Today's guest is Nick Krop, a CPA and partner of K&A CPAs and Cornerstone Accounting Solutions.
Nick gives us the answers most business owners have been trying to understand since day one.
From starting a business to growing a business, Nick's seen it all and gives out the advice you need to succeed as an entrepreneur.
Grab your drink and get ready. This is the caffeinated hustle, the best place to learn about entrepreneurs and FTS and life expert advice and guest interviews to launch your business and NFT journey further than you ever imagined. Now, here's your host, entrepreneur, coffee fanatic and founder of the NFT project, caffeinated creatures, Ben Carson. Welcome back to the caffeinated hustle. I'm your host, Ben Carson. thanks for stopping by. Alright, team, today is a great day because I've finally got you someone that you've been begging for a CPA who's willing to spill, the secret sauce, he's gonna let you know what's up. Because I mean, it's just it's so difficult to understand things that shouldn't be that difficult. And my guest today, Nick crop really should be able to help shed some light. So Nick is a CPA and a partner of que CPAs and the cornerstone accounting solutions, he holds his associate broker's license in real estate with Keller Williams, and he is just a phenomenal guy for taking the time and helping us out. So Nick, welcome to the show. Thanks, Ben. I really appreciate it. I mean, I'm excited to talk about some stuff because taxes are pretty needlessly complicated. I mean, we gotta get some sort of just let's just start at the top right, you're under oath, you got to tell us the truth. Do you actually enjoy taxes? That's a great question. I am do everything I can to get people's tax bill as low as possible. Do I love taxes in the sense of I want everyone to pay? No, I love the tax field in how we can better use, like, the tax laws for our businesses to reduce the money out of pocket for ourselves and benefit ourselves the most. So for me, I don't necessarily love, like, there's two different accountants that I've noticed in life, basically, from the people that come to me is, they either come because their account doesn't get back to them. And that's a huge thing. Or they come because they're like, you know, my accountant just didn't care. It was I was always looking for strategies or ways to reduce my taxes happen multiple times. And they're like, they just were like, it is what it is, they felt like they were trying to do something wrong. They're like, No, I just feel like there are some things we might be missing. So we're going to lower my tax bill. And the account just didn't really care about that, that's fine to each their own. They're just putting in numbers and helping them get to the tax bill that they owed. But some people really do want to know, like, okay, what can I do to benefit myself to pay my taxes, but pay, you know, like, what I what I can reasonably lower them to. So I'm more on that stuff. I'm a little concerned, I'm not. I will say I'm not a creative accountant, there are two there's creative accounting. And then there's, you know, getting a little creative with that I'm not a creative accountant, I'm not, you know, Saul, Saul Goodman's accountant or anything like that. But like, it's, you got to get a little Think a little outside the box, go a little outside of the guidelines. So you can then pull yourself back into like, okay, what can we what can we do here? What were some of those gray areas that we can be? Absolutely, that's a good answer. And I think before we get started, we do have to do a little bit of a disclaimer here, Nick's going to give some really good advice. But this is general advice. This is not specific to you, you have not signed a contract with him, nothing he's giving you is actual directly to you, you need to go find yourself a CPA and just take some of this advice with you. But don't do it without a proper CPA. This is not something that you can just run with. But it's a great answer. Because you know, the code, the tax code is just I have a CPA myself. And the tax code is so hard to understand is let's just start at the top. Is there any business that doesn't need a CPA or if you're going into business, you're just hurting yourself, if you don't get a CPA, I tell a lot of people this. So obviously, I have a Tiktok page, I get a lot of comments, things like that. And one of the biggest questions I get asked at least every 10 videos, it's when at what level of income or when should I get a CPA? When should I get an accountant? And for me, the answer is it depends on the your streams of revenue, of course, like how complicated your taxes are getting. But as soon as you have a business, you should have an accountant, you shouldn't have someone who's just doing your taxes for it, you should have an accountant, someone that you're going to talk to during the year, because if I'm looking at what you did, in March, February, April, anything like that, I'm a historian, I'm just letting you know, here's what you did. I can't retroactively really change anything. We can just work with the things that were done. But if you have an accountant that you come to during the year, I can say, hey, I want to buy a car for my business, hey, I'm looking to take on employees, you know, maybe I should switch over to a different type of structure for my business. Maybe