Most Home Service Owners Are Lying About Their Numbers | Chelsea Jamison

If you lose sleep over payroll taxes, running things through the irs, or ever getting audited. This is the podcast for you. I'm bringing on the general manager of my company, Home Service cpa. Her name is Chelsea. She's been with the company for a few months now, talked to dozens of different home service business owners about their books, their finances, their taxes, and we do all of those services at Home Service cpa. But today, she's gonna be sharing the tips and. And the tricks that she's learned that you can use in your business to make sure that if you got audited, you wouldn't be losing sleep over it. So without any further delay, let's talk to Chelsea and learn what you can do to make sure you reduce what you're paying the irs. So over the past, I guess it's been two months now, you've been talking to a lot of the different business owners thinking about joining Home Service cpa. I wanted to go over some of the kind of takeaways and practical things that people can use in their business. But what are some of the things that you see as, like, the obvious big red flags when you step into someone's PNL or their reports or their cookbooks? What are some of the things people are doing completely wrong across the board?

Well, I think that there are some, like, acute things that I can touch on, but I think more so than anything, what I'm seeing is that a lot of these people who have large, you know, I guess medium businesses who are doing under 5 million a year, but over 1, they usually already have some type of bookkeeper or a CPA in their lives that they're using, and they're getting these reports every month. And there's kind of this gap in financial literacy. Like, they have the report in their hand, but they don't really know what it means or how to take action on what they're seeing or anything like that. And I think that it's our job in a role like mine, really, to be working on not just being accurate and tidy with the bookkeeping, but also making sure that the owners are actually understanding what they're reading and understanding why there would be difference in periods. You know, obviously, particularly in landscaping, there's a lot of seasonality, so comparing, like, year over year versus month over month, that kind of thing. I did just talk to somebody yesterday who. Or Maybe it was two days ago now, but he. His net income was $300,000, and he was like, I don't have $300,000. Where's the money. That's why everyone says that, right? Where's the money?

I don't know.

But he's not an S Corp, and he wasn't on payroll, so he was actually. He was taking distributions. Those aren't on the profit and loss. They're on your balance sheet. So then when you actually go to the balance sheet, he had taken probably 180, $200,000 in distributions of the year. So if you kind of work that back in, there should be $100,000 left over. Right. And just not even, not even knowing where to find that or where to look. And having those kind of mysteries, I think, is a big thing in terms.

Of that, specifically the S Corp and paying yourself. A lot of the questions I get from owners is, how much should I be paying myself? What is a normal salary? If I do have an S Corp, what do you see as kind of the happy medium? Or what do you recommend to someone based on the size of their business, the amount of profit, how much I'll be having in distributions versus my, my actual payroll and like my W2. What should that be as a, as an S Corp?

Right. That's a great question. I would say that if you're, if you're going to become an S Corp, I usually just look at last year's distributions and like, what you need to live off of and try to shoot somewhere reasonable around there. Like, if you're the owner of your business, you probably shouldn't be the person making the least amount of money. So I would say, like, depending on where you live normally, somewhere between like 60 to 80,000 is appropriate to start. But again, you're also talking about how much, how much does your business make? So I would. If someone was making like gross revenue of $500,000 a year, then, and they have $400,000 in expenses, and maybe that's too high. But yeah, I mean, I would say, like, if you're the owner of a business, if you have multiple employees, you can't pay yourself $30,000 a year. Right. The other thing that is important to consider is if you're in a partnership, then everything basically has to be equal between you and the partner.

Oh, and turn to the W2.

Well, I think the payroll can be different, but the distributions all have to be the same.

Got it.

So you also do kind of have to find that balance of like, how are you paying yourselves or each other? And then kind of what's left over to share if you're big enough and you have things like a 401k. You also need to consider like the safe harbor match. So it kind of varies based on your complexity, I suppose. But I think like the, the line we draw really. And I guess this isn't about wages, but if you have at least $50,000 of like residual net income at the end of the year, we always recommend forming an S corp because you're going to save more money in tax liability than you will spend on the cash outlay to be an S Corp. And.

So essentially you're comparing the cost of setting up the S corp. Finally another tax return essentially versus the savings that comes along with having distributions instead of W2 income where there's way more taxes.

