The Tax Secrets Wealthy People Actually Use | Karlton Dennis | The Jared Goetz Show

I received a letter from the IRS right after I graduated college letting me know that I owed the government $12,000 and I had $6,000 in my bank account at the time. Once I got that letter, I knew I wasn't gonna be able to afford my rent anymore, so I quit my job and moved back home with my parents. Literally, my life started changing before my eyes. This person who had been doing football since he was 5 years old gave up on the dream. I didn't even do my pro day. I was in the peak shape of my life and I literally walked out on that dream. The biggest thing that I learned is that if you don't have a plan, the government will come up with a plan for you. I did not learn a lick of tax tax for 20 years straight. You're thrown into the real world and you're immediately having taxes being taken from you. You have to figure all this stuff out on your own. One of the clients actually bought that yacht. We ended up getting into an IRS audit. She had documentation of NBA players that came on and off her boat, and she brought Kobe and Shaq and tons of other Laker players onto her boat. We started showing the booklet. A guy that was in the IRS audit in our office, his eyes widened. The booklet got closed, the audit ended. The IRS are very friendly. They're gonna sit back and let you talk, let you talk yourself right into a bigger hole. Everybody believes that wealthy people have access to all these wealthy advisors and secret tax codes that only the wealthy have. It's not true.

Hey guys, welcome back to the show. In this episode, I'm interviewing Carlton Dennis. Now, this show is packed with information. Everyone here hates paying taxes. A lot of people don't know about taxes. Most people certainly don't know about most of the things that we talked about in this episode. Carlton is an expert who shared things with me to a point where I can't wait to go see what we can implement into my life and my business. I know you're gonna get a tremendous amount of value out of it. He's got a new book coming out that we talk about, which I highly recommend you get. On top of that, Carlton's had a tremendous amount of success on YouTube and social media, over a million followers on YouTube, and it's really inspirational. He thinks that it's the beginning and he thinks that people need to get on board. So take your notebook out for this one, guys. Hit play, enjoy. And I hope you get a ton of value out of it. So everyone hates taxes. Yeah, that's a thing.

It is.

Um, is that the, the reason you got into this field? How did you get into this field?

Absolutely not. I'll be honest with you, I didn't even know taxes existed until I graduated college. I didn't go to school for accounting, and I think that takes most people by surprise because I have like over a million subscribers talking about taxes, probably one of the most unsexiest financial areas. Yeah, but I got into taxes because I received a letter from the IRS right after I graduated college letting me know that I owed the government $12,000 and I had $6,000 in my bank account at the time. And it was because I was running my own personal training business, receiving money from all these 1099 contractors, and I never reported all of the 1099 income correctly and I didn't take all of my deductions. So when I filed my return, I owed a tax bill. I got a letter and then I had to figure out how I was going to get on a payment plan with the IRS. That was my introduction to Uncle, Uncle Sam and taxes.

You, I mean, you're a great story of like, hey, anything's possible.

Yeah.

Like people have these beliefs that you need to be an expert in this or you need to have the perfect plan to go do that. Oh, I mean, I mean, what you did is extreme. You advised thousands of people on taxes and millions of subscribers around taxes. You didn't even go to school to be a CPA.

No, I didn't. I actually came out and I was working in Gallo in a sales career selling wine and spirits. And one day, you know, someone came in. I had just built this beautiful wine display and someone robbed the store. All of the wine just came splashing down. I thought to myself, I graduated with a college degree. What am I doing here? So I quit my job, went to go move back home with my parents, and I went to go work in my family-owned business so I can be more disciplined with my money. Luckily enough, my family-owned business was a tax and accounting firm that my mom had owned for over 30 years.

Wow. And you didn't know anything about taxes even though she ran a tax and accounting firm?

Yeah, I didn't know anything about taxes even though she ran a tax and accounting firm, but she employed me when I was 14 years old and I knew her job was very important, but I was only picking up staples off the ground, helping out at the printer, doing basic things, but I never learned the entire tax code or the system or anything about taxes.

And then, so you got into personal training?

Yeah, I got into personal training right when I graduated college. That was like my side hustle and I didn't report all that 1099 income, That was what I was more passionate about. And I thought, well, if I go work in her office, I can have the extra time to go work on my side hustle, my business. But then everything changed when I started seeing how my mom was helping people and the type of revenue she was making from helping people.

Yeah, so then how did the personal training stuff start? I mean, were you just like really into fitness? And did you learn how to train people? How did that all start?

It actually started because I had a full scholarship to go to Cal Poly San Luis Obispo for football. I played cornerback. And right around like my junior, senior year, my body was in peak shape. I thought I was going to go to the NFL. People were asking me, you know, outside of football, dude, how do you get a six-pack? You know, a six-pack speaks for itself. You have a six-pack. It's like the best business card ever for a personal trainer. And so I started selling personal training programs. I was preparing myself for life after college in the case NFL didn't work out. And I'm glad I did because it taught me entrepreneurship and how to sell. But the issue was, is that required me trading time for money. I had to meet up with people. I had to build those workout programs myself. I didn't have AI or ChatGPT helping me out. So I realized that was a business that wasn't very scalable at the time. I didn't have all the right information. So when I graduated college, I got a W-2 job. I did my personal training on the side. And once I got that letter, I knew I wasn't going to be able to afford my rent anymore. So I quit my job and moved back home with my parents and went to go work in the family-owned business.

Yes. So how did you go from, you know, having dreams of playing in the NFL to not, and then moving back home? Like, what was that like for you?

It's pretty sad, to be completely honest with you, but we all go through this. Many athletes that think they're going to go to the NFL, they don't end up going to the NFL. We all have our situation that happens. For me, I started dealing with a few injuries my junior year. Those injuries weren't the issue. What, what was the issue was my mentality. My mentality was, is I started doubting myself. What if I can't make it? What if I'm not tall enough? What if I'm not fast enough? What if I only play in the NFL for 3 years and I never ended up focusing on using my degree in kinesiology to go get into physical therapy school or go into medical school so I can be ahead of the game? So by the time I'm 30, I'm already done with school, the medical school side of it. I started telling myself this. I start— I stopped watching football on TV and started watching Netflix and this show called House where I was learning about doctors that were trying to solve medical issues. Literally, my life started changing before my eyes. And it was so sad because this person who had been doing football since he was 5 years old literally gave up on the dream. I didn't even do my pro day. I didn't even show up to my pro day. I didn't run the 40. I didn't do the bench press. And I was literally in the peak shape of my life. And I let that— I literally walked out on that dream.

Is the pro day like kind of like a tryout?

Yeah, the pro day is a tryout where you're showing up for scouts at the NFL level. And they get to see you on display. You have a series of different, uh, events that you have to do, such as a vertical, a broad jump, a 40-yard dash, and specific drills relative to your position called skill drills. I was prepared for all of that, but I wasn't mentally prepared, and so I didn't show up. I didn't even give myself the opportunity.

Wow.

Instead, I went to career fair the week before the pro day and secured my job with Gala Wine Company.

Wow.

Yeah, that's what happened.

That's pretty intense.

Yeah.

I mean, I had my own version of not making my dream happen when I was probably around the same age. I'd started my first company throwing concerts. We were doing the world's largest foam party and, you know, did $1 million in revenue when I was 21 and all my friends thought I was successful and, you know, ended up doing a show that failed. We didn't sell enough tickets and basically couldn't pay vendors. It was a disaster. And I remember I moved back in with my mom.

Yeah.

And it was a really low point for me. Yes. Like, you know, people are counting on you.

Yeah.

He's going to make it, you know. "He's this guy who's gonna show us all from our hometown," right? And then you're back and sleeping on your mom's, I was sleeping on my mom's couch at the time.

Well, I was riding a high right when I graduated college only because I was the guy that landed the job so quickly. So much to the point where the job wanted me to go work for them before I even graduated. So on the outside it looked like, "Well, Colton's already in the career he wants to be in. Sure, the NFL didn't work out." But he's already found success. The issue was, is that when I started working for Gallo, I had these unrealistic hours working up at 5, 6 o'clock in the morning and working until 2 o'clock. So the college guy in me wanted to be in the bars, you know, in the afternoon because I had all this free time and I was doing the personal training thing. But then I got that letter in the mail that said, Carlton, you owe $12,000. You only saved up $6,000. What do you want to do? IRS wants their money right now. I was living in a penthouse. In Hollywood, California, Martin Scorsese's old apartment, sharing the apartment with other people, paying way more than I should have. And when that bill got in my lap, I knew I had to move back home with my parents. And I made the right decision ultimately because I was able to take my expenses essentially to zero. Right. You're eating off of Mommy's plate again, which sucked. But at least I was able to get discipline at that point in time. And that was when I met my wife, my now wife. And I started jumping into the tax space when I went to go work in my mother's firm.

Well, and what was like the first thing you learned that was a big aha moment for you?

The biggest thing that I learned that was the biggest aha moment for me is that if you don't have a plan, the government will come up with a plan for you. And my mom teaches that to people. And I learned that communication is the biggest difference between her success as an advisor and another CPA firm never being able to touch 7 or even 8 figures. Taxes already is a foreign thing. I mean, I went from, you know, grade K all the way through college with a degree. I did not learn a lick of tax for 20 years straight. And then when you get out, you're thrown into the real world and you're immediately having taxes being taken from you. You have to figure all this stuff out on your own. My mom became a master of communicating tax law, and that is so valuable in this space because when you're able to educate people, They can see their options. And most people feel like they're trapped inside of a box when it comes to taxes. They become numb to just paying taxes. I'll just accept whatever— what's left over. But that's not how the system works. And we certainly know that's not how wealthy people operate. So I started to envy how she communicated, and that was my first aha moment.

Yeah. And do you think most CPAs know the tax law in and out to a point where you can just trust that they're going to do what's best for you?

You know, that's a great question. The truth is, is that most CPAs are Certified Public Accountants. They're very skilled at doing accounting work. Accounting work normally reports on historical data. Your tax returns have to be filed in the current year, but you report the income from last year. Your bookkeeping and accounting needs to be included in your current year, but you're filing tax returns for last year. The conversations you're having with the CPA revolve around tax payments because they're basing your tax payments off of the profit you made in the previous year. So everything that a CPA is geared towards is accounting. Very little part of their tax license is geared towards tax and tax code, whereas an enrolled agent, which is the degree— or sorry, the license I decided to pursue— we focus primarily, primarily on just taxation when it comes to communicating tax law or figuring out ways to get in and out of deductions and strategies. And loopholes, an enrolled agent is supposed to be proficient. And I personally believe the biggest difference between our availability compared to a CPA's availability is a CPA builds a majority of their business model around being available to file returns. How can I get as many returns as I can complete in a set period before October 15th if my clients are on extension? Whereas an enrolled agent is doing forward planning. Which means they're working 365 days out of the year to try to figure out what is your income going to be, where are your investments going to be, and how can I match that up with your lifestyle and the tax code to help you mitigate your liability?