they're a single member, they want to be a S corp, or maybe they're going to bring on a partner. How does that work? What's the whole ramifications of doing anything? Without an accountant, someone who's constantly seeing what they have going on. They can never get good advice. They can only get general advice, right? Like I'm going to give here. They can only get general advice because no one knows specifically what's going on with their business. But if you have an accountant, a good accountant, they're kind of like your partner there with your business throughout the You got questions, give them a call, you got a question about something you're about to do, send them an email. And they should be able to get back to you on those things. Because you need to be able to make decisions during the year, and not be like, I'm going to save up all these questions, or I'm going to do all these things. And hopefully it turns out good. I see that happen too much. And so I always tell people, if you have a business, it should be a part of the cost that you are assuming I'm going to have an accountant, and they're going to be helping me out with this. And so in that vein, find someone who can actually help you during the year. Don't look for h&r block, that's not an accountant that you're looking for, you're looking for someone who's always going to be there, h&r block, those people change all the time, you know, some of these like tax services, they're not bad. It's just the consistency of the person isn't always going to be there. And they might not even be that great at business. They're good at taxes, but maybe not business. So you really want to find someone that can actually help you along during the year. That's the value we're providing our clients beyond just doing their tax return for them. That's a great, great response there. I think we need to talk about the difference that you provide in information verse, a lawyer here. And I know that's kind of an obvious question when you think about it, but or an obvious statement. But when you set up your company, you know, a lawyer is going to set you up a certain type of company for a certain type of protection. And the company you're getting is basically, you know, an LLC literally stands for a limited liability. from a tax perspective, what type of company makes sense for most entrepreneurs? And why? Yeah, you can always tell when someone's been set up by an attorney, because they have like five LLC is two trusts and a C Corp or something like that. And they get a lot of protection for it. But at the end of the day, did it make sense tax wise? Probably not. It's good to marry those two things up. It's always good to marry up a financial adviser and a CPA, an attorney and a CPA, it's good to have all those people certainly working together. Because like I said, I'm not an attorney. So I'm not going to give that legal advice, like, hey, what's the best protection I can get for this? Or that? I always tell people, that is a legal question. I can tell you the tax ramifications for this or that, but I'm not going to give you beyond the generalities limited liability, it's going to protect your assets, generally speaking, but how much protection? You know, speak more with an attorney for some of the other things like you know, should you set up a trust all this guy. So in terms of setting up for a solopreneur, you're setting it up for yourself? I mean, minimally get something and LLC is really fine, because it's so flexible. So as an LLC, you can obviously set up a single member and be just a disregarded entity or filing on a schedule C, what does it do for you tax wise? Nothing. I mean, once you start making a certain level of income, it does make sense to switch off as a single member over to an S corp. And that's to save on some of the self employment tax. Not all of it, obviously, because you still should pay in towards social security, assuming it's going to be there for you in the future there. They'll probably keep that they'll probably keep that going. I guess. All right. Hopefully, I'll say this. I mean, people that are probably in their 50s to 60s are fine. It'll be there. We're paying for it. People around my age are like that. late 20s, early 30s. I mean, yeah, it's it's a quarter flip on this one. But that's it, you know, you got to pay something, and the IRS wants you to pay something and but like, you want to lower that down, once you get to a certain level of income. Did it make sense, your tax savings are enough to make up for the additional cost of the tax return, and the additional costs of payroll things like that. But generally speaking, this is the this is the avenue people could set up an LLC or single member, you're not making that much money just be on a schedule C, it doesn't matter, there's it's not worth the headache of going on to an S corp. Because that requires a lot more accounting, you need a balance sheet, you need the income statement, you need to keep track of your assets a lot better, you need to keep track of your loans. All those things require so much more recreation than just the Schedule C because I just need an income statement on Schedule C, and then I bought this truck fantastic. I'll depreciate it don't really have to keep track of things quite as detailed. So at the beginning, especially if you're just starting off, you're not