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Adorama, the photographer's source for gear. Shop Adorama.com today. Welcome to Radical Personal Finance, the show dedicated to providing you with the knowledge, skills, insight and encouragement you need to live a rich and meaningful life now while building a plan for financial freedom in 10 years or less. One of the core aspects of good financial planning is to lower expenses.

And for most of us, taxes comprise perhaps the largest percentage of our budget. Now, of course, there are many forms of taxes, but they, when taken in aggregate, add up to a tremendous amount of money. So today I've invited Craig Cody, who's a tax planner on the show. Craig, welcome to Radical Personal Finance.

Thank you very much for having me. So I'm excited to have you on and I want to talk with you. I love to talk with accountants and tax planners about specific ideas and strategies for how my listeners can reduce their taxes. Now, obviously, this is a difficult subject to capture in something like an interview, given that there are so many types of taxes and there's so many plans and so many strategies depending on a specific situation.

But what I want to focus on is running through some ideas and some strategy of how my listeners can begin to approach the subject. But in order to engage their interest, you've contributed to a book called Secrets of a Tax-Free Life, surprising write-off strategies most business owners miss, which is quite the title.

And your chapter contribution is called this, How to Deduct Your Kids' Soccer Cleats. Hint, give them a seat at the boardroom table. So here's what I want to know. How do I deduct my kids' soccer cleats? Okay. Let's just say you're a self-employed individual. We'll say you're a real estate agent.

And you want to prospect for homes in your area that are actually maybe new listings or old listings. So you hire your kid to go out there every Saturday morning for about three hours on his bicycle and come back to you for, with a list of addresses of homes that are for sale that you could do some further research on.

Okay. And you decide, okay, I'm going to pay you $125 a day and it has to be reasonable compensation. All right. And then your business now deducts that money and pays your child. Okay. Let's just say your child is going to private school or your child is on a hockey team and it's expensive.

He's on a travel team. So you pay your child, you get a tax deduction for the payments to your child. Your child, who's probably going to make less than $4,000 a year is then going to have no taxable income at the end of the year. And he's going to use that money to pay for whether it's his private school, his cleats, his hockey lessons, his piano lessons.

So basically you're taking something that's a non-deductible expense and you're making it a deductible expense because you're paying somebody to perform a service for your business. Are there any limitations on the types of things that I could hire my kids to do for me? Well, it has to be reasonable.

Okay. So, you know, if your, your child's not a brain surgeon, you know, you can't pay him, you know, a million dollars a year to go around and check on properties. So it has to be reasonable compensation. And you could do that kind of research online to see what reasonable compensation is.

And typically with a child, we like to make it to be, you know, less than $6,000 a year because of, you know, the reporting requirements, et cetera. But $6,000 a year to somebody that's in, let's just say the 25% tax bracket's $1,500. If you have three kids, that's $4,500 a year in savings.

Explain more of what you mean as far as what's the difference. Why $4,000 a year? Why $6,000 a year? Why are you looking out for these numbers? Because at a certain point, your child has to file a tax return. Okay. And you don't want the tax that he winds up paying to be equal to the tax that you have to pay.

And basically we want to make it so your child has to pay no tax. So that's why we use that $4,000 to $6,000 number. Have you hired your kids? Do you have kids and have you hired them in your business? Yes. I've hired my kids. I, my kids have gone to a Catholic school and that's how they paid for their Catholic school.

They worked for me. The money went into their bank account and the school deducted that money every month and paid the tuition and they did a job and we kept good records. How old are your kids now? My youngest is 21. Did they ever feel frustrated with you or angry that you forced them to work to do this thing?

Tell me about their relationship dynamics. No, it was, you know, my kids live a good life. Okay. And they're good kids and they understood what was going on. And, um, you know, it's, it, it is still is a very good work ethic and I'm lucky I have a 21 year old that's a senior in college as an accountant.

I have a 24 year old that's a law school student and I have a 25 year old that's a New York City police officer. So how, what type of records did you keep for your kids? Well, every, every Saturday when they work, they'd have to sign in in the morning.

Okay. And then they'd have to sign in at the end of the day. We kept those records and we kept them in a file. We pay them. We, you have to make sure you pay them and it went into their bank account. Okay. And then every month the school drafted the bank account and pay the tuition.