Does it always make sense to file an extension for taxes?

No, it does not. I would say most W-2 taxpayers that have no investments need to file on time. If you're self-employed, I would highly recommend that you go on extension. There's almost always certain deductions that you're leaving out that your CPA or your tax professional can find in the later months. Because your accounting got updated again, your balance sheet got updated again, or better yet, you might just have received a K-1 that's pulling in a business loss that you can use to offset your taxable income. So I would see most self-employed individuals, especially those with partnerships and S corporations, they'll go on extension, and most W-2 taxpayers that have very few investments will file their tax returns with the masses by April 15th.

Is there any reason not to do an extension if you're self-employed and run businesses?

To be completely honest, the best reason to get a tax return filed within going on extension is if you know you're due a huge refund. There's a big problem going on right now in America where a lot of business owners are just doing compliance with their CPAs, so they're sending off massive estimated tax payments, way more than they have to. And by the time you actually calculate everything at the end of the year, your deductions brought your liability down, yet you send off so much to the IRS. So wouldn't you want to file that return as soon as possible to get that refund back, right? Or else you just gave the IRS an interest-free free loan, and that's not something that I'm down for.

Yeah, okay, that makes total sense. So if you're gonna get money back, you want to get it back.

100%.

Otherwise, there's no negative to filing.

No, there's no negative to filing an extension. Honestly, it's a very practiced behavior by entrepreneurs that are making significantly more money. If you're making more money, you actually want to file with the people that are making more money. But if you're making less money, uh, I would recommend go file with the people that are making a little bit less money.

Yeah, that makes sense. So do most people need an enrolled agent and a CPA that like working together? Like, how does that team work for someone?

Yeah, absolutely not. Most people don't need both an enrolled agent and a CPA. But I would say the average taxpayer that's making over half a million to $700K a year, they need a tax strategist, someone whose job is to help engineer tax deductions for them every single year. And if that person can also file the returns, great. But there's times when you have a CPA that you've trusted or that you you've loved or even inherited from a previous family member. I know a lot of the people that I speak to have CPAs that they inherited from their dad. That's fine, but is this CPA really good at filing your returns, or are they forward-looking and they're building a strategy and a plan? I would say the latter is not really what a CPA is catered to all the time. So this is when you might want to introduce a tax strategist to be on your team. A majority of those tax strategists that I run into have a proficiency in tax And that's where the enrolled agent license lines up very well.

But there's, there's also like just a lot of information that you as an individual need to operate knowing and learning and going. I know like when, you know, when I was growing in my career, I had a CFO for my company who was also a CPA.

Yeah.

And he didn't know all the strategies, but I would go out and learn things and bounce it off him and we'd figure things out and we'd cut my tax bill a lot. But if I just said, hey, do it for for me, I would have spent tremendous amounts of extra money.

Yes, you would.

And the question is, if you do that, can you go back a year later, 2 years later, and say, oh, wait a minute, we paid too much because of these things? Or are you like, oh no, too late?

Huh, I'm glad you asked that. You know, the IRS allows for taxpayers to amend their tax returns up to 3 years. So we're in 2026, which means if you've already filed 2025, you can amend your 2025, your 2024, and 2023 to include deductions or exemptions you left off of those returns and refile the tax returns. For a lot of taxpayers, it's going back and applying tax credits. For many taxpayers that I worked with last year that found us last year, they were unaware that they could apply energy credits to their tax returns. So we amended their 2025, their 2024, their 2023 and placed tax credits going all the way back to their 2023 tax return. And some of those credits were so powerful, Jared, that they wiped out the entire liability for 2023, that the credits rolled forward to 2024. And if we offset all the liability in 2024 and there are still credits left over, we roll in over those credits to 2025. So I want taxpayers to know that, yes, you have the ability to go backwards. There may not be a whole lot of opportunity there, but it's at least worth looking under the hood. It's definitely worth it.

If you're working with an entrepreneur who's, you know, running, you know, maybe making a lot of money, let's say, and you go back and you look at their historical tax payments, what's the likelihood that you can find something? That they didn't do?

I would say probably less than 10%, and the only reason I say that is because most of the— the only reason I say that is because most of the time when I find something, it's something that's big that was left off of the tax return. And if I go to refile the tax return to include that deduction or exemption that they left off, we know we're walking into an audit. And for many taxpayers, they get a little bit timid sometimes when it comes to audits. I don't get afraid when I know there's the right type of documentation and substantiation to support the reason why we're doing an amended tax return. Plus, we might even bring in tax counsel, a tax attorney, to write a letter for us. But these are situations that taxpayers find themselves into. 10% is, is pretty meaningful though, still in my world, right? Because I'm working with a lot of high-level entrepreneurs, so I don't need to onboard thousands and thousands and thousands and thousands of people. The right type of clients will find our firm, and we can spend time really searching through those returns and looking over every rock to see if the juice is worth the squeeze of going backwards.

Yeah, I've never been through an audit. You know, knock on wood. It sounds really scary. It sounds really annoying. I'm sure there's ways to handle it. Yeah. Have you dealt with audits before?

Absolutely. I've dealt with audits before.

What's that been like?

Audits are very straightforward. They're not what you think. Audits are all about speed. If you can get out in front of the first or second request, you can sometimes avoid an audit. From going deeper than it needs to go. Most of the times when audits get nasty or they get ugly, it's because the person who is getting audited didn't find out about the letter until later. So they sent a second notice and they sent a third notice. All of a sudden, by the third notice, you have a revenue officer that's been assigned to you now with one sole job. This person's not getting in touch, so go pursue them right now.

Yeah.

And that's when things can start to get a little bit aggressive. That being said, what are they actually pursuing when you go through an audit? Normally it's like one or two line items that they're questioning. And if they're questioning things, that means that they wanna see documentation and substantiation. This is the basis of why tax planning is so important. We as entrepreneurs, we move so quickly and we make expenses and transactions all the time on our credit cards. But if you have somebody that's in your corner that's sitting down with you on a monthly or quarterly basis, going over your expenses, going over your transactions, you have a plan and intention behind what you're doing, you can provide the right type of documentation and substantiation and create a plan with your strategist. So if you're audited in 2028 for 2026, all of that information that they're asking about is fresh, ready to go. It's not in your mind for you to try to figure out and try to re-document later. The biggest issue with audits is people never have all of the documentation and substantiation. So what the CPA or tax professional will do is they'll ask for an extension of the audit. Anytime you extend an audit, what do you think it gives the IRS more time to go do?

Go find more shit.

Let's just go look around and see more shit. And that's exactly what they do. They bounce from your 1065 tax return. Now they're in your S corp. Yeah, I noticed this in your S corporation. Send me your bylaws and your operating agreement. I just want to take a look at it. Now you don't even realize— you realize, shit, I haven't even updated my bylaws and operating agreement since I set up this LLC or S corp back on LegalZoom, you know, back when I was in college. So it's situations like that that it just starts spiraling out of control. The same thing is happening where you're paying out a tax professional or CPA to handle these conversations so you don't incriminate yourself with the IRS by saying something that you're not supposed to say. Right. That's the third reason why IRS audits get nasty. The taxpayer wants to try to talk to the IRS themselves, and the IRS are very friendly. They're going to sit back and let you talk.

Yeah.

And let you talk.

Yeah.

It lets you talk yourself right into a bigger hole.

Oof.

And we have had situations where an IRS audit was literally about one vehicle deduction. And the next thing you know, the wife calls the IRS, gets on the phone. I spoke to Jenny. She was so great. We were on the call for 2 hours. She knew about Jason and Lisa, and I told her how we placed them on payroll. Next thing you know, now we're having to support documentation around the children being on payroll and their working agreements, and it just metastasize into a whole hematoma, right? Versus it being just something simple that we could have dealt with with proper documentation. So you gotta be tight.

You got to be organized. You got to be quick to respond.

Correct.

And that's it.

Yes. Tight, organized, quick to respond, proper documentation and substantiation for all your claims that you're taking. This is how you approach an audit the right way.

So I don't know much about the IRS. I hear things on social media, whatnot. How many people are getting audited each year and are there certain tax brackets or income levels that make you much more susceptible to an audit?

Yes.

And is that getting stronger or weaker internally in the government?

Yeah. If you make under $300,000 a year, your audit liability is less than 1%. If you make between $1 million a year and $3 million a year, your audit risk jumps up to 1%. And then if you make over $10 million a year, your audit risk jumps up to 3%. So what we're talking about—

what was the first one? How much?

Less than 1%.

Less than 1, 1, then 3.

Less than 1, 1, and then 3%. So 80% of all taxpayers in the United States fall between that 1% and less. So their audit risk is extremely low, which means that the IRS is really—

3% per year or 3% in your lifetime?

Uh, that's per year. That's per year.

So if you're in that $10 million range there's a good likelihood that you're audited at least one time.

Oh, 100%. Over a 30-year career, if you're making over $10 million every single year, you should be going into your taxes with your CPA doing an audit preliminary. Yeah, that's what I tell people that are in the—

yeah, why not? It costs you what, $50 grand?

Why not? Why won't you just do an audit with us, right? We'll walk you through exactly what the audit's going to look like if you want to get audited, right? So those are the types of practices entrepreneurs are more than willing to do at that point of the game because a $50,000 or $100,000 audit is nothing to them to deal with a $2 or $5 million audit with the IRS.

Right.

So those are the types of safe practices.

Is the IRS getting— I heard there's like less and less agents in the IRS. Is that true?

There are less and less agents in the IRS. The IRS is aggressively trying to employ more agents. The administration that we currently have right now is on the opposite side of that fence. And because of legislation, because of the pressure that's been put on the IRS, because of how outdated their systems are, we're actually seeing more and more IRS agents leaving the IRS and becoming tax accountants and tax professionals. I've hired recently two IRS agents and they're working out really well in my firm. And I know that many taxpayers that I— or many CPA firms that I consult with, they're getting more and more agents that are interviewing for open roles at their CPA firms and practices.

