Click Here To Listen To The Retirement Tax Services Podcast


  • The benefit of asking for the last three years of tax returns as a financial advisor. (3:00)
  • Why you cannot take a one size fits all approach to tax planning. (6:05)
  • The problem with S-corps. (7:40)
  • What to be aware of if you have your children on your payroll. (9:10)
  • The importance of knowing your business plan before deciding your tax plan. (13:30)
  • How to navigate a situation where your client is receiving two different opinions. (18:50)
  • How to get a CPA on board with your opinion as a financial advisor. (21:30)
  • The importance of finding out where your clients are getting their information. (25:00)


As a business owner, being proactive with your tax planning can help to maximize returns and minimize liabilities. Unfortunately, many business owners don’t take this into consideration when building and growing their companies. So, in this episode, Jamie Shilanski, RFC®, will be joining the show to share what you need to be aware of in regard to taxes as a business owner because a one-size-fits-all approach never works when it comes to tax planning.

Listen in as Jamie explains issues that you may run into if you decide to put your children on your payroll and the importance of clear communication between CPA and RFC®. You will learn how to navigate miscommunication or varying opinions between a CPA and RFC®, how to ensure your clients aren’t receiving incorrect advice from the internet, and the importance of getting tax returns from your clients every single year.

Ideas Worth Sharing:

Clients come through the door for investment advice, but they hire you for the tax advice. - Jamie Shilanski Click To Tweet If you build a company as if you’re in a position to sell it, then you build that company as a stand-alone entity. - Jamie Shilanski Click To Tweet If you can justify your opinion and support it with evidence, most of the time the CPA is going to play ball. - Jamie Shilanski Click To Tweet

About Retirement Tax Services:

Steven and his guests share more tax-planning insights in today’s Retirement Tax Services Podcast. Feedback, unusual tax-planning stories, and suggestions for future guests can be sent to

Are you interested in content that provides you with action steps that you can take to deliver massive tax value to your clients? Then you are going to love our powerful training sessions online. Click on the link below to get started on your journey:

Thank you for listening.

Read The Transcript Below:

We’re not overpaying. No, we’re not overpaying. We’re not overpaying anymore. The tax code’s complicated, boring, and overrated. You don’t want that, you want a pro. One thing that you should know: this is a radio show. It’s not tax advice, don’t take it that way.

Steven Jarvis:     Hello everyone, and welcome to the next episode of the Retirement Tax Services Podcast, financial professionals’ edition. I am your host, Steven Jarvis, CPA. And with me on the show today, I have Jamie Shilanski, who is a financial planner and just all-round fan of CPAs, all of them. Jamie, you love every single one of us.

Jamie Shilanski: I love every single CPA I’ve ever met with. I’ve always had really great conversations, and they’re the first people when I’m hosting a dinner party, I’m like, “You know, who would be a great conversationalist? The CPAs, get them, herd them up, all of them.”

Steven Jarvis:     Well, it’s a good thing that our audience is mostly advisors and not CPAs. There are some good ones out there, but there definitely can be some pain points.

And you spend a lot of time working with business owners. We just got through the 9/15 filing deadline for business owners. So, in our conversations, getting ready for this, I know that there’s been some recent experiences top of mind for you.

Jamie Shilanski: Yeah. So, Steven, I wanted to ask you, who do you think your audience is? Do you think they are like tax aficionados? Do you think they’re much like myself? A financial planner that knows how important taxes are but does not geek out over taxes?

Steven Jarvis:     Yeah. So, Jamie, my audience members that I get to talk with, which I love hearing from the audience, so please reach out – it’s definitely a lot of advisors who are similar to you that they get the importance of taxes that’s why they’re listening in.

But they either are looking for ways to collaborate better with tax preparers. They want to do more for their clients, but they don’t want to themselves become the tax expert. They’re not looking to become CPAs.

Jamie Shilanski: So, I was thinking about that because so often, during my work week, my day starts with Micah Shilanski, my little baby brother, calling me at 6:00 AM if he’s not on the phone with your baby brother. Or is Matt older? Is Matthew Jarvis older than you?

Steven Jarvis:     I’m the baby brother, yeah.

