Small Business Tax Tips To grow & Keep Wealth in 2025 with Mark J. Kohler

0:28It's not about getting rich quick. We're always talking about how to get right and what's working now. I can tell you about what the future is. I can tell you about the past is, but we want to tell you how to get ahead now. We go all, we're going deep today in business. We're going to tell you, and we're dealing with a one percenter. I'm telling you. So we got both a rare breed and we got the main street coming right to you. It is Mark J. Kohler. He is a tax attorney. He is the Main Street tax attorney, and he's going to tell us today how to get it all right. Because, look, we've got to put more money in your pocket, baby.

1:05That's what we're here to do. What's up, Mark? Hey, thanks for having me, Ryan. This is awesome, and I love that your focus is on this. So important. Yeah, man. Look, we want to give actionable advice, ultimately. I have a lot of people on, and our focus this year in 2025 is how to get ahead in all things. And look, small business is the fabric of the U.S. We can talk the high end. We can talk the low. We do all this, but that is what drives America is small business. And I love what you're doing, Mark. I love the mainstream approach, podcasting, author. We're going to have all the links to Mark's stuff.

1:46We got, he's got more shit going on than you would believe, but it's all about helping the main street. So, uh, Mark set the table for us, man. I mean, how the hell did you get to 1 % lawyer and a tax guy? All in one, it seems like the perfect combo though. Like when I started reading your stuff and talking to your people, I was like, this is a rare breed here, you know, but, but it makes sense. Yeah. Well, that's what the ladies say, you know, uh, you know, spotted white leopard. um you know i well i was always an entrepreneur i was the kid with the lemonade stand i was had a small business in high school and hiring my brother's friends and screwing things up and i mean it was tom sawyer painting white fences whatever it was but i just loved entrepreneurship and when i went on to school i went into business and then i thought hey this accounting thing no offense to anyone out there i mean marketing class finance is tough sure but i don't want to work for wall street so marketing man i'm gonna go accounting because i can stand out there if i can just get a c in accounting all the other a you know hire all the other a accountants and so sure enough i stood out in the accounting group as the party planner it was super fun and then i had this teacher who was a lawyer and an accountant and i was like holy crap this guy can take over the world so you had all the benefits of understanding the numbers sitting at the table and business and then I could freaking file a lawsuit fight the IRS do whatever and so I was like I want to be that guy so I went on to law school come to find out of a hundred lawyers one of them has any tax background and I freaking said I'm going to Main Street screw Wall Street and here I am hey man I love it because you know what Mark and we we talked a little pre-episode this but you know how many times I've asked a question of my accountant you'd have to consult your lawyer on that.

3:35Because look, I like to push the limit. I can admit it. It doesn't take long to figure that out about me. But I want to do it legally. I want to get all I can get out of it. And so the moment you said that, I was like, I have heard that a thousand times. Consult your lawyer on that, Ryan. Is it true? Yeah, it's maddening. And the hard thing is, is taxes are law. I mean, it's tax law, you know, and understanding it. And, and only the big dogs or big companies have been able to afford tax dollars. So I've worked really hard over the last 25 years, building a model based on volume and a boutique where we can help clients around the country and been doing that.

4:20But the important thing here is the number one cost in our lives are taxes. And, and people don't want to talk about it. It's too boring. It's too complex. What the hell do I do? Well, we're going to freaking demystify that. That's my whole career is to say it's not that hard, and you're the captain of your ship. Quit looking for an accountant to do it all for you. You can freaking run the ship here. Hire the first mate, and you can control your destiny. What's the most common thing you deal with, Mark? Working with Main Street, working with small businesses, what are those commonalities, business to business?

4:58I think because I think I always think there's. There's knowledge and trends and numbers. And so when you get asked a lot of the same questions, when you deal with a lot of the same challenges, I tend to think that brings knowledge to our listeners. What are some of those key things that you're always sort of tackling or working with clients on? Well, what's great question and what's interesting is since COVID, we've had the great formation. we now have almost we're pushing up to almost 45 percent of working americans have a side hustle and people that's a that's a small business that's a gateway drug it's not a burden we should look at as an opportunity to use that those funds to get out of debt build wealth create assets and one in five americans own a rental property in some form or fashion so if i've got a rental property and a little small business people you're not quitting your day job let's just tap into that and so a common common theme and what we do every day is meet with that that community those people and that are the backbone of this country that are starving for simple answers to get their kids on payroll save some taxes right off their auto but you know whatever it is and I love that bread and butter stuff and so it's just there's no mystery it's not like there's this secret thing like Mark How do I save tax?

