The Tax & Legal Playbook The Rich Use To Beat The IRS

Welcome to a Beginner's Guide for Business Owners. And I can understand some of you might feel a little scared, a little nervous, a little confusion of what your tax and legal picture should look like as a beginner starting your business. Well, I've got the answers because it's actually very, very easy. I have the map, the layout, the design that makes it super simple to understand. This truly is the Beginner's Tax and Legal Guide for Business Owners. Now, I am a registered CPA lawyer and over my career I have had over 10,000 consultations with business owners just like you and have laid out this design that has unlocked all the tax and legal issues that they faced as business owners. The truth is, if you don't even have experience in tax or legal issues as a business owner, it does not have to be that complicated. What I've done over the years is create a design that I have called the trifecta. Now this trifecta is what helps you reduce your taxes, get better protection and succeed as a business owner. And you know, the truth is, every time I work with a business owner and use the trifecta, it predictably allows me to reduce the taxes they are paying. And that's specifically what we're going to talk about in this video. I'm going to walk you through the trifecta and tell you exactly what you need to do to apply these principles to save thousands of dollars in taxes and have better asset protection moving forward. And remember, the trifecta is a picture that says a thousand words. Now, before we go to the whiteboard, let's talk about why and when. And then I'm going to lay this out and we'll unpack it. The why of this trifecta is because we have to be organized if we're going to go out and start a business. Where is our profit going to go? What are we going to invest in with our profit? You may have been working in your business for years and you realize now I want to go to the next level, I've got some success. Maybe you've been just grinding it out and now you're like, how does this work with my overall long term plan? Well, the trifecta is that ability to manifest where you're going. We want to take your operations of your business and start to extract some profit from it and build some assets that might give us some passive income or benefits in the long run. For example, let's say you have a landscape business. That's your main business. That's where you're Making your money. But if every week, every month you spend all the money you make, are we really getting anywhere? And I've been there. It's hard. We're trying to pay our bills. But if we can just eke out a little bit of profit out of that landscaping business, now I can take that profit and invest maybe in a little rental property, little rental property down the street that starts to pay some rental income or goes up in value over the years. Maybe I take a little bit of that profit and put it in my Roth IRA and I start to invest it. So now my business is starting to create long term wealth and we're not going to get rich quick overnight. That's not what this is about. It's about getting rich slow. We want to take our business and build a sustainable plan that builds a picture, a future, a lifetime. And that's the trifecta. The trifecta gives us that picture so we can work towards it. Now let's talk about when. And let's stay with that example of a landscaping business. I think we can all relate to that. We probably all mowed a lawn before. Is that something you want to be doing for the next 10 years, 15 years or 20 years? When do we get off the merry, go round and start to enjoy the fruits of our labors and build a bigger portfolio or a bigger picture of our wealth? Well, the when is now. The sooner you can start to envision a future where your business is building long term wealth, the better. And you don't have to be rich to get there. You don't have to be brilliant to get there. We just have to change our focus a little bit. All right, now let's go to the whiteboard and let's start to put a picture together here. And you're going to love how this comes together. Now the trifecta is built upon a foundation like a house. This is where all of your wealth ultimately goes. It's where you file your tax returns. So down here would be a revocable living trust. And your, your tax return, your 1040, the same tax return you have to file every year. Think of all your money flowing downhill into your tax return. Okay, we all get that the trust is like your legacy. That's your estate plan. It's a living trust that's going to own everything ultimately. And you're going to build this, this legacy, this foundation for many years to come. Now we'll talk about more about the trust in the future. We don't need to stress about that right now. But the trust is that foundation with our 1040. And we're going to take this picture and divide it in half. Now, on the left side, we're going to put our operations, think of our business. And on the right side, we're going to put our assets, think of investments. So if we go back to our landscaping idea, you might have an llc. And this LLC is going to go out and do business. It's going to do the landscaping