Actually, going back to the last question regarding the amount of money you make and the percentage of an audit. So like, let's say someone does $10 million in revenue.

Yeah.

And they have, you know, $9.75 million in deductions. It says that they've made $250 grand. They're under the $300 grand. Are they more likely to get audited than someone does $500 grand in revenue and $500, you know, and $0 in expenses? And they have $500,000 in income?

That's a very important question. So inside of the IRS, there— everything is machine-based first when your tax returns get processed. So tax returns that report a gross receipts of $10 million or more, which is going to be reported on line 1 of your tax returns, automatically get flagged or triggered to be a part of a 10% group. There is a department inside the IRS called the— I believe it's called the Big Unit or Big Case Department. They have their own name for it. This is a department that is solely focused on dealing with cases $10 million above period. They don't even— they will never see tax returns under $10 million. They'll never talk to anybody on gross income, gross revenue. So even if your net profit floats at $200K to $300K, but you touch $10 million, you're a $10 million business on paper.

So then you're in that 3%.

You're still in that 3%.

That's gotcha. Yes. Yeah. So high revenue businesses, even if you're not making a lot of income, you have a higher chance of getting audited than lower revenue businesses. With higher margins.

That is 100% correct. High-rev businesses have a higher chance of getting audited.

Okay, that's a good distinction. Yeah, I did not realize that. That's interesting. So I want to go into some like specific strategies and thoughts around, you know, how people should structure their businesses to mitigate big tax bills and things people can do, you know, learn up front that can be really valuable for them. Maybe either new entrepreneurs who are just starting something, or maybe someone that owns a business What are some of the structures that people should use, whether it's LLC or S corp, C corp? Like, how do you think about the way people should structure their businesses based on where they're at in their journey?

I think of them as like shoes in a race. You have a sole proprietorship, which is like running around in your socks. Good luck if you want to get around the track more than twice because those socks are going to have holes in them and eventually you're going to have blisters on your feet. And the reason why sole proprietors are literally for people that are just at the baby steps of getting started in a business. They're trying to convert a hobby to a business is because you have no liability protection. Everything gets filed inside your individual tax returns. You're considered a disregarded entity. It is like playing in the sandbox. If you're trying to play, play this game, then you have LLCs. LLCs, I would say, are more like your everyday tennis shoes. If you're a business owner, you're probably going to set up an LLC first because it's the easiest structure to set up. If you're a single-member LLC though, you're still viewed as a disregarded entity. So you're treated like a sole proprietorship, but you do have liability protection, which is pretty awesome. You'll set up your business bank account, you do everything out of your business. But over time, you start to experience some pretty high taxes in the LLC structure if you're making earned income, not passive income. A lot of the entrepreneurs that I work with are still, you know, making—

by earned versus passive.

Oh, so earned income is income that you're working for, that you're trading time for.

As a contractor?

If I'm a contractor, if I'm self-employed, I'm running an e-commerce business, that's self-employed income. If I have a rental property, that's passive income. Oh, right. By nature, real estate is passive. So earned income is subject to self-employment tax, which is Social Security and Medicare. Passive income is not subject to Social Security and Medicare. So over time, when you're earning money through an LLC, that self-employment tax continues to grow. That's outside of your federal taxes to Uncle Sam. And state taxes if you're in a state that taxes you. I love the S corporation. I view the S corp as your race shoes. The S corporation is really great because you can break your income down into two different parts. You have distributions, which is you just transferring money to your personal checking account, but then you have salary, which is you giving yourself a W-2. That salary is the only amount where you see the self-employment tax show up, but it shows up as payroll taxes. Still Social Security and Medicare, but it's on a W-2 now, so it's payroll. The beautiful part is, is if I'm self-employed, can I dictate how much I give myself in a salary? The answer is yes, as long as it's reasonable. And that's the part right there that helps so many new entrepreneurs. The moment that you are at a point where your business is profitable enough to where you can draw out a meaningful salary, a reasonable salary, you can reduce the amount of self-employment taxes on your business profit and pay self-employment taxes on your salary. That's very powerful. I'd say right around $60,000 in business profit is when it's— the benefits start to outweigh the cost of an LLC owner switching to an S corp.

How much is the self-employment tax portion? Let's just say for numbers sake, you're making $1 million in profit.

Yeah.

And you have an LLC in Florida with no state taxes. Yeah. And then the other scenario, you have an S corp, you're still making $1 million, but you pay yourself a $200,000 salary. So you have $800,000 in distributions. Yes. What's the net difference for those two individuals?

With an LLC and no S-corporation election, self-employment tax comes out to 15.3%. Oh, wow. So you pay 15.3% before you pay federal taxes and before you pay state taxes. Now, one part of that is deductible when you write it off on your tax returns, the employee side of it, because you're your own employee. So 7.65% of it can technically be a deduction on your tax returns. But you're still paying into 15.3% tax. Now, LLC, and that's as an LLC. There does become a threshold depending on your filing status of right around about $160,000, $170,000, I believe, where Social Security starts to drop off and then you're just paying into Medicare tax. But it's still a significant amount of money for the average business owner.

So you're saying that an S corp in that scenario, let's say it's $250,000 in self-employment tax, $750,000 in income. Mm-hmm. That $750,000 is going to be subject— or that $250,000 is going to be subject to the 15% self-employment tax.

The payroll tax.

Minus the 7.5% that you can reduce.

Yep.

Versus an LLC, the full million dollars would be subject to the 15%. So after Medicare, or, you know, when that breaks.

Yeah, so this is an important distinction. So let's take that million-dollar example and first break it down as an an LLC owner. So if I'm an LLC owner, I can take money out of my bank account whenever I want, but the IRS doesn't give me a tax deduction for it because I'm an LLC owner. So it's just considered a distribution. So when I go to file my returns, if I have $1 million in business profit, I'm going to pay 15.3% on that $1 million up to a certain point because Social Security only taxes me up to about $170,000-$180,000. Then that portion falls off. Than I'm paying just Medicare. So it won't be the entire million, but it'd be a good amount of the first $200 grand, let's just say. Now, outside of self-employment taxes, I still have federal taxes. And if I'm making a million, I'm up in the 37% tax bracket. So let's add on another $370,000. And God forbid you're in a place like California, that's 13.3%. There goes your another $130,000, let's just say. So a person living in California making a million dollars in profit through an LLC is probably coming out the door anywhere from $300,000 to $400,000. That's pretty tough. That same person can transition over to an S corporation, and like you said, what if they give themselves a salary of $250,000? Now their business receives that as a deduction, right? So now we have $750,000 remaining in the business. $250,000 of that was, uh, payroll. They'll pay 15.3% just on that $250,000, but it's a deduction for the the business. The other $750,000 is sheltered from self-employment taxes, only subject to federal, only subject to state taxes. The best benefit about this is, like I said, sure, does that Social Security fall off a portion of that self-employment tax? Yes, but you still have to pay into Medicare tax, and that's still a percentage that you don't want to have to pay into on the entirety of that million. That gets eliminated when this taxpayer just transitioned over to an S-Corp.

So it was like the ballpark savings that someone would have going from from LLC to S-Corp?

I would say if you're fully optimized, the maximum amount that you're gonna save is around $25,000 to $30,000.

Okay.

Yeah, it's pretty good.

That's worthwhile. Very doable. 'Cause it doesn't really cost that much to run an S-Corp. Takes the filing—

30 minutes to file an S-Election to save that type of money. And for an average business owner, they're just unaware of this.

Yeah. And what are some write-offs that people can use that maybe would fit into their lifestyle? I mean, for example, I've always bought 6,000-pound vehicles, because I know it's a very specific rule that you can follow. But I see people, oh, I wrote off this McLaren because it's for marketing. Or people have all these theories. I don't know what's right or wrong. But what are some legitimate write-offs that people can really think about?

Yeah, absolutely. The vehicle deduction is easily a big write-off for many business owners because it's a lifestyle play just as much as it's a business play. If you tell a business owner, hey, the car is under 6,000 pounds, you can't write off the full value. But if you can just get the weight over 6,000 pounds, they start shopping cars that are over 6,000 pounds. They start figuring out ways they can use the vehicle for business. And for many taxpayers, they'll use Code Section 179, which allows for them to write off the full purchase price in the first year of qualifying equipment used in business. And we use bonus depreciation to make sure it's all deducted in one year, which I'm a big fan of bonus depreciation. So you see people purchasing G-Wagons and Rolls-Royces, vehicles that they're legitimately using in business. The IRS does want to make sure that you're documenting your business use. So if you're ever audited, you're gonna have to show documentation and substantiation around how was this being used for business versus if there was any personal use at all. And if there wasn't any personal use, that also has to be documented as well. So the vehicle deduction's a very popular one. But outside of vehicles, you can take the Code Section 179 deduction and use that in, in business on equipment as well. I have a lot of doctors and a lot of surgeons that used to lease equipment that was super expensive because they couldn't afford it with their, you know, super high student loan bills that they have coming out of surgery school or medical school. Maybe they're sitting on $500,000 in student loan debt, but they want to start their own practice, and their own practice requires them to buy 5 medical chairs, and each one of those chairs are $100,000. Well, that's like buying 5 Mercedes-Benz for them, right? So they would put a lease— they would lease these chairs into their medical office. Well, when bonus depreciation went back to 100% with the one big beautiful act that was signed into place last year, July 4th, 2025, we got 100% bonus depreciation. Now my doctors, my surgeons, instead of them having to set up leasing agreements, we're buying these pieces of equipment and using Code Section 179 and bonus depreciation to completely write off the entire bill. Yeah, it's pretty awesome.

And you can do that for planes, right?

You could do that for planes as well in the aviation space. Planes depreciate, I believe, on a 5-year depreciation schedule.

Yeah.

Yeah, so you can purchase a plane, charter the plane, you'll have a certain amount of personal days or business days that you'll get to use for your business. You can create a leasing agreement between your operational entity and the entity that holds the plane. The plane has to be purchased through its own LLC. But yeah, you can leverage bonus depreciation right off the plane and create a loss that offsets your S corporation flow through income.

Yeah, I almost did that like 2 or 3 years ago. I had a high income year that I needed to write off. And I was looking at one of those Cirrus.

Yeah.

I think it was like a $1.8 million plane. OK. And you can actually finance the plane, put down 20%, but you can write off the full amount.

That's the arbitrage.

