Your CPA Works for the IRS, Not You: CPA vs Tax Strategist

So when you're hiring an accountant, my accountant handles everything, right? Well, what is it? We did an episode on what is your accountant? Is it a bookkeeper? Is it a controller? Is it a CFO? Is it a CPA, right? Someone who prepares taxes. And these people that, you know, my accountant does everything, they're always looking in the rearview mirror. So you're driving along in the car, imagine this, you're Miss Daisy and the chauffeur is driving you and constantly looking in the rearview mirror and doesn't see what's coming up ahead. That's what a typical accountant looks like. You know, they're always looking back and saying, well, we should have done this or we should have done that, right? And so everyone's got 20/20 hindsight when it's a month past due, right?

And we can look back and say, oh, this is why this happened, right? Tax preparation is kind of like an autopsy. It's backward looking by definition. Your financial year is already dead. They're just determining the cause of death, right? Tax planning is not done on April 15th or April 13th when you give the shoebox full of receipts to your CPA and say here, do my taxes, right? Tax planning is done January 1st all the way through December, making sure that you're not paying more than you are legally owed, and I want to stress that, legally owed. There's a lot of loopholes that are built that you can take advantage of that are legal, right? You know what you're not getting is, when you're giving it to your accountant and your CPA, and this I need to be fair with them, you know, when you give somebody two weeks to say help me do my

tax planning and they've got a hundred other tax returns to do, you're not gonna get their best advice, right? Nobody's gonna give that. You ask me to do the same thing, you're not gonna get my best advice. What you need is to have somebody talking to you about Q3 and how you're gonna save $40,000 when it comes tax time at April 15. That's what you need to be doing. It's the difference between your mechanic changing your oil and your mechanic telling you your engine's about to blow because you didn't change the oil three times that you should have 15,000 miles ago, whatever that might be.

So you need to have a very frank discussion with your CPA and say, I really appreciate you handling my tax returns. How are you on tax planning? Right. Right. FYI, the episode you're talking about, the difference between CFO, controller and bookkeeper, is our next episode, which we might have recorded out of order, but that's okay. So there's a teaser there for everybody. Jon, we call that a tease in this business. That's what I just said.

I'm teasing. I'm just filling out the teaser. I'm embellishing the tease here, Ryan. You can't miss out on that episode, people. Mom and Dad. Yeah, that's right. We gave you dessert before dinner, Timmy. If you're having trouble sleeping, Mom, that'll be the one that puts you to sleep. We have a special guest on that one as well. And if you're watching this in the video, you'll want to watch it because he's a dreamboat. Yeah, Brad's a good looking. He certainly...

The other one that likes burly men. No, I'm butter side up, thanks. I appreciate everybody. Let's dig in a little more on preparation and planning. Give me some more examples of how planning can actually help throughout the year and help you kind of overcome challenges that you might meet. So preparation is filling out forms after the year is over. The money's already been spent, decisions have already been made, your CPA's just documenting what happened, making sure that everything is to the T, I's are dotted, T's are crossed.

It's clerical work dressed up in a professional fee, right? And I don't know about you, but it's getting more expensive every single year to get my taxes prepared. Planning is making decisions before the year ends, right? So we're talking tax planning in January for that year coming up. What are the big moves we're going to make? What are the decisions that we want to do? And we're carrying that conversation on at least a quarterly basis to check in on how we're doing with forecasting, with are we on budget, are we below budget, how's our cash situation, those kinds of things, because when you have time to plan, you have time to strategize.

And we're not only talking for this year, we're talking to where you want to go in 5 or 10 years. That really, some of those things really actually have to happen now in order to be successful for later. We're trying to give ourselves a runway, right? So we're talking entity structure, timing of income and expenses, deductions you didn't know exist. Again, legal deductions, right? Retirement vehicles, depreciation, the whole playbook, right?

Here's the tragedy. Most of these strategies expire December 31st. Most owners don't talk to their CPA until February, the year, you know, the two months after the fact. So the coupon's already expired and there's a... you're asking why the bill's so high. So you're paying a full price for a ticket that was, you know, half off six months ago. Nobody told you there was a sale. The sale's over. Enjoy your receipt, you know. You're paying... the problem is that you're not getting the full advice of your CPA if you're asking them in February, right? You need to start asking those questions in June, July, August. Now if your CPA pushes you off, right, because they're taking vacation and doing whatever they want, that's not the tax planning strategist you want, right?

They just want to have that high ticket preparation bill. Yeah. Can we give people a few nuggets as well? Like you mentioned, it's a structure, timing, etc., deductions they didn't know existed. Just throw a few nuggets out there that people are completely unaware of that would help.