Jamie Shilanski: Are you the baby of the whole Jarvi?

Steven Jarvis:     No, I’m the middle of seven.

Jamie Shilanski: Oh. See, that’s why we relate. That’s why you’re my favorite. So, Micah calls me this morning, and we’re going through like the rundown of the day, what we’re trying to get done and conquering and stuff.

And I said, “Oh, yeah, I got to talk to Steven here at nine.” He said, “What are you talking about?” And I said, “Well, he invited me on the podcast, I’m going to jump on there and talk about taxes and business.”

And he said, “Well, what are you really going to say?” And I was like, “I don’t know. We’ll just see where it goes, Micah.” And that’s because out of all the Shilanskis, I’m probably the least tax nerd.

Like when we go to Hawaii in January, dad and Micah are flipping through tax code and I’m like, “Margarita, pool boy, where we at with that?”

So, I got into taxes as a default. It’s something I grew up hearing from my father, Floyd Shilanski. He would always say that prospects come through the door for the investment advice, but they hire you for the tax advice.

And so, one of the things we do with our RA is we’re always asking for the last three years of tax returns. And that’s because when we get through a tax return, we can flip through that in 10 or 15 minutes and deliver so much value to a client. And it might be information that they already know, but maybe they thought it wasn’t so.

And they’re a little off on how to read a tax return because the CPA doesn’t ever sit down and do that. They hand them the tax return and they say, “Here’s my bill. That’s right up top.”

That’s the very first page on the letterhead that says, “You owe me X.” Second page is, “Oh, and you also owe the IRS. Aren’t you happy that my bill is smaller than that one?”

So, I got into taxes as a default because I work with a lot of small businesses, and a lot of times, those small business people are like my people, like the people I love to work with, are people that I share values with.

So, these are people that are salt of the earth. They started a business because they thought they could do something better than someone else.

These are not necessarily scientists that innovated some brand new technology that’s revolutionizing and disrupting the world. These are people that said, “I had a lousy experience over here, I had a lousy boss. I didn’t like being a part of this organization, but I love the work I did. I can do it better. Watch me go.”

And so, the very first conversation, so when they start up with me — normally, in that stage where they’ve either developed their business plan and they’re just kind of in the first couple of years, that’s my favorite time to grab a prospect, a small business prospect, because then we can get the planning done correctly.

Then we can start like building that business correctly, step by step. Oftentimes, I also have a lot of entities that started the business. Most businesses fail in the first seven years. And they come to me kind of mid time and say, “Should we file bankruptcy or do we keep going? Like what should we do here? Because we’re kind of at that crux.

So, a lot of my initial conversations with small business owners is we have two initially. What kind of legal entity should we structure and what kind of tax election should we make?

And if a lot of your audience is much like myself, this was an education I had to have because every CPA I’ve ever had a conversation with leads me to make an S election. But that’s not the only election that you can make as a small business, right, Steven?

Steven Jarvis:     No, it absolutely isn’t. And it almost kind of feels like that the CPA exam is just multiple choice that’s A, B, C, D, S, and that everyone just picks S all day long. That’s not the way it’s structured, but it can certainly feel like that.

I mean, there’s whole companies that their business model is, “Hey, come work with us because we’re going to get you to be an S corp.” And that’s it. It’s S corps for everyone. And S corps can be a great advantage in the right situation, but like any other area of the tax code, it is not one size fits all.

And you highlighted it there, Jamie, in how you asked those questions. But even just helping people with that education piece of your legal structure is not inherently the same decision as your tax structure.

And separating those out to help people understand that how you set up your business may or may not have a direct tax impact as far as the income tax rate you pay.

Because my experience with a lot of small business owners — I loved how you described that the plans and the excitement and here’s what I’m going to do. None of them start their business with a clear idea of what taxes are going to mean.

Some of the ones who are really forward thinking might have included an item in their pro forma or their projection that’s like, “Hey, I’m going to have to pay some taxes.” But it’s usually a nice round number and they just move on.

There’s no room for how do we plan around this? How do we make sure we take advantage of it so that we’re not overpaying the IRS continually.