Yeah, but someone came to me and said, Jared, are you sure you want to buy that plane? They call those a doctor killer. And I was like, why? Well, doctors can afford them and they fly them and die. I'm like, you know what, I don't know if I want that plane. So I didn't end up doing it. Just because I was like, I got a kid now and it's not the safest thing. And I was going to learn how to fly it and I had all these expectations.

Grand ideas.

Yeah, I'm going to fly it to these meetings. Didn't end up doing it. What are some other things that you can file under Section 179?

Code Section 179 can extend to anything that is considered new equipment or used but new to you. So even if you bought a vehicle that's a 2020 vehicle, that's a G-Wagon, and you place inside your business, it's new to you. So you could still apply 179 to it. But I like boats as well. We had this one client who purchased a yacht in Southern California, but the purpose of why she purchased the yacht is because she's a real estate broker. So instead of showing her clients how to view the homes that she was selling in Laguna Beach and Newport Beach, which, by the way, the average home on that coastline is around $20 million. She wanted to show them the views of the houses that they would buy from her yacht. And so under Code Section 179 plus Code Section 168, she used bonus depreciation to accelerate the purchase price of that vehicle. Even though she put down a loan or put down a down payment of only 20%, we were able to write off about $4.4 million, which the purchase price of that boat on our tax returns. It was a pretty awesome write-off.

I think one thing that people need to understand though with this is like, okay, let's say you buy a G-Wagon at the end of the year and then next year you want to do it again. Well, you're gonna either have to keep two G-Wagons or if you sell the other one, you can only— you're gonna have to take income on 4/5 of it, right?

That's 100% correct because when you depreciate a vehicle and then you turn around and go sell the vehicle, the government gave you a benefit in the year in which you took the deduction. You took your upfront deduction and now you're saying, I don't want it anymore, which means you have taxable income now. That's called depreciation recapture. So all that depreciation will show back up on your tax returns when you receive your little 1099 for selling the vehicle, and you're gonna have to report it and pay your income taxes on it. But maybe that's a part of your strategy too, though, right? Maybe you know that in the following year you're going to have less income, so you did the strategy in that year, and then you're going to use some other strategies in the following year. There's certain ways Right. People like to structure the strategy, but highly recommend that you always think with the end in mind.

How does it work if you buy the vehicle for $200,000 and then next year you sell it for $100,000?

You're still going to pay depreciation recapture.

On the $200,000 or on the $100,000?

You'll pay depreciation recapture on the $200,000 because if you absorb $200,000 in depreciation, you're going to recapture $200,000 in depreciation. The shitty part is, is you're out $100,000 plus You're paying taxes on a $200,000 vehicle.

So, wouldn't you capture a loss on the asset that you purchased and sold?

You can capture the loss, but it doesn't offset the depreciation. You're still going to pay taxes on it. It does not flow through to offset that tax.

Right, but you'd basically, you know, $200,000 divided by 5 years is what, $40,000 a year?

$40,000 a year.

So, you capture $160,000 in depreciation back the second year.

Yep, you would.

But if you sold it for $100,000, you took a $100,000 loss, that $100,000 would come off your top line.

That's a capital loss though.

Okay.

So you only get to experience $3,000 of a capital loss. Everything else rolls over to the following year.

Ah, interesting.

Like I said, it doesn't flow through to offset that.

That's why people need an enrolled agent.

Yeah.

So vehicle write-offs are very popular. Talk to me about real estate, because that's something that is very attractive. It's like, oh, I think about real estate. I think I can build this portfolio for my kids one day and my grandkids, and I could keep investing money in it.

Right.

But then you're like— I'm like, wait a minute. I'm better off just investing in a fund because I don't want to do all the work. I don't know anything about real estate. I'll probably lose money on a few deals. It's going to take a lot of my energy. I'll be stressed about it. Hey, guy, take my money and go do it for me. Pay me part of the return, whatever it may be. But there are tax strategies if you're a real estate professional that don't exist if you're not.

Yes.

Talk to me about that picture for entrepreneurs and just in general, how do you leverage real estate to build wealth and also have tax deduction?

I would say most entrepreneurs want to make their money outside of just their business too, and they want to turn to an investment that is low risk, or at least an investment that they can have more control over it. And if they're already pretty set up in the stock market, they start looking at real estate as another option because they are at least aware of some of the benefits that can come with real estate. Outside of just writing off your mortgage interest or your property taxes, you get to take advantage of the depreciation on the total asset. The best part is if you can qualify underneath IRS regulations to use the depreciation losses against ordinary forms of income— ordinary meaning W-2 or 1099 income. And for many taxpayers, they look at the real estate professional status to try to do this. The issue with the real estate professional status it's extremely difficult to qualify for it, especially if you're working full-time. It says that you have to spend 750 hours a year in a real estate trade or business, like managing an investment property, being a real estate agent, being a broker, doing flips, doing wholesale. For many taxpayers, they're spending probably more time in their business than they are in real estate. Well, the second part of the test states you have to spend more time in real estate than any other thing. And for many of my taxpayers that I work with, If business is their main thing, they're going to make sure business is their main thing because that gives them the highest return, even though they're paying a lot in taxes. And if they have a spouse that can qualify as a real estate professional, that's when they'll entertain the strategy. But if they don't have a spouse that qualifies, well, what happens now? There is one strategy I like to use called the short-term rental strategy, which is a tax play that allows for my taxpayers to qualify a residential property as a commercial property. And in order to do that, we got to run it like a commercial building, but not like any other commercial building. We have to run it like a hotel or motel business. I'm talking Airbnb and VRBO. Underneath IRS regulations, if you have a property that's being rented out 7 days or less on average by your tenants and you can manage the property for only 100 hours and more than any other person, now your property is in commercial use, rented as a hotel or motel-like business. It's considered a short-term rental, not a traditional passive rental in the eyes of the IRS. And all the depreciation that you can receive on that property, you can use to offset your active forms of income, W-2 and 1099. Now, a rental property is depreciated over 27.5 years if it's residential. But the moment we turn a single-family home into a commercial property, it's being depreciated over 39 years. So if I have a million-dollar commercial asset, I divide that by 39, I may get, um, you know, $10,000, maybe $12,000 in a depreciation deduction every single year over 39 years. One, 39 years is a long time, and two, $10,000 is not really going to move the needle for my clients. This is where the cost segregation study enters the conversation. A cost segregation study is a tax strategy used by savvy real estate investors to accelerate the depreciation. Very similar to— very similar to 179 with business owners, how you can take a vehicle that weighs 6 £6,000 and write off the full purchase price. The IRS created a strategy just specifically for real estate investors who are looking to accelerate depreciation in residential or commercial real estate by identifying non-structural components inside of your house, things that make up your property such as flooring, appliances. Imagine if you just turned a house upside down, all the things that would fall out, those are considered the non-structural components. The IRS will allow you to accelerate depreciate those, and you can write those components off and as quickly as 1 year under bonus depreciation. I would say, Jared, the average real estate investor who does a cost segregation study is getting somewhere between 20 to 30% of the purchase price as a year 1 tax loss on their tax returns. I'm talking a $300,000 loss on a million-dollar property, a $600,000 loss on a $2 million asset. And guess what? They're using those losses to offset their W-2 or 1099 income.

Wow.

Yeah.

That's crazy.

Yeah, it's pretty awesome.

And then there's another rule, right? If you have this property and let's say it's 10,000 square feet, or let's just say 2,000 square feet for the sake of a realistic conversation, and there's a hotel down the road, the Ritz-Carlton, that costs $3,000 a night.

Yes.

You can lease your house to your employees, right? That's the Augusta rule.

That's correct.

Is that right? Am I saying that right?

100% correct. It's called the Augusta rule. 14-day rule. You said it perfectly. How it works is you are able to create a rental agreement between yourself and your corporation or your LLC and establish a fair market rental rate for renting out your house for business use. Maybe you want to have your employees over and you want to run a sales retreat, a business mastermind, or an event. Well, these are places that are needed. There are places that are needed to run these events instead of renting out a hotel or, you know, going to a ballroom. You can choose to rent out your house and the IRS will allow for you to do this as long as you can justify the rate and then that you can create the right type of documentation and substantiation. So that rental agreement is gonna be extremely important, making sure you've logged your meeting minutes and making sure you can verify how you came up with the fair market rate. These are the things that the IRS look for in order for you to execute this strategy. Part of the reason why it got so popular is because in the '70s when the golf tournament was started, the Masters Tournament in Augusta, Georgia, There just wasn't enough hospitality available for people coming in touring from other countries to be able to stay in Augusta to watch this golf tournament. So it pushed a lot of the tourists 50, 100 miles out from the golf course just to be able to get in to see the tournament every single day. That's bad for business. So homeowners were able to charge up the wazoo for being able to have somebody from out of state or out of country come stay in their house for 7 or 14 days for to this golf tournament. And guess what? These homeowners of Augusta lobbied and lobbied to the city and lobbied to Congress, and a year later, they added the 14-day clause as a federal tax law, and now it's called the Augusta Rule, named after the Augusta golf tournament. Very, very popular strategy for us.

Yeah, that's a great one that not a lot of people know about.

Yes.

So if, let's just say, you know, someone has $1 million in income and they have a few months before the end of the year, and they want to wipe off as much of their taxable income as they could.

Yeah.

What are some strategies that you would deploy immediately?