business. And what we want to do is start taking profit from this business and bring it over here into another entity and build up our real estate, our rental property, like I talked about in that example. So now what you're doing is letting that business build a different type of wealth, a different type of income. This is referred to as passive income. See, over here, your assets are working for you. Over here, your ass is working for you. This is your business that takes a lot of work. And you're in this grind and you're killing yourself. So over here, you have this ordinary income that is just overwhelming. If we don't get off this crazy train in the long run again, we don't need to try to beat ourselves up and think we're going to do this overnight. We're going to set our sales in the right direction. Now here's the trifecta. Your trust will ultimately own your investment llc. Your trust will own your operational llc. This is a very basic structure that starts to unlock a lot of opportunity for planning. Because you've maybe heard about this S Corporation idea. We're going to talk about that in a minute. And you might talk about buying your own home someday. So here's your personal residence. And we start to build little bells and whistles onto this structure that we can build this overall umbrella of wealth. This, my friends, is the trifecta, and it's your trifecta. Everybody's is different. There's no race, there's no rush. We want to have a picture of where you're going. Now here's a couple other benefits. See this line down the middle? This is what I referred to at the very beginning about legal or asset protection. If your assets are over here, we don't want your business to threaten those assets. So we want this firewall here. And this business's main purpose is to make money and protect your other investments. And we're going to try to save as many taxes as possible over here with your operational business. We'll come to that in a moment. Over here, we want to build wealth. We want to start investing in all sorts of assets. You might be buying cryptocurrency, you might be buying gold or silver or real estate. Who knows? Whatever you know best. We want to start investing in those with the profit from your operational business. As we start to build this trifecta with essentially two companies, in the long run, we're going to take our time. Everybody's again, a little different. We're going to start to see overall picture and wealth grow and it gets us excited. And all of a sudden it clicks. We have a plan. And this transition from being a business owner in the weeds to stepping back and seeing the whole forest, it is liberating. And that's what wealthy people do. This starts to click and they start to build real wealth. They're not much different than you or me. They just figured it out and that's what you're doing watching this video and I commend you. Now, if what we've talked about so far is a little overwhelming, and it should. This is new information that's really exciting. Please let me ask you to take some action and call my law firm. We have been around for over 20 years. I have 14 tax lawyers that help Main street business owners affordably all over the country. And you can get on a zoom call with a real lawyer and talk about your trifecta and we will build it for you. Our prices are between $1,000 to $1,500 based on what you might need. And it's a plan that, that will give you a future. Maybe you just revisit it once a year. It's not an ongoing retainer that's really, really expensive. It's something super affordable that's going to help you to your next step. So build your own trifecta. I carry around my trifecta on my laptop. I have my own. I want every one of my clients to have a color diagram of their trifecta so they can hold it up and manifest it and get excited about it. Because being a business owner can be so lonely, it can be so tiresome when you feel like you're the only one pushing, pushing and pushing to find success. So this picture can be liberating. You can get on a call with a real lawyer that'll build your trifecta and you'll have your blueprint that you can review maybe once a year, you can take it to your accountant, you can take it to your insurance agent. And this blueprint or trifecta is going to help you succeed more than you ever, ever imagine. All right, now I Want to give you an important tax tip. I want you to walk away with money saving strategies right now. So let's build another trifecta. So we've got our trust down here. Let's, let's go with the 1040. There's your tax return. And one thing I alluded to a few moments ago was the S Corporation. Now I want you to know that almost every dentist, doctor, landscaper, hairstylist, restaurant owner, online marketer, influencer, Etsy shop, we're all S corporations. If you're making more than $50,000 a year, you have got to seriously consider the S Corporation. So on our operational side, that may mean you went from an LL and you converted to an S corp. So you could have an LLC taxed as an S corp, or you just come right out of the gate and set an inc. Just in general, the reason why we love this is if you have a regular llc, you're paying self