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In the Hidden Money podcast, you'll learn how you can legally use the tax code to your financial advantage. There’s wealth inside the tax code. Taxes aren’t the enemy.
Most people hate taxes (and pay more than they should). But when you view taxes only as an evil expense, you miss out on legal ways to grow your wealth. Unlock the secrets to saving tax and building wealth with the Hidden Money Podcast! 🎧💰 Hosted by Mike Pine and Kevin Schneider.
Kevin Schneider: This one gave a three.
And so I knew my very first
question out of the gate was,
"Hey, tell me about the three.
What did we do wrong?
What could we do to get better?"
She goes, "Well, y'all helped me with
this, tax strategy, and I only got
a twelve thousand dollar refund, and
I just didn't know if it reallyâ¦
Did it work?
Did it not?"
She just saw a twelve thousand
dollar refund, and I had to explain.
I was like, "Well, you made six
hundred thousand dollars on a W-2.
You had withholding against that.
But your husband also sold about four to
five hundred thousand dollars of stock.
That pushed you to like one point
one million dollars of income.
There was no estimated payments.
There was no withholdings.
Fidelity did not withhold on your stock.
So you made six hundred,
five hundred thousand dollars
that you did not pay tax on.
Mike Pine: She thought all the strategy
gave her was twelve thousand dollars.
The tax strategy actually saved her a
hundred and fifty plus thousand dollars.
Kevin Schneider: Welcome to
Mike Pine: this week's episode of
the Hidden Money Podcast, where my
partner Kevin Schneider and I, Mike
Pine, two CPAs that consider ourselves
Kevin Schneider: tax strategists
Mike Pine: tax strategists versus CPAs,
um, are excited to talk to you again.
Last week on August 4th, we talked about
what most or what a lot of CPAs are
missing in the whole tax strategy, tax
planning world, adding value to your life.
This one's focused more on you.
What are most taxpayers
missing when it comes to tax
strategy, et cetera, et cetera?
Um, I'm looking forward
to talking about this.
It's a little bit touchy 'cause
we, we, we gotta be nice.
We don't want to be like jamming
you like we were jamming CPAs.
Truth with love.
Truth with love, yeah.
Tough love.
Tough love is what mom used to
call it when she spanked me.
This is my tough love.
I
Kevin Schneider: love you, I promise.
This hurts me more than it hurts you.
Mike Pine: you.
I did not believe her, but now
that I gotta spank my own kids-
Yeah ⦠oh, I believe her.
It does
Kevin Schneider: does hurt.
Disciplining ain't fun.
But we're not here to discipline.
We are here to educate, and
it's not the end of the world.
If, if you've fallen into any
of these traps or missteps,
it's not the end of the world.
It's just education to get what, get,
get your train back on the tracks
and going in the right direction
and making change 'cause a lot
of taxpayers are stuck with easy.
It- easyâ¦
There is a degree of the human brain
that I think they just want the
easiest route, even if it costs them
something, and even if that cost is time,
energy, uh, education, whatever it is.
But at the same time,
think a- outweigh it.
Like, if you can learn a little bit
about your tax life today and you
have 30 years of working ahead of you,
you can apply things you learn today
for 30 years and, and repeat them.
Mike Pine: the time value of that, buddy?
Yeah.
Even if it's-
Kevin Schneider: That's the
time value of that right there.
Yeah, even if it's just some-
something small that you implement
today to change your taxes.
Let's say you change your taxes by two
grand a year, not a big deal in the
big scheme of things, but two grand
times 30 years, now you're talking
Mike Pine: 60.
With the, the power of compounding,
now you're talking, like, 180.
Kevin Schneider: Yeah.
So thâ¦
And that's just a small example,
but that's what we're trying
to here to do is saying, "Hey,
it's not the end of the world."
There might be some possibilities as you
listen to us throughout this episode if
you're like, "Oh, I've never done that,"
there are some things that maybe you can
go back and amend an actual tax return
and implement it, but it's kind of hard
to implement things after the fact.
Yeah.
So that's why we're always hounding
proactive, proactive, proactive.
Mike Pine: we're gonna hound that a
lot- Yeah ⦠in today's episode and
just give you some examples as well.
But let's be honest, it's, it's not just
because it's gonna take people time or
focus or energy to learn more about tax
so that they can take an active role.
It's 'cause it's tax, and for
some darn reason, Kevin, and
you and I can't understand this.
I, I know your wife and my
wife try to explain it to us
regularly, but it makes no sense.