You know what, this is a really great situation and many taxpayers actually find themselves into this. I'm gonna take this as, let's say it's an S corporation owner and they're self-employed, maybe they're running a marketing business or an e-commerce business. So they're spending money on ads in order to grow and launch their business. One of the strategies I really like to use is rather than running 100% of your operation through your S corporation or your partnership LLC, what if we establish a management company that's solely set up for the purpose of managing your operational entity. And that management company could manage ads, that management company could manage live events. What we love about this structure is if you set it up as a C corporation, one, C corporation has a flat 21% tax rate. S corporations are flow-throughs, so they flow through to your individual taxes, which is as high as 37%. 37%, 21%. We have about a 16% delta on the money just by moving money over there. Right. That's one thing. Two, the C-Corp can establish its own fiscal year end, meaning it doesn't have to end its year December 31st when you end your S-Corp's year and file your tax returns come April 15th. Your C-Corp can have a fiscal year end that ends possibly even 365 days after your S-Corp. So I love setting up these C-Corporations in the last few months of the year when we have a bona fide intent reason to operate a management company on behalf of an S-Corporation owner. And we establish a reasonable compensation from the S-corp over to the C-corp. Maybe that $1 million pays out 30% management fee over to the C-corporation. That's a $300,000 deduction for an S-corporation owner at a 37% tax rate. That's $90,000 to $100,000 in taxes being saved. And now you have the $300,000 sitting inside of the C-corp. What if I give that C-corporation a fiscal year end in September, September 15th? Well, 4 months and 15 days after the C-corp ends its year is when it files its tax returns. So that'll be October, November, December, January 15th, January 30th of 2027. So I'm buying a business owner in that S corporation time to use that C corporation management company's funds towards bona fide management intent, bona fide management expenses. And for many entrepreneurs that are ripping Facebook ads and ripping marketing ads, they will sell me, Carlton, I can definitely spend down that money inside of that C corporation as of as a marketing expense on behalf of our S-Corp. So that's one way to drop it down. Another way to drop it down is movie films. You know, when a lot of my clients hear this for the first time, they don't realize that this even existed in the tax code. IRC 181 has been in the tax code since before cost segregation studies. IRC 181 allows for movie production companies who are producing movie films in the United States that are under $20 million and below to deduct 100% of the production cost. Now, many savvy lawyers and professionals like myself, we look into how we can take these laws that have been created in Congress going back over many years and leverage them here today. And one of the best, um, strategies that we have from a lending perspective is seller financing. A lot of these production companies want to be able to get their equity out of these movies so they can go build the next movie. And so what they'll do is they'll set up a seller financing agreement between between the production company and investors and allow for my clients to invest and take ownership of a movie film. This is an active business with active sets going on, so for many of my clients that are looking for active deductions, this creates a really great opportunity, very similar to buying a vehicle. When you buy a vehicle, you may only put a $5,000 or $10,000 down payment down, but the government says if it's over 6,000 pounds, you can write off the whole car.

Yeah.

Same thing with the movie film. You put $100,000 down, you're taking on $300,000 of recourse $400,000 worth of total asset. You could deduct $400,000 on your tax returns.

Is that the rule, 1 to 4?

It's a 4 to 1 ratio for, for the structure that is set up in place for the IRC 181 film financing strategy. And so I had clients that got into really awesome movies with really awesome actors, some of my favorite actors like Jackie Chan, Mark Wahlberg, and they're very proud to be able to show up to these movie sets and play an active role in watching things go on. They They have to get their 100 hours of material participation, which is them watching movie films and reviewing scripts and things of that nature, which is super low risk. Um, but my clients now have these deductions that are on their tax returns. So that just takes us down from what, $700,000, um, another $400,000 deduction. We're at $300,000 now. Let's set up a private family foundation. A private family foundation is a 501 that you can set up. Um, with the intent to be philanthropic, even though you may not know all the ways in which you want to be philanthropic, the IRS will allow you to donate 30% of your adjusted gross income into a private family foundation for a tax deduction. 5% of the charitable assets that sit inside your foundation have to be donated to another 501 or qualifying charity of your choice. So if I have $300,000 of adjusted gross income, that means I can contribute $90,000 to my own private family foundation I just received a $90,000 deduction. There's $90,000 sitting in that foundation now. I only have to go deploy 5% of that $90,000. I have to write a $4,000 check to some charity. What if I use the foundation? I want to put on my own charitable event. I want to throw a party at my house and bring everybody, and we're going to raise money to give back to, you know, the Boys and Girls Club or create a grant for, you know, the student who's getting ready to go to college. These are the things that I can use those assets for. That's pretty awesome. Now let's just say I don't do anything. $4,000 goes out, I received a $90,000 deduction. I'm at what, $210,000 left of taxable income? This is when I like to introduce the solar strategy, and here's why. One of my clients decided to put solar on his house, and it was great when he did it because he was able to deduct 30% of the entire investment as a tax credit. 30% of his total expense became a tax credit on his tax returns. So he spent $100,000 applying solar on his commercial building. He had a commercial office, and he received a $30,000 tax credit on his tax returns. For many of my entrepreneurs that are sitting here right now, you may want to put solar on your house, you may not want to put solar on your house. What if you don't want to put solar on your house? Can you still be in the solar space? And of apply for tax credits. With our partnership that we have, you can purchase solar equipment, conduct Code Section 179 on that piece of equipment, and have that equipment be placed on somebody else's house who is already prepaying for energy. So now you receive the tax credit for owning the piece of solar equipment, they're paying into the entity for the, the power, so there's at-risk capital there, and you're using the income to buy the equipment and to have somebody manage the equipment. So that's being placed on solar, that solar is being placed on somebody's house. This is a business model that's been set up through a company that we have partnered with that allows for my clients to be solar business owners, provides them a tax credit while also giving them cash flow. That strategy alone will drop your tax bill down if you put $100,000 in from $100K or from $210,000 It'll drop your liability or your taxable income all the way down to about $110,000. But the difference is, is with a $100,000 investment, you're going to receive $90,000 in tax credits through this strategy. Someone making $210,000 is only paying about $40,000 in income taxes. I completely wiped out your tax bill for this year, and I gave you about an extra $50,000 and change of tax credit that's going to roll over to your 2027 tax return. You're welcome.

Wow. So you just went from $1 million in income with about, call it, a $300,000 tax liability down to— how much total cash would have came out of your pocket to deploy this?

Yeah, we had about $450,000 in total tax and we deployed about $300,000, maybe a little bit more, in order to get the tax bill down. But the difference here is if I don't do anything to deploy capital, $300,000, $400,000 goes to the government, not into assets. I just established 3 different assets that pay me. I have solar assets. I have my private family foundation that I can leverage and grow. I have a movie film that I own now, rights to the movie film that cash flows every time it plays on Netflix, Amazon Prime. This is creating wealth for a taxpayer that thus is giving wealth away to the government that doesn't do anything for them. When I tell a taxpayer, hey, you're going to have to deploy capital in order to offset your tax bill, or we're just going to write checks. What do you want to do? Majority of them tell me, well, if I deploy the capital, am I going to get a return? And then that's when the conversation starts around what do these vehicles really do for your life?

Yeah. Yeah, that's powerful.

Yeah.

Talk to me because I like— but I love all this stuff as a— I wouldn't call myself lazy, but I don't like to do things that I don't need to do. Yeah, something about myself, right? In a scenario like this, there's a lot of moving parts, a lot of, you know, companies to deal with, paperwork to deal with.

Yeah.

How would one keep themselves organized, even just at a high level?

Yeah.

Where they know everything that's going on, they have, you know, insight into how things are going, and they have, you know, all their different vehicles and entities in a place where it's easy to digest and understand.

Yes.

How do you help organize people, or how do people stay organized when they have all these things going on?

We start moving people out of the idea that they're going to have one operator that's going to manage everything, and instead you're going to have a team that helps you manage these things. A lot of entrepreneurs are so prideful on being bootstrapped and doing things, you know, themselves, solo dolo, bringing in a very lean team, getting things done. But when it starts to come to your finances is actually when you want to have a more robust team, you're going to want to have the financial advisor helping you make financial decisions around investments. Even if there's a tax play in mind, your tax advisor is there to help you reduce your liability and keep you within compliance. They're not there to help you make the— make investment decisions. That's what a fiduciary is supposed to do. So you might want to bring a financial advisor into play so you're not worried about always having to be the one that's doing the underwriting for every single opportunity that comes your way. And then when it comes to, you know, how are you making sure that some of these assets that you, you have fit into your grand scheme of your structure? Well, that's when an attorney gets involved, which we as tax professionals have attorneys on our team that help us manage your structure. Maybe we're setting up multiple entities and we're going to have to update your trust documents because these new LLCs are currently not written into your trust documents, and now your trust structure needs a whole overhaul. So we need to redo your entire entity diagram to show you the relationship of how all these entities are going to partner together. Your CPA That's the person that does your bookkeeping and accounting. They're making sure that your numbers are intact. They're providing your tax strategist the up-to-date profit and loss statement so that when he's making an estimate on how much you need to put into a solar or a foundation or a movie film strategy, that you're not overspending money on any of these types of investments. Because a lot of these investments are illiquid, you know, private deals that you're getting access to. So these are the team members that you're going to need. And most importantly, I would say, is Who's playing quarterback? The tax strategist likes to play quarterback most of the time because they have the best relationship with the taxpayer. When I say best relationship, they're the ones that the business owner is going to, to brain dump all their ideas. Here's how much money I want to make. Here's how much I want to have. Here's what I would like to do. It's harder to tell your CPA that because your CPA is not living in that world. They're living in the world of what's already happened, where your tax strategist is like, okay, what are we going to go together. So if you're forward thinking with me, I need to be forward thinking with you all the time. And so you're going to brain dump a lot of this information on your tax strategist and you're going to expect your tax strategist to go make everything happen. Go build the plan, get me the investments, talk to my— talk to my advisor so he understands what you presented to me. Make sure my attorney knows. And this starts to become what we call a family office. And a family office is a a practice with the sole purpose of assisting a family. A family has multiple needs, and your needs can extend well past your business. It can go down to you employing your children and needing to have the contracts available for your children. Somebody's going to have to take, you know, copies of the driver's license, all those things. Or it can go down as simple as the fact that, wow, you have all these different trucks because you're running an Amazon logistics business and now you have 40 trucks and we need to get 40 tags for those 40 trucks done and get you commercial insurance for all of these trucks because you're, you're paying individual insurance policies and you haven't consolidated this. That's deeper level thinking, deeper level planning outside of what's on your tax return here today.

Yeah.

And your family can benefit from somebody that's willing to go deeper than surface level material that they see on a return.

Are these services you provide?

They're services that we provide. Tax Alchemy is our advisory firm. We deal with a lot of business owners that are doing anywhere from about half a million upwards to about $20 million in revenue. And then our family office firm is for ultra-high net worth individuals that have a net worth of about $10 million and above. And we do managed assets there and, and family office planning. And that's really been a big value to a lot of our clients because, you know, we have clients that meet us in different places. There's somebody that might have just inherited a bunch of wealth. They're like, okay, well, I don't know if I need directly a strategy on taxes right now, but I don't know what to do with all these investments. I have all these entity structures that I just got overnight. That's a perfect client for Synergy for us to be able to make sense of everything and go deeper with somebody. We have a client that's getting ready to sell their, their surgery center and he's, he's selling it for somewhere between, you know, $10 to $20 million. That's perfect for Tax Alchemy because we're going to deploy a bunch of strategies right now with the time that we have to build him an entire tax plan. And then he might become a Synergy client later. So yes, those services work out really well.