really making any money, especially if you have losses, don't make an S corp, it's just gonna be an extra expense for a tax return. Don't do that. Once you get to like I usually tell people about $50,000 of net income, you're now probably at the point where switching over to an escort makes sense because you can put yourself on a 30 to $40,000 wage still have enough in pass through income that you'll save on the deci tax and it might be worth it to switch over to the S Corp. And then from there, you know you can you can choose to do something else if again, the LLC has flexibility I can as an LLC be single member disregarded entity, I can be a single member treated as an S corp. I can be a single member treated as a C Corp. I can even be a single member or I can be a multi member with a partner, right? So you can do a lot of things as an LLC, so an LLC being a catchall. I mean, minimally, just go get an LLC getting an inc really restricts you on what you can do. You can either be an S corp Er C Corp. Most people don't want to be a C Corp, when there are small businesses because the structure of a C Corp is not really conducive for what most people are doing, they're gonna take all the money out of the business, they're gonna be, they had to do that as a wage instead of just pulling out drawers from there, because those are gonna be taxable dividends. So C Corp is usually not the right way to go, unless there's certain amount of investors that you're looking to bring in here, if you're looking to maybe take it public, or if there's certain medical benefits that you're looking to take, like having a medical reimbursement plan and things like that, that's more doable on a C Corp than it would be on any of the pass through entities. So there are aspects for small business that might be good on the C Corp. But again, the level of recreation of all of your balance sheet income and expenses, like I said, a lot higher, probably not going to fit most people, most people should go single member LLC, you're not making much, maybe looking to switch it over to what S corp when you start making money. And if you have a partner, a partnership is okay. It doesn't mean that a lot of people get and this is not advice. This is not advice. Right. I said, No, we're good. We're good. One thing we get a little pushback on? And this is this is an area where we are maybe a little less conservative than other accountants, what's the right answer? And you can go either way on it. A partnership is structured where you have two partners, and you can't take a wage, right? So unlike on an S corp, where one of the owners has to have a payroll partnership, you don't have to write, in fact, you can't. So most people put it so that if you have a partnership of two people, they're both going to have all of their pass through income subject to self employment tax, there is no actual hard and fast rule that you have to do that. The Congress basically put it up that this idea, like do you have to put all of it subject to self employment tax? And they said, we'll get back to you with the IRS. And they never got back to them. And so it's just kind of up in the air, like, what do we have to do with this. So we've treated partnerships, kinda like the S corp, and that you give yourself a certain guaranteed payments like that, that wage, it's just a year end kind of allocation of a certain portion of my income is going to be guaranteed payment, subject to self employment tax, just like a wage would be, and then the rest is going to be passed through income. Now, again, people have absolutely fought me on this, that's fine. We've never been audited for it before. As long as you need to have some kind of guarantee payment in there. We're not skirting it completely. But we believe that there should be a investment aspect, even with a partnership, obviously, I put money in I should have passed their income back through to me, and I might have people working for me. So if I have people working for me, especially if I have employees and things will clearly I'm not earning all the dollars myself, clearly, it's not all self earned. So I can clearly have a an investment aspect on it. So partnerships do not necessarily imply every single bit of it's subject to self employment tax, that I feel that most accountants that's why most accounts push people towards S corpse is because the rules of an S corp are easier to put yourself on a wage. So we're going to worry about the rest is pass through. So we have been pushing more people towards the Escort because of the rules. Rules are good. Because if we follow the rules, you know, we stand to the IRS as radar, we're able to reduce your taxes. Without question. These are the rules we stuck by them. But if you want to a little more risky, you can go with the partnership route, or you can mess around with them. This brings up a good point because I've I've often wondered this, how much can you stretch the rules before the IRS goes, alright, you're paying the boat, we're gonna audit you. You don't want to have a lot of big things. So again, this is where we're, we're always going to look at what's the what's the general things are going to be looking for. If you have a partnership without guaranteed payments. It's a red flag, the IRS wants to see that they're guaranteed payments, that there is a partner that's working this getting