Taxes are not the sexiest, as any business owner would agree. But did you know that there are cool ways in which you could write off considerable sums from your tax obligations? As an enrolled agent and business profitability specialist, Jake Alexander works with business owners to implement some of the best tax deduction strategies that will allow them to take a bigger share of their profits than they otherwise would. Join in as he spills some of this juicy information in this conversation with Rondi Lambeth. As a business owner, you’re going to want to listen to this because at the end of the day, nobody cares more about your money than you do. It’s not too much of an exaggeration to say that Jake comes in a close second!
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School of Wealth – Cool Shit You Can Write Off With Jake Alexander
I have one of my good friends. He is a business profitability specialist. His name is Jake Alexander. Jake, how are you doing?
I’m amazing. How are you, Rondi?
I am awesome. Our show is called Cool S*** You Can Write-Off. Due to COVID, I no longer have the studio in Las Vegas, but instead of my 3,000-square foot house, I’m using about 1,500-square feet of my home, plus a three-car garage for my studio and my business. What does that mean, Jake? Because I’m using my house as a business, what do I get to do?
You get to write it off. There are all kinds of expenses that come along with that. It’s one of those things where you want to take advantage of it if you qualify.
We’re going to talk about cool s*** you can write-off. I remember when we were in Florida, you said that and I’m like, “You need to start a podcast called that. You need to buy a domain name right now before I buy it.” Jake, tell us about yourself. You are a Business Profitability Specialist. What does that mean?
We help people turn their business into what they started it for. In layman’s terms, I’m an accountant. We do a lot of stuff with numbers and taxes, but we consult and strategize with business owners to help them turn their business into what they originally started it for. It came from a need of we see too many people start their own business because they have a great idea or they’re good at something. They’re 2 to 3 years into it. They may be bringing in a lot of revenue or maybe they’re bringing in $500,000, $600,000 a year, but the bottom line isn’t exactly what they thought it would be.
We see people who get in a situation where they’re running this business to pay other people’s paychecks. They’re not even bringing home any money. It’s sad. We use the numbers as a guideline to put systems and processes in place to help them. If they want to grow to a $10 million per year company, we can do that. If they want to grow it to a $700,000 or $800,000 business that has 1 or 2 employees and has a 50% profit margin, we can show them how to do that too. We help them figure out what it is they want first and then use the numbers as a guideline on how to get there.
You sit down with people and you help them make more money because the reason we start a business is to make money. You can say it’s for other reasons. My company, for example, I started Fortress to help people with their credit. I started doing it for free, but I was doing it to make money on the real estate side. I was running these how to buy a home with bad credit seminars, bringing the people in a bad credit, fixing their credit and turning them into a home buyer. I was running seminars on how to short sell your home without destroying your credit seminars and then getting listings out of it. This was back in 2007, ‘08, ‘09 and ‘10. I started making more money doing credit repair than I was from selling homes. I made it even bigger.
I’ve continued that business because shortly after that, my little brother at 22 years old shot and killed himself over a little bit of money. It wasn’t a lot. There were other reasons, but that was part of it. About 50,000 Americans pre-COVID kill themselves over financial problems that stem from credit problems. You could eliminate almost all money problems if you have proper credit. If you have good credit, you can get low-interest loans or no-interest loans to fix your money problems. I didn’t start my company to help people alone. That wasn’t the sole reason. It was to make money, I’ll be honest with you on that. I’m glad that you brought that up, that you help people make more money.
We help them make a profit. Nobody wants to be in a situation where they’re working seven days a week, they’re stressed out. They’re taking on the accountability of payroll of other people to not make money. Not that it’s everything because at the end, money doesn’t make you happy, but it sure doesn’t make you sad. That’s what we do. I love your story because in a nutshell, we help walk people through that process. We’ve seen some amazing transformations where people start a company with one service or product. Through working with us over 3 to 6 months, it transforms into something they never thought it would be because we show them how to turn a profit from it. That’s a great example right there.
