Learn How to Reduce Your Taxable Income and Maximize Your Profits [Part – 2] with Brady Slack

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In this episode, we bring you part 2 of Joe’s interview with Tax Adviser, Brady Slack, wherein he shares valuable tax strategies, so that business owners can keep more of their earnings to spend, invest, and use however they see fit.

About Brady Slack

Brady Slack is the owner of High County Finance, LLC, a full service tax and accounting firm. Brady’s purpose is to be a resource that helps everyone experience wealth, all while paying the fewest taxes possible.

Brady consults with hundreds of investors and entrepreneurs, helping them in implementing key strategies and processes to increase revenue, reduce expenses, and pay fewer taxes. Brady also advises other accounting professionals, real estate investing programs, investment platforms, syndications, and businesses across the United States on accounting and tax strategies, saving his clients millions of dollars each year.

Show Notes

  • When should you start paying kids to do tasks (1:30)
  • How to get your kids involved in your business (2:58)
  • The definition of bonus depreciation (4:16)
  • Things you can right as a business expense (6:02)
  • What a transition expense is (9:38)
  • Brady’s book recommendation (12:59)

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Joe 0:45

So I love I love the never leaves the financial sphere specification that right because I feel like so many times, you know, when you talk to an accountant or any type of financial adviser, everything is like, yeah, you're spending $1 right to save 30. And like, you're they're trying to save money today. And really, like you're losing 70 cents on every dollar you spend. Right. And so, I love that criteria. I love the Augusta rule we were talking about before the show started. I love that one. I think that makes total sense. I love the pain the kids one and you gave a great example like your kids are really young. Any thoughts? I guess, when the kids are a little older, right? I have I have two kids between five and 10. Right? Like, what are realistic things that I could have them to do? Or you've seen clients do in their business? To actually pay a kid I understand. You can't pay a newborn or a two year old but I guess varier we are where have you seen that actually work and kind of maybe At what ages or age ranges? I think some contacts there would be really helpful.

Brady Slack 1:57
Yeah. As far as like when to start paying kids, like I mentioned before, that they have to be given a task or a role based on what you're hiring them to do. And as long as they can complete that task for that role, then you should be able to pay them now. Could you argue that a four year old can can do a task or roll it depending on the child maybe, you know, but the ages when I really started to see this become a benefit might be like five or six and less now. And now we'll start to get into like what are some of the tasks you can do? Unless there's a specific opportunity in your business where you could a younger child or social media or marketing or pictures or you know, in some aspect like that, not necessarily a role that they have to complete but a role that you're using them for in your business. And at that point, yeah, there's there, I would argue that there would be potential for that. As far as tasks when they maybe get a little bit older. I've had clients attend meetings with them, you know, and that's something that you obviously my boys are younger, but when my boys are older, they'll be involved in meetings that we have with our attorneys, they'll be involved in meetings that we have with my partners there'll be involved with in meeting, you know, that we have maybe me and my wife discussing money because she's a partner in my business. So, you know, they can attend business meetings, they can claim company vehicles, they can claim company offices, they can take out trash, they can, like I said before market or be in social media posts or help advertise for you. They can shred papers, they can help mail mailers, you know, put papers in envelopes and help mail mailers out. They can go to the store and buy, you know, the the drinks that you have in your fridge behind you like different things like that, again, there's a business task that needs to be done and they can help do that. Yep, makes perfect sense.

Joe Troyer 3:58
Of course. So then the third tip that you gave was bonus depreciation. Can you give some examples of items for bonus depreciation just for anybody that maybe isn't familiar with with the regulations around bonus depreciation?