Jamie Shilanski: And so, I do like S corps. So, I’m going to beat them up kind of in conversation today, but they have a time and place. And a lot of times, we think a small business we think who owns that small business? Husband and wife, mom and dad, someone in that way.

And a lot of small family businesses think that that S corp is great because it’s controlled. And one of the limitations of an S corp is you can only have a hundred shareholders. And sounds great for a small business.

But one of the reasons I don’t like S corps is you can only have one class distinction of stock. So, everybody is treated equally even if that’s not fair. And that’s a big question for a lot of my small business owners, says, “Okay, great, where are we at today?”

And my number one rule in building entities is that I always build entities with the intention of selling them. Not because I want to sell them, not because I’m looking for a quick buyout or how do we get this to the marketplace quick as possible.

But instead, because if you build a company as if you’re in a position to sell it, then you’re looking at that company as a standalone entity. And a lot of S corp owners look at it as like that family business. That’s it, that’s the whole family.

It dominates every Sunday dinner conversation. It’s what you talk about after you open presents on Christmas. It’s where you expense your holiday for your family to go on vacation. I mean that S corp becomes a living, breathing member of that family.

And I really like to take a step back from that and say, “No, this is a company, this is a business. Let’s not do small business shenanigans. Let’s run this business like a business.”

If you have your niece who has a hard time earning income on payroll, get her off. She’s either contributing or she’s not to that entity. Now, can you do fun things with putting kids on payroll? All day long.

Steven Jarvis:     Absolutely, yeah.

Jamie Shilanski: Yeah. I love those options. But you have to be comfortable with kiddie tax. And most people don’t realize what that is. And Steven, what is kiddie tax?

Steven Jarvis:     Well, so the IRS doesn’t like it when people try to get too creative with the tax code and try to try to hide things from them or shift things around. And son …

Jamie Shilanski: Like shoving your income to your small child

Steven Jarvis:     Yeah. Like saying, “Hey my little kids in a lower tax bracket, so let’s just pretend it was all their income, or even let’s give it to them.” The IRS for some reason doesn’t like those shenanigans.

And so, the kiddie tax is essentially a way for the IRS to say, “You can’t just pass all the income onto your kids and expect to avoid or get a better tax rate.”

Jamie Shilanski: So, you got to be careful with that and make sure the bang is worth the buck. Like you really have to watch what you’re doing when you’re forming those entities and looking at those small business shenanigans.

And then with those S corps, one of the reasons that I don’t like them is because they’re also pro rata distributions. Like, how do you get money out of the company? And we found this even with on our own family business.

It says, “Okay, we’re going to do all these different lines, we’re going to have all these different things going, but we’re an S corp. So, who are our shareholders? What are those percentages?”

There’s a lot of reason why it makes sense that the majority of the shareholders are still our parents. And so, we know that that makes tax sense. But then, as you’re building this business, you’re like, “Well, hold on a second, what am I putting all this effort, this energy towards? Where is it going? Et cetera.”

And it’s important for us in our own feeling to ask those questions because they will happen in other people’s families as well. And so, my goal is, even though that we’re structuring this company as if we were always going to sell it, that’s not because we want to get rid of the family legacy. That’s because I want to keep the family intact.

And if you look at family businesses in particular, I think Kellogg University does this, a phenomenal family planning course. And it talks about three generations. That you have the entrepreneur that starts the business, they are hustling, but it’s that second generation that takes it to that next level and really gets the income going. And then it’s that third generation that destroys all the wealth and they break it apart.

So, how do we structure companies? What election do we make? What tax election do we make that is really imperative to the value of the work that people are doing and moving that entity forward so that equal and fair can mean the same things?

So, when somebody forms an LLC for your listeners that don’t know this, the limited liability company is a legal structure. That’s a legal definition of something. Under the LLC, you get choices when it comes to how you want that LLC to be taxed.

Steven Jarvis:     Yeah, absolutely and it’s going to depend on how many people are involved in the LLC as far as what your options could potentially be, but just structuring an LLC …

In fact, just setting up an LLC doesn’t even necessarily mean you have a separate tax filing. That’s one I have to touch on with taxpayers constantly with rental properties. I’ll have people who say, “Well, an attorney told me that I should set up an LLC for this rental property, but I don’t want the extra tax form.”