Yeah, I love that. That's, that's— I'm excited to talk more about this. Stuff offline, because you are a wealth of knowledge.

Thank you.

And it's, and it's rare that someone could see a big picture and understand all these different moving parts. Yeah. So, and by the way, have you done the QSBS?

Yeah, yeah, the QSBS is really awesome. If you're a C corporation, you can hold your stock for up to 5 years and you can avoid capital gains. It was at $10 million and went up to $15 million, and there's certain riders depending on what type of business you are and how big your business that you might even be able to extend that all the way up to $75 million. So some really cool—

I'm very familiar with that because I've used it twice now.

Yeah.

Amazing.

Yeah. And most people don't even know about it until it's too late.

I didn't know about it.

It could have been a C corp.

I didn't know about it until it was too late. But I had done it right, luckily.

You got at least a year or two in?

No, no, no. We were fully in.

Okay, good.

C corp, like it was 5 years prior.

Perfect.

But I didn't even know about it. Yes. I was like, oh, wait. Seriously?

Did you know that there's certain businesses that don't qualify? Like tax and accounting firms don't qualify for QSBs.

Oh really? Only certain businesses qualify?

Only certain businesses qualify.

I didn't know that. I thought it was any C corp.

No, legal and professional service companies don't qualify.

Backtracking, so with all these moving parts, are there any software platforms that you're using to keep things organized? Like for, like, because it's a living, breathing thing, right? When you're creating new entities, when you're updating entities, when you're updating the whole organization. Things need to, you know, be in an organized place. Yes. What do you guys do to keep that stuff together?

Yeah, well, it's one thing to organize the tax strategy. It's another thing to organize bookkeeping. Every accountant is going to tell you QuickBooks is the tried and true method. Whether you like QuickBooks Zero or another platform, please get an accounting software. I like QuickBooks Online just because it's the most intuitive. Yeah, it hooks up to everything. That being said, on the advisory side of it, we actually built our own operating system where we manage all of our clients. Tax Strategies because I just didn't see anything in the space.

Oh, really?

And so all of our clients get on our tax command center and they have access to a dashboard, shows them all their strategies, when the strategies need to be implemented, tracks all their execution around it. And we have an audit vault where we've dealt with enough audits to know exactly how the IRS audits every single strategy. So we've plugged every strategy to a complete audit process. We just reverse engineered it. So all your documents would be saved in an audit vault. Protecting you when you need it.

That's really cool.

Yeah.

I can't wait to check that out.

100%.

So we were talking earlier and I thought it was a silly question, but I wanna ask it anyway. Can you write off golf or watches or any other lifestyle, things like that?

I can write off golf and I'll teach you how I did it.

How's that?

I write off golf because I turned golf into a business. It's very funny. I learned how to golf in 2021, shortly after meeting Ryan Pineda. Actually, I met him in 2020. Shortly after meeting Ryan Pineda, I started picking up golf and I realized how expensive of a sport it was. I was not making millions and millions of dollars yet, and I was looking for a way in which to write this off. Well, in 2027, Donald Trump had the Tax Cuts and Jobs Act and he got rid of entertainment expenses. So you can't go to a baseball game or just write off golf anymore. It has to be an ordinary, necessary, reasonable expense in the pursuit of income, which means I would have to be like a 1099 contractor making money if I wanted to write off golf. Hmm, what if I became a 1099 contractor and I made money? And I wrote off golf. What if I added a tab to carltondennis.com that said Golf with Carlton? And when you come and golf with Carlton, we'll talk about asset protection, tax strategies, real estate, income shifting strategies. I'll do this. I'll go take photos. And that's what I did. Hired my videographer. Let's go out to the golf course. He took photos and videos of me. We put up a drone in the sky, made the entire scene, added that site to my website, put a link for you to book with my personal assistant. Within 3 weeks, within 3 weeks, I was booked up to play golf. Now I had a new problem. One, I didn't want to embarrass myself. And two, I'm trading my time to go be out on golf course now. Within my first 2 years, I made 6 figures playing golf.

Wow.

I've made 6 figures playing golf. Since then, I've had to literally shut down the calendar because like I have so many more important things going on right now than for me to be out on the course. But yeah, I charged $5,000 to $7,500 a golf game. I never had to charge travel, people always came to me and I played at Pelican Hill and, um, Monarch Beach, which are two courses right on the ocean in Orange County. And it's an amazing experience. So I use Code Section 162A, which is a business owner can take a business deduction if the deduction is ordinary in nature, necessary in nature, and reasonable in nature to the business owner in the pursuit of income. I turned golf into an ordinary, necessary, and reasonable expense. I showed that I was able to make money from it. I had a bona fide intent. I showed documentation of substantiation. I kept receipts of every meal I ate, my bags, my clubs. I wrote everything off. So what if—

OK, let's say you go and buy a country club membership for $1 million in the pursuit of this.

Yeah.

And your business is not one that charges $5,000 a round. Rather, it's a way to open the door into investments in other people's companies. Where they could be worth millions of dollars, right? Let's say you go spend $1 million on the country club membership and the intent is to either be an investor or an advisor in things where if you make a deal it can be worth a lot, but maybe you're only making 1 or 2 deals a year. How does that look to the IRS?

Well, it looks like you're only doing 1 or 2 deals a year. It's, it's, the IRS are normal human beings. They look at all facts and circumstances and they really try to justify is this legit or not? Like, IRS is really not trying to you know, make it so that everybody can't take advantage. They really want people to legitimately take deductions like they really do. But when things aren't set up in a way that is realistic to the IRS, the IRS is able to base realistic based off of previous things they've seen. And so if they have court case rulings where they're like, okay, well, this court said this wasn't allowed, this one, this ruling back in 1998, they didn't allow this person to do it. And then right here, okay, this person did, but then this person showed that they showed up to the golf course 40 times. This person only showed up this many times, then they wrote off $1 million. This— these facts don't line up. The circumstances of you really trying to tell me that you're earning money through golf, it doesn't feel substantiated enough. We can disallow it. You want to go to court and fight us on this? You're now going to have to show court case rulings that are similar to the ruling that I just gave you. And if you can't go do digging and find another court case where something is similar, where you're able to justify it, it's game on now. It's whatever the courtroom says. And I have the upper hand.

Yeah. So, and what happens if, you know, that situation takes place and you end up losing? Do you just pay the additional taxes or are there penalties and fees and things like that?

You, one, refile the tax return, removing the deduction. So the million-dollar deduction will come off of the tax return. Taxable income gets reported again, and now you have a new established liability. So you pay the new established liability. And then on that new established liability, there's going to be a penalty fee that gets applied to it because you pay taxes late now and then an interest fee relative to how many months of interest was tacked on to the original date that that return was filed. And those, those interest rates and fees vary every year.

What if you pay the taxes upfront knowing that you're going to deduct it in the future because of this thing? So you paid it on time and you want to, you know, deduct it next year because you're filing it as a— you know, you're going— look, looking backwards on it.

Are you saying like in 2027 you're going to, you're going to take this deduction but you're gonna pay into more taxes in 2020?

Yeah, you know, you're assuming that you're gonna take the million dollar write-off next year. You spend the million dollars this year, you don't write it off, you pay your income, you know, the way it would be. And then next year you say, oh, you know, last year I did these things and you amend your return.

Oh, in that sense, you've overpaid on your taxes. So depending on when the IRS flags your return will determine whether or not they release out your overpayment or hold it and wait and then try to apply your overpayment to a tax return that was filed incorrectly. Meaning they're holding your refund because they don't believe that your deduction was legitimate until you provide documentation substantiation. And if you can't, and then your case falls through, that's when the return gets filed again. You won't pay any penalties or interest fees if you have already had the full balance that was due originally.

Gotcha.

Does that make sense?

Yeah.

Most of the time, though, Jared, that refund is going to get released from you the moment you file the returns because there's a— there is a machine that's just processing out that return. So then if the machine flags something, then a human being puts their eyes on it and then you get a notice in the mail. That's kind of the process.

Understood.

Yeah.

So what's the process of converting something to a business expense that wasn't a business expense? Let's say You know, I now I'm learning about this whole golf thing and I'm like, hey, I want to go do the same thing as you. How do you convert something to a business expense?

All right. So when you're converting something to a business expense, you got to set up the scene. Okay. IRS can't be there when you're there. Right. And they know they can't be there when you're there. So you have to do a really good job of recreating the entire scenario. So if I'm going somewhere that I know is going to be a trip that's going to be completely vacation, I'm gonna probably try to turn a vacation trip into a business trip way ahead of time. I know I want to be out there to relax, but I know the IRS says that I got to spend more than 50% of the time for business. So what I'm going to do is I'm going to create an itinerary that's going to be a business itinerary. I'm going to document it underneath business documentation. It's not going to be on my normal Word, it's going to be on my business Word browser with my Tax Alchemy logos and everything on it. And what I like to do is I like to go on websites like Eventbrite.com and look for events relative to the space that I'm already in. Believe it or not, there's so many financial events going on all throughout the world. I mean, if you just go on Eventbrite, you can literally pop up to a 401 conference today down the street, you bounce over to a 1031 exchange conference. And so this is so cool because if I can go get myself educated on something that's going to help me grow my business, being in a place that's not normally a place where I conduct a business, I can turn something that would be viewed as a vacation from the outside looking in into a business trip for me. So for me and my wife, we went to Hawaii twice in 2024 and 2025. Both of those times I went on Eventbrite.com. We looked up a real estate related conference because my wife qualifies as a real estate professional. And for 3 to 4 days out of those 7-day trips that we were there, She's handling the real estate thing in the morning. I'm on the phone handling stuff with the attorneys and the team. And we come back and we have a meeting and report to each other what we both learned. The business side of it got out of the way. The personal side and the fun happened all the way until the afternoon. Everything's a tax write-off because I was doing it for the business intent first, not for the vacation first. And so the IRS comes back and says, Carlton, what was this trip that you went on with your wife? Oh, you mean my trip where we went to a real estate conference where we documented this 4.5, 5 weeks before we went. It's on my calendar as a real estate conference. Everyone on my team knows I have photos of me and my wife at the real estate conference, receipts of us at the hotel, transportation. That's a real estate conference, by the way. We're in the real estate field, right?

Yeah.

These expenses become a lot easier to justify when you're doing things like that versus saying, well, I'm a business owner, aren't I allowed to write this off? I kept my receipt.