a guarantee, but getting some kind of self employed income on this, right? Doesn't mean it's not you could have all passive investors and they pay employees totally fine, it's fine. And it might be legit, that there is no guaranteed payment, but the IRS still may audit it, you just have to prove it. That's just a red flag having too much meals expensive, you know, like your realtor or something like that, like maybe but again, as long as you can prove it, those those are things that are going to cause the biggest red flag and then with an S corp not having owner compensation or having it too low. One of the biggest consequences of an S Corp is people like Oh, great. I made $500,000 at the bottom but I only pay myself 25,000 Hours and Wages I saved a ton and self employment tax. That's I'm like that's great. But that is extremely unreasonable wage unless you can really prove that. Usually they're just working by themselves. unless you can prove that you really did nothing. You worked super part time on this. It was all passive to you. And the IRS may still come back and need that proof right? I always do everything to keep under the IRS is radar. Right? But the guarantee payments on the partnership make sure that the wages on the S corp Even if they're just like, a little bit higher than you want, would you rather pay me to now deal with the IRS in an audit, or pay slightly more in taxes just to stay under their radar entirely? That's genuine. I mean, like you can, I also, please, I always tell people is like, it's totally your call, whatever you want to do, here's my suggestion, here's what I believe we should do. If you feel that you have enough reason to do something else, or you just don't want to do it that way, with wages and stuff like that, I'll let people I give hard advice on what they should be doing. It does. So at the end of the day, there is again, it's rule of thumb, it's what's a fair and reasonable wage, it's up in the air. But if they want to go their own route very low, I'm going to tell them the consequences that if the IRS deems that you paid yourself too low, they can make all of your pass through income separate self employment tax, that's one of the consequences they could have on it. So okay, do your call, you just make sure you have enough evidence for why you paid yourself so low, that that's reasonable, that's fair, because you know, they may audit you, will they I mean, not necessarily, you have a less chance of being audited on an S corp or a partnership return than you do on a schedule C, just because again, there's a higher level of reporting, you got to have a balance sheet and all this kind of stuff. So the IRS sees more of what's going on, they see your distributions, they see how much you've actually put on the business, how much is coming to the bank account, all that stuff, they're gonna see a lot more detail. So their questions are lesser, whereas on a schedule C, all they see is, here's your revenue, here's your expenses, here's your net income. That's, that's really it. So usually, you're going to stave off some audit by being on these different kinds of tax returns. But nothing's a guarantee. Nothing's a guarantee in life. Yeah, so if you are doing let's see, the S corp sounds like it's really the the path for most people, let's let's take it back a notch. The people that aren't making just enough yet, on their side hustle on their potential future business against they're there in the LLC. Are you doing the bookkeeping as a CPA? Or are you only looking big picture and you need to have a bookkeeper first? And then CPA? I do it that way. But I'm just curious if that's just my preference? Or if that's the generic way to do it? That's a really good question. I usually tell people this, you kind of need to, not everyone knows accounting. But everyone can say I made this much money in revenue I made, these are my expenses, and come up with an income statement, everyone should be able to do that. And everyone should at least try and do that, to understand what is going on with their business. If some people feel like they want to invest right away in a bookkeeper, I would invest it like if you're gonna have some of your books. Sure, you totally can. But I think it's really valuable to take control of that at the beginning. Because you need to understand where your money's going how much money you're actually making, and actually make sense of what a financial statement is. Because if you always just receive an income statement, from your bookkeeper or from your CPA, I don't think it leads to a lot of great education on what it is that you're actually looking at, unless you were in the weeds, seeing how each thing translated into that income, that net income here. So I usually recommend that most people, please try it on your own at the beginning. And I'm not saying to get QuickBooks, please don't get QuickBooks. If you don't know accounting, it's not going to help you. It's going to make things much worse. Get an Excel sheet, write it down on paper, I don't really care. But just do something yourself. Don't feel like it has to be QuickBooks. You just got to click the buttons and it does it for you. Right? No, no. That's great. Yeah. So let's talk about the creative accounting, you talked a little about so the difference between a CPA that just wants to push you through and the CPA