I don't know why most of
you don't see tax as sexy.
Tax is awesome.
It's exciting.
All right, I get it.
Y'all don't see it that way.
We're just gonna be very
different there, and that's fine.
But let me try to get you to at
least reconsider this paradigm.
If we could tell you, "Hey, you're working
hard trying to build financial freedom,
trying to build a nest egg," and if I
could tell you that you could potentially
grow that nest egg twice as fast, twice
as big, three times as big, and all you
have to do is spend some effort on taking
proactive control of your tax world,
your tax life, would you be open to it?
Because that is what I'm telling
you, and, and Kevin, back me up here.
It is that big of a difference.
Kevin Schneider: Yeah.
And you don't have to know the
Internal Revenue Code inside and out.
You- that's our job.
That'sâ¦
Our job is to understand what the IRS
is and the Treasury have set forth
as laws and rules, and apply those
to your facts and circumstances, but
through the lens of your benefit.
So it's not, "Here's what the IRS
says, here's what you have to do."
It's, "Here's whatâ¦
Here's how we interpret the
law, and here's how I would
apply it to your situation."
So you do need to rely on a
strategist, and so I think that's
the first thing that I think a
lot of taxpayers miss, is talking.
Letting us knowâ¦
I had this happen literally
probably twice last week.
You had it happen on a deal that we
just talked about last episode, being
brought in after the fact of something.
I had a client, she's been
a client for seven, eight
Mike Pine: years.
It's a constant
Kevin Schneider: It's a house from hell.
And it's, it, it's, it's even with
our own clients, but it's, it'sâ¦
That's why we're trying to change
this with this podcast, is saying,
you, you create a new LLC, which
on the big picture, it'sâ¦
Yeah, that's, that's probably
what I would have done.
But the way her, she makes her money, this
LLC would have been taxed inefficiently
because she already has an S corp.
So I was like, "Hey, let's get
that LLC inside this S corp."
So now as you earn money, we're already
tax advantaged and we, we could do
a QSUB election and all this stuff.
But I was like
Mike Pine: why I know you're a good
guy, because if she'd have kept that
LLC separate, made the S election- It
would have been more revenue ⦠we'd
have more revenue 'cause we'd be filing
extra tax return each and every year,
and they wouldn't have known any better.
It wouldn't have been in her benefit.
You make me proud.
It would- You make me proud, partner.
Yeah.
Good
Kevin Schneider: So I wanted this LLC
directly in the already existing S corp,
and we just file one S corp return for
both LLCs, and it requires a little
bit of paper pushing, but not much.
But I needed the stock of this
new LLC owned by the S corp.
Well, at the end of it,
she's already formed the LLC.
She already did all the attorney
work, and I was like, "Well, we
just need to change the ownership."
She's like, "Ah, toâ¦
Let's, let's just see how this
business does, and then if I can
get this up and running to the,
the degree I'm thinking I can, then
we'll do the change after the fact."
I'm like, "Oh, it's just so much
easier if we just do it from
Mike Pine: the onset."
It's
gonna be a lot more work, a
lot more effort, a lot more
money, a lot more expense to do
Kevin Schneider: money- Yeah ⦠a
lot more expense to do it that way.
And she justâ¦
All she did was she emailed you
and me, um, and I just responded
'cause I saw it first and I was
just like, "Hey, yeah, great.
Thanks for letting us know.
Here's how I want to structure it.
Is this possible?"
But if she just shot that email probably
three weeks earlier and say, "Hey Mikey,
Kevin, I think this is the right approach.
Do you agree?"
Then I could say, "Link
me up with your attorney.
I just have an idea."
I would shoot the attorney an
email, and then we would've had
it structured from the get-go.
So proactive communication
with your, your tax CPA, so
Mike Pine: vital.
It is.
So vital.
I-- That's, I'd say If you have a good
tax strategist, that's-- which I think I
know we are, that's the one of the bigger
problems we have with our client base
even though we've been working with these
people for a decade, in some cases longer.
Our clients, they-- we've
developed a tax strategy.
They finally are comfortable with it.
They understand it, but then they go
do something new, or they're pressured
for a business reason or economic
reason, and they sign something, or
buy something, or create something, or
sell something before giving us a call.
So talk with your strategist proactively.
But I'm gonna back up a minute.
I think another big problem that most
taxpayers do wrong is they assume
if they have a CPA, their CPAs are
their advocates and tax strategists.
That's a bad assumption, and we
talked about that in the last episode.
