2279 - Simplifying Tax Compliance for High-Net-Worth Clients with Gelt's Tal Binder

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0:58With us right now, Tal Bender. Tal, You are the founder and CEO of Gelt. You're found on the web at joingelt.com. I'm really interested in this topic. Tal, welcome to the show. Thank you. Thank you, Josh. Good to be here. Yes. One thing I neglected to tell you in our pre-interview conversation, I'm going to surprise you now. I want to know, Tal, you live down the road from me in Tampa, and I know you, like me, you're kind of a big fan of living here. There's a lot of great things to do, of course, generally pretty good people around. But what are you currently doing for fun? I know your wife is very, very talented in her work.

1:43But what do you guys do for fun currently? Oh, for fun. Honestly, I mostly work. But when we go, actually, I go to Orlando. So from once every couple of months, we're going to Epcot or to Universal Studios. And that's one of the biggest perks because we have nothing like that in Israel. So we just drive up to Orlando and we spend a day once every couple of months. And that's basically my fun. The rest of the time, I'm having fun building the company. Yeah, well, look, that was one of the main reasons we moved down here. I mean, we, you know, we wanted a lot of fun things to do locally. And sure enough, it's great.

2:23So of all of the theme parks, is Epcot your favorite? I would say that I like the roller coasters. I think that I like actually the thrill, you know. So Universal Studios for me, that's the one that I really like. My wife, she loves to go around and eat the food and all the festivals at Epcot. So usually we go with what she likes because, you know, happy wife, happy life. But sometimes we're going also to Universal once every six months or once a year or so. I'll tell you, like, there is nothing. My happy place in Central Florida is in the late fall, after summer. You know, we get into, like, maybe October sometimes, but definitely in November.

3:09and especially when we start getting into December and hoodie weather. But man, late food festival. Exactly. Food and wine at Epcot. Strolling around with the person you love. That is my happy place. I just truly, truly love it. You haven't been to Halloween Horror Nights, have you? Not yet, not yet. But I'm excited to try it. Yeah, it's at Universal Studios. It's my favorite theme park event. And I've been going every single year for the past, you know, I'd say 12, 13, 14 years, I think 14 years. Yeah. Yeah. A lot, a lot of fun. Anyway, hey, let's talk about, Tal, let's talk about Gilt. Gilt, what do you do?

3:52Sounds great. So Gilt is basically a tech-driven tax firm. One side of the company, we have CPAs and tax professionals. The other side of the company, we have engineers, product managers, designers, building our tax technologies. And we provide tax services to high net wealth individuals and businesses. When I say tax services, it's split into three categories. Category number one is tax compliance, basically making sure that we keep you out of jail. Category number two is tax planning. Thank you for that, by the way. I'm not suited for jail myself. Exactly. Me neither. I'm a client of my own company, which I know that it sounds funny.

4:29I'm a paying client of Gelt. I have category number two is tax planning, which is about answering the questions, how much taxes will you pay this year, next year. It's about estimating, estimations, the projections, et cetera. And lastly, number three, it's a tax strategy. Tax strategy is answering the questions, how can you minimize your tax liability to the minimum allowed by law? Whether it's from entity structuring to the actual expense optimization, retirement, et cetera, how can you push down your liability? But that's basically what we do. We exist for about like three years by now, serving clients and it's going really well.

5:06We saved millions of dollars to our clients. So it's really, it's been a privilege. And I really love the tax system in America. I think it's, I think that Americans don't appreciate enough how good the tax system here is actually. All right. Well, let's keep it good. Yeah. So, so Tal, obviously I have questions. So, you know, we've, we've had a, you know, a tax preparation service, accounting, bookkeeping, that sort of thing. What can Gelt replace? So that's a personal belief, by the way. You cannot be the best at everything that you do. Bookkeeping, it's its own specialty. CFO and controller services, like the finance management, it's its own specialty.