that wants to help you out? Are there specific examples you give that makes a CPA? Because basically, you know, you can only do so much work? Let's a CPA is national, if I'm if I'm correct, what is it like lawyer? It's got to be state, and each state is registered for that specific person? Yeah, it's a good question. I mean, I can do taxes for anyone, like I can do taxes for anyone and I state I work with people all over the US. The thing that our state licensure gives us is that there certain at a station work, audit work and things like that, that I have to have certain state licenses for like a CPA license in that state. I don't really do audit work or at a station stuff, so doesn't matter for me, and that's not applicable to taxes. So, okay, so let's just say somebody just wanted to find someone local, they didn't want to use someone on state. So what is a good way for someone that's listening to this that's potentially hearing this and realizing like the first 10 minutes, what you spoke about was just straight up great to them. And they need to get a CPA like how do they tell who they're interviewing, if they're a good CPA, if they're going to be creative and help them say the most or they're just going to push some numbers through and get paid and move on. So the first thing I actually did a video on just this the other day, so I kind of thought through this is the first thing want to look for are someone who isn't so quick to say yes or no and is not extremely black and white. Okay, the tax code is not black and white. It is a lot of it depends are an expense for one business might be fully expensed. And in for another business, even within the same industry, it might not. And it just depends on what that person is doing. So, if a CPA that you're talking to is just like, No, can't do that, yes, can do this, and just kind of pushes forward doesn't really give it any explanation for what they're talking about. I don't know, for me, that's kind of a red flag, like, they have a certain set of ideals. And if you try and come to them with something crazy out of the box, they're just gonna shut you down. They're not going to allow you to go through that, and then maybe talk more about it with you to see how they might go to make it work. A lot of people have crazy ideas. And it's great, I love crazy ideas. Because for me, I can maybe use it in one of my other businesses. Like, I want to hear your crazy ideas, because I don't think of everything, I really don't know everything. So you know, bring them on. And let's work through it. It's like, it maybe doesn't work the way you talked about it. But maybe if we did this, instead, we can make that expense work for your business. Or we could make this idea work within your business. But it works specifically for you. Don't go tell your friend, I'm doing this, I'm able to deduct this. So you can't do. It's not the way that works. Obviously, it's it works for us specifically because of what we decided. But for me, if they're too black and white, if they're too yes or no, I don't know they need to be mostly it depends or tell me more about what you're looking to do. And let's see if that kind of works. So when interviewing a CPA, you can probably tell pretty quickly if they're not going to be pretty, not not amenable to your ideas, if they're not going to work with you on some things. That's, that's one of the first things to look for. And another thing to do is, you probably have friends that own businesses, if you own a business, you usually have some friends that also own businesses, like you just kind of like it's within your sphere, talk with those friends about who they are using, because they should be using someone because that should be your first step is the first step is a referral for someone that they're using. Because one, that accountant will know that you came from a friend, that's they're gonna want to take care of you. Right? So they're probably good for some reason, right? They're probably good for that business. They might be good for your business. Maybe not saying always but that's the first step is look for that referral from a friend who also is maybe in your same industry, or at least in business, because they're probably talking with a CPA who knows business. That's what you're gonna want want to at least talk to first is a friend within the within that field. That's some great advice right there. I think referrals is probably the way to go. I've actually had my bank branch manager, get me my CPA, I just didn't know any questions asked him. I just got lucky that my guy's a little creative, too. But I literally I know some, like I have some friends that have businesses that they have very black and white CPAs. And they're trying to find somebody else because it's just it's just a numbers thing that they have no part of. So you know, pretty sure we're talking a little about and about business and the fact that you own a couple businesses. Can you tell us just a little about that, because I have some more counting questions, but I'd like to circle back. So tell us all about yourself. Sure. My background actually, before I got into full on getting my CPA, my accountant is I actually graduated college with my real estate license and I worked with my brother who was a real estate broker, and he owned a REMAX at that time. I started working at the back end