6:21It's just doing the basics and knowing it, understanding it, owning it. And that's – so there's no sexy secret there except that you really can build a wealth that you maybe never imagined with just those simple base hits. It's not about getting rich quick. It's not getting rich slow. I want to get rich slow. Yeah, adding them on and saving the most with that extra time, right? If you're going to moonlight over and above the daytime job, it's keeping as much of that as possible, correct? Oh, yeah. See, you give me a day, you know, and there's nothing wrong with that W-2 day job, work corporate America.

7:02That's cool. It's great. Let's go do your taxes. Bend over. I can't do anything. I mean, you're screwed. But if you've got that small business, ho, ho, ho, ho, ho. Now that little 1099 some of you are getting, that's like, that's a golden ticket. Now I'm writing off home office, auto, dining, computers, electronics, your cell phone, family members. I'm funding a Roth IRA. You can set up your own damn 401k. Now we're going to take all that money and start deploying it. And we're going to be efficient. We're going to be lean and mean. And you can pay 30 % less in taxes on that money than your day job.

7:38Your day job, you're screwed. Let's go get this other money that's a lot cheaper to get. Everybody wants to talk about making money. Why don't we talk about saving money? It's easier to save money than make money. Yeah, it is. That's true. It's a very simple statement, but it's very true. Yeah, that's true. It's because it's not always easy to make it. Let me talk to you about this, Mark. You know, they talk about tax brackets, right? Okay. And I think some of this terminology, you know, W-2s and X bracket, you're self-employed and small business owner. Like, what's the lead? And there's always the talk, especially three or four years ago, about Trump pays an effective 8 % tax rate or whatever it was.

8:22But for the average small business guy, and even the WTU, because we have people that are both listening to our show, that are small business owners, and that maybe are WTU thinking going small business. What's the least you could truly get away with legally doing it the right way? But like what kind of tax brackets should the average small business guy be in? Well, very, very perceptive question. And I'm going to try to answer this simply. So everybody, there's seven tax brackets out there and the highest being 37 and a half. Okay, cool. No one pays in total 37 and a half percent in federal taxes because it's graduated.

9:05So when we have brackets, that's our bracket on the next dollar after a certain limit. So once everybody kind of gets that, that this is a graduated bracket, that's point number one. So then what we want to look at is what is your effective tax rate? So like after we take all the killer write-offs we can think of, lots of options, what's that effective rate? And for some people, it could be zero. For others, it could be 35%. Now, it is generally true, the more money you make, the more tax rate you're going to pay, a larger percentage of your income in taxes. But then we've got strategies and tools.

9:45For example, why Trump was such an anomaly, and he really wasn't, it's just the Wall Street Journal wanted to point this out, is that he is a real estate professional. I've got his tax return here on my laptop. I got Joe Biden's and his from 2016. He was a real estate professional. Now, you talk about here on your show all the time. If you want to invest in short-term rentals, long-term rentals, do real estate and deploy money in real estate, it's not for everybody, but we have depreciation strategies and investment strategies that can offset my income over here. Trump had so much in depreciation from his hotels and in real estate investments, he was able to wipe out his income from the apprentice and his retail.

10:23So his effective rate at the end of the day was very low. Now, someone else who just works a day job, has no write-offs, makes 500 grand a year at Verizon as a VP, okay, you're going to be paying 30 % or more in an effective rate because you're not using the strategies in the best way. And I'd like, before we started the show too, you were talking about, hey, don't hate the player. Just hate the game. If you don't like that Trump paid 6%, don't be pissed at Trump. Just learn the rules. And so when you understand the rules, you're like, okay, I could invest in oil and gas. I can invest in a little solar.

11:01Oh, I'm going to build a Roth IRA. Peter Thiel's got a$5 billion Roth. It's a tax-free ATM. Oh, I'm going to invest in my health savings account and never pay tax on healthcare again. And these little tools that are out there are amazing and they're not complicated. Rich people, okay, here's the last point. Rich people geek out on tax strategies. If you want to be rich, start geeking out on some of the stuff and it'll blow your mind because this is where the rich get richer. Talking to Mark J. Kohler. Main streets. Tax lawyer. But look, Mark, I'm serious. Here's what I don't like, and that's why I really love your energy and your passion around this because it's so real and raw and true.