I never in my wildest dreams thought I would make millions of dollars helping people fix their credit. Now, I’m more of a wealth strategist where I help them with their credit, their debt, building wealth and investments. It evolved into something other than just credit. You said money can’t buy happiness. Did you see that study that was released that said, “The more money you make, the happier you are?”
I didn’t. Tell me a little bit about it.
They did a study proving that people with money are happier than people that don’t have money. What was interesting is they went down to $100,000. They interviewed people and found that when you make $100,000 or more a year, you’re generally happier. It’s not the physical cash that makes you happy, by holding this non-tangible object. It’s what the cash allows you to do. I know 76% of Americans live paycheck to paycheck. They struggle with money. They go to sleep thinking about money. They wake up thinking about money. They have stress. It’s the number one cause of disease and death in America because it all stems with money, and it’s because they’re not educated. There are only seventeen states in the United States that have any type of financial education and it’s basic. Most of us don’t learn anything. It was interesting that you said that. Tell me, you’ve dealt with thousands of people over the years, business owners, what do you see that most of them do wrong when it comes to their taxes or their business?
When it comes to business owners specifically, not classifying different streams of revenue. We’ll see a lot of times in QuickBooks that line that has like, “Fee for service income, $700,000.” One of the first things we do is we go in and break down where that comes from. Do you have a membership model? Are you selling a product? Is some of that service-based? The first thing we do is customize their chart of accounts to show them like, “Out of all the money you’re bringing in, where is it coming from?” The next step is showing them where they spend their time in relation to that. It’s amazing that 7 or 8 out of 10 people that we deal with, they’re spending the most time on the thing that makes them the least amount of money and they don’t understand why they’re not making money at the end of the day. We’re not saying it in jest, but it’s amazing. Once you tweak that, the arrows start moving in the right direction.
Why is it that you break down where the income comes in from? Is it strictly to show them where they’re making their money? Is it like the Pareto’s 80/20 rule or is there some tax reason that you do that?
It’s not necessarily a tax reason. To the IRS, $1 is $1. They want their piece of it anyway they can get it. It’s like you said, the 80/20 rule. For us being a tax business, I want to know how much revenue comes from 1040 tax returns. How much comes from 1120 tax returns? How much comes from partnerships? How much comes from our monthly packages? I want to tailor my business and my business model to the ones that are the most profitable. It’s crazy because people love to make money. In a weird way, we love all of our customers. If we had unlimited time in the world, we would take care of everyone, but we don’t. We found when we’re dealing with our customers that pay us the most money that we’re the most profitable on, we’re naturally more pleasant. We’re willing to help them. It’s a win-win situation for everyone. It works at a high level.
I’m going to text my bookkeeper. I want you to break down where the money’s coming in. She does a little bit, but most of it is service income. I want to break it down. How much do I make for my books? How much do I make for speaking engagements? I do a little bit in Infusionsoft for my podcast versus Facebook or Instagram, but I want to put that in there. Thank you, Jake.
It will be eye-opening too once you do it. You get a few months of a track record. You’ll get some good insight from it.
What would be something else that when you sit down with a client and you help them? What is your standard operating procedure?
A big thing is to train them to be proactive. Accounting and tax are boring in nature. I tried for years to make it sexy and make it fun. I might be getting close at this point. It’s to flip their thinking to be proactive instead of reactive. We love all our clients, but we love getting clients who have already bumped their head a few times. They had that first six-figure year. Once they got their 1099 and said, “Now I’ve got to pay taxes. What am I going to do?” We love working with those people because they’re in that 2nd and 3rd phase of, “I don’t want to defer taxes and figure out how to clean up the past. I want to proactively plan and make decisions that are going to help me run my business and purchasing assets. I’m purchasing assets that are going up in value while strategically taking advantage of as many tax deductions as possible.”
What most tax professionals do, including your CPAs and this is my opinion, not necessarily Jake’s, he might agree with me, he might not, is they look at life through the rear-view mirror. They’re looking at your books on what happened last year. They’re being counters. They file paperwork. They work for the IRS. If you don’t believe me, get audited and see how fast your CPA turns on you. They’re not strategists. They’re not specialists. They’re looking at the past, filing the taxes. You look at the past, try to do the best you can, but look towards the future.