That big national firm is just checking
the boxes and doing throughput.
You got to know and, and,
and, and here's your deal.
You gotta take charge of
your world, of your life.
I'm sorry.
Uh, just like I've learned, it used
to be 30 years ago when I was growing
up, your primary care physician
knew everything about your health.
He knew every issue you had.
He was developing a big
comprehensive medical plan for you.
Now, I go see specialists.
They don't remember me from anyone.
My primary care's got like
300, 500 patients he's talking
to every few months, right?
And they, they're not able to drive
and own comprehensively my health
plan, my medical plan, right?
I've had to learn to do it.
Now, I'm still trusting the doctors,
but I'm making sure they're informed
what one's doing, what the other one's
doing, reminding them of the history.
Unfortunately, we have to do that now.
Kevin Schneider: Mm-hmm.
Mike Pine: I am taking good-- 'cause
I wanna live at least until my
kids grow up and, and, and graduate
college, so my wife won't go
crazy, um, if I die s- before them.
But I wanna live at least
another 15 years hopefully more.
Yes.
Me too.
Hopefully more.
Um, Jethro turns 18 in 15 years, but
Kevin Schneider: At least 15 The
Hidden Money podcast would
be very boring with me.
Mike Pine: Yes, but we will have changed
the paradigm of the world with it by then.
Yeah.
We don't need this.
And on that note, if you learn anything in
this episode, please like and subscribe.
Please, this changes the logarithms.
Apparently, a super majority of
the people who listen to this and
watch this haven't subscribed to it.
We are trying to change
the way people see things.
We're trying to change the
way the profession's done.
We're trying to add value to your life,
to everyone's life, to this nation's life.
So please like and subscribe.
Sorry, that was a little
mini com- infomercial.
But yeah, don't just assume your CPA.
Like remember the guy, I think we talked
about this in a previous episode, we're
out at that huge wealthy party where
we got to meet our soon-to-be senator
or the guy who's gonna lose senator.
Um, I mean, the, the big
wealthy people were there and,
uh, Ken Paxton was, was there.
We got to meet him.
Um, there was that guy
there with his Lamborghini.
Uh-huh.
He's like making 2 million a year.
He's like, "It is what it is."
He's-- It is what it is.
And I make money, I spend it.
His CPA- You know, I gotta pay my-
Kevin Schneider: money, I spend it.
You know, I gotta pay my
Mike Pine: I got a good CPA, man.
And, and like, all right,
well, how much do you make?
I-- Yeah, he files my stuff on time.
He was like, "Well, how much do you make?"
About 2 million a year.
Yeah, what's your average tax
rate or effective tax rate?
He's like, "You know, it's like 38%."
That's pretty good, isn't it?
Dude, that's over $780,000
in tax you're paying
Kevin Schneider: Yeah Every year
Mike Pine: year.
Kevin Schneider: We could save him
a Lamborghini every year in tax.
We
Mike Pine: save him a
Lamborghini every year in tax.
That's what we tried telling him that.
And he's like, "Nah,
man, it is what it is.
My, my CPAs know what they're doing.
They've never missed a filing."
Kevin Schneider: Yeah.
It, it's, it'll drive us nuts.
Yes.
And that's why I think there's
something with, like, I think when,
like you said about the doctor, if
we go to the doctor, we know what the
answer is sometimes on our health.
You got to eat right.
You got to exercise.
Don't smoke.
Don't drink.
We get it.
Dude, you're depressing me.
I know.
But we know what the answer is.
Yeah.
But why, why do n- why do most people
not do those things is because,
one, they're not fun, they're notâ¦
They're stubborn, or
they're set in their ways.
And I think a lot of
taxpayers are the same way.
We're like, "Look, you could do, just
be a little proactive, change your
life a little bit, implement these
steps, and then if you do, it's, look
at the reward available for you."
They know maybe those steps, but
they don't want to do the steps.
They may not want to
materially participate.
They may not want to do some things
that could be a challenge or different
because, eh, it's just easier to have a
whiskey and not worry about this stuff.
I'll pay the government what it is, and
I'm just not going to worry about it.
That's like an ostrich.
You're sticking your headâ¦
Is it the ostrich?
Yeah, they stick their head in the sand.
They're just like, "Ah,
I'm just going to hide."
And over the c- like, just time, value,
money, millions of dollars to your
children, to your business, to yourâ¦
Whatever you're interested
and passionate about,
Mike Pine: On that note,
like, perfect examples.
