BEFORE You Hire a CPA or Tax Strategist...WATCH THIS

welcome back to taxes made simple i'm your host carlton dennis and in today's video we're going to go over when it makes sense for you to hire a tax strategist as opposed to a cpa most taxpayers have cpas filing their tax returns but there will become a time and place where you need tax strategies you're going to want to have a place or a person that you can go to that is educating you around tax laws that are going to help you reduce your overall tax bill whereas you have someone that also files your tax returns in this day and age it's about being strategic with our finances and one of the ways in which we can be strategic is making sure that our accountants are helping us save money and not just filing a tax return in this video i will answer for you guys today when it will make sense for you to consider hiring a tax strategist versus keeping the everyday cpa or if you may need both let's dive in [Music] now when it comes to understanding tax strategist versus cpa i don't want you guys to get confused a tax strategist could be a cpa they could be an enrolled agent which is what i am or they could be your everyday tax preparer but a tax strategist is someone who's took it upon themselves to primarily focus on tax law and their goal is to help you reduce your taxable income in integrity with the laws one of the things that i'm noticing about a lot of cpas is that a lot of cpas do a really good job of just filing your tax return well you know when you go into the office during january through april you're providing your tax account and your w2s and your 1099s and your profit and loss statement this is what we call tax compliance season and when you're in tax compliance season the goal of your cpa is truly to file your tax return to keep you the taxpayer in compliance but when you ask your cpa or your tax preparer these additional questions around how to write off your kids or how to turn that vacation into a business write-off they may be reluctant to sit down with you and give you that time of day to actually show you and walk you through how to take those advanced write-offs and one of the things you have to understand is it may not be your cpa's fault that he does not want to spend time with you showing you how to take those write-offs it just may not be a service that he offers and he may not be ready to offer you tax strategy help me guys tax strategy is not performed by everyday tax accountants it is truly a specialized service when you get to a place where you need tax strategy you have to understand what does that actually look like am i working with someone every single day 365 days out of the year or am i meeting with someone a couple of times out of the year let's talk about it when you're going into your tax provider's office one of the things that they're always going to do is they're going to ask you for your information because at the end of the day in order for us to be a successful tax preparer we need to make sure that we ask for the right information you will know that certified public accountants cpas are really good at accounting for everything that goes inside of your tax return but after the tax return has been filed sometimes and this is what i've been told you may not be able to contact that cpa for additional questions or they may not be available right after tax season to help you figure out how to be best at avoiding taxes for the upcoming tax season wait a minute this is where having a tax strategist could come in handy you see a tax strategist is there 365 days out of the year as you're making financial decisions most business owners are making financial decisions all of the time sometimes these decisions revolve around whether or not you should hire an employee whether or not you should think about establishing your business in the state that you currently live in whether or not you should purchase an investment property in your own personal name versus a different person's name there's tons of reasons why you may need to speak with a tax strategist so what we're gonna do is we're gonna go over five situations where tax strategists could come in handy in helping you reduce your tax bill as opposed to just consulting with the cpa or going at it alone let's jump in all right guys so we're diving into the ipad i love being on here so i can write and show you guys things number one you guys probably guessed it i'm a real estate tax strategist if you are considering getting ready to buy an investment in property then this would be a situation where we need to sit down with the tax strategist this is very important because most real estate investors have the question that comes up around whether or not they should purchase the investment property in their personal name right leveraging their own personal credit and their own debt to income ratio or if they should purchase their rental property in the name of an llc and what they need to do in order to make sure that that llc is ready or maybe they want to purchase real estate inside of their ira right you can purchase real estate inside of an individual retirement account but one of the things that you want to be careful for is ubit tax ubit stands for unrelated business income tax and this is a very nasty tax that is associated when you are doing business or investing inside of your ira so we need to be mindful of that not to mention how about investing outside of your or investing inside of your solo 401k all right let's go for the second reason