11:45Thanks. We sort of, like you said, the rich geek out on it, and everyone else almost criminalizes write-offs. Do you notice that temperature, how that's changed like the last 10 years? Like it's almost like people put it in this camp of like – and criminal might be strong. But like you'll be talking to someone – Unethical. Unethical. Exactly. That's a better word. And why the hell does that proliferate it? I think – okay, this is hard-hitting. people that don't make a lot of money don't want to look in the mirror and own that whether it's lack of determination laziness or just knowledge they'd rather blame or put this wealthy person in a box and say oh they're unethical and bad rather than look in the mirror and go you know what i could learn a few things i could freaking maybe i'm not going to watch tv every night for three hours and i'm going to learn how to digitally market online or i'm going to this weekend i'm going to drive Uber for seven to eight hours and take that money and go buy a rental property next year.

12:50I mean, can we get off our ass and do something rather than blame the rich for being determined? I led the way that was hard. I led the witness. I led the witness, Mark. I tend to do that. Like you went right where I wanted you to go because it's the truth. That's what the truth hurts sometimes. It's like, but I do think that's what's happened is it's been criminalized or, you know bad mouth or what all right you know he just writes all things or he's cheating the system or whatever and it's like cheat there's a difference between cheating the system which is why i love that you're a logger too cheating the system because we got talking about these things and i know that i'm that a lawyer is going to tell me you know what's what's legal what's not legal is cheating the system and using the system yes dude you just hit the word i wanted to say, I got to dive in here because this is exactly the word you say.

13:43The tax code, people, everybody, this is so, so important. You want to get theoretical. The tax code is built to motivate people to do things. Get married, pay less tax. A married couple will pay less tax than a single or married filing separate. Go put handicap access in your business, get a tax credit. Go buy a solar water heater, this whatever, or efficient water heater at Home Depot, get a tax credit. Go buy an electric vehicle, get a tax credit. Go buy real estate and help others have affordable housing, take depreciation. Go do this, go do that. The tax code, all you're doing is using it to help America get better and we'll give you a tax break.

14:28You get a tax break for doing good things to help the economy and and that's the the mind shift they're not the the rich are figuring out hold i can make money doing this save tax and make main street america better holy shit sign me up win win win that's the whole thing it's not it's not what we've been conditioned by media or whatever else to which is win for me lose for the government low you know breaking law pushing the limit no like you said it's set up because people smarter than me knew that we needed actions to make this country run because all everything that you named mark actually drives an action that keeps the economy and everything else moving doesn't it like yes it's crazy yeah there's another classic one right now.

15:28It's the oil and gas tax credit, and there's depletion credits and all this. If you want to go drop at any income level, you don't have to be materially participating. You don't have to quit your day job. There's funds you can invest in for oil and gas royalties, depletion, exploration, and invest 100 grand and probably get a$90 ,000 tax write-off, make cash flow and resell it for 150 grand four years from now the government needs drillers to go get natural gas and oil in the united states on u.s oil and we'll give you a tax credit and all of a sudden your effective tax rate goes from 25 down to 10 you're making money you're helping america be self-reliant on natural resources and everybody wins and you're the bad guy because you found this kick-ass tax strategy you know yeah but it's right i'm right i'm not crazy right like i'm no did it the proliferation of the you know the wealthy getting ahead or all that i got that's a real thing and that drives me crazy dude you're a lion you're not a sheep you're lying that's it i love it so let's talk let's talk about i'm gonna ask you two questions uh Our listeners, and we're going to couch this as small business owners or soon to be after this episode, small business owners.

17:01One thing they should stop doing and one thing they should start doing. If I'm a small – they likely aren't. I know we got 800 ,000 downloads a month on this show. So we got a lot of people, probably a lot of different things that they may or may not be doing that you don't know. But they come to you. What's the one thing you tell people to stop doing the most?

17:26Okay, stop is first. Yeah. So what do we need to stop doing if I'm a small business owner? Yep, yep. From an accountant. Stop thinking. Okay, here it is. It's a mindset thing. It's going to be easy. I got a few others. But stop thinking you're going to find an accountant to do all of this for you. stop thinking that oh yeah as soon as i find that accountant i don't have to worry about this anymore i'm gonna find that perfect account that speaks mark kohler and by the way i got a network of a thousand accounts around the country and growing that speak mark kohler but yeah you're not gonna find someone that's gonna care as much about your finances and future than you now you need a good accountant they're your first mate but where are you steering the ship are you do understand what strategies they're doing?

18:13Are you understanding what structure you are and why? You don't have to know how to do an effing tax return, people, but you need to know what numbers are on it and how to read it. A rich person knows their tax return. So you just start doing what rich people do. It's super easy. And they work with their advisor. They don't have an account that just plugs all that crap in and you pick it up two months later. They have meetings with their accountant throughout the year, at least quarterly and going, Hey, I'm going to do this. I'm going to do that. I'm going to start that. I'm going to sell this.

