Writing Off Your Life: Tax Strategies of the Super Ninjas with Barbara Schreihans: An EOFire Classic from 2023

0:02John Lee Dumas:Who's ready to rock today, Fire Nation? JLD here and welcome to Entrepreneurs on Fire, brought to you by High Level, the all-in-one sales and marketing platform. On today's classic episode, we'll be breaking down, writing off your life, tax strategies of the super ninjas. To drop these vibe bombs, I brought to Barbara Schreihans and the EO Fire Studios. Barbara is the founder and CEO of Your Tax Coach. She's a tax strategist who aids business owners in saving millions of dollars in taxes while also growing their profits. And today we talk about how you have to stay consistent in working your business, how along the way you can identify gaps in your processes and think of ways to improve them, and oh, so much more.

0:37John Lee Dumas:And a big thank you for sponsoring today's episode goes to Barbara and our sponsors. Cape is a privacy-first mobile carrier built from the ground up with security as the priority. If you care about protecting your digital life without giving up your smartphone, Cape makes that possible. Visit cape.co forward slash fire and use code fire for 33 % off Kate for six months today. Stop duct taping your business together. High Level runs your website, your funnels, email, automation, scheduling, payments, and memberships all in one place. And when you sign up at highlevelfire.com, you get a 30-day free trial plus my exclusive bonus stack that includes weekly office hours with me and much more.

1:14John Lee Dumas:Visit highlevelfire.com, highlevelfire.com. Barbara, say what's up to Fire Nation and share something that you believe about becoming successful that most people disagree with.

1:30Barbara Schreihans:Hello, and thank you for having me. Oh my gosh, something that most people disagree with. I would say that you have to stay consistent. Even if you are kind of out of your business now because you've created a team and you've created processes, you still have to work at it every single day.

1:51John Lee Dumas:Fire Nation, we are talking about writing off your life. We're talking about tax strategies of the super ninjas. And we have Barbara to drop all these value bombs here today. And I want to start off with your story, Barbara, because I find it fascinating. Why in the world did you become a tax strategist?

2:13Barbara Schreihans:Everybody asks me that because they're always like, you don't look like an accountant. You don't act like an accountant, which I don't really know what that means. But I think people typically think of accountants as kind of like boring and old and stuffy. But I kind of accidentally fell into accounting because I got pregnant in college and I needed a major where 100 % chance the day that I graduated, I had to have a job, right? Because I was having a baby my junior year. And so I was like, I need to support him. And so when I went to my career counselor, they were like, well, if you want no chance of not having a job, you need to go into accounting.

2:58And so I was like, really accounting?

3:02Barbara Schreihans:Like that sounds so boring. And I ended up switching and loved it. I loved the tax side of things. So I went back and got my master's in taxation. Yes, that's a thing. And worked at all the big accounting firms and just realized like they weren't actually saving their clients any money in taxes. They weren't actually helping small businesses. And so that's how I created your tax coach is literally just to help small businesses and save people money in taxes.

3:34John Lee Dumas:One thing I talk about a lot here at Entrepreneurs on Fire is you need to identify a problem that's not being solved. You need to identify a void in the marketplace, an unmet need, and then create the number one solution to that problem. And you did just that, Barbara. You are a walking, living example of that. And you built a successful firm very quickly as a result. So we talked about really the major reason why, because you became the number one solution to a real problem that existed in this world. But let's go a little deeper now. Talk to us about building a successful firm. How'd you do it?

4:14Barbara Schreihans:A lot of hard work and headache and tears, but really, like you mentioned, solving a problem, having really really good communication I also saw that as something missing in my industry is someone someone just explained this really good on a call I had earlier they were like accountants are like dating someone that's not really into you and doesn't really respond when you when you reach out to them and I thought that was so funny but really good communication And then we also used social media, which no accountants at the time were really using social media to talk about how to save in taxes. And so I really just shared every day like little tips and tricks on things that could help small businesses.

5:02Barbara Schreihans:And when COVID happened, because I started my business the same year, 2020, I really just chatted about how you can save your business during this time, helping people get those PPP loans and EIDL loans. So I think like leading with value and leading with service and the money and success kind of just falls with that.

5:26John Lee Dumas:Well, let's talk about a specific thing that you were really able to identify and implement that you really think would be a valuable lesson for Fire Nation today. I mean, something that it just clicked and you're like, okay, this is working for this reason? What was that thing?

5:44Barbara Schreihans:Writing down every single thing I did every day, because look, when you start your business, it's just you, probably. It's just yourself. And as you continue to grow, and by the time you make your first hire, you're going to have to know how to train that person. And so I think really from the beginning, writing down processes and procedures, even though I had nobody else on my team, I wrote down everything so that when I did make that first hire, it was so much easier to train. And then you can also identify like kind of gaps in your processes or ways to make it better or customer service tweaks.