There was a guy who called me on either December 31st or it was New Year’s Eve, I don’t remember. I was in Costa Rica on an annual business shareholder meeting. He’s like, “I made $5 million last year. What do I do about my taxes?” I’m like, “Nothing. You should have called me six months ago, not the day before.” I see what you do as an enrolled agent, which is different than a CPA. Explain to the readers what an enrolled agent is.
An enrolled agent is a federally recognized practitioner that can represent any taxpayer on any tax matter to any IRS office anywhere in the United States. It’s more of a sniper approach to tax. CPA is a very well-rounded accounting education. Enrolled agent is all tax. That’s what we do, that’s what we learned. That’s how we strategize and put plans together for our clients.
If you’ve read my past episodes, I say, “Have a CPA who does your taxes, use an enrolled agent or an attorney to strategize.” I learned that when I got audited in 2012, how fast my CPA turned on me. I had a tax attorney that was a paid sponsor of my radio show. He educated me a lot on how audits work and how to protect myself in the future. I have a CPA, but I don’t even know their name, Jake. I’ve never talked to them. I’ve never emailed them. I get a bill from them once a year, but I have a tax professional that does everything for me, but the CPA stamps it. Tell us something else. What other cool stuff do you have for us?
In our company, we focus on working with small businesses. $1 million and under, that’s our sweet spot, but every once in a while, we get to do some one-off projects. That’s where the whole ‘cool s*** that you can deduct’ thing came from. We’ve done yachts. We’ve showed guys how to deduct $2 million yachts on their tax return to the effect where it saved them $700,000, which is enough to pay for the down payment on the yacht and the operating expenses for two years.
We’re in the middle of a project now where the guys are buying a battleship. It’s the coolest thing in the world. It’s got guns on the top. It’s a Coast Guard Cutter Adak that’s out of commission. The guy made it his life’s mission to preserve it. We’re helping them get it shipped across the world. It’s over in Iraq. It was going to sail it across the ocean. We’re going to park it at a Marina here and turn it into a museum. A new one that came across my desk is for all the car collectors out there. I can’t think of his name, but there was a gentleman. I think it’s The Motor Enclave. There are these new fancy car condos that are popping up everywhere in Texas that are popular.
They’re building one out by the Hard Rock Casino here in Tampa. That’s what we were talking about. I need to get in touch with him. Did you know that through a valid nonprofit entity, the federal government licensed by the IRS, the Code Section 501(c)(3), you can have a classic car museum that legally has to be open one day per year where people can come, attend and take a tour through the museum? That would entitle you to deduct not only the cost of the purchase of the museum, the build-out and then all of the cars that would go in it. You start to think about that. It’s pretty interesting.
Can you drive the cars to make sure they stay lubricated?
As long as you were doing it for a specified business purpose, which everyone knows you can’t let your exotic or classic cars sit for too long. You’d have to have maintenance. You could even use them for straight-up personal use if you prefer as long as that was documented and everything was fully regulated. That’s one of the cooler projects we’re working on right now.
There’s one not too far from me. It’s attached to the Caldwell Idaho Airport where I keep my airplane. There was a car condo there.
We talk a lot to people about their hobbies and interests, which I guarantee, no CPA is going to ask you about that. They’re very like, “Let’s get to the point.” I don’t want to say we specialize, but a lot of times we can help people turn their hobbies or interests into a business. The IRS’ definition of a business is an activity engaged in under the pursuit of a profit. The yacht that we did, like he bought it as a business asset. We had a business plan for it. It runs through a business bank account. We hired a captain and crew to man it. He had to buy a $15,000 jet ski to go on the back so when people rent it, they can be able to go and have fun on there.
It’s thinking outside of the box and you brought it up about the audit. Nobody wants to get audited. It’s not fun. If we weren’t bald, it would account for a little bit hair loss. A big thing when you get audited is intent, what was your intent? It’s not the IRS’ job to question whether you spent the money or not. It’s their job to question your intent. Take our client, for example. If his intent was to purchase a yacht for a business purpose and it didn’t make any money, that’s none of their business. If his intent was to purchase it to defraud the federal government, that’s a whole different story.