Right? Yeah, certainly. And I think like until people actually work for themselves, I don't think that we have any concept how much your employer is splitting that the. I think when you're self employed they call it self employment tax, but it's, it's all the same thing. Right. It's Medicare and Social Security, but we only pay half of that as a W2 employee. And so I've, I've had clients in the past who've made $200,000 for the year, but they've spent a lot of it and then they get a tax bill for $45,000 and they're like what? You know, but that adds up like it's 15% of what you bring in. Right.

So what are some other things that you see business owners doing wrong when you first get into their accounts? Yeah, specifically around the bookkeeping. Because I think so many people, like when we talk about say know your numbers a lot of times from my perspective, that's operations. So that's like close ratio and you know, your time to lead and these more operational. Right. And a lot of great operators know those numbers, but then they have a profit and loss statement they don't really understand. They don't understand how that correlates with the balance sheet.

Right.

First off, what is the balance sheet? What is a profit and loss? And then when you look at those two things, what are some of the immediate mistakes you're seeing people make?

So that's a. Yeah, I guess starting there, like that's kind of the fundamentals. Right. So the profit and loss covers a period of time. I, you know, we talk about net income a lot. But as an owner I think that the, the bigger key metric really is the net operating income because the things that fall below the net operating income are things that you could hypothetically take away and the business could still operate. So. And that's also, that's important to know if you were like going to sell your business, right? That's kind of the number people are looking at.

It's like depreciation.

Depreciation is a non cash expense that's under the line. Interest. Interest paid is under the line. Which I personally disagree with. Like I, I do it in bookkeeping, don't worry. But, but I, I think that because, because what they're saying is that you've financed, you finance the business being able to expand, right. And that's technically not an operating cost, but in my mind it's still a cash expense. So yeah, I mean, I would say that my real number is net income, net operating income plus the interest paid. But amortization and the difference between depreciation and amortization is the depreciation are on your fixed assets, your plant property and equipment. And then amortization is capturing the value of intangible assets. So like if you spend $20,000 trademarking something or you know, you get your logo made or your, you have massive startup costs, those kind of things, you can amortize those over time.

My experience is like, mostly for home services. Depreciation is the things we're using. Amortization. It's rare that you're doing any sort of AP and things like that.

Yeah, yeah, yeah. So I mean, and then I guess that's, that's one of the first things I would say that I'm seeing is these massive. On the balance sheet, there'll be like this massive record of assets, right? Like $500,000 worth of equipment and then $2,000 in depreciation for the year. And I'm like, what's going on? So I think making sure that your bookkeeper or you, if you're doing your own books, is trying to capture that depreciation every month because then it doesn't really hit all at the end of the year. And you can kind of get a better idea of like what kind of wiggle room you have if you needed to make another asset acquisition or if you can make another asset acquisition, if that's, if it's appropriate. But yeah, so that's a big one. Loan payments, the loan payments on equipment, assets, anything like that. The only part of that payment that is an expense is the interest. The principal of that payment is actually essentially increasing your value that you have in your assets and then offsetting your liability for the loan. So a lot of a majority of the books I go into the entire loan payments being expensed and even Though that's nice from a tax perspective in that it makes your net income appear lower. It's incorrect A, and then B, it also makes your net income look lower. So like I have a client yesterday who he's gonna put an offer on a home next door to his parents house and he had been booking all of, he has a couple vehicle loans and he'd been booking the whole thing and as, as an expense and so we were able to split that up and so it actually, you know, his net income is higher and he's going to get a better rate on his mortgage. And I mean so it is, I guess that's kind of a double edged sword but it's incorrect to, to take it as a whole expense.

So if I have a $300 a month payment coming out on equipment, let's say it is a 4% interest, I got a 5 year term on something.

You have good credit.

Yeah, yeah, exactly. Right now. So assuming that I see $300 come out on my, in my QuickBooks for example, what am I supposed to actually do to make sure I split some portion of that interest? Some portion of. I don't even know because I just saw this dollar amount from the dealer. Yes, it said 300 bucks for sure.