why it may make sense to have a tax strategist on your team let's say that you are ready to hire employees and you're not sure how you should go about in hiring those employees maybe they're employees that you want to be contractors or maybe they're employees that need to be w2 and you're not sure how to go about placing them on w-2 payroll how often you should be paying them this is a situation where a tax strategist could come in hand because at the end of the day you need to understand the differences between when you decide to pay an employee as a 1099 versus when you decide to pay an employee as a w-2 you see this w-2 lifestyle it comes with fica it comes with suda it comes with fuda all of these payroll taxes that you may not be aware of but being a 1099 contractor just comes with you paying the contractor and issuing them a 1099 right but in order for us to understand when it makes sense to 1099 someone versus when it makes sense to w-2 someone is so important there have been so many situations where i've had clients come to me and say hey carlton i think i'm getting audited i think what what's happening is workers compensation is attacking me these reasons come up because maybe their contractors that they had as contractors actually should have been employees maybe you the employer who's hiring a contractor maybe you're dictating how they do their work or maybe you're providing the supplies and equipment for when they show up to do work for you and maybe you're controlling their hours and so instead of them being contractors they're actually employees so guys this is when we need to be extremely mindful instead of just doing things let's speak with a tax strategist or cpa who can tell us hey it might make sense for you to process payroll through a payroll company such as like adp or carla dennison associates and now you're in a place where you're not going to get in trouble from the edd for not issuing payroll to your employees all right let's go over number three let's just say you're deciding to sell stock cryptocurrency any type of money that you have in the market so you're you're liquidating anytime we liquidate stocks bonds anytime we look at stocks bonds crypto or maybe you're one of my clients who needed to pull money out of their 401k to survive take care of some of the bills or just to support yourself with what was going on with the cares act you need to know what your tax burden is going to be part of the reason why it's so important to understand your tax burden when you're selling stocks bonds crypto 401k is because you may have losses that you can use to offset your taxable income that's correct if i've been trading in the market and i decided that you know things were tough last year i got on robin hood and i was trying to make some money because maybe my job wasn't there for me and they weren't supporting me and paying me overtime anymore because of all the uncertainty and so you started doing some trading in your brokerage account and you were harvesting some losses because you were just learning well guys these losses can go to offset your taxable income right not to mention if you sold stock you're going to have capital gains tax which needs to be calculated we can't just look online and see oh capital gain says it's at 20 that just means i need to multiply 20 percent or whatever i just made on capital gains and that's going to be my capital gains it does not work like that right there are various different rates that we have to take into consideration there's a zero percent a fifteen percent a twenty percent we need to take into consideration what rate you're going to fall into capital gains wise not to mention ours is the capital gains going to be short-term gains where you sold in less than 365 days or are they going to be long-term gains where you held on to some of the stock for longer than 365 days and you decided to sell it guys these are the things that we have to take into consideration ahead of time before going into our tax provider's office to figure out what are we going to owe versus what are we going to see back in the refund in order to be in a place where we are doing best practices as taxpayers we have to speak up which means that we have to partner with people we feel comfortable with have the conversation around what we were doing inside of our brokerage accounts be transparent around the situation that we're in and why we may have needed the money so that way someone on the back end can help us so we're not end up overpaying the government guys the government was not there when you were sitting inside on your couch trying to figure out how to make money they came through with the little stimulus checks but that's about it they weren't there when you were sacrificing and working those overtime hours and doing the things that you need to do provide for your family so what we can do as stewards of our finances is make sure that we take the correct steps to partner with the correct professionals when we're selling stocks and we know we're going to have a taxable event number four let's say that you have low business expenses now i'm going to be very careful when i explain this i want to make sure i'm talking to the right business owners if you're in a place where you just started your business of course you're going to have low business expenses you haven't made a lot of money yet which means you're not spending a lot of money but you could be in a business where you make a lot of income and you just don't have a lot of expenses