I had a conversation with a client. He loves to go snowboarding with his kids. Once a year they go out and do the thing in Montana or wherever you go snowboarding. I was like, “That’s awesome. That’s always been my dream as my kids get older. I want to take them and do a week in the mountains. Tell me a little bit about it.” He’s like, “My son is way into it. He’s got the GoPro. He’s got videos. He’s got 200 subscribers on his YouTube channel, which isn’t a lot but it’s a start.” We started picking it apart, “How serious does he take it? Is that what he says he wants to do when he grows up?” He’s like, “Yeah. He’s even got some of the other neighborhood kids have offered to pay him to get lessons from him.”
That sounds like an activity engaged in for profit to me. As long as there’s some substance there, a lot of times there’s very intriguing stuff that we can come up with. A lot of people don’t realize they have these side hustles or side things that they do that they could turn into multimillion-dollar businesses, like what you said of your story or worst case for a few years, they provide some good tax deductions while making memories with your family.
I say it every single day, taxes are the biggest expense in life. It’s your responsibility and only your responsibility to correct it. It’s not your CPA. It’s not your tax professional enrolled agent. It’s your responsibility to figure it out because nobody cares about your money as much as you do. It’s been my sport since I was a teenager. At fifteen years old, I left home. I went to work for an entrepreneur and he started to teach me about taxes at 15.5 years old. I would rather learn about taxes than watch a football game. I’m surprised I’m not in the tax profession like you. I kind of am because I get to play with it and have fun with it, but I’ve never done it for a living. How did you get into it? Were you like you woke up at 3, 4 years old and you’re like, “I’m going to be an enrolled agent when I grow up?”
It’s funny you ask that because I’m a little different in this industry. I’m an anomaly. I have a sales background. I don’t have a traditional accounting background. I’m not formerly educated in this industry. I was in sales and sales management for ten years at a Fortune 50 company. I worked my W-2 job, I was good at it. I always had little side hustles. I sold everything under the sun. I sold roofs. I sold lasers. I sold Easter baskets and vacation packages, you name it. One of those side gigs that I did, I wasn’t making any money and I was sinking a small fortune into it.
I was signed up for this company and I was going to trainings. I was flying around. I was doing meetings, trying to sell people, do all these kinds of things. I met a woman through that business who did my taxes, she said, “All that money you’re spending, that’s a deduction.” I said, “I had no idea. I was just doing it for fun.” That year, I got the biggest tax refund I’d ever gotten in my life. I remember I was jogging, I was out running. When I saw the text came through and she told me how much it was, I dropped my phone and I was like, “That’s interesting. How does that work?” She explained it to me. I saw how much she charged me to do it. I was like, “That’s interesting. How does that part work?”
That company had an in-house training program. They teach you enough to be dangerous. Go out and hassle your friends and family to get them to have you do their tax returns instead of going to Turbo Tax. Charge them $200 and go from there. In the first year, I did about a dozen returns, nothing crazy. I made a couple of thousand bucks. I forgot about it until the next tax season rolled around. It’s funny when things come at you in life, I was not in a good headspace. I was going through a divorce. I was drinking a lot. I was not in an entrepreneurial “let’s go start a business” mindset. I was at a low point.
All these people from the year before not only reached out to me, they tracked me down and wouldn’t leave me alone like, “You’re my tax guy. You’ve got to do my taxes.” It was a light bulb moment. I was like, “I’ve been in sales my entire life and I’ve never “sold something” where the people come to me and not only come to me.” I’m trying to kick them off of the stick. I’m like, “Leave me alone. I don’t even do that anymore.” That was the second year that I did taxes for people on a very simple level, the 1040 stuff.
