal to wag the dog. Right. That you're just doing.

I love that. If we can just pause on that. I think that's so important. You know, people say like oh, I can, I can deduct this. I'm gonna spend a dollar on this. I can deduct 25 cents. It's like but you're still losing 75 cents. You know, it's like, yeah. So to your point, like yeah, don't, don't say hey, I'm not paying tax on this. It's saving Me money. Not necessarily.

Right, exactly. Exactly. Because you don't know how the rest of the investment might play out.

Right.

That's the uncertainty part. The tax code part is the known that that's the certain we can really plan and be proactive of. That comes down to the numbers. The nice piece there is for a lot of strategies we use, Chris, and help your, you know, a lot of your clients and people you sent our way is that, you know, they might outlay 50 grand strategy. I mean, let's be honest, they cost something.

Right.

So anyone listening today, you think you can save tax by blinking, you know, at the right time and stand on one leg? I wish that was the case. Right. Government made it that easy for us. But it's really understanding how these assets and strategies work in the numbers behind them. Right. And how it works to your benefit. So, you know, client, my outlay 50 grand, but save them $100,000 in tax. Well, now, now, that tax, that's a. That's a return on tax that a lot of people can get comfortable with. And then let's say there's other facets and benefits to that strategy other than the tax. That's kind of the gravy on top. Right. We want to walk away from a strategy that. That we're saving more than what it cost us to do in the first place. And that that's a big thing we provide here at taxes save. So clients understand no client does anything till they understand the benefit to them on the return of tax. What we can really control and guarantee.

I like that. And I remember, you know, when I invest in oil and gas for like, $100,000 investment, I may be able to save 80,000 in tax. So my outlay is significantly less. And I might get those numbers wrong, but my outlay was significantly less. But I also got a return over the next several years on my investment. So it was. It was great because, like, if you get a 5% return on $100,000, it's 50,000. But if your net outlay is only 20,000, you know, your. Your actual return on your. Your actual dollar out of pocket goes up 5x. And, you know, that's a. That's a huge difference aside from oil and gas. Can you. Can you give me another example of some things that specifically W2 employees may be able to employ?

Yeah, so I'll. I'll throw a random one out there, you know, because one one code is called section 181. It's actually investing in film financing.

Right.

And so the Whole idea here, just like, you know, the government gave the benefit to oil and gas back in 1913 with different presidencies was that, hey you, you put money out in oil and gas, right to the movies here in a second. What we're getting at that you're, you're supporting domestic fossil fuel production, you're making fossil fuels cheaper in the great usa, Right?

Right.

Well, started losing a bunch of jobs around movie production late 90s, early 2000s, the US said hey, let's make movie production great in the United States again. Let's create more jobs, stimulus, commerce. So no. 3, they passed section 181 of tax code. And so here we get some great movie opportunities. You know, we've had Mark Wahlberg films working notch producers. These aren't, you know, family friend, startup film. Right, we know these.

I just watched a Mark Wahlberg film yesterday. It was called what Dirty Play Dirty. Have you heard of that one?

He's got a lot of them. He's got a lot of them.

He's got a lot of them too. He's all crazy.

Yeah, so that one is great because you can outlay, you know, say 50,000 to get a four and a quarter times deduction. Well, how are we doing that? How are we getting rallying 50 and getting a 214, $215,000 deduction. Right. How are we, how are they able to do that? And it's in the financing, right? It's, you know, what makes America great. One of the many things I'd say is leverage, right? Institutional leverage, financing. Right. How are people buying homes these days? You know, they put a certain amount down, right? How you've grown your real estate portfolio. Well, the same thing works in other assets, right. And so that financing, but the producers going out and borrowing money to produce this film, we're part of that down payment and so we're taking that with the producer. Of course it's educated risk. You know, these are big time movies that will make sales and, and cover, you know, production costs. But of course, you know, that's the other reality to have to take some risk. The government says, hey, hey, whoa. If you ally capital and think you're going to save tax and take no risk, you can do that, but you're only going to save against maybe types of income, like passive. Everyone probably listening to this, this, this today is probably got active income whether they're a business owner, W2, you know, short term capital gains unit, Roth conversion. Right. That's all active income. So, so we got to take some Risk. Right, but it's, of course, educated risk, but it's that leverage part of that down payment that creates that four and a quarter to one deduction. Right. And that's where we can get a lot more bang per buck of return on tax and have a less of a worry, though it is still a worry. We want to make money on our money too. Not just save the tax, but it's less of a concern because of what the tax savings were for us year one or something like that.