So first of all you can always ask the loan originator for an amortization schedule which will break down each payment every month. What's principal and then what's the liability payment or the principal payment? I have not had really. Anybody have luck doing that? Like you should be able to get it but nobody seems to be able to. So I, well I have a debt schedule template that I use but the functions are pretty simple in QuickBooks or I'm sorry in Excel just to actually you put the percentage rate, I always say discount rate. It's not a discount, it's a charge that you put the percentage rate in. Put the loan payment, the origin value, the length of loan and then it'll calculate it for you. Those are pretty easy to find online.

So or even like throw it in chat. If you team like hey, this is my initial amount. They said this is my rate. Okay, got it.

And then when the transaction comes in, instead of categorize, categorizing it immediately you open it and then you, you click split and then you're going to have two line items. The first line item would be the principal payment and that's going to come out of that. It's going to reduce that liability account that the loan should have been created on. And then the second One would be the interest expense. That'd be the second line.

So split is the right way to do it because I used to do it as a journal entry, which technically you can kind of make it work, but it's a pain in the butt.

That's what I did yesterday.

It's hard. Oh, really?

Yes.

Oh man. You're probably going to see that in some of my accounts in 2026. We're trying to give away 100,000 copies of the copy and paste millionaire book that I recently wrote. It's. It's the blueprint from getting from zero to $3 million in annual revenue for any home service business. Now, as part of the hundred thousand book challenge that we're trying to give away, we have two ways to be able to take advantage of this. One, you can get the free audiobook, ebook, the course, and a physical copy of the book sent to you for free without paying shipping. If you go to mikeandy.com cpmcourse now if you're like, I don't wanna take a course. I just want the book shipped to me right away. You can go pay for the shipping at $6.50 for a $35 book. I'll cover everything else. Just go to mikeandys.com 100k Our goal is to get this book in the hands of 100,000 home service business owners. So, okay, so now that I have split that out, should I be doing that on every single transaction? Should I do it the end of the year? Because I do. See sometimes people just, they'll put it as an expense the whole year. At the end of the year when they're going to do their taxes. I should figure this out and I split things up correctly. My problem with that is like profit and losses throughout the whole year now have been affected. It affects my profit sharing. What do you recommend in terms of that one specifically? Because that's the probably the most common accounting error I see all the time.

I see it everywhere. You just do them as they come in. Like the most loans I've seen, I've talked to a lot of people over the past two months and the most like quantity of loans I've seen is probably like seven. And that's only seven transactions a month. So what I do is I just have one Excel sheet, then I just call it debt schedule and each tab is a different loan. And then as the transactions come in, I just highlight the one I'm splitting so that I kind of can just. It's easy on the eye, you know. Where to start off with next and then I just post it. But it's, it's really not. Once you set up the debt schedule, which like you're saying chat GPT could very easily do for you. I've never thought about that then. I mean you just, you just keep a record of it yourself and just plug them in. I agree with you. I think you can certainly do it at the end of the year, you could do it at the end of the month. But it again it, it's, it's less time and kind of less cognitively intensive I guess to like then try to match everything up. Right. Like if you're just recording it properly in the first place, then you're actually saving yourself some steps.

Yeah. And so that's really like the profit and loss side of things. On the balance sheet, what's that actually happening? Obviously we have assets and liabilities. It's more of a snapshot in. Yeah, but what exactly when it comes to a loan, what should I be looking at? Even just to verify what my accountant's doing to verify that what my balance sheet, like I see so many people, they look at the P and L, they, it makes more sense because it's a period of time, they look at their balance sheet and like that's not really how much money is in my account. Like why is assets, what's this owner's equity thing? Can you explain a little more about balance sheets?

Totally. So the balance sheet is actually just one moment in time. It's one day. So if you go into your QuickBooks online and you run the balance sheet, it gives you a period and you can do this yourself to test me. But anytime the end date is just the date of the balance sheet. So you can say 112026 through 1231, 2026 or 1231, 2026 through 1231 2026.

And it's always going to be still.

Just going to be 1231, 2026.

Got it.