The third year, in my infinite wisdom, I decided to quit my job and go full-time. That third year, I did maybe 60 or 70 returns. I barely made enough money to survive for the year. We’ve compounded since then. The next year it was, I don’t remember exact numbers, but 150, 300. That was 2016 when we started. Five years later, we’re a team of seventeen people. We’ve got CPAs and EAs. We’ve got a full bookkeeping staff and admin staff. We’ve got more than 2,000 clients in a dozen states. It snowballed. Being open-minded and wanting to learn different things is what got me into it.
In my world, being a wealth strategist, I’m constantly learning stuff every single day. It never stops. Do you find that with the different law changes, you have to stay on top of it?
There are CE requirements based on which license you obtain. 2020 is a perfect example. One of the things I like about this business when I got into it, it’s supposed to be very predictable. Into the year, you do 1099s. March and April, you do your returns unless you extend you do here. 2020 threw this entire industry on its head. There’s the stimulus stuff, the PPP, EIDL. They extended the deadlines. We didn’t get the break that we all signed up when we got into this business for.
The PPP is not taxable. Now it is taxable. It’s not deductible. Now it is deductible.
There’s still not a clear answer on that. I was looking at a balance sheet. It’s the craziest thing too. You said always learning, not only am I always learning, I’m always looking for a different way. I’m always looking for an opportunity. For us in our company, the PPP was a great way for us to connect with our biggest clients closer than we ever had before. We personally walked them through the process. We introduced them to a new, small local banker that could help them. They had Wells Fargo and they ran out of money like six hours into the program. For us, it was a tidal wave of activity, but we turned it into a positive.
On top of that is the accounting and tax industry is flooded with mature professionals who’ve been in it for 20 to 30 years. The last thing they want to do is learn all this new stuff and mess with it. There’s a huge opportunity. We acquired a company at the end of 2019. We finished up another one. At the end of 2020, we acquired another company too. It was a retiring practitioner who has been doing it for years. All this crazy COVID stuff, shut down here and there. They don’t want to mess with that. Once again, in the chaos, there’s extreme opportunity as long as your wheels are turning the right way.
This is going to be brand new. I’ve never done this on a show like this. I’ve used to do this all the time on Your Credit Matters Radio Show, which was a live radio show on 42 different stations. I would do call-ins. What do you think about doing some call-ins as in comments and questions? What do you think about doing some “What can I write-off?” Q&A?
I love that stuff.
You said that when you did the tax returns, then you’re drinking a little bit too much. Do you know that a lot of people don’t know you can write-off alcohol?
It’s 100% deductible now too because of all the COVID stuff.
I say that every day, “Due to COVID, you can write this off.” I remember when I was a real estate agent, I owned a real estate brokerage firm. One of the things that I did to get a lot of clients is every Friday afternoon at 11:00, I close the office as in we were no longer on our computers working. We had these open house signs, but it was a free barbecue. Every Friday at noon, I offered a free barbecue. There were probably 10,000 cars a day that would drive by my office in Colorado Springs. At noon, people would come in and I’d have burgers. I would have buns and Brats and beer. My drink of choice was vodka.
My favorite drink right now is water. I don’t know how many hundreds of thousands of dollars I made by free lunches. What was cool was part of that time, I was homeless and I was sleeping in my office. The food that I didn’t use, I ate for the rest of the week and I got to write-off my food. There was a time in there that I wasn’t making any money. Once I got the thing rolling, I started making some money, but it was that short little time. We’ve got a question here, “Can you write-off leads you pay for?”
Similar to your event, that’s a marketing event. A hundred percent, the full cost of that is deductible.
Correct me if I’m wrong because I’m wrong a lot. I’m okay to being wrong. You can write-off anything as long as your intention is to make money from it?
I wouldn’t say anything but very close.
I have a friend that used to write-off $200,000 in hooker bills every month.
Is that marketing or is that entertainment?
It was client appreciation and client gifts. If you don’t believe me, watch a little movie called The Wolf of Wall Street. Jordan Belfort is a friend of mine. There’s that scene where his dad is like, “$200,000, Jordan, on prostitutes? What kind of prostitute takes American Express?” He’s like, “The good ones.” I’m not condoning that behavior. I’m just saying what Jordan Belfort did. I’m doing my best. I am sore like you would not believe. “Can I write-off my new SUV in 2021 that was purchased in 2018?”