Brady Slack 4:16
Yeah, bonus depreciation is a I mean, there's a wide variety of different things you can use on an accelerated bonus depreciation schedule to kind of break it down a little bit further. Depreciation is the cost recovery of an asset. So I spend $50,000 on a car, the IRS is going to allow me to recover that cost over its useful life and a useful life is just how long the IRS has deemed that that that asset is going to last right vehicles typically five years. But what the IRS has stated is that any any tangible asset that has a useful life of less than 20 years and be a seller added in a bonus depreciation manner, which means I can just accelerate or capture more of that depreciation expense sooner rather than waiting the 515, seven years that that asset might last, right? So as far as like, what asset people should be looking out for, like I said, again, it's got to be tangible. So there has to be a physical asset that I purchased for my business. And typically any asset that you purchase that that in value, any tangible asset you purchase in value of more than $2,500 shall be put on a depreciation schedule. Okay? But, but vehicles is a common one, machinery or equipment might be another one. Now, this is kind of hard, because I know a lot of the people are that you work with or coach or are in kind of a digital online space. So again, there might not be like a lot of tangible assets that you're using in your business. But again, what transition expenses do you have that you could potentially classify as, as a tangible asset? Again, your vehicles, maybe an office that you purchase, or remodel, leasehold improvements to occur and or existing Office that you might own those. Those are some of the things that that we would talk about, or maybe the digital creator or the Yeah,

Joe Troyer 6:20
yeah, it makes perfect sense. Yeah, actually, I built this office here that I'm recording this in this last year, I didn't think at all about, you know, bonus depreciation or some type of advanced depreciation schedule. So thanks for that. That's fair, you got pays for my cast episode very well. worth our time. Cool. Yeah, I think those ideas are really great. What about like, I heard somebody the other day say that they run, they, they run like a YouTube show, or a podcast, video podcast, and it was a girl. And she said that basically, like, you know, she was a news anchor, they'd be like, putting makeup on her doing her hair, doing her nails. And that would be part of the production and part of the show. So she's like, now, I, as you know, in my own company, I'm running the show. So now, like, the day before I run a podcast, or I do the show, I get all those things. And I use that as a business expense. What do you think about that as a strategy?

Brady Slack 7:31
Yeah, again, that's kind of like a transition expense that I've already talked about, you know, in regards to her, she probably typically already ready wears makeup, you know, she already probably put that on on a day to day basis. But her as a content creator making money off of the content that she creates, would be able to justify and say that, hey, this, like this particular expense, it's substantial in my business, it helps me make more money. And can I keep that there? This is always a funny kind of ruling from the IRS that I go back to these kinds of instances. And it was actually highlighted the other day by another tax content creator on Instagram, that I, you know, that I follow, just to kind of see what what they're doing, you know, and emulate some of the things that are successful on there. And but he, he's kind he posted recently a lot about like content creators and only fans, creators and how they're independent contractors, they're business owners. And the post that he made the other day was along the lines of if you get a boob job, at EA, and you can directly correlate an increased amount of revenue to the side increase of your breath, you can write that off as a business deduction like this is that this is probably one of the most outlandish examples that I can think of. But the IRS has actually ruled in tax court that if you can correlate that size increase to an increased amount of revenue, subscription followers, whatever, you can write it off, you know, and that's an actual tax court ruling that has happened, I can't remember the actual ruling off the top of my head, but I know that that happened several years ago. So again, it the IRS, like this is what I think a lot of people miss out on, sorry to go over, you can tell me off whenever Joe but the IRS wants people to make money, like they really do. Because when you make money, they believe that they're gonna be able to tack that on the back end, you know, however, if we're doing things legally that we can do, even though we might be making more money to help save us more on taxes, it's not gonna really matter. So, you know, the, the opportunities are endless. They always say,

Joe Troyer 9:38
I love that and I didn't catch it earlier until you just repeated it, but the classifying that as kind of a transition expense, you know, I think you've talked about the cars in that as well and things like that, but I didn't catch that that language until you just said it again. And I think that that's that's really a That's really interesting. And I think that that's a great way to really think about, what are you doing every day? What are those transitions? And what are opportunities? or areas that you could potentially, you know, use to reduce your overall expenses?

Brady Slack 10:18
Ya know, for sure. Yeah, that's Yeah, that's exactly right. I'm glad you kind of caught on to that. So,

Joe Troyer 10:26
man, this has been fantastic. I know that you've already saved me a good amount of money on my on my next tax bill, I really appreciate it. And you really got my mind going definitely with the transition expenses. I think that anybody here you know, can use the bonus depreciation, the the paying of the kids, the Augusta rule are three easy things to do. But there's a lot more basics, you know, home office's deductions, and there's a lot of things under transition expenses, you know, your internet, you know, your power, your home office, your cell phone, like all of those things. Those are very basic. There's a lot of things like that, that you guys can do. But hopefully, here are three out of the box ideas that you guys can use as well. And, look, man, if somebody wants to reach out and chat with you, guys. Brady, what's the best way to get in touch with you?

