Joe Troyer 0:45
Everybody is Joe Troyer, and welcome to another episode of show me the nuggets. Today, we have on Brady slack, who's the owner of high county finance and I met, I met Brady at a mastermind, we had a really good conversation. I'm like, Man, this is this is somebody I need to have on the pod to share with you guys. So he's been doing full service tax and accounting. And, you know, it's not about how much money you make, right? You've all heard the saying that's about how much money you keep. So really excited to have Brady on today, man, welcome to the show.
Brady Slack 1:19
No, thank you for having me on. I'm excited to be here. And hopefully, we can drop some nuggets. Today, I think we might be able to, I mean, there's a lot of Yammer, but I think we might be able to.
Joe Troyer 1:31
And I'm excited, we talked about just like two or three things before the show that got me excited. And I know it's things that people don't really know about, that'll have a huge impact on on, you know how much they get to keep. And really, I want to focus in today on how to reduce your taxable income and maximize your profits. And before like, we really dive deep, I gave a little intro for you. But can you help bring us up to speed on kind of how you got into, you know, into the business that you're in today and how you got started.
Brady Slack 2:04
I got tripped and pushed if you really want to know the honest truth. I was in school, I was a double major studying accounting and personal financial planning. At the time I was dating my now wife, and her dad owns a business, um, he's on a business for a really long time a very successful business here in Utah, believe it or not delivering bread, you know, of all things to school districts. And when I was going to school, I was working in real estate at the time doing some transaction coordinating for a title company. And he's like, Hey, my accountant is looking for some people to help him out for tax season. And it just so happened, the guy was gonna pay me more than I was currently making. And I thought I should probably get a little bit of experience here since I am an accounting major. And I fell in love with it more so taxes and debit and credit accounting, because they tied so much into what I wanted to do. And that was I wanted to be able to leverage high net worth clients and help make them more money. But what I found is there's such a lag in the accounting industry, especially when it comes to tax planning that yes, you can do so like there's so many things you can do to help clients make money. But what they really miss out on is how to keep most of that money like you, like you said earlier. So I worked for that firm for a number of years. And then about three years ago, I left that firm, and I started high country finance. And then we've grown we've got a staff of just over 25 employees. You know, we've we've 3x Our revenue every year that we've been in business so far, I think we'll continue to do that this year. And I love what I do. Again, I just I got chipped and pushed into it, but I wouldn't have traded that pretty thing. Man, I love that we
Joe Troyer 3:46
need lots more people like you, I think it's every entrepreneurs duty, right to to really be responsible for their accounting and for their taxes and to take ownership of it. I know way too many entrepreneurs and myself included in the past, I've been very passive about it. And then it's like, you know, it's it's, it's the day taxes are due, and you're getting a message from your account and saying, you know, hey, go send this check. You know, it's three times more than you thought it was going to be or, you know, three times more than, you know, above and beyond what you've already paid in in terms of estimated taxes. You know, so, man, I absolutely love that. And that's why we have you here.
Brady Slack 4:30
Yeah, thank you. No, I think, to kind of highlight on that. I I just think taxes are so ambiguous. There's so there's so much unknown. And I just think human nature is that when you don't understand it, or when it seems difficult, I'm gonna put it on the back shelf because I don't really want to have to worry about it right now. I don't want to have to go through that hard thing. And so I think my biggest goal is just to be able to provide that value for our clients help explain it so that they understand it because if they understand that they're more willing to do that, and so that's Yeah, like I said, I kind of got to push into it. But there are only two certainties in life, death and taxes. And I didn't necessarily want to be in a mortuary the rest of my life. So I'm happy to be doing what I
Joe Troyer 5:10
do. That's awesome man. And looking at the notes that our producer prepared, he said that you also do a bunch in the like, you actually advise other tax professionals or account professionals, real estate investing programs, investment platform syndications. You know, and talk about a lot about tax strategies. So definitely seems like you got the entrepreneurial bug as well.
