#506 Peter Holtz: How Do You Cut Business Taxes by 40%?

[MUSIC] 21st century entrepreneurship with Martin Pysgerick. [MUSIC] >> What we do that's very different is the fact that we believe in a business while cycle. [MUSIC] We love to help our entrepreneurs understand their numbers and the business while cycle is basically four steps. Understanding your numbers so you can understand how to make money, keeping the money away from the government and effective tax planning and minimizing taxes on typically will save our average savings for our business owners is 40% reduction in tax. Then we help them reinvest those savings back into the business to grow their profitability. And then we help them make other investments to enhance their financial security. [MUSIC] And if you think of that well cycle and in putting that in place every single year, it grows their wealth and it really becomes like an upward spiral, right? Instead of spiraling down, you're spiraling up and growing your wealth higher and higher and higher. [MUSIC] My name is Peter Holtz. I am a CPA and certified tax planner. I've been a CPA for almost 40 years. I am in a business that is a lot of people look at it as very old school. And a lot of CPAs are basically box fillers, okay? You give them your numbers every year, but put the numbers on the boxes and tax returns and tell you how much to pay and when to pay. They don't do anything to help you save money on taxes. They don't suggest procedures, they don't understand your business, which is the key is understanding your business and what you can absolutely write off every single year. It's really, really important. And what we love to do is understand your business and get you on the business well cycle so that you can maximize the profits in your business. Keep those profits away from the government and continue to reinvest your money, which is the most important part of those profits. I mean, you got to think about it too. If you don't do tax planning, up to 50% of your profits can go to the government. And then you have half what you should have to reinvest in your business and grow it for yourself, for your family and for your legacy. [MUSIC] Most of the time when you retain a CPA is an entrepreneur, you're not really getting a chief financial officer. But most entrepreneurs, especially when they're starting out. And especially as they're growing their business, really needs somebody with that level of knowledge and talent. That CFO level to help you understand where your profits are, where they're coming from, what you should do next, what strategies you should put in place. And also then how those strategies interact with tax planning and how those strategies can help you save money on taxes. And most of the time we have achieved big results, the best results on tax planning. When we integrate this business strategy with the tax strategy. Should you be an escort, should you be a C-corp, should you be an LLC, should you be a sole proprietorship? What is your partner do, whether it's your husband or wife? Are you paying your kids, are you using the Augusta rule, are you using every single loophole you possibly can to maximize the cash in your pocket? Because every entrepreneur has that creative edge to use every dollar from their business to reinvest in their business. And it can be something that can be the best of things. And it can be the worst of things if they're not investing in the right things. Now, I have to understand your business first. You've got to understand where your profits are coming from. The key to that and business is very, very easy. You figure out what to do that makes you money and you do it over and over and over again. This is how all businesses work. You figure out what's making you money. You figure out what your margins are and where the margin is coming from. Meaning if you could buy whatever widget for $10 and sell it for $15, you make $5 each time. If you sell enough of them, you make enough money to cover your overhead. Margin is the key and starting with really having timely actionable clarity on what your margins are is the most important thing in business. Because if you don't know that, you're flailing. You're heading this way, that way you're chasing every single other bright, shiny, shiny object that's out there to try to make your business grow and go. But really, where are your margins coming from? How are you making money? I'm very, very fortunate, I think, because I generally am a very visual person. I think in pictures and I can envision or envision or visualize whatever I think I combine those two words. I envision business process. And I've seen so many different businesses after 40 years of being in business that I really understand how most businesses work and where their margins are coming. And if you find a way to generate margin and you find the, you got to find the volume to generate the margin, right? And really that volume is the function of the market that you're participating in. You've got margin, you have volume, you generate enough money to go and cover your overhead. And then the fourth thing that you get out of that whole process is the profits. Those things that get to hold on to and keep to grow your business moving forward. And if you take those profits and you keep it in your pocket instead of giving 50% of the way to the government, your growth process, if you really think about reinvesting in your business, we have twice the money and the government doesn't take 50% you have twice the money. If you have twice the money to reinvest in your successful business that you already understand, now you're able to grow and create more wealth, right? Because now you can grow twice the rate because you have twice the money. You cannot exit without good numbers, right? You cannot exit without good results. If you're not making any money, nobody wants to buy your business, right? If you're not in a good growing market, nobody wants to buy your business. And you could say you should think about this all the time or you should think about it when you're ready. And the answer is yes, you should. It's both are