And part of the reason why your balance sheet doesn't match what you have in your bank or you know, your, I should say your bank balance in your assets doesn't match is because you're probably not looking at it that same day. And then also there's usually like a one day lag between posting transactions. So the balance sheet is a synopsis of everything that you own, which are all of your assets. So that includes cash, plant, property and equipment, land, buildings, all that. Um, and then if you think about this is actually the accounting equation. So if you think about everything that like all of your liabilities for the business, then everything between what you own and then what you owe is your equity in the business. So I think that the other thing that people don't really understand is that, or commonly understand is that net income is actually flowing through into ownership, owner's equity. So you're not going to see it in the assets. Even though it's cash that comes into the bank, that's not technically how it's represented on there. And so your equity is a combination of really three things. It's how much cash you've put into the business, how much cash you've taken out of the business, and then in all forms and then also how much your net income is currently. So that is kind of how they're related to when you, when you take out a new loan. Think about it this way. So you go to the bank, they give you a $10,000 loan, you have $10,000 in cash.

Well now assets went up.

Assets, your cash is up. Yeah, you got 10, 10k, let's go. But now you owe $10,000.

So liabilities went up.

So liabilities went up, right? Yeah. So that's the whole double entry accounting thing is that you, you can't have a transaction that doesn't have like an equal reaction on the other side of the accounting equation. So you would post that $10,000 cash as an asset and then you're also going to post that you owe $10,000. So now every month, if you're making that 300 payment and you're using your little debt schedule that ChatGPT put together for you every month, as you pay down that loan, your interest is going to decrease on it and your liability, or I'm sorry, your interest will decrease and the amount towards principal increases. And so the cash is then again leaving from that top line asset, but you're also reducing the liability that's owed and then that expense comes out in the owner's equity as an, as an expense.

Right.

Through net income.

Got it. And like when it comes to even like using a bookkeeper professionally, like I think so many times when people think bookkeeper like they just do the transactions in QuickBooks. And realistically I think most people could probably do that part of their job in 10 to 20 minutes a week.

Right.

I think the part that, so I got my first bookkeeper was after about three years in business, maybe four years and I got my first sales tax audit. Didn't even know I was supposed to be filing sales tax. And I was doing everything wrong in terms of expensing the loan side of things because at the time we had like tractors and excavators, we had everything in terms of equipment. I lot of debt and I was doing it all incorrectly. So when I got audited, I will send an ode thousands of dollars in fees, not just the actual money I owed for the taxes is the penalties and interest. And so when does it start making sense? Because like, from my perspective, it's not the categorization that I'm paying a bookkeeper, it is the insurance or the peace of mind knowing that like when I file those taxes, they're correct and no one can come back to me because it's done correctly.

Yes.

And then that, that like having a professional bookkeeper, having yourself looking through, even over my shoulder is, is a way for me to make sure that when I get audited, I can confidently do it without losing sleep.

Right.

From your perspective, as you get people probably finding their first bookkeeper for the first time or switching bookkeepers and they're like, I think something's wrong here. What would you recommend someone? When would you recommend someone to go get a professional to really help them versus just kind of do it themselves or even like have TurboTax do their, their, their tax return thing, Right?

Yeah, I mean, that's kind of a, that unfortunately. I want to say that, you know, so many businesses start and fail and it's usually about the money. Like if you're the kind of person that is motivated, you love what you're doing, you have a great product or service and you're passionate about it, there's no reason why you shouldn't be successful. But a lot of businesses fail and it's because from the beginning they're not doing it correctly. So like, hopefully you were able to access those thousands of dollars to pay the penalties, interest. But I mean, I think it should really be from the beginning. And even if it's not a professional, you should at least be taking the steps to educate yourself on some of this stuff versus just kind of flying blind. And I feel like, like we have a, we have products that help people go from like just the impassioned entrepreneur to a business owner. Right. Because that's. That you have to cross that line at some point. I think anytime you have employees, it's good to have a bookkeeper accountant because then you know that the payroll taxes are getting filed appropriately, which, that's another way that you can get burned very badly. Anytime you're going to do big cash outlays you know, I think from the beginning, unfortunately, but it's like that's not necessarily feasible for everyone. So there are some cool programs though, even QuickBooks. So if you have QuickBooks online and you can't afford to hire someone like home service CPA right now, hopefully you do in the future. But you can do. The ProAdvisor course is free through QuickBooks Online and it gives you a very rudimentary but correct walkthrough of how to expense things, categorize things. And I have actually done it myself after I'd been in accounting for many years just to see what it was like. And it was like a 40 hour program and I did it in like two hours. But. But they really cover a lot and it's free and you're already paying for it through QuickBooks.