I remember back when I was in high
school and in college, my dad, he's
a physician, was always really good
and healthy, and thankfully now he's
still healthy in, in his 80s, um,
because he took care of himself.
And we'd go out, like he and I'd
go backpacking to Montana, and I'd
go to a diner after, after killing
ourselves in the mountains, right?
And like, I was hungry.
So I'd order always my favorite meal at
any diner is big old country-fried steak
Kevin Schneider: and gravy, french fries.
You see-
The cream
Mike Pine: Cream gravy.
Oh, I mean- Yeah.
And I was like, "Dad, why?"
And, and he'd order like
a salad and a fruit plate.
I'm like, "Dad, come on."
You watch yourself.
He's-- Yes.
And he's like, "Mike, I know you
don't think so, but you're gonna
end up regretting this one day."
Um, and it's the same thing with-- And
he's right, by the way, and I did, and
now my back is killing me, and there's so
many things that could have been better if
I would've just focused on what he said.
But at the time I'm like,
"Yeah, probably, maybe, but
Kevin Schneider: But cream gravy.
Mike Pine: But cream gravy.
That cream gravy.
"And, and I just hiked 26 miles, Dad,
over two mountain ranges, so come on.
I'm counting on the divide twice."
But anyways, um, it's the
same thing with taxes.
Like you might think, "You know what?
It's, it is what it is.
It doesn't matter.
I'm making two million dollars a year."
And that guy was what?
In his early 40s probably.
Well, when he's 60, wanting to
retire 65, and he's got good
money, but there's something else.
His wife really wants to go
buy this nice ranch in Montana.
Now that I'm thinking of Montana, or
Kevin Schneider: something,
Mike Pine: but they just don't
have the budget to do it this year.
He's going to regret.
Well, I don't know if he will because we
could not get him out of it is what it is.
Like what?
20 times.
Yeah.
But we couldn't get him out for that.
Um, but if he knew what he was doing,
then more likely than not, he's going
to regret not pay-- focusing on it,
but it's going to be too late then.
So be proactive.
Take, take charge.
And you don't have to run,
like Kevin said, you don't
have to memorize the tax code.
You don't have to learn the tax code.
You just have to push your
experts, your specialists.
I push my physician,
"Did you run this test?
Are you sure?
Should I take a GLP?"
Like you, you ask the questions, push
it, and if they're not willing- to
answer it or think outside the box.
You don't have a tax strategist,
you have a tax preparer.
Yep.
Agreed.
Kevin Schneider: if they're not
willing to answer it or think
outside the box, you don't have a tax
strategist, you have a tax preparer.
Yep.
Agreed.
Um, I think, I think some other common
things, let's just make sure, and,
and I think you and I kind of vary
on the spectrum on what to do here,
but maxing out your 401if you're
offered a 401with match, do it.
It's lowering your taxable income today.
Now, there is the other flip of the
coin is, yeah, it's gonna be taxable
in the future, and what if I use
that money today to buy a different
asset that appreciates in value
quicker, getting out of the market and
Mike Pine: all that.
Kevin Schneider: But-
Hire a new tax consultant.
Yeah, or hire a tax consultant.
But really, if you're maximizing your
retirement benefits today, depending
on your age, time value money, that's
gonna compound tax-free until you start
drawing on it, and it's a tax deduction
during your working years, which are
typically higher, and you can always
tax plan in your retirement years.
Yeah.
So let's make sure we're still
not missing the tried and true
easy th- stuff, HSA accounts.
If you have a health savings
account, you can contribute to that.
Invest that HSA money, let it grow tax,
tax-free as well, so long as you pull
Mike Pine: it out for
qualified medical expenses.
Heck, even now you have Trump
accounts, which we don't talk
about much because it seems so
political, but these are good things.
Yeah.
And the more that they've
gotten solidified in the law-
Kevin Schneider: that you could tap
Mike Pine: It's like a 401that you
can tap into It's like a 401â¦
Yeah, exactly.
It's like a retirement account that your
child can tap into when they need it
Kevin Schneider: for things
Mike Pine: buying a home, medical
expenses- Starting a business ⦠going
to school, starting a business.
But it grows tax-free, and
you're allowed to do it.
Um, something we need to talk about
as employers, you know, employers can
deduct HSA con- or not HSA, Trump account
contributions to their employers' kids,
Kevin Schneider: to their employees' kids.
So we can-- Our business can give money
to the Trump accounts of our employees'-
Mike Pine: Yes, and take a deduction.