5:48Taxes are a specialty, basically. And that's what we're focusing on. So we are trying to do one thing and we're trying to be the best at the one thing that we do. we replace the cpa that is doing your taxes basically from filing the taxes preparation um estimations to optimization that's basically what what we replace and we don't believe in actually eliminating the need we have the engineers and we have quite a lot of ai in the system but we don't believe in like in eliminating the tax professionals so each one of our clients we assign a senior tax manager to them to make sure that they have a human one point of contact oh Yeah.

6:24Everything in the back office, everything that is happening in the back office, which does not interest our clients too much. They just want to feel secure, that they are in good hands and the job to get done. That's something that we are automating it bit by bit using technology and AI.

6:43Well, sorry about that. So, well, this is amazing. Tell me more about how it works because this makes so much sense because there's so much, and hopefully all of us are having conversations with AI, but I'm a big fan of professional service providers providing some human oversight because this is a case where, yes, AI can likely do a lot of the heavy lifting. That said, we don't want to go to jail. Exactly. AI, of course, has the danger of hallucinating and that is not going to be a defense in court. There are actually tax courts that show that it's not defensible. If there is a mistake in software, it's still the taxpayer's responsibility to pay all the penalties following that mistake.

7:35But it's definitely, okay, so it has a lot to unpack there. But the long story short, there are two ways that you can think about AI and professional services. Way number one, replace completely the tax professional or the professional person itself. Way number two is increase the productivity of the tax professional. So, for example, if a task takes 20 minutes to a tax professional, it will take them two minutes using the right tools. We believe in the second approach. We want to maintain the relationship between our clients and their account manager, TPA, basically. But we want to make the tax professional 10 times more efficient, 10 times more accurate, and being able to serve more people without damaging the quality of service.

8:21So there is a very, very gentle balance to maintain there that we are constantly working on. But it's going really well. We're tripling every year. We're doubling and tripling every year. The company right now, it's about like 40 people and we keep growing. So it's going overall quite well. Yeah. Well, so obviously, this represents a lot of potential cost savings. Do you mind maybe just kind of going through the metrics or kind of the financials in a best case scenario? I think there are a lot of us are paying a lot of money. And, you know, sometimes it feels like a little bit too much money. I think in my case, I have some frustrations with, you know, just, you know, the tax system is, it just requires so much details.

9:10It's complicated and it's complicated for good reasons. And, you know, it's complicated for other reasons as well. But the bottom line is it generally involves a lot of currently human work. And that just feels wholly unnecessary. You know, when, you know, someone who's, you know, completing a very simple tax return personally can just do it online. Right. And so what I'm curious about is, you know, like, let's take a look at some of the, you know, kind of the free online or the low cost online personal tax prep services. And in what ways, how is this similar and what ways is this different? it yes of course and i think just that that we'll both share a love-hate relationship to the tax system in america oh at least i'm i have a love-hate relationship with taxes in general because i love the profession on one side on the other side you know nobody wants to pay taxes but it's part of like you know of life if you're looking at the the tax market as a whole in my you can split it into three.

10:15You have the low-end solutions. You can find their companies like H &R Block and TurboTax and similar that you can do kind of like self-serve or assisted tax service that it's mostly A, will help you to file the taxes. Then you have the mom and pop shop, the small kind of local firms that are very small, usually one owner and maybe like one staff or it's just the owner that they are kind of like, if you're looking to outsource, If your tax situation is a bit more complicated or you just want to completely outsource and not think about that, usually you're going to those people. It can go from like very simple taxes to medium complexity taxes.

10:54If you have a small business, you would go to those as well. And then you have the big firms, the more complicated one. You can see the national firms there from the big four, kind of like Ernst & Young, Deloitte, etc., to the top 100 firms like Mercom and CB, those kind of firms as well. We are competing at the higher end of the mid-tier and the upper tier. So usually people are coming to us when they have a business, maybe they have a decent amount of profits from the business. They are too complicated for the mom-and-pop shops. They are not going to work with the tax of their TurboTax. They're too complicated for that.

11:35They need an actual service, ongoing service and accessibility. And they're looking to elevate their tax situation. They're looking for accuracy and they're looking for optimization and ongoing support. That's usually when they will come to us. And we are competing with the bigger firms or the high end of the boutique midsize firms as well. Sure. So I'll point out that as everyone recording this and, you know, again, get in early, you know, get really good pricing. But right now, just in terms of like, so we have some reference for pricing, you know, it starts anywhere from$1 ,500 a year for individuals.