Yeah. Yeah.

But explain it to me. What's, what's the scenario that makes you a golfer? Right? How can you show me that you're making money from golfing? Yeah, prove it.

Yeah.

Oh, this dude created a website, he has a logo, he flew a drone up in the sky. How do you even get shots like this, dude? You have to put a drone in the sky. Yeah, right. That's what I was doing.

I mean, what if you're traveling somewhere and, you know, on your travels you're answering emails and working?

Were you going somewhere for business?

I mean, maybe it's because you can think better there. You're an entrepreneur and you need clarity.

I like the idea of going somewhere where you have more clarity. Set up the business trip.

Yeah.

Because if you think I'm going somewhere because I need more clarity, that's not a business trip. That's not a business trip. You have to have a bona fide intent of why you're going somewhere for business. For example, me being out here, I knew exactly what I was doing when I came out here. My schedule was already dictated from the moment I got off the plane to the moment that I'm getting back on the plane. Every moment I know exactly what I'm doing. Yeah, I know that I'm doing a podcast with you. I know that I'm meeting up with this guy named Julio. I know that yesterday I had this this podcast show. I know I was going to dinner. I even knew what I was going to order at dinner. I know how to structure my life so that it can be a tax write-off because I know how the IRS thinks. The IRS thinks in, in what is the outcome that he is trying to do with this? The outcome is I want to be able to deduct this trip. Okay, well, if that's your outcome, prove to me that it was business related and set up the scene for me because I can't put myself in your shoes, Carlton. You're going to have to show me with documentation. Yeah.

Is it binary? Is it either a business trip or personal, or is it like 50% of that trip was business.

No, it's binary. It's either business or it's personal. It cannot be. It cannot be the same. Yeah. In my life, it's always business. There is no in-between. My wife and I know when we go somewhere, please don't tell any of your friends we're on a vacation.

Yeah.

Because then you've incriminated us.

Yeah.

We're not. We're not on vacation.

We're on business.

Yeah, we're working. Your laptop got loaded into your backpack, just like my laptop got loaded into my backpack. We're getting work done on this.

I'm asking hypothetical questions. So let's say you have a really big tax bill.

Yeah.

And you're like, you know what, I'm gonna go rent a house in Paris or in France for a month, and I'm gonna set up some meetings there. But I'm gonna be there for a month. Yeah. And I'm spending a lot of money on this house, and I'm gonna bring a few team members out there with me, and we're gonna work there.

Yes.

It's a destination.

Yes.

But you don't necessarily need to be there for a month if you have 4 meetings. But you're there, that's your trip.

Yeah.

In that case, would it still be binary, either business or personal?

You still have to track the amount of days that is business versus personal. Okay. You have more than 50% of your time has to be business.

So more than 50% has to be business to make it business.

That's correct.

Gotcha.

Absolutely. Yeah. Interesting. And what you just said, what if you do spend $100,000 on a house in Paris or in the south of France? If your business can justify the expense, it's an ordinary necessary expense to your business. If somebody is only ripping $200K a year in business profit, for them to go spend $100,000 on a villa in France to go do business is not a reasonable expense for someone who's only making $200,000 or bad business. But if someone has $20 million in business profit and they're spending $100,000 on a villa in south of France, that's a completely different conversation. Why? Because that's literally less than 5% of your total net profit going towards one expense versus 50% of your total net profit going towards one expense. The IRS does look at that.

It's like half a percent.

Yeah, like half a percent. Yeah, it's half a percent. Yeah. Yeah.

All right. Well, there's so much good information here. Tell me about the book that you're writing.

Okay, so we're writing the book called The Art of Legal Tax Avoidance. It's already written. I'm ready to go with this book. And what we're doing is we're democratizing how people get tax savings. Everybody believes that wealthy people have access to all these wealthy advisors and there's secret tax codes that only the wealthy have. It's not true. The IRS tax code is very black and white. There are specific exemptions, deductions that are sitting right in plain sight, but you have to understand the art of weaving these deductions together and stacking them so they have a meaningful result on your tax return. Just like the example we gave earlier with the person making $1 million, he had to deploy close to $300K. Having the right strategy stack is important. We don't need to get all the way to zero liability. Going from 37% tax bracket just down to 20% could be enough for for somebody, that could be meaningful savings. Plus, it allows for you to be more liquid to do other investments like reinvest into your business, which gives you the hardest, biggest ROI on your return. So the book Art of Legal Tax Avoidance is out everywhere on Amazon Prime June 23rd. Love for you guys to grab a copy of that. It's going to help you understand the tax code and more importantly, the strategies to save you money.

So this is all the things that we talked about today and more.

That's correct. Everything that we talked about today is in the book. You can go learn it. Right now.

I mean, that knowledge is so valuable, especially even if you're a brand new entrepreneur and you have any aspirations of being successful. That book that, what, costs $20?

Yes.

Whatever it is.

$34.99.

Yeah. Could save you millions of dollars.

Yes, without a doubt. And it certainly has the strategies that we teach in the book. You guys will see real examples from real clients, real tax savings in there. And it's not just six figure. You'll see seven and eight figure tax savings.

Do you have any examples of like extreme scenarios where you've helped people out in ways that were just like mind-blowing?

Yeah. I mean, one of the clients that I just shared with you, that client that actually bought that yacht, we actually ended up getting into an IRS audit. And the beautiful part was she had documentation of the NBA players that came on and off her boat, including RIP Kobe Bryant. She brought Kobe and Shaq and tons of other Laker players onto her boat. And because her captain kept a log booklet of everybody that came on and off that boat in chronological order, when we went into the IRS audit, the IRS auditor asked us what type of documentation even supports her having a business vehicle. We explained why under Code Section 162A she bought the vehicle and how Code Section 179 allows for the full depreciation deduction. And then we started showing the photos, we started showing the booklet, and the guy that was in the IRS audit in our office, it It was a field audit, so he came in, his eyes widened. My family is the biggest Lakers fans. She knows, she knows Kobe Bryant. This is so cool. The rest of the audit was talking about how long he had been a Lakers fan. The booklet got closed. The audit ended.

Wow.

IRS agents are human beings, not there to kill you. They're there to point out things that you already know, like cavities. When you show up to the dentist, you know you have a cavity. When they open your mouth, you know you haven't been flossing. Same thing. You haven't been documenting, you haven't been providing substantiation and documentation. These are the basics of how a business owner operates at a very high level. You have to be willing to do the boring things right. The boring things are brushing your teeth twice a day, remembering to floss, and in the tax world, that's remembering to document and provide substantiation and to be proactive instead of reactive with your taxes.

Yeah, it's amazing. I want to talk a little bit about you personally. I mean, you have so much clarity. So much energy. You show up. I mean, your social following is massive. You've been very consistent in what you're doing. Thank you. What are some things that you do to make yourself the version of you that can do all this stuff?

Um, yeah, man. I mean, for me, I need a lot of time to myself, to be completely honest with you. I'm the type of person that I'm gonna wake up at the ass crack of dawn, like 4 or 5 AM. I'm just gonna get to a quiet place inside of my house just to kind of get with me, my I have my notebook just so I can just write down all my ideas. I'm always, always ripping ideas. And so I like to get to that quiet place. And then after that's done, I go to the gym. For me, I'm a gym guy. I'm the same person that you heard about that graduated college and had the personal training passion is the same person that shows up every single day in the gym. It's just changed a bit. I do Pilates now instead of bodybuilding. I do Muay Thai now, which has been pretty nice. And then I have a fitness trainer that I work with about 4 times a week. So I'm very, very passionate about fitness. And then most importantly, when work's done, I unplug. I, I, I fully unplug and I'm fully present with my daughter and my, and my, um, my wife. And I like doing a lot of date nights. Me and my wife have a really good disciplined routine that twice a week, Thursday, Friday night, is date night. That's our time, uh, allows for us to take time to destress. She works inside of the business too, so she understands, you know, the the things that go on and the things that we deal with, which puts us on a really awesome wavelength to understand each other. But more importantly, it also allows for us to push business aside so we can focus on our relationship when we need to. So those are the things that have really kept me centered, kept me grounded. And of course, Jesus Christ. I'm a big faith-filled leader. I fear God and I'm grateful for the background that I have in Christianity and what it's done for my life and my ability to use my platform that I have to be able to spread Jesus Christ. This message.

Yeah, I love that. It's really powerful to have scheduled date nights every week.

Yes, it is.

Like, that's huge for me too. And it's like, when family is number one, if you're— if you have problems in your family, the rest of your life goes to shit. It spills out on the outside. If it looks good, it's not. And it's so important to give yourself the time and space to communicate and enjoy. Yeah. And unplug. But I think there's this big misconception in society that if you're going to be successful, You gotta grind, you gotta hustle, you gotta beat yourself down, you gotta have fears, you gotta be worried, you gotta be stressed. But I don't think those things go together. I mean, I've come to a point in my career where I feel like the less stressed I am— it's not about the number of hours I'm working, it's about the intentionality, it's about getting into that intuition. It's like you could take a million steps in a million directions to get from point A to point B, or you could take one step and you get that clarity from that solitude. From that peace of mind, from tapping into that intuition. Or you can call it a flow state.

Yeah.

Are there any things specifically that you do to get into a flow state where you kind of get that clarity or those ideas start flowing?

You know, for me, I'll be completely honest with you, my flow state does not happen until I'm about an hour into making content. So when I'm sitting in front— which, by the way, I do content 3 times a week.

Yeah.

I try to stay in the studio for at least 8 hours each content session. An hour into doing content, an hour into reading off my teleprompter, I feel like I'm floating and the words come to me sometimes when I don't even need the teleprompter. The ideas come to me sometimes when I don't need the teleprompter, or I could be reading off of the words on the teleprompter and my mind is already thinking through the next video and how I can make the next video 3, 4 times better than the one I'm currently doing. So I get into a really awesome flow state after I've done all of the stuff that I needed to do for myself, the workouts, the get right with my body. Once I get in the studio and I shut everything off, the noise shuts off and it's just me and the camera, that's when my flow starts happening. A few shots of espresso, no breakfast, I'm ripping. Ready to go.

So you're in the studio 3 days a week?

Yeah, 3 days a week.

How important to your career and life in general has content creation bit?

I mean, it's been life-changing. If it wasn't for me getting discovered on YouTube, my family and what we benefit from, from social media would not be existent right now. A big part of our top of funnel lead flow comes from social media. Matter of fact, 90% of all of our business—

Wow.