6:25Barbara Schreihans:And now we're, we have a team of like 20 something employees, and we still do the same process. Every employee has to write down and do loom videos of everything that they're doing so that we're constantly improving.

6:39John Lee Dumas:See, I love that Fire Nation because what you're doing is you're building this library of tutorials, of guides, so that if somebody leaves your business, you don't have to go back and recreate the wheel. You say, okay, here, listen, this is your video library of tutorials right here that you can go through and you can learn these things. And then, you know, as you improve processes, improve systems, you go back, you re-record some of the things, you update them, you keep them fresh and real and make sure you're doing those things. But one thing I want to talk about, Barbara, is you went from one to, I think you said, 27 employees.

7:14John Lee Dumas:Talk about what it really is when it's feet on the ground to grow by those numbers, from it just being you to then having your first hire to now when we're talking here, not too long after you first got going on this, 27 employees. What does that process look like?

7:33Barbara Schreihans:I'll say the first hire was the hardest for sure, because it's your baby, your business is your baby, and you kind of want to control as much as you can. But as soon as I hired the first person and I learned to delegate, and another rule that I kind of live by is if someone can do it 80 % as good as you, then it's okay. You can let go of a little bit of control. And so after making that first hire, I think another big thing that business owners need to know and calculate is can you afford the next hire? What those KPIs look like? So for example, in like a service-based industry, like accounting or maybe even attorneys or other service-based industries, there's kind of like this 3x to 5x calculation of like can you get if you pay someone$50 ,000 a year, do you have$150 ,000 of billable work for them?

8:36Barbara Schreihans:And so I kind of just followed that philosophy of even when I didn't really want to hire because the payroll numbers are a little bit scary. It's like, okay, is this 150k in the pipeline or whatever their salary is. So I think knowing your numbers and knowing how to calculate when the next hire is also super, super important.

8:57John Lee Dumas:One thing that I love that you are kind of teaching and touching upon a little bit here was the fact that it's important to let people do their jobs. Like when people can do something as you put at 80 % of the level that you can, give them that responsibility. You go off and do what you can do and what you should be doing best and let them develop and let them develop pride in what they do. Give them a hundred percent responsibility for the result. And guess what? People don't want to screw up. And when you give them 100 % responsibility, it's on them. They either succeed or they fail. And it's on them whether they do one of the two things.

9:34John Lee Dumas:If you are so micromanaging, they're not going to have any pride in anything because you're just such a micromanager. But then number two, they can always blame you if they don't succeed because they're like, well, I was just doing exactly what you told me to do as you were standing over my shoulder, like yelling at me every step of the way. That's not going to work. But if you say, listen, I know you're good at what you do. This is what I want as a result. Go and find a way to do it. Now you're giving people pride in their work. They care about the results and they're going to find a way to do it.

9:59John Lee Dumas:And then they're going to get better and less fragile as employees. There's a great book called Anti-Fragile by Nassim Taleb, which is all about building anti-fragile humans and teams and people. And that's such a key process and something that you obviously have been doing, Barbara. And that's why at 27 people now, you're still rocking and rolling. Now, we have a lot of things to talk about around this topic. And of course, some super ninja tax strategies, Fire Nation, that will save you money when we get back from thinking our sponsors. There's no better time to review your systems than the new year.

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12:22John Lee Dumas:If you care about protecting your digital life without giving up your smartphone, Cape makes that possible. Visit cape.co4 slash fire and use code fire for 33 % off Cape for six months today. Fire Nation, ideas are exciting, but systems will allow you to create freedom. That is where High Level comes in. High Level allows you to build and run your entire business from one platform. Website builder and hosting, funnel and landing pages, email marketing, automation and workflows, calendar booking, payments and subscriptions, even course and membership hosting. Everything works together seamlessly.

12:57John Lee Dumas:Plus, award-winning 24-7 support so you are never stuck. And when you go through my link at highlevelfire.com, you unlock my full bonus stack. a 30-day free trial of High Level with full access, a private 50-minute coaching call with me, weekly live office hours with me, a digital copy of my book, The Common Path to Uncommon Success, my 50 days to something execution roadmap, and more. Stop piecing tools together. Start building momentum. Visit highlevelfire.com and start building your something today. Barbara, we're back, and our listeners, Fire Nation, chock full of entrepreneurs.

13:35Barbara Schreihans:They are solopreneurs,

13:36John Lee Dumas:small business owners across the board. How can we write off our life?