of it, so I was doing the books and things like that. So I've always had some type of financial accounting and management accounting, but I was doing the books for that and a few of our other companies like my family's companies, and I eventually became a part owner in the REMAX with him and I've been now realtor for since 2014. So was that around like eight years or so at this morning, I got my broker license. Eventually I did a lot of real estate. And I pretty much told myself I'll never be a CPA and my dad was CPA and I was like get to do 40 hours a year of CEE that sounds awful. I just don't see that ever happening. Obviously I didn't get an accounting degree. So it's not it's not going to happen. And then we we sold REMAX and I was like why I should become an accountant. And so So I finished out some of the rest of the courses, I needed about 30 more credits, finish those out and sat for the CPA exam over about a year, took to take all those exams, pass those and I just kept going that route. So we've owned that and in between there and between us moving from owning the REMAX selling the REMAX and then opening back up Kay CPAs, which is my dad's old firm, he basically stopped doing CPA work. He still has been a CPA for about 30 years or so he just stopped publicly doing people's taxes. He just had did a number during the year mostly his businesses. He's a property investor and things like that, as well as a Yeah, we've he's owned more businesses than his age. He's in his 60s Now he's, he's own publishing firms. We own a gluten free restaurant at one point in time. We have a gun range and our fan but like we just do a number of things. He owned a mortgage business. He was part of REMAX he was doing it in the caffeinated hustle. That's friggin awesome. So we restarted K, basically, we actually took it from like, founder, we had like, maybe 50 grand in the first year worth of clients. And that was COVID years 2020 we restarted the company grew into like, yeah, no, right. It was, yeah, my first tax season, my first full tax season, there was an extended six months season, which, okay, I mean, it was actually kind of awful. And then the second year was extended again, and this year was a regular season. So it's been interesting progress there. But we open that up, we probably tripled at the second year. And then we got it up to like 250 or so this past year. And then we bought another firm little ways down the road in Maryland here, which is about 10 times our firm size. So we are we're quite expanded, I traveled between the two offices during the week, just me the other partner, my dad, he's stays here, and then the other partner at the other office, he stays there. So I get to, uh, get to have the fun time, which is a hybrid, which is great. But in between all of that me and my wife have a number of businesses that we started like she has like a social media marketing business. She did photography for a bit. And then we opened up we got really into the Disney community. So we're Disney adults, which is made fun of a lot, but it is we are different people. I got five kids, we go to Disney a lot. I get it. That is expensive. It is your the real thing is, is people say oh do you take your you take your kids to Disney a lot. I don't want to take my kids with me. I made my wife want to go to Disney. If we were going to Disney, I don't take my five year old or my two year old with me that sounds awful. But we got really into the Instagram Disney community and we were going to Disney a good bit and I was like, hey, there's all these Disney inspired apparel shops like we should start one. And then we can write off our trips legitimately we wrote off, I don't know, four or five trips a year to Disney we're gonna put in you know, we got annual memberships stuff, Like, legitimately we went out, we got videos down there. We always were taking photos of products. While we're down there. There was a lot of marketing we were doing while we're there. But didn't mean we couldn't have fun because we're in Disney. So, you know, that was a part of Honestly, I was a part of the branding. I was a part of the marketing and things like that. So it was it made a passion. A little more affordable. So it was it was a fun time. Did I make a lot of money in that now lost a ton, but it doesn't matter, because we're going to vacation there anyways. So we're able to kind of have best of both worlds. And then wow, okay, so clearly, if you're going to do a vacation, make sure you make it a business trip and go on Friday. Make sure your business on Monday night your weekends covered. That's that's a genius. Okay. All right. Now we got we gotta get back on topic, because what you explained is exactly one way to go about just talking about the fact that you have more than one business. Do you separate everything per business? Or if the business is overlap? How do you treat that? Do you take the more successful business to handle some of the burden of the less successful business? How, how exactly? Are you supposed to treat all this? If it's all sort of a hybrid? It's all sort of muddled together, but it's still supposed to be separate? How do you handle this the right way? That's a really good question. I mean, and attorneys answer and begin an LLC for each business, not wrong, probably good to protect the assets of the business stuff like that all