Did you do any strategies such as, I know one that parents are often think about is doing something like making up your own parental match of money and then contributing it into a Roth IRA. Did you do any of that kind of thing with your kids? No, we didn't do that.

But that's another thing that people will do is they'll, they'll pay the child so that child can put money into an IRA. So by the time they're 18, you know, they could have substantial money in there. You know, another thing we do is with, we have a lot of real estate agents and, uh, realtors tend to have children and children tend to need braces.

So for a real estate agent, we'll set up what's called a one Oh five, a section one Oh five plan, which is basically a medical expense reimbursement plan. So typically when we have our medical expenses on our personal tax return, we deduct them on schedule a, if they don't exceed 10% of our adjusted gross income, we really don't get a deduction for it.

So instead our realtors will set up a section one Oh five plan, which is fairly simple to set up. Okay. Um, and then they will be able to deduct the cost of certain medical expenses, most of their medical expenses and get a dollar for dollar deduction. So I want to come back to that in a second, but let me just real quick explain the Roth IRA thing for kids, for my listeners who may not be familiar with it.

Um, in order to make contributions to any type of a retirement account, like a traditional IRA or a Roth IRA, the contributor needs to have earned income. So in this case, a child needs to have earned income. So if you've arranged a situation where your child can work each Saturday and earn as, uh, as Craig said, $4,000 per year, perhaps that $4,000 per year counts as earned income.

And they can contribute all of that up to either the yearly maximum or up to the maximum of their earned income into a retirement account. So what many parents can choose to do is they will help arrange employment for their child so that they have $4,000 of earned income.

And then they'll also make a bonus gift to their child of something like $4,000 and then $4,000 will go into the Roth IRA, uh, which is the child's earned income. And then they'll go ahead and contribute or gift to the child $4,000, which they can then use for living expenses.

So it's a way of the parents, uh, giving money to the child, but giving it in such a way that it can be put into a Roth IRA, which can be, uh, which can grow tax free, uh, forever. And one of the major benefits of that is because the child is earning a very low amount of income and they're paying taxes on that $4,000 of income, they're paying taxes at either a zero or a 10% rate depending on, on the bracket.

And it's a very, very low, uh, effective tax rate. So it's a very useful way for essentially a parent to, to help a child fund a Roth IRA from an early year. And if you start that or you can help them get employment at a very early age, you get a tremendous growth of compounding over time.

Is that, that about accurate, Craig? Did I miss anything important? Did not miss anything. What's the earliest age that you've seen a client be able to justify hiring their children? Okay. Well, I believe the tax court says seven. Uh, we typically would not use anyone less than 11 years old and it really depends on what they're doing, but I'm more comfortable with somebody 11 years old and older.

Okay. Back to the section 105 plan. So, uh, how would I, if I, you know, I have a business, radical personal finance, uh, and I could hire my kids in that, how would I go about setting up such a thing? If I know my kids are coming up with braces and I want to set up such a plan, how mechanically do I research that and do it?

It's a, it's a relatively easy, um, setup. It's a simple, you know, couple of page document. What you basically do is you, you, you hire, let's just say your spouse. Okay. And the section 105 plan says that, you know, for her reasonable compensation, she is basically, um, able to pay her certain medical expenses.

Okay. Up to whatever would be reasonable compensation for the job she's performing. And then those medical expenses are for her family. So that would cover her children and her spouse. So she's not actually getting a W2. Her compensation is in the form of a section 105 plan. And it could, so could I make all of her compensation under that section 105 plan?

Well, I mean, it has to be reasonable compensation. So if it is reasonable compensation, yes, all of the compensation could be under that section 105 plan. And the benefit of that, a couple of other things, for example, um, if my, if my wife and I are both working in the same business, then if we go on something like business travel, if we're both employees of the same company, uh, we may be able to deduct the full cost of those expenses instead of me simply deducting the cost of my expenses.

Uh, and that would be much easier to do if we were both employees of the company. Uh, it's much easier to deduct other personal expenses, whether that's cell phone costs and similar things. Am I accurate in those statements? Well, uh, you know, if it's a business expense, we can deduct it.