12:10Businesses start at$2 ,500 a year for kind of essentials, you know, compliance and estimates. Um, does, does that, um, include, uh, and maybe you said this and I missed this. So for the actual, obviously there's, you know, all of the decisions we make throughout the year, which are an important part of taxes. Uh, but then there's the actual preparing the, um, you know, to file your returns. Uh, is that included in some way? Yes. So when you hear tax compliance, it means preparation and filing. So when you hear compliance, it means the preparation and filing. So what you're getting for the base amount is the preparation filing plus basically the quarterly estimates.

12:53A lot of the times if you're a business owner, you need to pay quarterly estimates or don't pay. There's no strategies about management of those quarterly estimates. But that's another conversation. so that's the package that you're seeing on the website we have one-time package or retainers for strategy and that those are usually depending on the situation it's so personal and the more complete we have clients that pay us and need five figures a year because they are so complicated we have the more the simpler clients i would say that most of our clients are paying us around like between five to ten thousand dollars a year and like overall for their compliance and planning.

13:31Okay. So tell me about the company itself. How are you growing and expanding? So right now, all of our leads are inbound. We have a very talented growth team that basically that split into two. We have the marketing, their responsibility is to generate the leads. And we have the sales team that they're there to make sure that the leads that are coming here in are number one qualified and number two, it's a good match. We want it to be a win-win. We want them to be happy with their services and we want us to be happy with what we are getting. So that's from the structure of the team. I know that right now everything is inbound and it's really split between sponsorship of certain media channels, whether it's podcasts or newsletters, et cetera, as well as referrals.

14:22Clients love working with us. They want to, you know, they're going on the golf course. They talk to their friends about taxes. And if one client is saying, you know, I love my tax guy. I love this company. They saved me$100 ,000. That's it. Like they're referring to their friends. And that's usually how we grow right now. But that's generally the way that currently the growth is being fueled. Nice, nice. All right. So how can someone check this out and like know if this might be a fit for them? They could potentially save a lot of their accounting fees that they're paying out. They could get obviously identify additional tax services or additional tax savings, which, you know, if you're limited on a human knowing everything, you might miss out on something that you would qualify for.

15:16Whereas if you can just do a really thorough deep dive with AI, you know, AI is just going to have access to lots of other data points that might be relevant for, you know, making some of these, you know, strategic tax decisions. But where does somebody go from here after they've heard this conversation? and they can just go to our website join gail.com j-o-i-n-g-e-l-t.com and then schedule a call with with our account executive he's the best person to learn about you show more information about us we will also like usually if we think that there is an opportunity for optimization we would raise a flag if we don't think that there are much that much opportunities we'll tell you hey you don't need this service so we are very honest about what you need and what you don't need.

16:05We're not trying to push you something that you don't need, obviously. And I think from the optimization side, we definitely have a lot of success saving a lot of people money. It's important to know that it's not just about the AI. It's the combination of technology and a person. So we don't fully rely on the AI to deliver all the services. AI can save us time and can raise flags. But at the end of the day, we have senior tax managers in the company reviewing the information and making sure that nothing is being missed from that perspective. A lot of the time you also have like, kind of like, it's not a clear cut.

16:38You have a decision and there are trade-offs. Taxes are all about trade-offs, by the way. But yeah. I just saw this, Tal. Do you partner with accountants or accounting firms? Usually, so it depends. We are replacing the tax portion of accounting firms. But if there are accounting firms out there that are providing CFO services, and bookkeeping services and now looking to a partner for like the tax side because we're specialists. We do one thing and we try to do it the best in the world. So if they're looking for a counterpart or somebody to work with, like we're happy to partner with other accounting firms as well.

17:13Oh boy, we need to talk. All right. Tal Binder, founder, CEO of Gelt, the website, joingelt.com. Tal, thank you so much for joining us. Thank you, Josh. Appreciate that. Have a good one.

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