—comes from social media, primarily YouTube and Facebook.

So what was the social growth experience like for you, right? Was it— so there's this concept that I talk about all the time, and I've experienced many times, which is the Valley of Disappointment. I don't know if you've ever heard that model before.

No, no, no.

So basically imagine, uh, you know, a chart, and on the y-axis, the vertical axis is progress, and on the horizontal axis is time. Yes. And we believe that when we do something for a unit of time, we're supposed to get a unit of output or progress. Yeah. But the reality is you kind of start with a little bit of a high, you go into a lull, and then for a long time You're down here, and then eventually you start to grow exponentially and you surpass where you believe you're going to be. Yes. But that time down here, and it could be weeks, it could be months, it could be years, it could be shit, a decade, is where most people give up. Yeah. Uh, have you experienced that with your content creation, or did you take off, or how is—

yeah, for me, that trough that you're talking about is the years and years and years that I put in in my mother's office, actually learning tax strategy so that when the moment finally happened, I was ready for it. Yeah. So what I chose to do in my late 20s was I was grinding overtime to learn tax strategy, even though I really had a background in sales. And that grind led me to getting my enrolled agent's license, not just because I wanted to become an accountant, it's because I actually wanted to understand the code. I wanted to be able to speak it. I wanted to be able to talk it. I wanted to be able to go into a conversation and know the solution. Not just say, well, that's what our team does. You need to get on the phone with so-and-so. Like, I wanted to be the person. And as soon as I got my enrolled agent's license, it felt like I woke up with superpowers. Like, fuck, I could finally understand this stuff. It makes sense. All I want to do is just go get this into the hands of as many people as possible. But I didn't have the right strategy. I was just talking on Instagram. I didn't know how to really, really record content. And then COVID happened. I had just moved into a brand new apartment complex because something told me I need to level up from where the environment I was at and be surrounded by people that are making a little bit more money and being a little bit more of an expensive apartment complex. And I ran into one of my best friends. His name is Charlie, and he was down by the barbecue pits cooking wagyu every single day during COVID while the world was falling apart. He was unbothered. And I went down there and I asked him, what do you do for a living to be this unbothered? He's like, dude, I run YouTube. I make my money off the internet. And he opened the app of YouTube Studio and showed you— showed me he was making $40,000 a month. Off of videos he had created a year ago. Wow. And that changed everything for me. I was like, what do you do? I was like, well, I run sales and I'm a tax strategist for my mother's firm. I'm figuring it all out. Yeah. And he's like, bro, take your videos and go put them on YouTube. No one's teaching tax strategy. Yeah, I did that. Wow. A month later, 40,000 subscribers. Wow. 3 months later, YouTube was sending me a letter in the mail saying, where do we send a silver plaque? I had 100,000 subscribers on YouTube in the first 4 months of me launching my YouTube account. Wow. This was me creating a few videos and overnight it almost— I became a YouTuber. Yeah. Now I wanted to become one of the best tax YouTubers. I want to have all the videos. So I started putting out YouTube videos like it was owning real estate. I looked at it like that, dude. If you can create a really good video, it sits on the internet like real estate and people go and shop that rental property. But I want to own all the real estate. Any time someone types in anything tax related, I need to own that real estate. How to pay yourself as an LLC, how to pay yourself in S corp, how to place children on payroll. And that became a game for me. Wow. How can I cover up all the real estate on YouTube? And so fast forward 2, 3 years later, we broke 1 million subscribers from just repeating that pattern. Let's go.

Repeating that pattern. Congrats. Thank you, man. And so do you think in today's day and age people still have the opportunity to grow on YouTube?

Yeah. Yeah, it's so early on YouTube. People need to go all in on YouTube right now. If you notice, viewership is actually moving and gravitating towards YouTube right now. They post the analytics every single year. The number of users and subscribers that are jumping on not only YouTube TV, but YouTube the platform has heightened. And most importantly, we are in a, a trust-declining culture right now. People are losing trust with the influencers that they're seeing on Instagram and TikTok because they're only seeing 60 seconds and 30 seconds on Instagram and TikTok, and they're starting to lose trust because a lot of that culture has not been around for a long time. They're realizing a lot of these business owners that have been on TikTok and Instagram have only been on TikTok and Instagram for 2 years. That's a fake business owner right there. He has— he doesn't have millions of clients. He says he has millions of clients, but he's selling you and he only had 10 goddamn clients. That's the reality of what's happening on the internet. And so I like YouTube because YouTube is a a no-bullshit platform. You, you can sniff somebody who's really doing shit versus not really doing shit on YouTube because you have to put out a long-formatted video to really get any traction on YouTube. And really, the best videos are between 9 and 14 minutes on YouTube. We know, we know that sweet spot now. It's 9 to 14 minutes. 9 to 14. 9 to 14 minutes. If you can get really good at 9 to 14 minute videos because you're just monetized to where someone can go place ads on your videos, So YouTube actually wants to push it out for you, but you're not long enough to where your viewership drops down. You can keep your viewership over 45 to 50%, brother. Your, your videos are just going to get pushed out. Yeah, that's the sweet spot. So I started learning what YouTube wanted because I got connected with all these YouTubers. So anyways, I say that to say this: YouTube is the tried and true asset for you to go spend time with somebody. If you want to really submerge yourself with an entrepreneur that you don't have access to, an Alex Hormozi, a Dean Graziosi, a Tony Robbins, you're gonna go to YouTube to go submerge yourself. You're not gonna sit there and flick through a bunch of Instagram videos. Instagram's gonna get you motivated. YouTube is where you're gonna go through the transformation with somebody. And so that's why I went all in on YouTube.

What is your strategy or your system? If you're pumping out, you know, you're working 8 hours a day, you know, 3 days a week, how many videos are you making? How are you coming up with the ideas for the videos? And then what is your teleprompter/studio process? Yeah.

So one day of full prep. This is a day where I'm just reviewing scripts, getting aligned, and I'm normally having meetings with a lot of the people on my content team to make sure that the vision that I have in place is being implemented across the entire ecosystem since we run multiple companies. So I might do content for one company one day, another shoot for another day. So we have an entire prep day after my prep day. Then we go into the film session after my you know, workouts. I normally get into the studio from 9 and I'll stay into the studio until about, you know, 5. And I start off with long format videos. Long format videos are the videos I prefer to start off with because you don't need to have super high energy to deliver transformational information. Short form, you do need to have super high energy. So I let the long format get me going, get me into a rhythm, get me into a flow state. So when I cross over into doing short form, I'm actually more unscripted. Scripted for short form. Yeah, long form, we have scripts. I have a, I have a copywriter that's been working with me for 4 or 5 years now. He writes every single script for my YouTube videos. Um, on my prep day, I'm reviewing those. Those get loaded into my teleprompter by my videographer. So when I— the moment I sit down in my chair, everything's loaded. My Stream Deck's right there. I just hit the button, record. I just start going. Are you there by yourself, or you got— no, he's sitting behind the camera just waiting for me to show up. Um, he's just making sure I don't— if there's any words that I don't grammatically correctly that he stops me and gets me to redo it. Because when we get into a rhythm for an hour or 2 hours, we'll just say fuck it and keep going. Yeah. No, no, no, no, no. Yeah. Who's, who's critiquing you? Right. What was that? Yeah. What was that? Nope. Rewind it on the teleprompter and say that fucking word again, Carlton. That's somebody you need, somebody doing that for you, right? When you're at this level. So yeah, I have somebody that's helping me do that. After 4 videos, 4 YouTube videos, it's his job to make me pause. Get up, go outside, let the sun touch your body. Why? Because right after 4 videos, my body and my tongue starts to get a little mushy. Yeah, like the words start coming out too fast. Like, Carlton, why are you all of a sudden talking fast? Because he wants to get done with the script and be on to the next one. Yeah. Why is Carlton sound mad all of a sudden? Because he's annoyed that he's filming so many videos today. So back in order, so he can sense my energy. And we know after doing content for 5, 6 years, 4 videos is the point where Carlton just needs stand up, get up, get him a shot of espresso, just go make him walk outside. Yeah, that's 25 minutes of me just to myself. And I'm right back in for another 4 videos. Now I got 8 YouTube videos. That's 2 months or that's a whole month worth of content done in about 6 hours worth of time because I'm posting 2 videos a week, one on Monday, one on Friday. That works well for my audience. So that's my YouTube side of it. Wednesday, I normally go into short-form content day. This is my creative session. If I can't get any short-form done right after the YouTube session where my energy's still high, then all Wednesday I'm shooting short form. When I'm shooting short form, I try not to do short form in the same place that I'm doing long form. I want the algorithm to pick up things differently. Yeah. So I shoot short form all over. I'll be outside, I'll be in my podcast studio, I'll be on my stage where I do my live events. And I personally like to just call out my audience in short form. You are this person. You shouldn't be doing this if you have an LLC. Here's the biggest mistake you're going to make if you go to set up a— I want to make it seem like I'm just talking to you. Yeah. Short form is not about me talking to the world. Long form is about me talking to the masses. Short form is about me being your friend, as if me and you are sitting in the car on the way to the airport together. You're just trying to learn something from me.

Yeah.

Here's what I would do if I were you and I was getting ready to structure my business. Right. I want it to be conversational like that. Yeah. And so that has been our strategy. We look at what is going viral on the short form side and we We always duplicate viral, viral content. That is 20% of our strategy is duplicating other viral content. And the other 80% is pretty much what we come up with or creative.

Yeah, I love that. And for short form, are you using a phone or using a camera?

We shuffle between the two. There's times when my video team will specifically want me to hold front face and do something, and there's times where we'll just use a camera. I would say 90% camera, 10% front face. Yeah, this was so packed with information.

Yeah. So my mind is going. I'm like, I want to— now I'm getting like, you know, I'm talking fast. I want to get out of here so we can talk about my strategy. Let's do it. No, this was great, man. I really appreciate it. Yeah. So much information. You're such a wealth of knowledge.

Thank you for having me.

I'm so impressed. Seriously, I can't wait to go look at your content and like learn more about you. You know, we met at at Zenith. Yeah.

And I was like, this guy's cool.

I'm glad you know anything about you. And come to find out, you're the man. You're the tax man.

Thank you. Thank you. Are you glad you joined? I'm very glad. Yeah, great to meet you. I'm glad you joined.

Loved it. Yeah. But thank you so much for coming on.

Thank you for having me. Great. Yeah, absolutely. Solid.