If it's personal, we can't deduct it. So you want to make sure that it is actual business. So, you know, um, you know, the wording is important. Correct. Uh, that's in my studying of this subject. If you want to answer any tax question, uh, I have a lot of beefs with the IRS.

I have a lot of beefs with the tax code, but, uh, when I study it, generally I find that there's a pretty consistent theme throughout it that if this is a business expense and it's legitimate business expense is deductible and you can do, uh, you can deduct it. If it's not, it's not.

And that's a doctrine that continues through in every area. Uh, I'd love to hear some other stories. I mean, you've been doing tax planning for, uh, I think you said six, 16 years, 16 years. We've been focusing on it for probably on a business owner for about six or seven years.

Um, there's the, there's, there's another thing we, we call it the Augusta rule. Okay. Augusta, Georgia, where they have the, uh, what is it? The US open the PGA tour, uh, every year. Um, and I guess there's not a lot of hotels for people to stay at. So the government basically wanted people to rent out their homes.

Okay. So basically if you rent your home to your business for less than 14 days a year or 14 or less per year, your business gets a deduction and the homeowner does not have to pick up the income, uh, on the tax return. So basically if you have a fence at your home for your staff, okay, you could rent your home to your business.

Your business pays you personally and your business gets a deduction and you don't pick up the income. So how, let me think how I do that. You're thinking of things like a company party or like a planning meeting or a board or corporate corporate meeting, something like that. Any type of a board meeting, staff meeting, you know, it has to be, you have to see what they would charge if you went to a restaurant and said, you know what, I'd like to rent your room, but I'm not going to buy food for you.

How much are you going to charge me? Okay. So once again, you have to make sure that your numbers are correct. Right. And this would be another example where, uh, in my study and I'll just tell the idea and then you correct me if you're wrong, but uh, you have different, um, meals and expenses.

So generally meals and expense meals and entertainment are deductible at 50% of the cost, but there are a section of 100% deductible meals and entertainment expenses. And one example of that would be something like a company party, a five year anniversary party or a sales party or something for the launch of a new product.

So there's no reason if the event is for a legitimate business purpose and you would want to have good documentation, good pictures of it showing that yes, this is a five year celebration of the company, not a Joshua's birthday party. You'd want to have that. This is a launch of a new product, et cetera, appropriate business purpose.

But if there's an appropriate business purpose for an event, there's no reason why you can't hold a large business function in your home. Uh, there's no reason why you can't have your business pay you a rental expense for that. And there's no reason why you can't pay for all of those party expenses, the food, the catering, the entertainment, et cetera, out of the business checkbook and have that be a completely deductible expense.

Is that accurate, Craig? Well, it's pretty accurate. You just have to make sure because the travel and entertainment rules are very onerous. But in this case, it has to be for employees, staff and the board of directors. If it's for clients, it doesn't meet the rule. Okay. And it's not a hundred percent deductible.

So for any clients, even if it is for a business purpose? Correct. Okay. So that's good. So I was wrong in my impression of that. Uh, what about, so I guess then a better opportunity would be something like you said, a company staff meeting or board meeting, or how about something like a company Christmas party?

Would that be a workable, a workable solution? Correct. For the staff. Correct. Interesting. Where do you go as a lay person to try to figure this stuff out and learn about it? I guess you could go to the tax code. I go to seminars throughout the country a number of times of year.

They're typically hosted by, you know, uh, CPAs that do, um, training for other CPAs, uh, where a lay person would go. I, you know, I would say, I guess they could search the internet and hope they get it right. Um, you know, it's, you know, it's kind of like, you know what, you could go to the store and buy a bone saw, but would you want to amputate your own leg?

Not so much. So tell me some other stories. What are some other, the interesting ones that you look at that, that, that people love to hear, uh, hear about when it comes to the world of tax deductions? Well, they, they love the, you know, the medical expense reimbursement plan.

They love the self rental. Okay. Um, let's see. Um, you know, real estate, um, if people that own real estate, there's something called cost segregation, which basically is, it's almost like an accelerated depreciation. So, um, I have a client that has five rental properties. Okay. And he's depreciating these properties over 27 and a half years.