And I say, “Well, what extra tax form is it you think you’re going to have to file?” And they say, “Well, I guess I don’t know, but there has to be an extra tax form.” Nope, not automatically. It depends on what we’re using the LLC for and these choices we make.

Jamie Shilanski: And that’s imperative. Because an attorney told me. And so, when you’re setting up an LLC especially today, because you can set up an LLC, for what? A hundred bucks online, super quick. Rocket Lawyer, what my attorney friends like to call Legal Doom instead of LegalZoom.

Because whatever choices you make you better. And I have clients that are attorneys but they maybe don’t practice business law. And if they want to use one of those platforms to generate all their stuff, fantastic. They understand what they’re reading.

For the common person, we don’t sit there and go through legal documents all day long. So, whatever elections you make, if you’re going to use a platform like Rocket Lawyer or like LegalZoom, you better be cognizant and aware of every choice you’re making. And so, that LLC, that’s a legal structure. So, that’s what’s really important to remember.

The second step of that, once you have your LLC set up, is now deciding how do I want this to be taxed? And so, you have quite a few choices on your tax options. And so, this is where I drag a CPA and now, we start looking and saying, “Okay, what’s the best option?”

So, what I have here is I’ve got my business plan that I built with the business owner. I’ve got the attorney who’s given me the legal advice, and then my third element is I’ve got to work with that tax professional.

So, most of the companies that I work with, one of the ground rules that I lay, unless we have a really great accountant or bookkeeper already on staff, is they’ve got to outsource bookkeeping and accounting.

Most small businesses try to do this themselves, and they try to do it in-house to save costs. They just don’t know what they don’t know. And most CPA firms today use what’s referred to as BOSS, so back office support solutions.

And so they run … in fact, Steven, this is why you see an exodus, I think, of CPA for individual tax preparers in the industry is because most of them are moving to just the accountant model.

Steven Jarvis:     Yeah, absolutely. Jamie, there’s a couple of things I want to pull out of here as you’re talking through that because I really love how you’re describing this process. I’ll often get people who will ask me, “Oh, well, you’re the tax guy. So, it’s always taxes is driving everything.”

And I say, “No, you’re right, I am the tax guy, but this is a perfect example of why taxes are an important passenger, but not the driver.” I love that you went in that order of, you start with what’s the business plan? What are we trying to accomplish? What are our goals? How do we structure this in a way that’s going to be successful for us?

We get the attorneys involved, and then the CPA’s not an afterthought, but they weren’t who we started with. And I like that approach because as I mentioned, those companies will just say, “Hey, S corps for everybody.”

I do think that a lot of them are well intentioned, but they’re coming from the standpoint of they’re just thinking about taxes. And so, their marketing materials sound great; “Let’s avoid self-employment tax, you can have distributions. Here’s all these different things that you can do that are great for taxes.”

And in a specific situation that may or may not be true, but I see where they’re coming from. But that’s just one piece of the puzzle. And to your point, if we don’t know how we want this to be structured or grow or what these different complexities are going to be, making an S corp election right out of the gate can cause real problems.

Jamie Shilanski: And so, a lot of times I see S corps, particularly in family-owned, closely-held businesses. But what happens when it’s not your family, when it’s your BFF?

In fact, the smartest thing I ever heard an attorney say to me was there was a group of five friends that came together, formed a business, and they had kind of a verbal working agreement for the first year and a half.

And she said, “Hey, listen, I got a file cabinet full of ex-best friends behind me. Do you want to see it?” And that really resonated to me because you’re right. When you start a business together, it’s all excitement and energy and passion, and we’re going to do all of these things and it’s going to be so phenomenal. And then you get sort of after that startup stage, it’s real.

It’s business license and workman’s comp insurance, and tax filing statuses, and who gets to have a company vehicle. So, you have all of these things happen that maybe a CPA is not really thinking about because they’re just looking for that pass-through income.

And so, this is where I love to get the CPA’s input, and then I make a strong argument. If I don’t have a husband and wife, a mom and dad, or a family, there’s probably strong argument that I’m not going to have my client choose in S election. Instead, I’m going to go 1065 partnership?