separately. That said, I'll give you from my own experience, what do I do with actually all of our company so I have my real estate that I do not the accounting the accounting is the accounting firm, like the his or more partners, between me and my wife, we have her photography business that we started, we have the Nick and leet, which is our Disney apparel shop. We have four seasons media LLC, which is the main LLC, and that is her social media management and things like that, and she does consulting and stuff. So four seasons media LLC, that was the original LLC we set up. And then anytime we created a new business, it was our family business, and I created separate books for it, and I created a trade name for it, I could actually get a separate bank account and everything for that business operated, I could receive checks in the name of the business that required a NIC and lead is a registered trademark of was a trade name, I guess I should say, of the LLC for season four seasons media. So that's how we operate our Disney inspired apparel shop. So at the end of the year comes through to one LLC, and you're right. This helps me have basically this loss leader business or this business that basically needs to be supported by something else, just kind of wrapped up within there and then expenses are legit. I keep my books separate. If ever I were to be audited, based on my array of expenses on this one business, I can clearly show how you each operating section of this business is expensing these certain items. So it is kind of grouped all together. I even have my real estate as a trade name on this LLC as well, again, it's part of our family businesses. So I operate them all under one LLC. Is that the best thing for most people to do? Probably not. I do my own books, I know how to keep track of everything. And I'm making sure everything is cogent and make sense. Most people would probably be a little better off separating their businesses out so they can see things separately. I don't think everyone I don't think anyone has really the mindset to do that. Now that said, Can you though? Sure. Yeah, there's definitely an argument for it. I mean, I don't see why not. You just have different brands within that LLC. So yeah, because I just think about how many businesses could work like that, you know, like, if you have an Airbnb and you're renting out your own home, like you're gonna find ways to buy things for your business, you could use personal if you have one good business, you're going to use it to support another business is starting up. That's not so well yet. Like, there's a lot of gray area in this and I appreciate this the open honestly there because I'm sure people get lost in the weeds here a lot. Oh, yeah. Oh, yeah. Well, I mean, first off the fact you're taking Disney vacations, and being able to write them off, that is brilliant. I have five kids, can I like write them off? Somehow? I can't, I can never seem to write off as daggone kid. Well, I mean, there's always, there's always a classic, you know, put your kids on your business type thing, which is, I get tagged in a number of videos as of late, especially like, is this real? Can I really do this, I put my kid in my business and write off these things. Yes. If they're doing real work for you has to be it has to be real. You cannot pay them $12,000 Because they exist like no. One of the things the IRS definitely looks at is when you start paying your kids just understand the more and more you do some of these routes, the more chance you have of being audited. Because you're doing a lot of things. It doesn't mean you're doing anything wrong. It just means that you're opening yourself up for the IRS saying okay, I need more proof behind why you have so much travel expense or you I can see you're paying your kids $25,000 a year, how are you doing this? What are they doing for you just make sure it's legitimate work and make sure that they could clean your office for I grew up cleaning my dad's offices for him, that's what we kids did, we didn't get an allowance, we cleaned the office, that's what we got paid to do. We were doing legitimate work. And we would come in we do scanning or shredding of documents and things like that, like it was in the early 2000s. So a lot of paper stuff, we still weren't all digital at that point in time. You know, it's legit work, they had to do things do do something, yeah, don't don't just give them money. And then you can, you know, obviously, then if you pay them $12,000 or less, you know, the standard deduction, they can pay, they'll pay no taxes on that, you could then even have them put it into like a Roth IRA, if you want to, you could pay them $18,000, put them into a traditional IRA. And then now they owe literally no taxes, again, they have it invested somewhere, like you can do a lot of things with that. And that's great. Just make sure they're actually earning those dollars, not just paying them that money. You know, I've got a one year old, I'm not sure if I could pay her salary just yet. I gotta think about that. You know, you know what people do with their, their baby chilled their two year olds and stuff like that, again, it's legit, it's legit, but you got to make sure it's legit legit, modeling their models for whatever it is that you're doing. Like, yeah, take photos of them, they got to be a part of your