I can't remember the cutoff.
It's like twenty-five hundred
or thirty-five hundred, um,
per, per employee, not per kid.
But- That's cool.
Yeah.
We sh- Actually, I shouldn't have said
this on the podcast 'cause now all our
employees are gonna be like, "Hey, dude."
Hey.
"Come on."
Come on.
Step up.
But if we wanna keep the awesome
Kevin Schneider: awesome talent
we have.
We will.
Yeah.
Yeah.
And so as a W-2 employee, I
think those are some very tried
and true things you could do.
And also on the itemized deduction
side, are you giving to charity?
Are you getting appraisals
on big non-cash stuff?
Um, bunching is a thing.
We, we really haven't talked about some
of these strategies, but bunching could
be if you're one of those taxpayers
that either itemizes one year and then
you take a standard deduction the next.
What if you, you know, you itemize maybe
$1,000 above the standard every year?
You're not really getting the value of
your itemized deductions at that point.
So every taxpayer, you get either
itemized or standard deduction.
You get the higher of the two.
Well, the standard deduction,
let's just say for 26, I'm-- don't
have a laptop in front of me.
Let's just say it's $25,000,
somewhere around there, for married.
Let's say you give enough charity, pay
property tax, and have mortgage interest,
and you tally those up and it's $26,000.
Well, I'm gonna itemize at $26,000.
Well, really, what happened is you
gave $1,000 of charity that bumped you
up-- you're getting $1,000 benefit when
you're comparing because you're owed the
twenty-five every year no matter what.
So what if we bunched some things?
And bunching just means I'm gonna
double up my property taxes in one year.
I'm gonna pay my property tax bill in
January, and I'm gonna pay it in December.
So my property tax deduction doubles
now that the cap is above ten.
I'm gonna pay some charities.
I'm gonna bunch my charity
more so into one tax year.
So now I'm going to purposefully take
the standard deduction of twenty-five,
but then my itemized deductions, 'cause
I'm bunching more deductions in that
year, I might get a forty to fifty
thousand dollar deduction on my itemized.
So now I'm gonna get my standard
ev-every other year, which I'm used
pretty close anyway on my normal years.
But then every other year, I'm
getting a fifty thousand dollar
Mike Pine: deduction
instead of twenty-five.
And you're gonna spend the money
and contribute the money anyways.
It's just a timing difference.
You're being wiser with the timing.
And the timing difference
can literally be one day.
Yeah.
Instead, you could pay it on the
1st of January or pay it on the
31st of December, but that one day
makes all the difference in the
Kevin Schneider: Yeah.
So that, that's bunching.
Um, and we do that with clients
that kind of hover, you know,
around that itemized and standard.
Um, but there's also
other reasons to bunch.
If you have an high, high income year, I
might want to inflate your deductions in
that high tax bracket year comparative
to if you're in the 24, 22, 24% bracket.
Now, oh, I'm getting this
big stock option hitting.
It's gonna vest.
I'm gonna be in the 37% bracket.
I'm like, "All right, let's conjure
up everything we can this tax year.
Let's double pay property tax, double
pay our charity, whatever we need to do."
Um, that's a strategy that
Mike Pine: you can utilize this year.
Another big miss I see taxpayers make
regularly is the whole idea of how
much tax they're actually paying,
and they get confused between refunds
versus having to make a payment
when they file that return, right?
So we have this client, you were
just telling me this story about her.
Um, you met with her 'cause
we do these discovery calls.
Every one of our tax return
preparation clients, we offer a
discovery call afterwards, and we,
we hope and push you to do those.
And, uh, as part of that discovery
call process, they also rank y- rate
us, uh, one out of five, how happy
were you with the service we provided,
um, and the value we provided you?
And you got that, and you saw
she gave you a three out--
Kevin Schneider: She gave us a
Mike Pine: out of five.
Three stars
Kevin Schneider: out of five.
Ouch.
Yeah.
So tell the story.
So yeah, that-- So like you said,
every discovery call we do, our client
relations team reaches out, "Hey,
we're glad we filed your return.
Give us, give us your feedback
on the preparation process, our
overall satisfaction with the
firm, and then what would you like
to discuss with Mike or Kevin?"
And so most clients honestly give a
four or five, most of them fives 'cause
we're, we're really doing good work.
Fours are good.
Fours, fours we're gonna
ask questions still.
But this one gave a three.
And so I knew my very first
question out of the gate was,
"Hey, uh, tell me about the three.
What did we do wrong?