And I’m going to say, “Alright, we have our legal structure, is a limited liability company, but how do you want to be taxed? We’re going to be taxed as a partnership. Here’s why I’m going to advocate for the partnership, here’s why your CPA is going to tell you not to do it.”

Because they’re going to say, “You want this pass-through income, you have this self-employment tax, da-da-da-da-da. You want to do all these things.” And I want 100% understand that.

Until things fall apart, until best friends aren’t best friends, until husband and wives divorce, until family doesn’t even talk to each other anymore. And it happens over something trivial and small. How about this one pro rata distributions of an S corp.

You have an S corp, you want your business rights off. And so, you have one member say, “You know what, I’m going to buy a Tesla, and that’s going to be my business car.” And then you have the other one buy a Chevrolet used pickup truck.

So, here you are, your used pickup truck’s 300 bucks a month, the Tesla is $1,300 a month. How is that fair and equal?

And those are the questions that I walk through with clients and say, “How do we want this structured when it’s not the two of you? If you’re totally strangers, how do we want this to go? And maybe the self-employment tax is worth it.”

Steven Jarvis:     Yeah. So, Jamie, what I would love to get your insight on, because a lot of professionals feel really strongly about the way they do things. And so, you and I get to collaborate really closely because you’re an RTS Premier member, and with your individual and family clients, we have a great working relationship where we can talk through these things and make sure that we’re doing what’s best for the client.

But you described that situation where you’re going to your business owner clients, you’re setting this plan up for them, and you’re even letting them know, “Hey, your CPA’s probably not going to agree with this.”

So, how do you navigate that dynamic when you know your client’s going to go to their CPA, and CPAs tend to be viewed as a trusted expert, as a trusted advisor. And so, now, you’ve got to navigate this of CPAs saying one thing, I’m saying another thing. How do you handle that?

Jamie Shilanski: Well, starts with that business plan. So, during that first meeting when we’re having that business plan says … a lot of people on this podcast might not know what the pro forma is.

And so, anytime you’re building a business, you’re supposed to have a business plan that shows all your marketing models, what your expectations are. And then the pro forma is your spreadsheet. Says “Here’s my anticipated revenue, here are my anticipated expenses, and this is one …”

And anytime you go to do lending or borrow money, they’re going to ask you for that pro forma. And then they use, what is it? RMA, the industry benchmarks — most industries, whether you’re a dentist or a veterinarian or a CPA or attorney, you have some type of industry benchmark of what people charge for that particular good or service.

And so, then the bank, the lending institution will take your pro forma, they’ll run it against that and say, “Hey, does this pass a straight face test? Are you projecting a 50% profitability, but of overall, in your industry is only 10%.” And then they’re going to tell you, “You’re off base, go fix it.”

And so, pro forma is just this hypothetical projection of what you think the world that your business is going to be in. It needs to be positive, but it can’t be too positive because then, it’s unrealistic. And you have to keep watering it down.

So, when I have that long-term business plan, I say, “Here’s where we’re going in the next 5 to 10 years. And this is how we’re going to design things. This is how we’re going to build it. And we don’t know what we don’t know, but this is where we’re headed.”

And then I want to talk to the CPA. I will have many conversations with CPAs that my clients are not privy to or invited to. And that’s a place for me to look at the CPA and for us to just bang it out. Let’s just hash it out. Let’s just go to blows. Let’s argue our points.

And most of the time, I don’t deal with a lot of CPAs that get overly stuck in the non-invented here mentality. A lot of times, with CPAs, if I can remind them where the company is headed, where we’re going to go, and then give them the reason why I want this choice to be made, and then ask them what their fears, their doubts, their concerns are, and then reinforce my opinion.

So, that’s the biggest thing with CPAs for me, is I better be able to point to a tax code, point to a private ruling and say, “Hold on a second, this is how I read it. Could you help me? Like you’re the expert.” And they’ll say, “Well, it’s not normally done this way, but I do see how you have a point with this code.”

And that’s what they want. They don’t want their clients to be in trouble with the IRS, and they don’t want their name attached to a client who’s in trouble with the IRS. So, as long as you can justify your opinion and support it with evidence, most of the time the CPA’s are going to play ball.