18:40And you're there's, It's synergistic. So stop thinking you're going to hire someone to take all of this off your plate. You're taking the number one thing you should be doing and thinking you're going to delegate it. It doesn't work. I'm going to boil that down, Mark. That's what I do. I'm a marketer. You need to be the CEO of your tax team that you start building today. And so your accountant is on the team, but you're the CFO, CFO, or CEO. both yeah yeah both both of the team and you have to think about it that way because you cannot just like your own business after i've got look i i'm on five companies now i've gone down this road i tried to delegate the business away you know doesn't work good luck no it doesn't right you know that's when you get in trouble yeah it's what gets it i've been in got all the scars you I've done it too.

19:36You cannot delegate. And the taxes, you need to be the CEO of your own tax team. And it might be a two-person team, three-person team, but that's what I just heard you say. And I think we try to delegate the taxes away. Yep, I love it. And you lead right into my second point, and it's so easy, people, this mind shift change. So number one, you're not going to delegate away this tax and legal topic, although you're going to build a team. So I love the way you said that, CEO of that team. What you are going to do, and it's a little different though, is I need you to treat your side hustle, your business, like a business.

20:17We've got to start knowing there's a set of books. There's a methodology here. I've got to put in tax deposits. I've got to be engaged in the process. this. So many people that have a side hustle, they get this mysterious 1099 from selling something on, you know, they got a 1099 from Etsy or eBay or whatever. They're getting a little 1099 for side hustle somewhere. And they see it as a burden. No, no, no, no. That's a business. Treat it like that. Treat your rental property like a business. When you start to treat your operation like a business, it now starts to work for you. And the profit from it can be redeployed into assets that work for you while you're asleep and that money can be used to expand and scale but if you don't treat your business like a business it it does you no good it's just a noose around your neck um anyway so we've got to start owning and being involved and being the ceo of your tax team you don't have to do it all ceos don't do it all but you've got to be involved and you've got to, because ultimately, this is what it crystallized for me.

21:29And I've gone through this myself is like thinking through the opportunities for the write-offs and other things. There's just things that the accountant's not going to know. They're not in your business every day. They don't know how this was used or that was used. And a receipt's not going to tell them that. And so you have to be involved. And let me, no, totally. And you said this at the very beginning of your show. You want to give actionable items. Okay, let me give you some actionable. All of you, at the very least, should have a spreadsheet where you track all of your expenses. Number two, use a credit card or debit card exclusively for your business.

22:05If you've got an Amex, use it for business. Use your Visa for personal. Try to start separating your accounting. If you're using QuickBooks Online or some of the easy software platforms, great. But just start tracking your expenses. You don't know if they're a write-off or not, but if you don't track them, you can't meet with your accountant at the end of the process and carve out the ones that are really work for you. Bad bookkeeping loses money. So start with some decent bookkeeping. Next actionable, get a podcast or some good blogs that you like or video that you follow on YouTube of tax tips.

22:39I've got a 30 ultimate tax guide this, and I have a podcast where every week we could talk about different tax tips and all that. If you don't like Mark Kohler, it's fine, but you've got to have someone that you're following say, okay, can I write up? What am I doing right now with healthcare? January 15th, that was a big day. That's the last day to enroll for healthcare for 2025 and get a health savings account. What am I doing by April 15th? Am I putting together college savings for my kids in an ESA? What is an ESA? Well, you know, kind of tell me the difference between a Roth and an IRA. So start getting educated on these things and just start kind of learning.

23:14And it's going to be hard. It's not going to be, sometimes it's fun. Sometimes it's just like, oh my gosh, but you're going to be the coolest person at the next dinner party you're like oh check out what i learned you know everybody's like what you know i mean it's just cool stuff yep i love that that might that might fall on what they should start doing yes yeah exactly right stop delegating start documenting the d's i gotta write that down i gotta write that down stop delegating start documenting you know that's good uh the interplay you know i I mean, can you hear me now? You're like, this is what I do.

23:50Just write things, you know? I like it. What else should we be doing, Mark? I mean, a lot of people, obviously documenting, taking control. What are things we need to start doing? Here's the number one thing I've been talking about this last year and a half. It's just really evolved to something very special. And this is for you too, Ryan. Just everyone listening should be doing this. and that is integrating your family into this business. So let's assume you're stopped delegating. You're starting tracking. You're treating your business like a business. Understand your card table moment. When was that moment when I had that great idea?