What could we do to get better?"
She goes, "Well, um, y'all helped me
with this, uh, tax strategy, and I only
got a twelve thousand dollar refund,
and I just didn't know if it reallyâ¦
did it work?
Did it not?"
And I was likeâ¦
And then she just didn't know.
She just saw a twelve thousand dollar
refund, and I, I I had to explain.
I was like, "Well, you made five hundred
thousand dollars of income on your W-2."
It was actually like six hundred grand.
It was six hundred
thousand dollars on a W-2.
You had withholding against that.
So the tax, let's assume the withholdings
were good on that six hundred.
But your, your husband also
sold about four to five hundred
thousand dollars of stock.
That is capital gain.
That was-- That pushed you to like one
point one million dollars of income.
Mike Pine: So now-
Kevin Schneider: there were-
You didn't pay taxes on that
there was no estimated payments.
There was no withholdings.
Fidelity did not withhold on your stock.
So you made six hundred,
five hundred thousand dollars
that you did not pay tax on.
So if you think about it, y'all
made five hundred thousand dollars
tax-free, and this tax strategy dipped
into the taxable income of your W-2
Mike Pine: W-2
Kevin Schneider: got some
of your W-2 refunded.
So this tax
Mike Pine: strategy
covered all of that tax
But she thought all the strategy gave
her was twelve thousand dollars But if
she wouldn't have done the strategy- She
would've owe $140,000- so ⦠in tax.
So the tax strategy actually saved her a
hundred and fifty plus thousand dollars
Kevin Schneider: And she goes, "Oh."
It j- like, so I,
Mike Pine: So now we get a
Kevin Schneider: Oh, yeah.
So it's just changing even our own
clients, helping them to understand
that refund does not equal tax savings.
But, um, you know, sh- she's
the stay-at-home mom, you know.
She has three kids.
She substitutesâ¦
She's a substitute teacher
on the side as well.
Uh, her husband's earning, um, the W-2
and the stock options and everything.
So I had the meeting with her, so
she just didn't understand, but
she handles the financial stuff.
And so it's just grace with your
client, educating them and not,
you know, just being curious,
"Hey, why'd you give a three?"
It's just a misunderstanding
of what tax, tax is.
Right.
That's all it was.
And what, what really made me mad is they
live in, uh, I won't give too much, they
live in a state that is very egregious.
Um, it is not Texas.
Um, I won't tell you East Coast or West
Coast, but if you make over a million
dollars in this state, they take your
federal charity and cut it in half.
Mm-hmm.
They made $1.1
million, so they barely breached
Mike Pine: the, the, the income category.
It's a cliff.
I mean, the tax- It's not just like the
Kevin Schneider: It doesn't phase down.
No.
It's they, they- You went over the cliff.
So if you make over a million dollars
of income, not taxable income, not
age- but income, which they did,
stock, W-2, they take the charity
and just cut you at the knees.
Mike Pine: It doesn't carry forward.
You don't get anything.
So-
So that state is basically incentivizing,
if you make a lot of money,
Kevin Schneider: you make a lot
of money, don't give any charity.
Do not give, don't give to charity.
Because a lot of the strategy
was revolved around charitable
donations and appreciated assets.
So I was able to say, "Hey, on the
federal side, look at what we did."
And then I was like, "All right,
let's go to New York," and I was
going through the New York return.
I was like, "Okay.
Oh, shit."
Mike Pine: All right,
cat's out of the bag.
Kevin Schneider: All right.
That's not a map.
New York.
New York.
So I was going through the New York
return, and I was just like, "Why
does this not tie up to the Fed?"
And I had one of our
staff members on the call.
I was like, "Hey, man, can you look
at this while I'm, I'm gonna goâ¦"
And he goes, "Oh my,"
and I was like, "What?"
He gave the news.
I was like, "You've got to be kidding."
I was like, "All right, so
here's your tax plan next year.
Move."
You're moving states.
You're
Mike Pine: getting out of that
state because that costs you-
Or, yeah, I mean, another way now
that we have some time to work with
that client is we get them some
business loss to reduce their- Income
their income below the one million,
and then they don't-- then they
get to get pa- It's justâ¦
Yeah, that's- Sorry.
I mean, uh, we don't want
to be political here.
Hey, look, I don't care what party's
in charge, you shouldn't pay more
taxes than you're legally obligated,
and you are a better steward of
those taxes, those hard-earned
dollars that you worked for, than the
government is i-in almost every case.