Yeah, no, I love it. So what you're saying is, you know, you can invest, say $50,000, but then you can deduct over $200,000 on your, you know, if you're, if you're making a half a million dollars and you're in 35, 35ish percent tax bracket, you know, that's, that's a huge tax savings. They can out outstrip that, that initial outlay significantly. Yeah, that, that was a new one for me. When, when you guys educated me on that, one of your, one of my friends that's on your team, I was like, that's really, that's really cool. Yeah, that was interesting. I've heard of, you know, there's conservation easements now. The law changes, and that's what I love. You guys keep up with these changes that go through and there's, there's new incentives. I mean, shoot, we put solar panels on our roof like 20 years ago, almost 15, 20 years ago. And it was great because we got, we got a huge tax deduction. You know, we started a little bit of an outlay, but, you know, we got really cheap electricity because of that for I think it was seven years. And it increased the value of our house. So that was, you know, that was an example of something else that we did that was pretty straightforward. But, you know, those laws have now changed a little bit as well. So I think that's, that's what's great about what you all do at taxes saved, is that you keep up with the changes and look for the opportunities that the government is incentivizing, you know, today.

Yeah, I'm glad you bring that up, Chris, because, you know, you work with a lot of our CPA team already, and I was talking to our lead CPA the other day, and that's what, like you said, you know, I'm learning things every day too in tax code, working with just a great team of expertise and, and you know, keeping up to date with it. But that's the big thing for those that Are listening. Chris brings up a great point for W2 earners and just W2 earners. This is vital for there's what's called a business loss limitation, right. That, you know, let's say you're, you're making a million dollars this year and you're, you're a high, high income earner and it's all W2 income. Right. The rule right now for 2025 is that you take a max amount of deductions of $626,000 for married filing jointly. Single filers, it's half that. 313.

Right.

Well, you know, this big beautiful bill Trump sign. Right. There's a lot of great things, but the thing he left out, well, here we are again getting the W2 people. Kind of the dirty end of the stick here is that is now dropping to next year at 512. So instead of 626, the most amount of max amount of deduction you could take if you had it is 512.

Right.

And then half that for single filers. So it's really, you know, for those that are looking to save the most they can tax, of course we got three more years of Trump in this big bill. But a lot of people think, oh, you know, he signed that bill and it's, it's permanent. You know, I laugh with clients. You know, let's be honest. Is anything in the government really permanent? Right. Especially when we change. And I think people can see the writing on the wall. Right. I hope we have, you know, a tax favorable administration. But we kind of saw from the other side, not again, politics. But it comes into play here and we talk about taxes and tax savings. You know, with that. Right. We probably know the writing on the wall that taxes will go up.

Right.

So that the time they kind of have to.

Right.

They have to.

Right.

38 trillion in debt ever growing. Right. Even this big beautiful bill added 3.3 trillion to it. Right. It's going to, someone's eventually going to be paying this back and it's going to come in the form of tax, as we all know.

Yeah, absolutely. And that's why. Yeah. I mean tax, you know, I always, I love the example. People say, hey, I'm going to put money in my 401k and I won't have to pay tax on it right now. And then what they find out is, you know, hey, I'm 25, 35, 45. I'm sucking all this money into my 401k. One of the things I've Heard increasingly from our, our clients, our investors. Davis is, hey, Chris, I'm stuck having to take these required minimum distributions out of my qualified plans where I have to pay a penalty. And they find out that they're actually in a higher tax bracket now in retirement than they were when they put the money into their qualified plans. And they say, Chris, I don't even need the money right now because I have all this money coming in from my past investments, or maybe they still have a business or maybe their spouses is still working. That's one of the other things you all do is you help with converting that. Can you walk through kind of how that strategy would work for a qualified plan? Because a lot of people know about Roth IRAs, but say, hey, I make too much money to contribute to a Roth IRA. How does that work for sure?