marketing, you know, they have to be in there, your create a separate company, that is your modeling agency and employ that children under that modeling agency. And if you if you do it under either a partnership or a Schedule C, right, this modeling agency, if you do it under an S corp, you're gonna pay FICA taxes, your kids are gonna pay FICA taxes, if you do it under a partnership, or it can't be a corporation. So a partnership or Schedule C, they actually you don't need to pay payroll taxes at all, because they actually don't earn Oh, Social Security, Medicare taxes at that debt age before they turn 18 I believe. So you can really reduce the amount of money that you're paying for them. Okay. Well, that's, there's been some awesome advice here. Nick, I think we got to start thinking about wrapping it up. I do want to ask you one last question. Before we move on to the closing stuff here. Outside of setting up an S corp. Let's say you have an entrepreneur that's making at least 50 grand a year net profit or more, they've already got the S corp, what is the next best thing they can do to save on taxes? Hopefully at this point, they already have an accountant that they're working with that can help them actually know what they're doing. Setting up retirement accounts, stuff like that through your business, it's probably gonna be the next best thing. So honestly, partnering with a financial advisor is really your next step. So you can now invest that money and see where you can reduce your taxes that way, and some investment accounts, things like that. That's probably your next best step for most small business. entrepreneurs things I've got is stop just taking all the money out, but actually invest it towards yourself, do some tax deferred accounts, things like that, that can benefit you that way. Because other than that, it's just going to be looking at certain deductions. I know everyone wants to take as many deductions as they want, they want to add a car on to their business, they want to do this or that. But sometimes it's not feasible to just add a bunch of assets on your business, like, it has limits on what you need to actually expense in your business. So you guys are looking outside of the business itself. As an S corp, you know, you can set up a set plan, you can do a lot more, especially as an individual, you can contribute a lot more and reduce your taxes that way, while investing in your future. Those will be the next best steps of large deductions you can take within your business, that there aren't just you finding silly ways of putting a 6000 pound or more truck on your business and things like that, like okay, all right, you needed that Ford F 154. For this business for my accounting firm, not really. I work from home, I don't go anywhere. So that's why I need my truck and my coping mechanism. That's great. All right. Well, Nick, this has been awesome. This has been a ton of value. I really appreciate your time work and our listeners, you know, find out more information about you check out online. Where's your social media? Yeah, so I mean, the best place to find me is right now on Tik Tok. I'm Nick the CPA on tick tock. And that's where I produce the most content. I actually give a lot of tax video videos just like letting you know some of the general rules answering questions that people ask me in the comments, things like that. I'll do the occasional someone will tag me in a video, I can kind of debunk some things that are said out there. I try not to bash on people, though. I truly just want to get information to people. That's the only goal. I'm not out there to just try and own people or anything like that. So tick tock is a great place to find more information. And I do take some of those videos and put them on Instagram. So if you're more of an Instagram person, I do try and populate that with those videos as well. I have not set up a YouTube yet. That's that's definitely next in line. Facebook, just no one's on there anymore. So don't don't worry about that. Otherwise, our website is crop cpa.com. So KR o p cpa.com. That's that's where you can go if you ever want to send an inquiry. If you have questions. You want to talk more with me personally, you can set up a meeting that way. Yeah. So yeah, for sure. Well, I'll put those links in the show notes. And you can always get a hold of Nick. And since he's, you know, nationwide, give him a shout out. email him know. You heard about him from the show, and you just want to talk some business and see what happens with it. But Nick, we're gonna close it out with the same question we ask every guest on the show. What is your favorite caffeinated beverage to get through the day? A number of coffees at least two to three. I love the honesty there. It's not one. It's not just coffee. It's like I gotta have three coffees to get through it. That's awesome. Well, man, I appreciate your time. I appreciate all the info and we'll talk again soon. All right, man. Sounds good. Have a good one. Thanks for listening to the caffeinated hustle. Sponsored by caffeinated labs LLC. For more information or to connect with Ben, check us out online at caffeinated labs.io. Or email us at support at caffeinated labs.io. Be sure to subscribe so you never miss an episode, or give us a follow on social media by checking the links in the description. We'll see you next time.