And now he's going to sell one of them. Okay. And he's going to have a big gain. And we talked to him about doing a, what's called a cost segregation study. And it basically, you accelerate some of that depreciation. So instead of writing everything off over 27 and a half years, you get to write some things over five years, seven years, 10 years, and 15 years.

So in the early years, you pick up more depreciation. In the later years, you pick up less depreciation. Okay. Um, you do a cost segregation study, you fill out a certain form of 3115 for the IRS and you pick up all that missed depreciation over the last five or seven years in one year and you get to offset some of the costs of the gain.

So my understanding of this cost segregation strategy, the reason this works is because instead of having the entire value of the home counted as real estate, which would be depreciated over that 27 and a half year period, you're recognizing that there's a certain value of plant and equipment or appliances, things like that.

And some of those are able to be used more quickly. And so thus, if you go ahead and figure out that of this million dollars of value in these properties, $50,000 of value is, is a plant and equipment that can be depreciated more quickly. That's why you get that depreciation.

Is that accurate? Yes, it is. Okay. So this is definitely useful because I've spoken with a number of real estate investors here in my local area. And especially, I mean, Craig, my impression is this as much, if you have larger commercial property, this is probably very much something you should pursue if you haven't.

I don't have the impression that it's so applicable if just somebody has one or two rentals. Am I wrong in that impression? Yes, you are. Okay. Tell me, tell me more. How does it apply in a individual residential property? Well, depending on how much you paid for that property, how much you allocate towards the land and how much you allocate towards the building, it can make a, it can make a difference of $20,000 a year in depreciation.

That's well worth investigating. So you do this thing, you do this tax planning thing for a living. And I'd love for you just to talk about, let's pretend I or one of my listeners walks into your office. Now, obviously you can't teach somebody everything that you do in the course of a short podcast interview, but where do you start?

What do you actually, when you're looking at a client situation, where do you start and what do you look for to try to figure out where they can save money in tax? Well, first thing we look at, you know, okay, did they pay any tax? Okay. Because if they didn't pay any tax, there's probably nothing we can help them with.

So what do you mean by any tax? Any income tax or any self-employment tax. Okay. Then we look at the entity structure. Okay. A lot of times people set up their business and they basically go to the attorney and they say, I want to start a business. And he says, okay, set up an LLC or set up a corporation, whatever he's typically more familiar with.

Okay. There's no planning that goes into that. All right. So, um, we look at that and we, a lot of times just changing the structure of your entity can save you a lot of money. So explain why, uh, the different entities and the different advantages and disadvantages for each type of taxation.

So we'll, we'll compare an LLC and an S corporation. An LLC, all of your net income is taxed as income and it's also taxed for self-employment tax. Okay. So that means basically on the first $120,000 of profit, you're paying 15% self-employment tax plus regular income tax. Whereas if you were set up as a corporation in this case as S corporation and you took a reasonable salary, you might be able to cut your self-employment tax in half.

Can you not do that? Can you not do that just simply by electing to be taxed as an S corporation while maintaining your LLC? Yes. But, um, that's, I would say that's rare that I come across that. Why? Why is it rare? I mean, yes, I imagine it's probably rare, but is it, is there any technical advantage from the taxation perspective to my choosing to maintain an S corporation instead of an LLC taxed as an S corporation?

No, no. And like I said, we rarely see somebody come into us that is an LLC and they're taxed as an S as a corporation or an S corporation. Um, a lot of times that's one of the things that we'll recommend if they are an LLC, we'll recommend that, okay, you don't need to change your entity.

Okay. Probably from a legal perspective, it's better to be an LLC. Okay. So now we could, you know, take advantage of the tax code and elect to be taxed as an S corporation. Do most people with LLCs come in, are they being taxed as a C corporation or they're being taxed as a sole proprietorship?

Most LLCs we see are either taxed as a sole proprietorship or they're taxed as a partnership. Okay. I don't believe I've ever had somebody come into my office that was an LLC being taxed as a corporation or an S corporation. Interesting. Sorry. I meant to say partnership is what I meant.