So it was 2010 through that, that data there, the bomber Biden administration that has allowed us the past 15 years to do unlimited amounts of Roth conversion. But there's a catch. So they'll let you move from a 401k IRA, 403b, 457, all these different tax deferred buckets depending on where you're, you know, what you're saving into in your profession is they, they say, you know, sometimes players have different rules there, but let's just say you can convert is that if you move money from ira, right, which is pre tax dollars, to a Roth, which is post tax dollars and tax free for life, you have to pay ordinary income tax for the amount you move from. You know, say you have a million dollar IRA and you move 100,000. Now you owe tax on 100,000 plus on top of whatever you're making. So say you make 200 grand and you move 100,000 from Ira to Roth, now you owe tax on 300 grand. So they get you, they get you on the way in, they get you on the way out, right? They kind of tempt you to say, hey, we'll give you a tax break now what you contribute, right? And so hear me out, right? I'll come back to 2010 because it's important, important data I'll bring up for a reason. But the reality of it is, right, that little tax break now assumes that tax rates won't go up in the future when they start forcing you, like you said, taking these RMDs, right? So there's that, that compounding risk, right? Because of course you want your money to grow so you have a nice big bucket in retirement. But if it's too big, right? The RMD is even bigger. And they figure the RMD they take, you know, for those that are born before 1960, right, it's your ages, 73. For your first RMD currency after 1960, it's 75. So the government wants to, hey, wow, that could be. For those listening 20, 30, 40 years from now. And you know, all of a sudden, you know, a million, half million dollars today is worth, you know, why Warren Buffett Einstein considered compounding insurer wonder of the world is because it really is a wonder of the world. I mean, you can turn a million, you know, Rule 72, every 72 years it doubles, right? So if you're looking 40 years out a million dollars today, you're looking at like 4 million plus, right? And so now it's saying, great, you got your account nice and plump and now you're the ripe age of 73 or 75. We're going to divide that by what we call the RMD factor. And that's, you know, 26 and a half for those that are 73 and 24.6 for those that are 75. So you get a million dollars divided by, you know, 24.6, right? That's what they're forced to take, is the required minimum distribution. And that's before tax. We see for a lot of clients, like you said, Chris, either they're still working, making good money, right? And then they have to stack that RMD on top of what they're making, right? Maybe it's Social Security, pensions, and now they own tax on top of that. So they thought they were going to get all of it when they retired, but now they're getting maybe two thirds of it if they're lucky, right? Depending on where they are and what state and what bracket they're in. So I say that that's the one risk, the compounding risk with those accounts, right? The tax rate risk in the future on these accounts. But here's I'll flashback to why I said 2010. Before 2010, Chris, someone was retired, right? Which most people, that's when they start thinking about Roth conversion or if they made over 100 grand, can't Roth convert, right? So there's that legislative risk that not to scare people, but you know, history doesn't always repeat, but it can rhyme, I like to say, and that's our concern is that growth, the tax rates in the future and then big one, what if they just change the rules, right? And the rule changing, you know, then it's just too late. So we're big on, on time value of money compounding interest and clients recognize with some of these strategies. You know we've helped your clients and yourself with use them to offset not just their income short term this what they're making but use these deductions to offset Roth conversion income at the same time.

Absolutely. And that's, that's a strategy that personally use to get money out of our qualified plans and avoid that. And I know you've one of, one of our joint friends, you were going to Show a multi 8 figure savings which is just incredible just with this strategy alone. So it's really incredible. And we're not talking about a guy with $10 million, we're talking about $3 million if I recall.

Yeah, I know you're talking about. Exactly, that's a big one.

Yeah, it was incredible. So you know Davis, I'm excited we're going to do a webinar this evening. So the day we're launching this podcast here, we're going to do a webinar this evening. So I'm going to have the link in the show notes if anybody wants to, to really dive into some of these strategies and we're also going to have a link if you want to schedule a free strategy session with taxes saved. But Davis, where can, where can our listeners find out more about your company and you for sure.

Taxes saved dot com. Uh, Chris, what we, we love to do is, you know, it's one thing is talk about how we can save taxes. It's another thing to let's, let's see the results, right?

Yeah.

So every, every week it, it Wednesday at 6pm Eastern we released a case study of the week. Right. Everyone's scenario is different. Like that's what makes this job really fun is that everyone's just getting, you know, they have their preferences and everyone has different scenarios of what we're saving them. And so we put that out there, right? We put the return up, we put the results on the right side of the screen and everyone can now see oh maybe that, that does relate to me, right. I might not, I might make a million dollars, but I make a couple hundred grand and I have a million dollars saved away. Right? Everyone's situation's different. And that's what like you said, we offer, you know, a free consultation to kind of show what is your tax risk. What potentially are some things we can do to help with that. And we'd be happy to do that here with the Taxes Safe team.

Yeah, no, love it. Take a look schedule a free strategy session with Davidson his team to check that out. As you all know@nextlevelincome.com we strive to teach you how to make, grow, make, keep and grow your money. And Davis, thank you for helping our audience understand some strategies and some tools that they can use to keep more of their hard earned money today. Hey pleasure Chris, thanks for 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.