We should pay taxes.
We need to pay taxes, butâ¦
I used to live in California.
That's where I started my career.
Man, I was paying high taxes, incredibly
high energy costs, incredibly high
rent, incredibly high taxes- Everything
⦠incredibly high sales taxes, incredibly
high gas taxes, incredibly high taxes.
And the weather.
The roads su- Well, the
weather was beautiful.
It was.
The, it was, it was very nice,
actually, and the coast is gorgeous.
But high, high taxes, the roads sucked.
There were potholes that never got fixed.
The, it, it's-- I know and I believe
that, and this is really what started
catching me on fire, is I saw the
money go to the government and, and it
not produce anything for the economy.
It sucked it out of the economy.
Whereas I know if we give this to
entrepreneurs and people, let them keep
their money, grow their businesses,
hire more people, let those people
make more money, let them produce an
economy, it's, it's a-- Uh-oh, I'm
gonna say a bad word for politics,
but it's trickle-down economics.
It works.
It does work.
Um, it grows the economy.
So anyways- If it- New York, if you're
wondering why your economy's going
down and getting worse and worse- Tax-
Or at least if your charities aren't
Kevin Schneider: to help your
people, I wouldn't wonder why.
Yeah.
Mike Pine: Okay.
Start with ta- uh, starting with-
Kevin Schneider: law is always a good
way, and we, this, we talk about this till
we're red in the face, blue in the face.
We're gonna be doing it till we die.
We don't imagine we will.
Mike Pine: on a bad tangent, by the
Kevin Schneider: Yeah.
We're gonna assume sorry.
But man, if you can just start
with the incentives in the tax law
on your clients and work there.
I mean, tax, the tax law,
whether we believe it or not,
incentivizes and directs our
actions more so than you think.
Like, it's the reason why all the
car manufacturers, if you go buy
a truck, it's not a, it's not a
coincidence that most all their
trucks are 6,200 pounds, 6,100 pounds.
They're over the 6,000 pound
limit for tax purposes, 'cause
if your truck is under 6,000
Mike Pine: pounds, not many
people are gonna buy it.
I- It's taxes ⦠I'm gonna let the secret
out of the bag, the cat out of the bag.
I'm working on a book that's gonna come
out this year, and I've devoted an entire
chapter of going through the history of
our income tax world in here in the US.
And the fact is, is what Kevin just
mentioned, it's not by accident.
It's not a loophole.
As the government started taxing
and taking more income out of
the economy to pay bills for
good things, in a lot of cases,
Kevin Schneider: most cases in
Mike Pine: beginning, and then it
petered out, but they realized, wait
a second, the economy's slowing down.
We're not getting economic growth.
Our tax base is actually getting
lower, even though we're at raising
Kevin Schneider: taxes, but
Mike Pine: but we still
need to have taxes.
That is what started shifting
paradigms in Congress.
Wait a second.
Let's use this tax code to, to bring
in taxes, but let's also incentivize
people to do things to invest in our
economy that will grow our economy
and raise our overall collections.
Now, this is gonna be awesome.
I have a, I have a chart in this book.
I'm actually was working
on it this weekend.
A chart in this book that shows over time
when our tax rates have gone up and there
was less incentives to invest in the
economy, tax revenues actually go down.
Even though tax rates are going up, total
collections from the government go down.
But when they provide the
right kind of incentiveâ¦
Now, you can't just say,
"Hey, no one pay tax."
That's not gonna work.
But you provide the right kind
of incentives that will actually
grow the economy, you lower taxes,
total tax collections goes up.
It's not what you would think.
It doesn't make necessarily common sense
to everyone, but that's how it works.
Sorry, big tangent.
Big, big tangent.
Let me go with one last one, Kevin,
and we could go on and on for this, but
just because you're making more money
doesn't mean you have to pay more taxes.
That'sâ¦
I think that's, like, probably one of the
most common misconceptions and erroneous
Kevin Schneider: cons- beliefs
that I hear from people, right?
Mm-hmm.
Yeah.
I mean, by letter of the law,
yes, you have to pay, uh,
'cause our tax structure tiers.
So technically, as you make more money
Mike Pine: how you said that.
You said that by letter
of the law that's true.
No.
Well, from the surface without- Okay,
from the surface- From the surface
Kevin Schneider: surface- From
the surface ⦠without bringing
in all the rest of the law
Mike Pine: Right.
Thank you.
So
Kevin Schneider: if you were just at fa-
I'm not reading the law Let's, how about
Mike Pine: I'm not breaking the law.