employment tax on every dollar you make in your small business. Some of you have already seen this on your tax return. That's 15.3%. That is ugly. If you make 100 grand, you're spending $15,000 right out of the gate before you even get to state or federal tax. With an S Corporation, you, we can split that up, we can break it into two pieces. And this is again what every business owner does that's making this amount of money. And we take a W2 and pay our self employment tax or FICA, the F word, FICA. And we pay that over here and we might pay that on $40,000 and then take the rest. It's almost like a dividend, a pass through piece of income. Now you still make 100 grand. You make the same hundred grand, but it comes on two different pieces of paper. One is payroll and one is a dividend or this draw. Now you don't have to change your banking procedures. You don't have to wait for a paycheck. It's a process of just doing better journal entry and bookkeeping. It is not difficult. Super simple. But now what we do, Instead of paying $15,000 on 100 grand, we only pay 15% on this $40,000. So we're paying 6 grand in FICA, not FICA 15. So we just saved $9,000. How would you like an extra 9 grand? That's like 7, $800 a month. That's a big deal. So the S corporation allows you to unlock the savings. Now this is a big topic. I just wanted to expose you to it and talk about how this works into a trifecta. So now when we look at the big picture, you have an S corp on this side and we get back over to the asset side. That's the llc. So we have our trifecta. So I really, really encourage you as you move forward to start building an S corporation into your trifecta if you have operational income that exceeds $50,000. Now with this S Corporation, what's exciting is it can start to feed your IRAs and your 401ks and you can have both. You may have a 401k just for you. It depends on your employee structure. You might have to include some employees, but there are so many options. And again, I just want to expose this to you because it gets to be really exciting. Because if you have old 401ks from a prior job, an IRA, maybe even a health savings account, we can start to invest this money not in Wall street, but in what you know best. So these types of LLCs are now owned by your retirement accounts or tax free money. So it's a next level strategy that all the rich people use. Now I want to just say this right now. If some of you are already like, oh word, this is too crazy. I'm getting confused. I don't like this. Let's take a breath. This whole process is going to push you to new levels, the levels that you've dreamed of. It's going to take a little bit of learning. And so as we start to build our trifecta and start to redeploy profit, remember we want to move profit across the line, across the river, whatever. We want to take that money and put it over here to work, whether it's in real estate or in some of these retirement accounts. Because we can't just rely on Social Security. It's scary out there and we need to take care of ourselves and our family. So as our operations start to grow and we use the S Corporation to save taxes, that very tax savings that we just created is going to build the wealth that we're going to have in the future. It's a machine and it starts to feed on itself. It's like a snowball going down the hill. And that's the wealth you've been dreaming of. We just have to see it and this trifecta is going to help you get there. Now again, if this piece seems a little overwhelming and where do I start next? You can start to head in that direction by getting over to directed ira.com. this is a trust company. My law partner and I, Matt Sorensen, set up to help clients invest their retirement accounts in what they know best. Not in Wall street products, but in other small businesses. Real estate crypto. You get to invest your Roth IRA and 401k in what you know best. So get over to directra.com we have our own podcast over there. We have a 1, 800 number where you can talk to representatives to help you open your own account. Extremely affordable and it can unlock a future of wealth in your retirement accounts. Now, the average cost to open up a new retirement account is around three to four hundred dollars. That's all. And we have service representatives and online forms to help you get started, even in the middle of the night, so you can start building your own retirement funded by your business. We have a podcast, we have all sorts of webinars and books and free resources to help you get started. That's over again@directed ira.com check it out. Now, my final tip today, and I want you to walk away with some cool stuff. Here is the trifecta when it comes to your real estate. You know, something I've been writing about for years and I tell all my clients this, it's in every one of my books, is look to invest in a piece of real estate every year. That doesn't mean you have to go buy an expensive piece of real estate or even buy it all yourself. You might partner with two or three friends or two or three family members and create a little LLC and go buy that cute little rental property that's down the street from grandma. But if we can start to build