Got it. So for like end of year taxes, I know obviously right now when this is coming out, it's kind of like too late for end of year.

Right.

But what should be someone be thinking about or asking their accountant to educate them on as it gets close to the end of the year? I think one of the most valuable things that Brad does for me when it comes to my taxes is sending me a video prior to the end of the year being like, hey, here's your estimated taxes, right? And then based up on this, here's maybe like you're, you're just above this bracket. So maybe we want to bring that down because, you know, 24% is, you know, let's try to get that underneath the 20% bracket. Yeah, I think one thing people a lot of times when they hear brackets in general think they're paying 24% on the entire thing. Like, no, this is a tiered system. Your first 20, 30,000, zero, then it goes up slowly. That being said, when it comes to end of year, I think a lot of times at home services, people just section 179 write everything off.

Right.

One of the things Brad explained to me that was really, really kind of changed my mindset is if you expect to make more money next year and the year after that and in five years from now, maybe you actually don't want to take the section 1 in 79.

Right.

Because the tax bracket that you will be in in five years is likely going to be higher. Right. And so instead of taking your $30,000 section 179, when you're in a 10% bracket, maybe you take a five year depreciation schedule so that in year five you have something to write off when you have, you're in a 24 or 25 or 28% bracket. And so what kind of questions if someone's just starting their first, second year, they're starting to make profit for the first time. Because usually when I see people actually thinking about this, like, oh, I'm going to have a tax bill.

Right.

What kind of question should I be asking my accountant? What sort of things can I be looking to do? Tax strategies to be able to minimize that in December, November, and actually thinking about reducing my tax liability?

Well, I mean, Brad's example of kind of planning and strategizing around depreciation and asset acquisition is spot on. Like, that's a, that's a huge thing. I think, like, what I've been seeing a lot of are these people that are now at that point where it's probably time to make an S Corp election and start putting themselves on payroll and then learning how that works, too. So that's another question. Weirdly, I've also talked to quite a few people whose current accountants and bookkeepers don't recommend that, who are way beyond the point where we would recommend that. And I don't know if it's because they don't want to do another return or what. But yeah, I mean, that's definitely something I would ask. Is my current structure supporting me being able to have this growth period next year and the year after that, or how can you reorganize or what can you do to minimize your future tax liability? The other thing is that people need to pay their quarterly estimated taxes.

I actually, yeah, same thing. Brad originally was like, hey, by the way, like, every year you've been doing taxes in the past, you're paying these other fees. Because if you don't pay quarterly, you might pay all your taxes at the end of the year. Yeah, but they're going to tack on a whole bunch of fees.

It's crazy. So, and I will tell you, and I didn't know this until I started working in tax, and I don't know how many people actually know this. If you pay either 90% or 110% of last year's liability, you do not get the penalties on. Right. Because you did your best faith effort paying your quarterly taxes on your prior year's liability.

So if you do quarterlies and you pay more than, let's just call it 110%, 110% of last year, of last year's. Even if you're a little short, there won't be any penalties.

There's no penalties. On it. Because you did your best. Faith effort, I always say. It's the only thing I like about the irs.

What if. What if, say, for example, you're supposed to get a return or, like, you overpaid. Yeah. What if you just leave that money in? Will that account for estimated taxes the year following?

I don't think that they actually will do that.

Okay. So, yeah, they want quarterly, essentially.

That's. Yeah, yeah. You can't. They don't want to hold on to your money. If they hold on to your money for more than 90 days, then you're supposed to be making interest on it.

Oh, okay.

Yeah. Like prime plus one or something.

Really?

I have actually received interest for a client before. That's.

That's crazy. I get these random little IRS tax. That's what it is.

Because. Yeah.

So usually what I'll do is I'm usually ahead one year on my taxes.

Okay.

And I just leave whatever it is in there.

Yeah.