Brady Slack 11:17
Yeah, what I mean, the easiest way might be just just to go to Instagram. Follow me the Brady slack. I've got my link, I've got my website attachment there. And you can go online and you can you can listen to my podcasts, you can schedule a consultation, you can look at some different articles, or you can sign up for my email list that I put out every Tuesday at tax to the email list. That's a good way. Otherwise, like I said, you can always reach out to our office or you can send us an email. My email is Brady at high consumer finance.com.

Joe Troyer 11:48
Awesome. Yeah, definitely give Brady a follow great content on on the socials. Definitely some good stuff and stuff you guys can implement in your business right away. So I guess in ending this out and rounding it out, Brady, one last question. So I feel like every podcast they say like what's, what are your favorite three books, and I do something a little different? I think it's all in how you ask the question. Recently, since starting this podcast, I gave myself permission to pick up a book and actually not finish it. Because there were so many times that I picked up a book and I'd struggle with it. And I feel guilty. Like I had to read the whole damn thing. And I've really stopped that right and said, It's okay, if I don't like it. I don't like it. There's plenty of good book recommendations out there. So when I have cool smart people that I like on the podcast, I always ask them, I think a key question and that's like, what's the what's the one book for you that you think has made the biggest difference? The biggest impact on the way that you do business, the way that you see business, the way that you interact with people, whatever that is what comes to mind?

Brady Slack 12:57
You sent me this question. I've been thinking about it. But I I think I'm going to stick with the theme of our conversation today with taxes. You know, and if I if I were to, if I were to talk about one book that kind of changed my mentality around taxes, it's written by, I would consider him a friend and a mentor, his name Tom wheelwright, he's an advisor you know he's he's a rich dad advisor, he advises Robert Kiyosaki, we're in accounting network together I've spoken on stage with him before but his his book tax free wealth, I think it and then his new book The when the you know, when when wealth strategy to seven strategies that the government wants you to the seven investments the government wants you to make, that's his most recent bestseller those those two books hand in hand, I think, for any entrepreneur, who would like to understand more about taxes are two that are a must read, they highlight very simply what the government wants to try and achieve by issuing taxes and tax law and what the purpose of tax law is. And it helped me understand my role as an advisor in helping business owners be able to continue, as Tom says, make more money and pay less in taxes. So that those are two books that I would I sorry, I broke your rule. I said two, but they're by the same guy. But anyways, yeah, Tom's are really Tom's a good friend and mentor of mine. And those are that those are the two books I would recommend.

Joe Troyer 14:25
That's awesome. I've read the first one, but I didn't know he had a second one out. So thank you for that. That gives me a great book to read that I know I'll enjoy. And so this podcast again, you know, worked out. That's a great recommendation. Definitely recommend this first book and the second book, I'm sure it's great. Just like at first, I think that the book does a really good job setting up like why it's your duty to really go after this stuff. And that like at the end of the day, like paying as little on taxes that's legal is not a bad thing like this is is being set up for a reason, right? Like these laws and regulations get passed because the government has benefits in you taking advantage of them, right? They're trying to push policies, they're trying to make something better. And so they're gonna reward you for taking part in this strategy. And so I think that that book for me, helped fundamentally change kind of my thoughts on taxes as well. And I think, you know, that would be a great win for anybody listening.

Brady Slack 15:28
No, I'm glad to again. Yeah. Great book recommendations.

Joe Troyer 15:32
Awesome, man. Well, thank you so much for spending the time with us, Brady. It's been fantastic. I hope you guys enjoyed this episode. We'll see you in the next one. Thanks for tuning in and show me the nuggets. If you've been enjoying the podcast and find our content helpful. Please visit our apple podcast page, hit the subscribe button. Leave us a review. Joe and the whole team have been working hard to bring more value to the show. We're feedback will go a long way in helping us make store better and reach a wider audience.

Transcribed by https://otter.ai

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