passive residual income, that's where the wealth really is. So let's look at another trifecta. So we get down here, we've got our 1040 or our trust at the bottom. We have our S corporation kicking butt and we're out there building our business, whatever that may be. And that's our ops side. And then on our asset side, it's really broken into two pieces, right? We've got over here IRAs, our 401ks, our health savings accounts. We just talked about that. But over here we're going to start building up some rental property. Maybe it's rental property where your kids are going to college. It could be a rental property where you vacation, could be a rental property you rent to your parents that are getting agent. So we want to be thinking, where do I go where? What type of real estate speaks to me and we get practical and careful and start learning some new skills in this area. Now, what's Cool about buying rental property is it generates passive income and passive income generated is taxed. Oh, the best of all, this is where you get capital gain. 1031 exchanges, passive losses, depreciation, all the cool things rich people do. You can do it too. So while you're making money over here, we're taking that profit and redeploying it into your own portfolio of real estate. Now the trick here is, is finding an accountant that understands this, that speaks this language. How cool would have it been if your accountant would have presented this to you in the last few years? Hey Tom, Mary, let's sit down and talk about buying real estate and building wealth. I don't think so. Right. It's time to upgrade. It's time to find a tax advisor that speaks this language. Well, over the last two years I've been building the Main Street Tax Pro network. By the end of this year I'll have over a thousand CPAs, enrolled agents and attorneys around the country that speak. Mark Kohler. These tax pros have been personally trained by me. They understand real estate taxation, they understand cryptocurrency, they understand self directing and over 80 different tax strategies that you can apply in your small business. People, they make you money, isn't it? Some people think their accountant costs them money. When you have an accountant that knows this stuff, they make you money. So if you're looking for a tax advisor that understands what we're talking about here and can build and enhance your trifecta, they're all trained on the trifecta. Get over to markjkohler.com and click on the Tax Pro network. It's like a little LinkedIn page of all these different tax advisors around the country. And don't worry if they're not down the street, it doesn't matter. They could be west coast, east coast, young, old, doesn't matter. We want an advisor that speaks your language. Get on there, do some discovery calls, interview some of them. Find one that understands what your goals and aspirations are. Now as for the cost of a tax advisor, it's going to vary. It's going to depend on the size of your business and what you're doing. But the cool part is I don't make money on that. I'm not trying to charge these exorbitant rates and force my advisors to charge some minimal or maximum price. I want them to create a package they present to you and you get to decide if you want to move forward. And I've got hundreds of advisors to choose from. People, the beauty here is you are the captain of your ship. No longer do you have to wait for an advisor to lay out some strategy on a silver platter. You get to come to the table with. Hey, I heard mark on his YouTube channel talk about this. I read this chapter in Mark's book. That was pretty cool. Oh, I was listening to Mark's podcast. Can we talk about putting my kids on payroll? What about the S corporation and payroll levels? Hey, can I do the home office? Can I ride off my truck? How can I run off my kid's car at college? People, the list goes on and on. And these are easy concepts. It does not have to be hard to talk about a strategy and have a conversation with an advisor that doesn't demean you, doesn't talk down to you, and is so conservative you want to just jump off a cliff. Now, in summary, I want to say thank you for watching this video and I hope I've impacted you in a big way. I think these are awesome big principles that are life changing. I took the last 25 years learning street smart tax strategies. You don't learn this in law school. You don't learn this in a master's program or the CPA exam or a bar exam. You have to get out there and network and figure out case law and strategies and statutes that work. Legitimate, ethical, honest strategies. I'm not even pushing the envelope. I'm not that aggressive. Accounting industry is broken and so many ways and I'm trying to change it. I want to be the goat. I want to be the guy that changes the accounting industry and changes millions of lives. You're one of those people. Please take action today. Start following me either on YouTube or the podcast. Get my books on Amazon, read my blog articles, get to the network, hire someone in the law firm. Take action now to change this trajectory and this future that's right out there for the taking. You can do this. The American dream is real. Don't give up.