And then that way, I just never have a surprise because I got surprised. One year I had to sell a piece of real estate. I'm like, never again. Yeah.

Yeah.

So it. Just keep the money in and then what happens? I get a return and I say, okay, great, Just apply that to next year's.

Yeah.

So that's what that is.

I didn't even know that it's interest.

Yes. I know. It's these random little, like, okay, where's this money coming from? It's from the irs, but I have no record of, like, payroll. Okay.

Anytime I would see stuff like that before, though, I'd always be like, should I even deposit this? Yeah, no, it's like, ask for this.

It's like 100 bucks or. Yeah. And then sometimes. Am I going to get in trouble if I post? Yeah. My goodness.

I know it's pretty bad, but. Yeah. No. So I would say, like, those kind of planning questions. Also making sure that you're not to, like, herp on the payroll thing, but also just making sure that you've filed all of your payroll reporting. Like, you really. Not just from, like, a legal standpoint, but also just, like, taking care of your employees. It's so crucial that those things are up to date. Because if somebody were to get injured on the job, like, at least here in Washington, you know, they. If you've been paying into L and I on their behalf, and they've. I think they pay into it also, then they have coverage that will support them and take care of them in that period where they can't work. So I Think that staying on top of the payroll compliance is a really big thing, too. Not again, not just to stay out of trouble, but it's a way that you take care of your employees. I actually used to manage a medical practice, and I had a guy from Columbia who worked for me, and he got a job at a local restaurant here in town, and they wanted to pay him under the table. And he was like, letting them do that for a while. And I was like, you can't do that. That's disrespectful to you. You should be getting the paperwork filed for you. He had. I mean, obviously had like, a proper ID number and everything. And I was like, if something were to happen to you, you're not covered there. You know, I mean, so it's like. It kind of goes beyond the compliance side, and it's about.

Yeah.

Full.

Yeah.

Fully carry.

Yeah. I remember the first time I actually ever really dug into what L and I does and covers, etc. And for those of you L and I in Washington, it just.

Workers, labor and industries.

Yeah. Yeah. And so it happened. One of our team members was. It was a dump truck site. They dumped. He put his finger up inside and it took it off right down to the skin. Broke the finger. It was. He was out for about six months, but L and I stepped in, did the surgeries, all his physical therapy, and then covered his wages, I think like 80% or something like that for that six months. But it was like $85,000, if I remember correctly. Because you. You can see the itemized cost.

Yeah.

And I'm like, either A. I would have paid that out of just guilt. Right. Because he did. While working for me.

Right.

And I didn't have the safety protocol at the time because we were not. We were flying by the seat of our. Or I would have been like, sorry, I don't have the money.

Yeah.

And he would have been in a really bad spot, him and his little family. And so I think it's very important to your point, like, actually doing it just for the sake of your team. Not just, oh, like, I'm skating by, they're saving some taxes. Like, I think people sometimes just try to make sense of it.

I know when it's expensive, it's expensive, but it's also like, if that guy didn't have health insurance, what would have even happened? I mean, you know what I mean? Like, he might not have ever been able to even go back to work.

And I think just sleeping peacefully at night is the most important thing.

100%.

And so whether it be payroll taxes or workers comp. Or higher general liability insurance, for crying out loud. Or making sure your taxes are done correctly. Like, well, I know I'm not really claiming all my income. It's like, just sleep better at night. And I think that was a big bridge I crossed after my first audit was like. And this is like, even with Brad, when I go to him, I was like, I just want everything done right. I don't even want to think it. I don't want, I don't even want to push the boundaries.

Right.

Because like that discretionary effort that is wasted on the energy of, of risk and concern could be deployed towards the business.

Yeah.

And just like growth and like advertising or like finding another employee instead of just worried about someone finding out one day and then it sinks businesses all the time.

Oh, 100%. Yeah.

No one writes a book about the fact that like lni shows up and like, oh, hey, you close down your doors or you give us $300,000.