And if not, when I meet with a client, I say, “Listen, if you already have a preexisting relationship, I absolutely love that.” I will play nice with anyone who plays nice in my sandbox.

If they don’t play nice in the sandbox, you’re the teacher, I’m going to have to tell you I’m going to excuse myself from that situation. And phrasing it like that puts me in a situation where the client, now, if they’re getting static from their CPA, it makes the CPA look petulant, not me.

Steven Jarvis:     For everyone listening, whether you work with business owners or not, the way Jamie just explained that is almost a masterclass in how you should approach this. I hear the stories all the time of advisors not getting along with CPAs.

But when you take this approach, the CPA fighting with you is going to be the very rare exception because you’ve laid out why this is the right decision for the client, there’s a clear plan around it, you’ve supported it with other situations, you’ve seen this or relevant tax code — that you’re coming to the CPA as someone that you’re trying to proactively collaborate with. You’re not dictating to them, “Hey, I know what’s best for my client, so just do this.” It’s supported by all these other things.

And in fact, Jamie, as you described that, at least the way I took it, was you’re not really even coming to the CPA and saying, “Here’s all of the tax things that you’re going to have to know, just go report it.”

You’re coming to them with the plan that makes sense for the client, then asking them to get on board. And so, they still get to be the expert on the tax piece. Even if there’s an outcome you’re hoping for, an outcome you’re seeding, they still get to be the expert in their own right.

We all just want to be treated like professionals, like peers. We don’t want people talking down to us. We don’t want people dictating how we should be running our practices.

Jamie Shilanski: And I don’t want to embarrass the CPA or make them seem like the evil person that just wants you to pay taxes and is too afraid to do anything. Like I’m not going to talk trash to the client about the CPA. I’m always going to elevate that CPA.

I’m always going to say, “Hey, listen, your CPA and I might have different points of view. They might try to talk you out of this. This is why I support my decision. I’m happy to kind of …”

One of the analogies that I always give my clients, is I say, “Listen, you have a financial team and we’re all playing for you. But here’s the reality; one of us has to be the quarterback. One of us has to call the shots on the field. Now, that whole team has to work in unison.

Because if I can’t get that ball down the field, we’ve got a big problem. I can’t get it across the goal line. I said “But ultimately, you are the coach, you’re the coach client, you have to call the shots.”

“So, if we’re out there and we’re telling you what we think is best because we’re on the field and in the trenches, we’re going to give you the best round of information possible. But you are the coach. You call the shots, you are in control. You tell me which direction you want me to take.”

And Steven, I had a guided conversation really, really further in depth. And like I said when we started this conversation, I am not a tax nerd. Like I don’t just geek out over taxes, but I understand the value that they provide to clients.

And so, when I look stuff up, I’ll go to, and if it doesn’t come from RTS Premier membership or, I’m probably going to discredit the advice. Because anyone with a website, 30 bucks, you too could be a tax expert allegedly online.

And especially, oh man, Steven, how about this one? YouTube, all of the information that is in YouTube University from all of these “tax professionals,” that are not licensed, they’re not normally CPAs at all. And I see them in the real estate world all the time. And because I deal with like a lot of … yeah, you know who I’m talking about.

Steven Jarvis:     No, I had a recent example of that. Real estate immediately came to mind because we had a new taxpayer, we worked with this last year through one of our other premier members who when we went to review their tax return, they had bought a couple of rental properties. They had poured all this money into renovating the properties, and we were just catching it on the back end. We weren’t involved in any of the planning conversations.

And so, we went to review their tax return, the taxpayers say, “Hey, we’re kind of surprised we owe so much in taxes. Where’s all of our benefit from our rental properties?”

And that was the first time that anyone had ever explained to them how passive activity losses work or what those limitations are. And their faces just fell. They were devastated. They thought for sure I had screwed everything up.

And as we talked through it, come to find out they had gotten their information from YouTube, from people on the internet who did not have a stake in their success.

And they were 100% under the impression that they could write off all of the expenses and get a benefit right now. And that was a really hard conversation to have to have with them because they made that decision based on incorrect information.