Absolutely. It goes by the placed-in-service date, not the purchase date.
That SUV, Gerald, is it a full-size SUV as in like a Tahoe, a Suburban, a Durango? Is it a full size or a mini-SUV? That’s what I want to know. Let us know what kind of SUV because I think Jake is going to have some exciting news for you if you give us the right answer. Let us know what type of SUV that is. It is a Ford Expedition. Jake, take it away.
Once they’re over a certain size limit, you can deduct up to 100% of it in the first year if needed. It all depends on your level of income and your long-term strategy. This is where we are a little different is the good news is you can deduct 100% of it in the first year of the total value, not of like your down payment and what your payments are. If it’s a $50,000 truck, you could show a $50,000 deduction for the first year. However, you want to make sure that falls in line with your long-term strategy of what’s going to happen in year 2, 3, 5. What happens when you trade it in? The good news is that could be a massive deduction for you.
My red truck that you guys see me in the red GMC Denali, the retail on that was $84,000. I put $1,000 down via my American Express. I ordered it the day that I picked it up and I signed that no money down, except for the $1,000 deposit. It wasn’t even a down payment. I got an $84,000 write-off that year. I bought it on December 20th, 2018. How much money did it take away from me? Zero because I used the credit card. The following month I made a payment. That’s called Section 179 deduction. What’s the limit on that right now, Jake?
I want to say up to $50,000. Now it’s higher than that. I’ve got to polish up on that, but with the Tax Cuts and JOBS Act, they made some changes to it. It’s a healthy number, let’s say that.
I believe it’s $500,000, not to correct you. It used to be $1 million under Bush, and then Obama dropped it down and then Trump brought it back. I learned something, Jake. I’m looking at a Citation 7 that I’m going to purchase the next two years or so. They’re about $2 million, $3 million somewhere in there. Do you know if I can Section 179?
I think it’s up to $3 million on the jet.
The yacht that we did fell into that and $2 million was the cap on the luxury yacht, as long as they were purchased for a qualified business purpose, which chartering the yacht does fall under that. I don’t know if you plan on chartering the plane or not.
Yeah, with Derek Warren. If I buy it, he’s like, “You will have zero costs at all. You get the jet. You get the $3 million write-off. You’ll have no cost whatsoever including your pilots. You pay for gas when you use the plane.
It’s the craziest thing. It’s very similar to the yacht situation. There’s a big difference between a tax loss and an operating loss. What gets people audited and gets them in trouble is when they show an operating loss year-after-year. Depreciation is a paper loss. That $1.9 million deduction that we got for that client, that goes aside from the actual operating expenses and income of the yacht itself. At the end of the day, the yacht makes a little bit of money. Not much, it barely pays for itself, but it covers the cost. The client pays for it when he wants to go out and use it.
Gerald Gold said he paid $84,000 on that Expedition. Jake, he can talk with you. Marlon asked this, “How do I write-off customary, ordinary, reasonable and necessary?
That depends. Are you a W-2 employee or do you have a small business? They did make some changes. W-2 employees can’t do itemize deductions. They’re non-reimbursed employer expenses anymore. That’s what you’re referencing. If that is the case, my advice would be to start a small business on the side and we could figure out some corn for you to deduct.
Do you know what the mileage rate is for 2020?
They change it back and forth all the time. I have no idea why. It’s just to confuse us. It’s either 53.5 or 54.5. Maybe it went to 51.5. It’s never a big change. It’s enough to keep you on your toes.
“My 22-year-old son works for me. How can I pay for his daycare for his new baby?”
He works for you and he’s already on the payroll, I’m assuming?
That’s what it looks like.
I would include that in his employer compensation, which the company would pay out the payroll tax. He would pay the other. I have daycare, so I feel your pain. Daycare is like $2,000 a month. Let’s say you gave him a $24,000 raise to cover the cost of that. His savings is $2,000 a month. He’s going to end up paying whatever 8% of $24,000 is. He’d be paying more like $2,000 for the year in the payroll taxes compared to the $24,000 of the actual costs. Increase his payroll.