Yeah. And that happens, that happens with the federal taxes. Yeah. And I, you know, I do think that there is something to say for the fact that depending on your age, I guess, because hopefully we have Social Security, but a lot of this is also hopefully putting some money towards our future when we can't work as well. That's a, that's a really big part of it too. Like. And it's a little bit of a pyramid scheme, but. But. And you should all still have a 401k. But. Oh, that's another thing. Actually, that's another good question for your accountants. Sorry to bip around here, but the hsa. I, I just met with someone the other day who was like, I can't keep buying trucks to depreciate, to not pay tax.

Right. Yeah.

He was like, he had to sell some of his trucks and. Cause he didn't have anywhere to park them. He had too many, too many years of the same advice. But looking into like the simple IRAs and 401ks and HSAs and like smart ways to tuck your money away that reduce tax liability is huge. A lot of people don't know this, but after you reach a certain threshold in your hsa, you can actually start investing the funds and you can actually manage depending on where you.

Health savings account.

Yeah, yeah, Health savings account. And you can actually manage the investments. And those investments also grow tax free. Yeah.

And what's. Is it 3500 still the limit per year that you can put into an hsa?

I think that, that's the, that's the limit. That's, that's. What's the right word? That's non taxable.

Got it.

And then you can fund beyond that.

Got it. But then it's only.

Yeah, I thought that's the right number. I know I need to read up.

On the big beautiful and even like 401k IRA, etc. Like just between like maxing out your 401k and do an IRA that could potentially shelter 30 plus thousand dollars from taxes.

Right, right.

Just that in itself when it comes to 401k. Like one of those things I think of is sometimes, especially for early level technicians, they might already be covered by state health insurance and they might never do their 401k, but it's relatively cheap to offer it. Employees, for example, 401k, it's usually like 9, 10, 12 bucks a month to get them enrolled in a program.

Right.

And ideally you set them up on a career path where they at least get in the habit of putting aside 2 or 3% going into an account and actually set them up for something down the road or they have a nest egg of five or ten grand if something crazy was to happen. And so I think it is a relatively cheap benefit to be able to offer two technicians. And even if you don't contribute or match or anything at the beginning, it's something to get started and it doesn't.

Cost a whole bunch and it total increases employee retention. Any program like that that you can offer that helps supports your employees even in those kind of ways where maybe they don't see the benefit of it right away. I think like it's so expensive to train someone, it's such a time suck and a money suck to train someone. So the longer we can keep our good people and you know, part of that's by offering programs like that that are beneficial to them, I think. And, and you can have some tax savings with it as well if you're putting some away for yourself. I think it's a win, win, win.

Yeah, absolutely. Fantastic. Well, thanks for coming in and answering some of the questions. How can people get ahold of you? Book a call, et cetera.

Yeah. Homeservicecpa.com and then there's a little link at the top, on the top, right. Where you can just schedule. Right. On my calendar. If for some reason my days or times are not available for you, please email me. I am meeting with some on the Saturday. Like I don't usually open the weekends, but I am pretty free on the weekends. So I'll make it work. I know everyone out there is really busy and. Yeah, I've met. I just want to say I've met so many amazing, really hardworking people in the past couple months. And it's been really. I think that a lot of this stuff can feel really overwhelming. And I know I've spoken to quite a few people who are already overwhelmed for one reason or another, but you kind of just have to take the step to start getting it straightened out now and then. Like you said, you'll sleep better at night.

Yeah. And I think even if it comes to we want to sell the business one day, you need your numbers in line. Yeah. If you want to get a mortgage one day.

Yeah.

No one's going to take your PNL and trust anything if they immediately, as a banker underwriting, like, yeah, this doll does not make sense. And this is not true.

They know what they're seeing.

Yeah. And so I think it's. It's also just like thinking a few years down the road, even for people that, like I was 21, 22, you're growing the business, just focused on that. And not having this can potentially put you back a few years.

Yeah.

When you do get married, you want to get a house or you do need to have an investment and have a good credit score. Like, these are little things that put in place now are good habits to set you up in the future.

Absolutely.

So. All right. Book call Chelsea. She'll be happy to talk to you. And I look forward to having you at home. Service cpa.

Oh, can I give one quick shout out to Matt from Galaxy Landscaping.

Okay.

Who I met with today, and I told him this was going to be my first podcast and he totally hyped me up. Thanks, Matt. Let's go.

Good stuff.