Jamie Shilanski: And the flashier the YouTube video. If they start with like red, like big bulging cursive letters about how you can cheat the IRS out of millions of dollars, et cetera — this is a warning; that red is a red flag, move away.

But I had a client that owned a flower shop, very successful branch and bought a G-Wagon, a Mercedes G-Wagon whose base model starts at what? $150,000. I should know this because my spouse wants one so bad.

My spouse wants one so bad. And I refuse to do it because I’m like that is a house for most average Americans. Side note, when my spouse wanted a G-wagon, I bought her a gladiator and get a vanity plate that said, “Here’s my G-wagon.”

Jamie Shilanski: They did not laugh.

Steven Jarvis:     I was going to say, I thought your spouse would want something that can get off road and I don’t see the G-wagon being great at that. But I’m not an expert there.

Jamie Shilanski: There’s a fancy side to that one, let me tell you. So, the client sent me a YouTube clip of some random person claiming all this tax advice that said “Go out and buy your luxury vehicles and they are a hundred percent business deductible.”

And so, the client buys this vehicle and says, “Hey, I have this business …” in a flower shop I’m expecting like a cargo van. Something that I could reasonably justify to the IRS.

And so, luckily, in this relationship, the CPA calls me and she’s like, “Jamie, this is not a business vehicle.” And I’m like, “No, this is not a business vehicle.” And they send us the YouTube video and says, “Here’s all the reasons we should have tax deductions.”

Steven Jarvis:     They sent us the YouTube video?

Jamie Shilanski: And I was like, absolutely not. And having to walk clients off the here and now. And so, there are a lot of times, like even though I pick on CPAs and we might spur and go back and forth.

We’re all in it for the best interest of the client. And we want to deliver that absolute value. So, sometimes when the client is wrong and sends you a YouTube video because some idiot told you could expense some G-wagon, you have to take the win, and be like, “Hey, listen, I side with your CPA on this one. I really think this is bad. You’re exposing yourself to a lot of audit risk, and you’re the coach. What do you want to do here? Because I’m going to tell you, don’t do it. That’s just your personal vehicle. Walk away.”

Steven Jarvis:     Yeah. One of the challenges that comes up with taxes is that these so-called experts think that the fact that they haven’t personally been audited means they’re doing everything correctly, which is not the case.

Unfortunately, tax prep software will let you do just about anything you want. And the IRS is super understaffed, although they’re quickly hiring 87,000 agents. So, that might change a little bit here soon. And your tax strategy should not be, “Let’s hope they don’t notice.” And so, just because it hasn’t blown up in your face, doesn’t mean it’s right.

Alright podcast listeners, Jamie and I were having so much fun that we actually broke this episode into two sections. So, that is where we’re going to leave off with part one of this great conversation about working with business owners around taxes.

Now, of course, the show is all about taking action and so we still want to give you action items from this part one of two of my conversation with Jamie.

So, action item number one of course, is going to be, make sure you subscribe and come back next week to hear the second part of my conversation with Jamie.

We switched topics a little bit, but still focused on working with business owners. So, a lot of great information in next week’s episode. So, be sure and come back next week and keep listening.

Action item number two, and of course, this is one that you’re familiar with; but we want to make sure that we’re getting tax returns for our clients every single year. And for our business owner clients, it’s especially important that we get all of the related returns as well, especially if there is a partnership or S corp, that we’re getting that form 1065, that form 1120-S that we have all of the underlying details.

The other piece specific to this first part of the conversation, is we wanted to make sure that as we’re talking to business owners, we have somewhere in our process, somewhere in our checklist, that the conversation around how to structure a business doesn’t just focus on taxes. Making that election on an LLC is not strictly a tax conversation.

Alright. Until next week, good luck out there. And remember to tip your server, not the IRS.

We’re not overpaying. No, we’re not overpaying. We’re not overpaying anymore. The tax code’s complicated, boring, and overrated. You don’t want that, you want a pro. One thing that you should know: this is a radio show. It’s not tax advice, don’t take it that way.


The information on this site is for education only and should not be considered tax advice. Retirement Tax Services is not affiliated with Shilanski & Associates, Jarvis Financial Services or any other financial services firms.

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