I follow the law ⦠is face
value a good term we can agree on?
Yes, yes.
Okay.
At face value- That was a great
Phil Collins CD with the, in
my opinion, the best drum solo
Kevin Schneider: See, that's
Mike Pine: your- Phil
Kevin Schneider: I'll take it.
There you go.
I ha- I have no clue.
I'll take your, your word on it.
Mike Pine: your word on it.
Kevin Schneider: face value, as you make
more money, your tax bracket gets higher.
But what you're missing is, as you make
more money, take some resources and
invest it into your tax plan and get
your tax bracket down, because it's not
also a coincidence that the big wealthy
people, Elon Musk, which sometimes
he tax plans, sometimes he doesn't.
He's been notorious to not tax plan.
Donald Trump,
Mike Pine: bad example,
Kevin Schneider: good example,
however you want to see it.
We're above him.
He doesn't pay tax.
Do you know why?
No, he is.
He makes a lot of money, and he
pays a lot of CPAs and tax attorneys
to handle a big problem for him.
So if he didn't do any planning,
he's paying 37% and whatever,
plus more in the States, right?
So the more wealth you generate, the
more team you should have around you,
financial advisors, CPAs, attorneys,
just to protect your assets, protect
with your wealth that you're growing,
expedite it with the financial
advisors, and expedite it with the CPA.
A lot of people don't view a CPA as
Mike Pine: an ex-expediting your wealth.
Kevin Schneider: They just
say how they're, they're just
kind of the nerds behind.
Well, I'm expediting my wealth, but yeah.
That's what we try to do is- That's
exactly ⦠if I can save you 300 grand
in tax this year, I'm expedi- that's
$300,000 of money going back to you
that you could give to your financial
advisor, or we could use that 300
Mike Pine: grand to tax plan
again next year, and now we save
600 next, whatever the plan is.
So in reality, you're 100% wrong
if you believe the more money I
make, the more taxes I have to pay.
Because in reality, we just
named all these rich people
Kevin Schneider: money I make,
the more taxes I have to pay.
Because in reality, we just
looked at all the rich people-
Mike Pine: They make a lot more money
because they save money in taxes.
The more money they make, the less
tax they pay 'cause they invest in,
in things that grow our economy.
And by keeping that money and growing
their portfolio, growing their
businesses, they make more money.
So the lower your taxes you pay,
the more money you make over time.
That should be the new way, dude.
I like that.
So seriously, if you've learned anything
here at all, like anything here at
all, even if you don't like it, but
I guess you wouldn't help me out then
if you didn't, or Kevin out, please
do like and subscribe this video.
I, um, I feel kind of embarrassed,
almost guilty asking someone to do
that 'cause it's like fall out, you
know, I'm like advertising us, right?
Asking you to help us grow.
But we are trying to change not just
our business, not just who you are
and, and your, your experience with
tax and income generation and growth.
We're trying to change the way
this is-- the whole paradigm of
taxation around this country.
Once the American public at large
wakes up and realizes, "I can use the
tax code to grow my wealth faster.
I can use the tax code to grow
our economy faster," that's what
Kevin and I are trying to do.
I know it sounds like a big, mushy
mission statement, but that is
our, that's our vocational mission.
Um, please help us with that
by liking and subscribing.
That's what runs the logarithms with the
YouTubes and the podcasts, and that's the
only way that this word's gonna get out.
And also be
Kevin Schneider: on the lookout
Mike Pine: for, um, a book coming
out in the next few months.
Ce-certainly by winter.
We'll do a podcast on that.
Oh, we, we'll have to.
Yeah.
Yeah, 'cause otherwise no one's
gonna buy or see the book.
All right, guys.
Thank
y'all.
We'll see you all next episode.
Kevin Schneider: See you next week
Thank you for listening to this episode.
Revo Taxpayer Advocacy LLC is not licensed
or registered as a CPA firm with the
Texas State Board of Public Accountancy.
I'm a CPA, Kevin's a CPA.
We have a lot of CPAs on staff that are
licensed and held to the same standards.
However, when we decided to be
revolutionary and change our
name to Revell Taxpayer Advocacy,
the state board would not allow
that and let us remain licensed.
They say we have to have one
of our names in the firm for
us to be licensed as a firm.
And guess what?
It's not us that's important.
It's revolutionizing the way you feel
about taxes and saving you money.
We are advocates for you, so we were
willing to drop our firm license even
though we're still individually licensed.