Okay. So what else, what else do you look for? Um, so, so we'll start there. We'll start to look at their compensation to see if their compensation is reasonable. Um, a lot of times we'll see a regular C corporation where the owner is taking all his compensation out in wages.

Uh, that could be a trigger for the IRS and we'll figure out ways to deal with that. Um, how do you define reasonable? I know this is a big question that people say, you need to have reasonable compensation. How do you figure out what is defined as reasonable? Well, you, you can hire a company to do a compensation study for you.

Okay. And, uh, for, you know, less than a thousand dollars, they'll do a compensation study and they'll tell you what reasonable compensation should be based on what you're doing. Okay. So you want to separate out, separate out what your job functions are, how much of it is management, how much of it is employee type work.

Um, you can go online and you can go to the IRS, you know, website, download schedule C information for that type of business. See how many schedule C's there are and what the average compensation is. There's a lot of different things you can do, but you know, depending on what the dollar amount is, you know, you may want to go and get a real compensation study.

What else, what other ideas do you have and how else would you approach a planning situation? You know, here's another one, you know, home office, you know, we always hear, Oh, home office, it's a red flag. It's not an IRS red flag. You just have to make sure the, the space inside of your office, okay.

Um, you accurately accurately documented, it's only used for business purposes. And then you get to write off a portion of your, you know, your real estate taxes, your mortgage interests, your maintenance, your utilities. And then some people will say to me, well, why should I write off my real estate taxes and my home interest on my home office?

I get to get them on schedule a, okay. Well, part of the reason is depending on how much money you are making, if you're subject to alternative minimum tax in the Northeast, at least, you know, our real estate taxes are generally high, so they get added back. Okay. And you lose the deduction basically for that.

Whereas if you're taking it as part of your home office deduction, you're not going to lose that deduction. Um, another thing you're allowed to do is if you have a home offices, you're allowed to have a, um, a deductible home athletic facility for the employees that work in your home office.

Okay. So if you have a home office and maybe you have a gym in your basement or pool, okay, you can make a lot of those expenses deductible if they're for your employees. Yes. Interesting. So in, when I've looked into this in the past, when I looked into the athletic facilities and the, and the opportunities there, I found that one had a lot of hurdles and I came to the, to the understanding myself that that one really wasn't worth pursuing.

So I'm interested in your, uh, and I, it wasn't worth pursuing cause it had so many hurdles. Uh, before we get to like a home office, is it possible to do something where you're doing things like gym memberships or athletic club memberships? Is that, is there any way to deduct those expenses?

No, there are not. So the home office, excuse me, the home gym, are there rules on its accessibility and availability to other members of the family or is it, is it able to be available to them and it's just gotta be, uh, in the home for the employees? Correct.

Correct. So if it's for the employees and their families. Interesting. I could see that being effective for somebody who wants to set up something like a, I don't know, a pool or, or an exercise pool or, or something like that for physical therapy. Uh, as when you get into bigger expenses, it probably would be well worth looking into.

Yeah. I mean, listen, they all add up. Yeah. That's the challenge with tax plan. People want one, one big thing and it's always, uh, it seems to be many, many little things. I'd love for you to talk a little bit about your perspective and how you advise people when it comes to vehicles, uh, and the various deductions for vehicles and then the various um, ways that somebody can own and operate vehicles.

Share with us a little bit about your advice on, on, um, business, business vehicle deductions. Well, typically, I mean, if I was to generalize, I would say that you're going to get a bigger deduction from a vehicle lease than you are going to be get when you purchase a vehicle.

Okay. And let's not talk about big trucks where they get to write off the whole truck in the year they purchase it. But let's just talk about your standard car. Okay. Um, that you use maybe 80% of the time for business. So if you have a lease and you write off 80% of your lease, okay.

Um, let's just say you're driving a BMW for $500 a month. So you get to write off, you know, 40% of the, I mean, 80% which is $400 a month of that lease. Now the IRS uses an inclusion table. Okay. Basically an amount that you have to add back to income.

And that number is such a tiny number. It's almost ridiculous to even have it. All right. Um, but most clients will get a bigger bang on a vehicle lease assuming they're not doing, you know, 30,000 miles a year and stuff like that. Why? And this is because the reason I ask is this is a, you hear all kinds of pieces of advice on this.