24:29Every big business started out as a small business and there's no such thing as a small business, as big ideas. And you've got this idea and you want to make it big and you've got this dream. team that that little nucleus share it with your family and how to do that is called the family board i want you to have a family board and a family office you don't have to be a billionaire to have a family office your family office is that third bedroom down the hall with a couch in it that's your family office let's start writing off a retreat with our family at least once a year we could be writing off dining as we go out as a family and talk about business we can be paying for our kids cell phones whether at college or even in high school our kids are going to be helping with the business and social media or stuffing envelopes or cleaning rental properties.

25:14This is family. I mean, do we have to watch The Godfather for crying out loud, people? Treat your business like family and have a family board and a family meeting. It makes your LLC or corporation more legit because you're having annual board meetings like all of you know you should be. And you're writing off crap your accountant doesn't even talk about. All of my kids, it was so funny, right? At Christmas, my kids love it. They come down to the Christmas tree. All my kids are over 18 now. They come down to the Christmas tree. They go to their Christmas stocking. We still try to do that. It's fun.

25:44And they go in there, and there's their 1099 for the year. It's just adorable. They love it. They get their 1099 for the year for all the money I gave them during the year because I'm taking a tax write-off. They're in a lower bracket. They can pay tax at a lower bracket. They're building their lives. You want money from me? You're getting a 1099 because you're on my board. I love that. I love that. Mark J. Kohler. He is Main Streets. tax lawyer, tax advisor, and lawyer. I don't want that to get confused. You got to know that before you leave this episode. But, Mark, I love that. I'm going to start giving my kids.

26:17I got four boys all under the age of 15. Oh, my gosh, dude. Think about this. Your kids don't pay taxes this year on the first 14 grand and change, 15 grand and change. The numbers just changed for inflation. So your kids could earn$14 ,000 a year at working at McDonald's and pay zero tax. No one in America pays tax on their first standard deduction of around$14 ,000, let's say. Okay. So you've got four kids that could work anywhere under$14 ,000. Why aren't they working for you? You can pay your children under age 18. You don't have to give them a W-2. There's no FICA. There's no FUTA. There's no workers' comp.

26:55And it's outside labor and the right line item. I teach all that. We talk about it on our shows. It's in my books, blah, blah, blah. but your four kids, if depending on their age and what they're doing in the business, let's say we're paying them five to 10 grand. Four kids average of seven. Four times seven, we're at 28 grand. We just got a$28 ,000 tax write-off. So you're going to be paying for school lunch, school clothes, soccer, football, all that. You're not paying for it anymore, Ryan. They pay for it. You're transferring money from your company into their bank account and they pay for school lunch and sports.

27:28Now you just got a tax write-off for that. and you can even double down and form an IRA for each one of them. So now each of them have a Roth IRA of seven grand a pop if you want. And now that can come out for college tax-free. So I've got my Roth IRA going. My kids are on the payroll. We're having board meetings as a family and I'm taking my four kids out and I'm teaching them about business. They're selling books at my table. They're at the event checking people in. They're ushering people at the event. My kids learn that my life is business and my passion is going to be their passion if they want it to be.

28:01That's how succession happens. So many business owners think they're just going to plop a business on their kids when they're 28 years old and they're going to get it. They're not. They're not. And so you've got this incredible tax deduction right now while your kids are under age 18, the board meeting for better asset protection, more tax write-offs, you're building wealth in their IRAs for them in college, and you're teaching them about your business. There's so many birds you're knocking out with one stone, I can't even count them all. I'm doing about one fifth of what you just said. So notes taken.

28:33And I'm not the only one. I mean, I'm doing it. They know DaddyWorks. They're integrated. They come. I make it clear they do things. They're doing a lot of what you said, but I'm not following it the way you're describing. So Ryan Offord needs Mark Caller on.

28:52And I just want to say this for everybody. I know our time is almost up here. But what could happen? I want to warn everybody. Ryan could get off this podcast and go, I got to call my accountant. So he picks up his cell phone, calls his accountant, and go, hey, what the hell, Tom? Why am I not putting my kids on the payroll of my Schedule C? I got an S-Corp over here. I got a 1065 and an LLC over here. Why are my kids not on my payroll? Well, Ryan, you can't do that. Well, because it's high risk. And because, oh, all right. You know what? Nine times out of 10, he's not going to jump on the bandwagon with you.

29:24Because it wasn't his idea. and so he's going to be offended that you brought him a tax strategy this is the problem with me trying to educate accountants because they are so scared that they're going to go oh my gosh i should have told ryan that that's what's going on in his head but he can't say that so now he's going to poo poo mark kohler which is bs i've got more credentials and more writings behind me than any other accountant in the country on this and i'll stand behind it and i teach other accounts this they just got to own it go to their clients and go you know what i got to be a better advisor for you.