#294: Turning Income Into Assets to Build Wealth with Tom Wheelwright (Rebroadcast)

“Employees pay the highest percentage of taxes. Big business and investors pay the least.”

– Robert Kiyosaki

In today's rebroadcast episode, Jason A. Duprat, Entrepreneur, Healthcare Practitioner, and Host of the Healthcare Entrepreneur Academy podcast, sits down with Tom Wheelwright, CPA, and CEO of “WealthAbility.” Tom highlights how your business can be the best tax shelter. We also learn how to save more money while increasing your gross income, as well as tax strategies for long-term tax reduction. Tune in to learn more from Robert Kiyosaki's Tax Advisor himself!

3 KEY POINTS:

  1. The government wants and supports business owners for the sake of the economy.
  2. One beginner mistake is handling taxes yourself without having a financial partner.
  3. Instead of asking if it's deductible, the better question is “How do I make it deductible?”

EPISODE HIGHLIGHTS:

  • Tom began his career with Ernst & Young, where he spent seven years. He went on to work for a Fortune 1000 company and has spent 25 years buying and selling CPA firms.
  • Tom was handpicked by Robert Kiyosaki to be one of his Rich Dad advisors. He serves as Robert's tax advisor as well.
  • He's authored two chapters in “The Book of Real Estate” by Robert and contributed to four other books.
  • Most recently, Tom has been touring with Robert providing financial education. Together, they have 50 CPA firms worldwide.
  • Tom left big company accounting because he wanted to work with entrepreneurs.
  • When business owners work from home, they get a tax benefit. However, employees don't so there's massive inequality.
  • You should consider starting a side hustle. It allows you to put extra money in your pocket and offers massive tax savings that can add up.
  • One small business tax strategy is to have a home office. Rather than take a flat deduction, itemize. Also, it's better to claim % of rooms vs % of square footage.
  • If you set up a home office right, not only does it give you a deduction for a portion of the utilities, maintenance, and even the cost of the house, but it even gives you a bigger deduction for your car because it turns your commute into a business expense.
  • Ultimately, you want to evolve into an LLC or S Corp for tax deductions. With an S Corp, only your wages are taxed, not the distribution. An S Corp can cut your taxes in half.
  • Tom cautions against filing as a sole proprietor because it's risky and costly to set up. In addition, 100% of your net income is subject to social security tax.
  • Never plan to be small. Act like a big guy and get big guy benefits!
  • Business owners often overlook the fact that business travel and meals are tax-deductible.
  • Don't intermingle funds. Your business isn't a hobby. You must behave like a real business to reap the best tax benefits and optimize write-offs.
  • Not only is it okay to employ your children, but the government likes you to employ them and they'll give you tax benefits. Children can earn up to $12,000 tax-free, allowing them to save for college more effectively than a 529 Plan.
  • As an entrepreneur, there are three tax planning principles to keep in mind: reduction of taxable income, tax credits, and tax rates.
  • Focus on permanent tax benefits vs postponing paying taxes. Have a team including a tax advisor, attorney, insurance agent, and bookkeeper.

TWEETABLE QUOTES:

“If you take your money and you put it back into your business, you don't pay any tax.” – Tom Wheelwright

“Employing your children is a great way to teach them how to work and the value of money and investing.” – Tom Wheelwright

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