So why would, why would I get a bigger, um, bang for my buck, better deduction leasing a car versus buying? Because when you purchase a vehicle, just like any other asset, you have to depreciate it. Okay. And typically vehicles, unless they're over like 6,000 pounds, you can't take a section 179 deduction, which means you write it off in the year that you purchase it.

Okay. So you have to depreciate it over time. And I believe the first year's depreciation on a vehicle, if you're using it, a hundred percent is about $2,600. So if you're using it 80%, that's, you know, let's just say it's $2,000. All right. Versus the lease that's costing you $500 a month and you're using it 80%, you're getting about a 4,000, $5,000 deduction for it.

So you're doubling your deduction. So that that's assuming however, that I'm using an actual cost, uh, expense reporting methodology rather than a mileage expense reporting methodology. And that's assuming that, uh, the actual, that the actual cost is less than, than the mileage. Is that right? Exactly. Exactly. Right. Cause when I've, I mean, I'll be, I've always driven cheap cars in my businesses and always been able to use cars to create, uh, I guess, I don't know what the right term for it is.

I call it a phantom tax, a phantom tax loss, meaning that the vehicle probably costs me because the car is so cheap. Um, I can't remember when I've calculated, but let's just say it costs me 30 or 40 cents a mile to run. And the actual expense allowance that the IRS permits is what is it?

57 cents, something like that now. Uh, so I wind up for every mile I drive, I wind up picking up, let's just say a 30 to 40 cent per mile, um, tax loss. Uh, and that's been, that's always been something that's beneficial to me, but it assumes however, that I'm driving an older, uh, inexpensive to operate vehicle.

Yeah, most definitely. I mean, you really have to look at, you have to look at, you know, all the different, you know, instances and figure out what works best for you. But typically what we get is we get the client that's saying, listen, I'm, I'm going to buy a new car.

Should I buy it or should I lease it? Okay. They're not interested in driving the 1980 Chevy citation. You know, they're ready to buy a new car. They don't want to deal with the headaches of, you know, operating an older vehicle. So it really comes down to preference. And then once you know what your preference is, then we figure out what's the best way to go.

You see a lot of people talk about the 6,000 pound heavy vehicle thing. Uh, and do you see the people buying big SUVs, et cetera. Can I buy a Range Rover and get extra tax benefits because I chose to buy a Range Rover instead of a BMW sedan? Yes, you, you, you basically, you can, you know, assuming it meets the qualifications for section one 79, which a Range Rover would.

Okay. But it's kind of like, are you buying it because you want the Range Rover or are you buying it for the tax deduction? Okay. Um, if you're buying it for the tax deduction, you're kind of going down the wrong path. You still have to spend the money. Generally, I find that when people want to spend lots of money, they say I'm doing it because I get a tax deduction when in reality they spend more money on it than they save on taxes.

I usually find that tax deductions are a good excuse for people buying fancy stuff for them and paying more money. Exactly. Because let's just say you're in, you're in the, you know, 30% tax bracket, 25% bracket. You're only getting, you know, 25 cents, 30 cents on a dollar. Okay.

So you still have to pay for that vehicle. Right, right. And you get the same problem that you're going to get the biggest tax deduction if you buy the newest vehicle. But the newest vehicle is where you have the highest appreciation and so you have the biggest expense. So sometimes you can come out better if you, uh, if you choose to buy something different, something older.

As you said, you've got to decide what you're trying to do and what you're trying to accomplish. Right. I would, I would never, you know, advise somebody to go out and buy a vehicle or lease a vehicle so they could get a tax deduction. It's typically, listen, this is what I'm looking to do.

We need to buy a new vehicle for the business. Okay. Which way should we go? Okay. And we do the analysis and that's what we come up with. It's never the other way around. Do you have any other ideas for the kinds of things that people can deduct? Uh, that, you know, the, again, the sexy stuff, the toys and things like that.

Oh, let's see. You know, what about stuff like boats and airplanes? Uh, well, you know, we don't get too many people coming to us. There are rules with airplanes. Okay. Um, I believe that you get accelerated depreciation. I've honestly never had somebody come to me, you know, they were going to buy an airplane.