It’s a deduction for the business. If you’re already helping him, then do it. I met with an owner. He’s got about 35 employees. We’re going to set up a tax-free retirement account. We’re eliminating his 401(k) program because his employees are getting ripped off like most people with 401(k)s. We’re divorcing the government, converting their 401(k)s and IRAs to a tax-free retirement account. By doing that, the CEO and owner of this company has got two kids. He does a lot of social media marketing. I said, “Did you know that you can pay your kids about $500 per picture per post? If you take two pictures a month per kid, post it on social media, you can take $24,000 out of your successful business, give it to the kids.” How much taxes did they pay on that, Jake?
How much deduction do you get?
What I said was, “Let’s take that $24,000 now and put it in your tax-free retirement account, which then will grow.” I did the math. It’s going to be like $250,000 per kid by age 18 that they can then use for college, for business trip or whatever. Speaking of that, you can put your kids on salary. You can do all kinds of stuff. Let’s talk about putting your kids on salary. Tell me about that. What do we have on that?
You can absolutely put them on a salary. The standard deduction amount has been changed to $12,000. If you’re paying your dependents under the $12,000, essentially it can be a write-off to the business and they’re not even required to file a tax return. They pay zero taxes on the money. That’s a great strategy. Depending on the situation, this is a different one we’re working on for a client. He has all of his kids on payroll, but they’re grown and doing their own thing. We’re looking at converting them from payroll to paying them as subcontractors. They could be taxed as an S-Corporation and save a great amount on the actual payroll taxes that they’re having to pay. I’m not trying to get too technical.
The payroll tax is 15% right off the top for your Social Security. If you make over $40,000 a year, you’re only getting to credit 15% of what you put in goes towards your account. The rest goes to private jets for Nancy Pelosi and haircuts for her that she gets to write off. I learned that too. I did not know that. I knew it was legally a Ponzi scheme. If you look up the definition of Ponzi scheme, it is what our Social Security system is. I hate paying it, Jake. I spent almost two decades with the fire department and I didn’t pay Social Security. Now as a business owner, I pay as little as I can possibly pay.
You’re not planning on depending on it.
I pay what I legally have to pay and I hate paying it. It’s ridiculous, but it is a way to save people 15% right off the top. Jake, I appreciate you so much for being here with us. This is the busiest time of the year for you, is it not?
It is. We’ve got an awesome team. They’re handling everything behind the scenes and that frees me up to do this stuff, which is what I love.
How do people get in touch with you, Jake?
The best way is to go to www.Jake360.com. It’s my virtual business card site. It has links to all my contact info and social media. You can even click on there if you want, a pop-up goes right to my calendar. If anyone has questions like the guy with the Expedition or the payroll, I love to chop that stuff up. We’ll spend some time with some of your readers. I can set some time aside on the calendar and do some strategy sessions with you, guys.
Thank you so much. Go to Jake’s website. As always, I’d appreciate a share, a thumbs up, a like or a post. Share it with your family. If you find value in the show, please share it on your social media platforms. Tune in next episode for some more information on wealth. It’s not about money, but maybe next episode, I’ll have a health strategist on the show to talk about getting healthy. Jake, you’re looking good. I look forward to seeing you here in Florida. Thanks for coming on the show. I appreciate it.
About Jake Alexander
Jake Alexander is a speaker, consultant, and serial entrepreneur who has been in the financial industry for nearly a decade. Jake is an Enrolled Agent with the IRS and completed a fellowship with the National Tax Practice Institute.
He’s a Gold Medal Junior Olympic Athlete and Extreme Sports Enthusiast, who built one of his businesses from 0 to 7 figures in less than 5 years. He enjoys traveling to exotic locations and loves to immerse himself in different cultures. He’s worked with clients who have generated 7 to 8 figures in revenue and has been featured in Accounting Today Magazine.
Jake’s greatest passion is empowering individuals to design their future on their own terms.