Brady Slack 5:36
Yeah, I, to be honest with you, I'm not your typical accountant. Like I said, I, I don't love the debit and credit side of accounting. I've got a fantastic partner, his name is Mike, who's, who's our CFO. And he does outsourced CFO work for a lot of our clients as well. And from a debit and credit standpoint, he's phenomenal. But I don't, I don't necessarily love that, you know, outside of the accounting firm. And this is what I also believe thing makes me unique is, I am an investor, I am an entrepreneur, you know, I invest into real estate, we own a SASS company that we're building and outside of the accounting firm, there are other things that I'm doing because I understand the importance of the importance of business and the importance of building a net worth and the importance of investing and reinvesting money, not only from a tax standpoint, but just from a generational wealth, opportunity. I want my boys to be able to experience hard work, and I want them to understand what their dad's doing is important. And, you know, I want to be able to be that that mentor that advisor or that example to them, and maybe my brothers but but yeah, I you know, I've worked with a lot of different real estate syndications and coaching platforms. I love real estate, I think it's great. I've spoken on a couple of different stages. I've helped advisor I've helped coach different accounting groups on different things. So yeah, I definitely think that that entrepreneurial bug is also something that sets me apart from other accountants, because a lot of the advice that people receive are, it's for people who've never done it. You know, it's from people who don't own a business, they don't know the struggles of owning a business, they don't know the struggles of trying to run a payroll or make a payroll, and they can't. So I think that insight provides just a little bit above and beyond what the normal accountant is able to provide, in my opinion.
Joe Troyer 7:21
Yeah, man, I know now why, you know, we hit it off, so well. So um, so digging in. Before we talk about specific tax strategies and reducing your taxable income, I think it would be good to just talk about kind of your, your, your process or your framework, high level, you know, the simplified, reduced produce. And then we can start getting into some particular strategies on actually how to reduce your taxable income and maximize your profits.
Brady Slack 7:53
Yeah, so I, I formulated a little process that we do with all of our clients, whether it's a client whose business is making $200,000 a year or their businesses making $20 million a year. You know, and with our team, what we do when we onboard that client, or while we're working with that client is we go through the process of simplify, reduce, and then produce. And really what our goal is in this process to is to be able to allow our clients to understand the processes, the way that their money moves, how they're making their money, how they're spending their money, and allow them to to look a little bit deeper into the nuts and bolts of that framework, so that they can highlight a pain point, they can highlight areas where maybe their financial processes are not up to date, or they're not current, or they're not benefiting their company, because everyone comes to us and they say, Hey, I have a goal to to x my business, or I have a goal to make X amount more money this year. And I think that's fantastic. Everyone should have those goals. However, they're not going to reach those goals, unless they first simplify those processes, you know, reduce the amount of over expenditure and reduce the amount of stress, reduce the unnecessary, you know, gaslighting that's going on in their business to then be able to hit those production steps. And we can very easily calculate through financial projection and analysis or cash flow or budgeting analysis to determine how they can get to those revenue goals or those profitability growth. But But until we kind of weed through the simplification and the reduction of whatever's going on in their business, we're never going to hit the production phase. Yeah.
Joe Troyer 9:34
One of the businesses I'm working with right now, we're doing a roll up inside of the HVAC industry. And like that's one of the big things that they talk about. So they help them go from like being mostly a service based business to doing a lot of installs like doing one install a day and that's like every H back technician or companies like wet dream like but they don't understand like the cash flow forecasting and planning that has to happen to make that transition, right, and none of them have the money stuck away and have that plan set up to actually be able to do that. So when they start transitioning and trying to do that they all fail miserably. So yeah, I mean, that's, that's so paramount that like you do, do the, you know, analysis to see where you're at right now. And then what it's going to take to actually get there. Because most people just skip that step. Right. Like, they just, you know, do you have the advertising, you know, dollars set aside to actually do that? Right. You know, do you have the team? Did you get another truck? Did you employ that other person that you need in order to do that? Those are all huge line items that there has to be accounting for.
Brady Slack 10:43
Kind of like put it it's kind of like putting the house before the horse before the cart or the roof before the foundation. And don't get me wrong, the horse or the roof, they're very important pieces. But you know, if you don't have that foundation set, I think that's what a lot of people, that's what a lot of people put into.
Joe Troyer 11:01
Awesome. Yeah, that's good advice. Good stuff. All right. So let's get into the meat man. Let's talk about reducing taxable income, right. And that's why everybody's here. That's why everybody clicked on this thumbnail, or on this episode, like, I want to save some money in taxes. So I think like, let's not jump into like the very, very basic things, right, like, Let's spend our time talking about maybe three to four out of the box kind of ideas that probably most people haven't heard of so far.