Um, but there are special rules for airplanes, um, that we do a little bit of research for. I mean, you know, your 401k plan, your, you know, depending on where you are operating, there are, um, different types of defined benefit plans, how much free cashflow you have. You know, there's a lot of things that go into it, uh, other than just say, I want a deduction.

Okay. Can you afford the deduction? You know, can you put all this money away for your retirement? You know, can I use this money to do something else? Um, but typically the sexy ones are your self rental, your medical expense reimbursement plan, you know, your typical 401k, um, the vehicles.

All right. Um, making sure they're taking, if they're using a home office, they are taking advantage of all the home office deductions they can. Uh, those go into it and the right entity, the right entity classification. You know, we, we had one client that we saved, uh, the wrong entity classification was costing them $450,000 a year.

Okay. So, um, it was a pretty simple fix. Pretty simple. You, you earned your fee on that one. Craig, let me ask you a question. And, and my listeners know that this one's a, uh, an area of special interest for me. You live in Massachusetts, is that right? No, New York, New York.

You live in New York. Okay. Uh, have you ever thought about moving and do you just recommend that your clients move, um, to save on state income taxes? It's a discussion we have with the client, depending on, you know, what, you know, it depends on their business, where their business is located, or are they a consultant, you know, how, how are they working?

Can they work any way they want? You know, I mean, luckily today they're, it's very easy to work remotely, but you know, if you're a brick and mortar, you can't really do that. Um, so it's a discussion we have depending on what type of business the person is in.

Yes. But you could move from New York to Texas or Florida that has no state income tax and, you know, save a lot of money. Or even in New Hampshire if you want to stay in the Northeast. And, uh, I think New Hampshire taxes dividends, uh, and investment income, but they don't tax earned income.

Uh, is that, I think that's right. Um, have you ever considered moving yourself? No, no. Why not? I'm, I'm, I'm New York, uh, grown and raised and I'm not going anywhere. I love them 15 miles, 20 miles to Midtown Manhattan. You know, um, I love it here. You know, um, I'm not going anywhere.

They got you. They got their hooks into you. That's right. And they'll soak you for all the money. That's, that's, you know, it's the cost of doing business. Well, it is, it is always interesting to me because when I run the calculations and you go through and you figure out, okay, how much can I save on my tax return by setting up a home gym and a home office?

And you know, these are for many people, these are hundreds or perhaps up to a couple thousand dollars of actual tax savings where on the mean time you have a state income tax bill of five, 10, 15, 20 grand, uh, even in a just comfortable middle income, uh, six figure salary people, uh, let alone, uh, the Uber wealthy, uh, and how big those bills wind up being.

Craig, tell us about your business. Tell us about your tax practice and let us know any, uh, action step that you'd like my audience to take to follow up with you after this interview, if they'd like to work with you. Great. Well, they could reach us, um, at www.craigcodyandcompany.com and if they go to that website, uh, forward slash, uh, R's in radical P's and personal F's in finance, they could, um, request a free copy of our book.

All right. Um, our office number is 516-869-4051. We do a free analysis of your tax returns and our typical savings is close to $20,000 a year. You work with people all across the country or just New York? We, I have clients from Oregon to South Florida to obviously New York.

Um, we have a team of eight, four CPAs here. Um, we specialize in tax planning. That's where we start and we go from there to your typical tax and accounting work. Um, we have a little niche in, um, international clients that come to New York to do business. They're doing business in Europe or Coke.

They want to do business in the US with Coke. And then we have, um, uh, the outsourced CFO business, whereas you're, you're a little bit bigger company and maybe you have a CFO and he's doing low level to high level work and you know, maybe it's not working out.

He's not satisfied because he doesn't want to do low level work and they'll hire us and we'll have a bookkeeper and a CPA assigned to you. And then I'll do the top down, you know, heavy lifting and we have a nice, um, diverse client group with that. Great. I'll put those links in the blog post for today's show.

Craig, thanks for coming on. Thank you very much for having me and, um, I will look forward to listening to the episode. Thank you for listening to this episode of Radical Personal Finance. If you're interested in building financial freedom for yourself and your family, please subscribe to the podcast with our free mobile app so you don't miss a single episode.

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