What's the relocation to Puerto Rico? Isn't that somebody, one of our customers takes advantage of that situation? There's other little nuggets there that can sort of... Our clients take advantage of that, right? It's called the Act 60. And so you can legally go and avoid some federal taxes that way. There's a way that you can structure your entity five years before you want to exit and up to millions of dollars can be tax-free and avoid capital gains, right?

There's Section 179, which everybody falls in love with, where you can buy a bunch of assets or finance a bunch of assets and you can speed up the accelerated depreciation for that year so you can take the whole expense of the million dollar crane that you just bought, right? But you're financing it over five years. There's ways that you can take advantage of retirement plans and put $55,000 to $75,000 away in your retirement plan that's completely expensed by your company.

Those are just a few of the bigger ones where it doesn't necessarily cost cash in order to take advantage of these deductions. That's real money. That's real dollars. We're not talking a thousand or two. This is significant funds. What can the real cost be here? The real cost of not having a tax strategy? Not having a tax strategy, but also the tax benefit. You just discussed there.

We're talking tens and tens of thousands of dollars for each one of these things. So people should be taking advantage of it. What is that total up to? This episode is brought to you by Cruncher & Sons CPA Group. For over 40 years, Cruncher & Sons have been filing tax returns accurately, on time, with absolutely zero strategic advice. Their motto? We don't save you money, we just count it after the government takes theirs.

Cruncher & Sons. Where your tax return is always correct and your tax bill is always higher than it needs to be. Cruncherandsons.com or don't. They won't follow up. It's July. Is that real? No, but it sounded familiar, didn't it? I can tell it up to millions. Millions of dollars, Jon. I mean, we have... There's one client who's taking advantage of the research and development credit and it's getting five to one on their return on investment. They're saving... They saved over two and a half million dollars in taxes. Holy smokes. Right. In just five. So this isn't, you know, saving a few grand here and there on what you're paying.

This is really significant dollar amounts. It is but also if you save a few grand here and there that actually adds up to tens of thousands of dollars as well. Right. Yes. That's why he does marketing on you math folks. It's an exercise in addition. Yeah, I'll turn that few thousand dollars into tens as well. That's an investment, right? Marketing's an investment. It absolutely is. And if you sock it away in your Profit First account, you can stare at it and smile.

Right. So why don't CPAs offer this? Like, why isn't this just something they do proactively? You want the real truth? Well, we're generally pretty truthful in this, and transparent in this podcast. But you're the one who's the truth. One thing I will sell you, and this is coming from all around. I like Tom Cruise all of a sudden. That's right. Of course I ordered the code red.

With my one tooth in the middle. Oh, it's a great movie. Love it. Have you noticed with Tom Cruise, he's got the tooth right in the center of his face. If you draw a line down the center of his face, he's got one tooth centered on it. Just a little bit out of whack. You'll never not be able to see that now. I've never seen that and I hope that gets out of my head by the end of this podcast.

Go check it out. Just look at a photograph. Mom, Dad, look at a photograph. It's spelled flossing, Tom. Maybe it's two teeth. Come on together. Interesting. Now I've completely lost my train of thought. Yeah, why aren't CPAs bring it up. You were gonna say, okay, give people the truth. Well, if you find a great CPA, keep them. Okay? A great bookkeeper, CFO, controller, CPA is worth their weight in gold. Unfortunately, a lot of people have just gotten lazy and greedy. That's all the simple truth is. Tax planning takes energy. It takes using the laws and instead of saying no, saying yes we can do it if we do it this way. You know, the end result is that you want to save $100,000 in savings and you want to, you know, have your money go through St. Martin or wherever, Ritzy thing that you were talking about, you know, Puerto Rico being a big one, right, is well we could do that and it only

works for about one out of ten thousand people, by the way, you know. And that's usually like a U.S. Congressman or Senator. I mean, that's who creates the laws here, folks. I mean, right? That's why you have the Augusta rule. This is why you can, you know, take interest off of your second home because they can afford a second home, which is their home state and Washington, D.C., by the way.

Like put the two together, right? So it benefits them. So it only benefits a certain amount of people. But it takes effort to say if we want to save $100,000 in taxes, well, we can't necessarily take advantage of the Act 60, but we can do this, this, and this. And whatever that might be. And this is the code that we're going to use, and here's the form we're going to have to use, and this is how much savings it's going to take, and it's going to cost you 10% of your savings, or it's going to cost you $20,000 to get there, whatever that's going to be, because now you're paying somebody for what's here and not necessarily how fast they can get your tax return done.

It's not malicious though. It's structural. Most CPA firms are just volume shops. They want hundreds of returns coming in. And then they work on other things. If you have an S corp, you have to file by March 15th. That means you have to have your stuff ready for your CPA probably by February 15th. That's a quick turnaround for a year end. So if your CPA gets into March 1st, what do they do?