Brady Slack 11:29
So I'm going to preface this conversation if you don't mind, Joe, with just a quick, like, a quick blurb, right? Because I get the question all the time, from business owners, even business owners who've been in business 1520 25 years, what can I write off? You know, and, and we'll talk about a couple that I that I see a lot of business owners that miss out on. But I think just in general, a lot of business owners could write off a lot more expenses, if they just had the right framework or the right mindset, then the IRS, the IRS defines a business deduction, as an expense that has a business purpose. It has, it is necessary for your business and an income producing activity. It is reasonable or ordinary and expenditure. And I have to have some sort of documentation for that expense. As long as whatever I'm spending money on meets those four criteria, I should be using it as a business deduction. And I think there are a lot of people, this is maybe the first one, I think there are a lot of people who I call them transition into trying to transition expenses, or transitory expenses, meaning everyone has their expenses, their cars, their cell phones, you know, their computers, their home office, where if we just look at it in the light of it, does this expense does have a business purpose? Is it making me money or helping me make money? Do I have some sort of receipt or documentation of proof of that expense? Then write it off? You know, and I think a lot of people miss out on that. And some accountants are like, don't write off your home office, because a home office is a red flag for the IRS. Oh, crap, it maybe was 15 years ago, but it's not anymore, you know. But as far as, as far as a couple deductions. And I always try and look for deductions where money doesn't necessarily leave my financial sphere, because we get to the end of the year all the time. And business owners are like, hey, what do I need to spend money on this? So I don't have to pay as much in taxes? And I think the question is a good question. But the framework is bad. Because if you spend $1, you're really only going to be saving 30 cents in taxes. So the real question is, would that better? What's that dollar be better utilized in another function? So that I mean, I might have to pay the 30 cents in taxes, but at least I have 6070 cents to then go reinvest or take a distribution on an investment. Something else, you know, so the three or four expenses that I think a lot of business owners are starting to key on, thanks to, you know, whatever financial point they're looking at on Twitter, or Instagram or Tiktok, you know, but one is in Augusta rule expense. You know, you and I talked a little bit about we before we started this, but but the Augusta rule expense, state that an individual can rent out their home for up to 14 days during the year, and they don't have to include that dollar amount as income on their tax return. And they can exclude that from taxable income. How does this benefit a business owner? Well, a business owner can rent out their home to their business 14 days during the year for training, seminars, team meetings, retreats, education, whatever you're doing as long as again documented at a market rate and be able to deduct it from the business, but then just put the money into their own bank account so that money never really leaves my financial sphere. Okay. That's it. That's a common one that I don't see a lot of people take advantage of. There's some rules, there's some regulation, so talk to your advisor. But that's, that's a common one. Another one that I don't see a lot of people take advantage of is paying their kids, you know, you can pay your kids and have them do work for you in your business. And then your kid can pay for their own dance or basketball or wrestling or, you know, music class or whatever it is, they pay or you know, a date night or whatever, you know, paying your kids run it through a payroll, unless it's coming from an LLC, in which case, you can pay them without having to run that through the payroll, um, you can pay them up to the single standard deduction, and they don't have to pay federal or state income tax on that on that payment. Right. Again, Now, granted, I have two boys, I have a two and a half year old and I have a seven month old, I would love for my two year old to be able to work in the business. But that's probably not very realistic. And I've seen cases where, you know, an examiner from the IRS has been the business owner because they're paying their two year old. So there has to be some reasonable compensation for a reasonable amount of work being done. They have to understand how to perform a job and do it themselves. But as long as they can do that, am I right? Again, money that doesn't necessarily leave our financial sphere, we still you as a parent on the flip side can still have control over what they use that money for, but but at least it doesn't leave our financial sphere. Those are those are two ones. Another one that I actually see pretty frequently and it's also a blanket statement. bonus depreciation bonus depreciation is is a line item deduction that I don't see a lot of accountants utilize, like I personally believe they should. The government has allowed us to depreciate, you know, 100% and 2020 to 80% this year, and asset that you purchase new for your business. Like we talked about $1 You know $1 gapped or is another dollar earn, right? So why would you not want to try and utilize that asset in a way that's going to help you keep more money? I mean, we could go on and on, but those are kind of three main ones that I don't see a ton of business owners take advantage
Joe Troyer 17:25
of. Thanks for tuning in and show me the nuggets. If you've been enjoying the podcast and find our content healthy. Please visit our apple podcast page, hit the subscribe button and leave us a review. Joe and the whole team have been working hard to bring more value to the show. More feedback will go a long way in helping us make the show better and reach a wider audience.
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