really true. Like what do you want to do with your life? Some people get into business because they want to pursue their passion, right? Let's say they're a restaurant tour, they love to cook, they love to create a food and enjoyable experiences and works of art really for their customers, right? And they want to become successful at it, okay? And they may want to, at some day, retire and create the systems in the process that somebody else can take on and then they can exit or they want to sell their brand or whatever. Let's say you have somebody like an emerald villa, right? Or a, who's the guy who does Spago? I don't remember his Wolfgang Pock, right? Wolfgang Pock is not working at every restaurant with his name on it, right? He's creating the process, but yet he's inspired by the art of what he does. So at some point, he will be able to exit somehow or maybe he's done a partial exit already by getting other investors that, and he gets a piece of the action essentially for his name continuing, right? So there's so many different ways to cut up that whole, am I going to exit? Am I going to create a long-term value where I don't have to work? You know what I mean? I will just get a piece of the profits for whatever. I could sell it all all at once. I could take a royalty forever. Or, you know, there's so many different ways to do things that's really, really amazing in our business, but the number one thing you've got to make money. And the number number two thing is you've got to create, and you make money by creating value for your clients and your customers, right? And the number two thing is, in order to do that, you need money. In order to do that, you have to minimize your taxes, right? You've got to have the right numbers. You've got to be able to show your investors the numbers. And you want to minimize taxes so you can grow those numbers. Right? In the tax side of things, to talk about that, you know, I talked about box fillers and I talk about the real danger and of some many people in my profession as accountants and CPAs. They view themselves really as compliance experts. Taking your numbers, not even understanding the numbers, but putting them in the boxes of the tax return to get them filed on time and tell you how much to pay and one to pay. That is not a service. That is a compliance. You know, you're required to do it. But believe it out, I have seen CPAs prepare tax returns for gas stations that have no assets on them. Okay? And how do you have a gas station with no assets? How do you have any business with no assets? I've seen restaurants with no kitchen on the tax repair. I mean, there's so many ridiculous things that I've seen because this, the people, when they view themselves as a box filler, they just don't think about what do the numbers mean. Okay? And when you look at a tax return and you see something like that, it is funny. You laugh a little bit and you think, oh my God, how stupid can you be? But it is because of the fact that people are thinking so hard about getting the boxes filled in correctly. They don't think about the business. I, so many people never write off their vehicles when they should because they may have, I had a guy last week, multiple pizza locations. Him and his wife are working in the business and they, and they never wrote off their cars that they used to travel from place, multi locational location. It's in the cost of doing business. And it's like their previous CPA didn't even bring it up, right? So there are so many different things you can do. The key is understanding your business. The key is understanding your business strategy and weaving that into your overall strategy for everything else you do in your business. I think with the advent of AI and everything that's going on, I have, I have sometimes people that come to me and they're like, well, I put this into chat GBT. And chat GBT says this or flawed says this or whatever AI tool has, but what you have to understand right now with AI and everything that it does, it's an averaging technology. Okay. And AI is going to go out and scan the internet, right? And figure out what's out there. And it's going to average what the average response is. And a lot of the detail that it's going to get to is the internal revenue service websites. Okay. So if you want to just listen to what the IRS has to say about whether or not you can write something off or whether or not that write off is justified, believe it or not, the IRS is not going to tell you it's justified. It is anytime you take a write off, it's a legal position that you need to take based on evidence. And it's based on judgment. And as of now, AI does not capable of judgment. It's capable of averaging things. And certainly, and every time you get a response on tax planning or tax issues from chat GBT or any other AI tool, it's going to say, check with your tax advisor because it's complicated. Okay. Because it involves human judgment because it involves actually dealing with somebody that has been a sit sat in front of the internal revenue service and has gone through an audit and understands the audit process to justify your position. And you know, chat GBT cannot tell you whether you should take the allowance, the mileage allowance or your car or you should write take the actual costs on your car. But a competent tax advisor who is a tax planner who understands your business can tell you which one to take usually at the drop of a hat. It's usually a very interesting and quick analysis, but chat GBT can't tell you that. And as of now, I'll talk about the answer. And I'll talk about the answer. We do nothing unless we can save you money. And we do nothing unless we can save you a multiple of what our costs are. Our business is always a positive ROI business that we work with our clients. If I can't save people a multiple of what my cost is to them, I won't do business. There's no other way to do it. [MUSIC PLAYING] 21st century entrepreneurship with Martin Piesgerick. [MUSIC PLAYING] Imagine a space where triumphs, trials, and tales of entrepreneurship come alive. 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