this happens all the time for my clients that are day traders that are doing amazon automation businesses where there's all these little contractors running around delivering orders for you and everything is already covered right you might be in a place like this where you have these hands off businesses that don't really require much other than your laptop and your cell phone so if you're in a place where you're making high income but you have low expenses then you need a tax strategist because at the end of the day someone should be able to come to you and say okay i understand that this is the nature of your business so unless i change something inside of your business you're going to continue to write these checks and write these checks to uncle sam every single year unless something changes we will continue to overpay uncle sam now how do we get out of a place where we have high income and low expenses does this mean we just need to spend more money this is the direct thing i want you to understand about tax strategy tax strategy does not revolve around you just spending more money to avoid paying uncle sam right anyone can do that it does not take rocket science to know that if i made a hundred thousand dollars worth of income and i have a hundred thousand dollars worth of expenses i have no taxes but then also i have no money business owners don't want to be in that position where they constantly have to spend money to avoid paying taxes so what do we do we partner with strategic tax strategists someone on the other end of the line needs to be able to say hey i have strategies for high-income earners who also don't have a lot of expenses inside of their business it's important for your tax professional to understand your business if you're someone who isn't traveling all the time and you're not in a business where you're going to be leaving the house very often so you can't take a car expense or a traveling expense you need strategies to be able to avoid paying uncle sam and sometimes these strategies need to be more complex than just putting money into a retirement account this is where having a tax professional who really understands your goals comes in handy because they can partner with you on figuring out how to keep you in a place of making the income that you want to make without having to write such big checks to uncle sam every single year business owners should be rewarded for making more money not having to pay more income taxes for making more money and if you partner and understand the laws with a correct professional you'll see where all the advantages lie in the tax code let's jump into number five now god forbid god forbid but things come up and you could be going through a divorce which means that you're going to have a filing status change and if you're going through a filing status change which means that maybe your spouse just passed away or you're going through a divorce or you decided to get married ooh right then things are changing now we have clients all the time that say hey my wife is a real estate agent i'm working for tesla or working for apple what does this all mean now should we combine our finances does it make sense for us to file married filing separate this type of calculation should not be done in the tax appointment this calculation should be done ahead of time what's the reason why well for the reason i just said if one of you is a business owner and the other person is a w-2 taxpayer maybe the business owner has an ability to be able to take additional write-offs ahead of time that would make sense for the couple to file jointly or separately based on the particular situation maybe you have student loans and one spouse does not have student loans so i'm disqualifying one spouse from being able to take the student loan interest deduction when you guys file jointly but we also have to take into consideration the filing status is for married filing joint the tax brackets are different when you're filing married versus filing single the government limits the amount of tax credits you get to take so if you have children that you have on the tax return and you file married filings separate now we don't get to take all the tax credits that we would have take if we filed married filing joint do you see now how important it is that we take the time to speak with the professional so that way we're never putting ourselves in a compromising position the last thing i wanted you to do is load up a shotgun and point it at your foot and say hey carlton uh here's my foot today and i'm a taxpayer who just shot myself in the foot because i didn't know what i was doing that's what we don't want to do and as a part of following this channel you're going to become a savvier taxpayer and someone who understands when it makes sense to leverage the law my name is carlton dennison if you enjoyed this video today i'd love for you to do something for me like comment subscribe so i know that you're here for me and i'd love to see you on the next video cheers [Music] you

Channel: Karlton Dennis

Views: 59,315

Keywords: cpa, tax, taxes, understanding your deductions, taxes made simple, tax strategy, tax expert, karlton dennis, taxes made simple karlton dennis, deductions in taxes, tax deductions, tax planning, easy tax tips, tax tips, taxes made easy, taxes explained simply, small business, income tax return, BEFORE You Hire a CPA or Tax Strategist...WATCH THIS, tax strategist

Id: LJxYMQClwl4

Length: 15min 17sec (917 seconds)

Published: Fri Aug 27 2021