13:43Barbara Schreihans:Oh, my favorite topic. So really what we tell everyone is a majority of things that you're paying for in your life. There is a way as if you're a business owner, there is probably a way for you to write that off in your business. You just have to find a way to connect it. And I love the quote, just change your facts to change your tax. And so examples of that would be you have to buy a new car. Well, can you use your car in your business? Even if you're an online entrepreneur, maybe you drive to the post office every so often or you drive to Target to get supplies or to a retreat or some kind of mastermind group.

14:28Barbara Schreihans:You're using all of those as business miles. And so you can write off the cost of the car. And so you can do that with anything, meals, even if you're meeting with friends, are you chatting with them about your business with parents or spouses? You're probably telling them all about your all the deets in your business as well. And so there's so many things that you can write off that you're probably like a little a little hesitant on. But again, just connect it to your business.

14:56John Lee Dumas:Fire Nation, think about what Barbara's saying, because for you, every dollar that you can save is another dollar that you can put back into your business again. And it just compounds on top of itself. So what's a couple things that really excite your clients when you alert them to this? Like maybe give us a couple of really specific examples where they're like, Barbara, thank you. Like, this is awesome.

15:18Barbara Schreihans:Yeah. One would be how your business is structured because how you're structure determines how you're taxed. And so if you only have an LLC for your business, you're paying the highest amount in taxes possible because you're paying federal tax, state tax, and the silent killer self-employment tax, which is another 15.3 % on top of your federal or state bracket. And so how you're structured is super important. Then we look at your family because how can we help you as a family save money in taxes while still keeping the most amount of income in your household? So I always hate the when accountants like only say go out and buy more stuff.

16:01Barbara Schreihans:It's like, no, how can we keep it in your family and build generational wealth? So another awesome tip is if you have children, you can probably find a job for them in your business and you can pay them up to$12 ,950 per year completely tax free in your business. And that's going to almost$14 ,000 in 2023. So paying your kids is also a huge little fun tip. And then when your kids are on payroll, they're now eligible to have a Roth IRA, which is really awesome because those are tax deferred accounts. And if you just contributed the max Roth for five years for your kids at retirement age, they could have over$2 million just from you putting in 30 grand.

16:53So that is super fun.

16:55Barbara Schreihans:Also the Augusta rule. If you have never heard of the Augusta rule, you can Google it. It's called Augusta rule because it started in Augusta, Georgia in the seventies when the master's golf tournament came to town. This was obviously before Airbnb was a thing, but when the tournament would come to town, all the hotels would be sold out. And so people started renting their houses out. And you can actually rent your house out for 14 days or less per year, and it's completely tax-free. And so business owners use it now so that their business pays them rent personally, and it's totally tax-free. And I've seen businesses get hundreds of thousands of dollars out of their business just from that one rule.

17:37John Lee Dumas:Fire Nation, I bet a couple of you right now have your eyebrows raised like, wow, I can pay my kids almost$14 ,000 a year coming up in 2023 tax-free and then get their Roth IRA going. I mean, these are some amazing opportunities that like Barbara said, will build generational wealth. So Barbara, let's really end with a bang here. You shared some ninja tax strategies to save money in taxes. Let's really end with a couple more super ninja tax strategies that you really want Fire Nation to know that you really want entrepreneurs to get to make the most out of what they do?

18:16Barbara Schreihans:Get the maximum home office deductions. A lot of times we hear from new clients coming in, they're like, is home office deduction still a red flag? It is not. Everybody works from home now. So max that out. Vehicle deductions are a huge way to get tens of thousands, if not hundreds of thousands. Hey, maybe you have like a Lambo or a supercar. You can totally write that off in your business. We have clients that write off planes and yachts and all kinds of fun toys as well. RV expenses were really popular during COVID. I know a lot of people bought RVs to just kind of like be nomads. And so there's some cool ways, maybe if you have a podcast and you go on a podcast tour in your RV, your RV could be a write off in your business.

19:03Barbara Schreihans:And then everyone's favorite topic is food. So if you go on any meals at all where you're chatting about business, write those off. But also if you keep snacks in your home office, those snacks can also be a deduction as well. And a lot of people don't know that.

19:21John Lee Dumas:Fire Nation, so many cool and exciting things. And of course we can't hit them all because it's just a podcast episode with Barbara and we only have so much time. So Barbara, let's end with one key takeaway that you really want Fire Nation to get. If everything you shared today, you know, they wrote down feverishly, but then, you know, by some weird thing, they forgot everything but one thing. What would that one thing be that you want them to know, you want them to remember?

19:50Barbara Schreihans:The one thing, I actually didn't even say it, but my number one tax tip is that you have to know your numbers because if you don't know your numbers, we can't then strategize on how to lower your taxes. So please, please, please keep track of your profit, your expenses, all the income coming in. And once you know your numbers, then we can strategize the best way possible.