They file an extension. And now you have until September 15th to file that thing. And then the same thing happens on April 15th. They'll file an extension for your LLCs or your Schedule Cs and those kinds of things. And now they have them to October. So what happens? 16th, the day after tax day, CPA is on vacation for like two or three weeks. Right. Why? Because they just spent the first four months of the year doing tax returns for 12 to 18 hours a day. Mm-hmm. They're a volume shop and that's what happens. So planning takes time, it takes energy and that's not necessarily a specialty of your CPA because only 7% specialize in tax, Jon, right? So you're gonna find the right 7%. And by the way, the clients that are doing the Puerto Rico Act, they have a US attorney and they have a Puerto Rican attorney and they both have to talk together and they both specialize in what's going on

there. Right, you can't move. It's a specialty. You can't go on vacation or move and just expect to get it. It's been well thought out and planned. Right. And I talked to these people on April 10th. They weren't doing a hundred tax returns. They took my call. We had a two hour meeting. Right. Because it's that specialty. That's what they do. Right. So, I mean, clearly there's a whole strategic approach to tax here. So what should you expect from a real tax strategy?

You alluded to some elements of it, what actually does it consist of, and how does Synergy help with that, right? Like a whole seven pillar approach with the Synergy Hacked methodology includes tax. So how do those two things jive together? So at minimum you should have a planning conversation in Q3 with your CPA. At Synergy, we do Q1, Q2, Q3, right, and then Q4 to button it up.

And we also double check if we're not doing the tax return, which please, you know, go ahead and have your great CPA continue to do your tax return, we double check that the planning was done, right, that the right strategy was done and it's a good thing to have a double set of eyes on your CPA who's doing literally hundreds of tax returns. There are transpositions, there are fat fingers, there are simple mistakes that happen because a lot of this stuff is key entered.

No sense in having that. The conversation that you have in Q3 at a minimum is that it needs to cover your entity structure, estimated payments, retirement contributions, depreciation, your timing of your big purchases or hires, anything that changes the picture. Even I'm getting married, I'm getting divorced, whatever that might be. A great tax strategist, and that's who we hire at Synergy, is we're looking for people who can actually talk to business owners and help them strategize and take the Greek IRS code and make it plain English.

There's a million pages of IRS code for a reason. Again, look at the people in Washington. But a great tax strategist looks at your business like a chess player, right? They're always a few moves ahead. They're not waiting for a pile of receipts in February, you know, calling in September saying buy that equipment before December. Also, you know, a very used strategy is delaying your December invoices and putting them in January into a different tax year, right? So that way you're not paying as much because you're making a lot of money, you're not having as many sales go out in December and inflating your taxable income.

Here's the problem with that though. Jon, when I send out that invoice in January instead of December, I'm now 30 days past when the cash would be coming in. Your CPA doesn't worry about your cash flow. He's worrying about the tax liability. Those things don't connect. It says, well, whoa, hold on here. There are other strategies out there that we can use that you continue to bill on time and receive your money on time because we have a plan for that money.

Oh, and by the way, we've already planned for your tax liability because we've been planning for it since January. Your forecast confirmed it in June. We've developed these other strategies along the way to make sure that we've lowered your tax liability to as low as possible. That's the difference between CPAs working in silos and people working in connection. Right. Yeah, that's most important or expensive words in business.

I wish I'd known that sooner, right? Exactly. So, speak a little bit more about how tax interweaves with other facets of good financial management. So, obviously, Synergy Hacked layers the seven different pillars on top of each other. How does tax weave its way into all the different facets of that methodology to be able to create a compound effect? It's baked into how we think about cash and financial operations.

The first thing we do is evaluate, is the advisory team working together? Spoiler is, they're usually not. They're not even in the same zip code. The CPA is usually the biggest gap. We'll have our operations person, our sales and marketing person, maybe our finance people, a couple of department heads all talking about things, but where's the CPA? On the beach in their office, just give me the numbers, let me crunch them, right?

So we have to bring the CPA into the conversation as to, hey, here's our goal, here's where we wanna go, help us get there, right? So when we link all the pillars together, we make sure that the cash, profit, and tax are managed as one system, right? They're not three separate conversations with three different people who've never shared a calendar, right? Right, your Profit First allocations, your tax strategy and your exit plan are all connected as well.

Do we have the right entity structure? Are we ready for an asset sale versus an equity sale? All those things come together and they're planned years ahead to where we're getting there. And then it's no surprise. Our tax bill is no surprise. Our estimated payments are no surprise. Neither is our exit. And so when you have good tax planning, right, you're going to have more cash. And when you have more cash, you have more marketing.

You have more marketing, you can have more operations, and off it goes working in tandem together instead of silos. Yeah. It's a cycle of growth upwards, self-sustaining as opposed to going the opposite direction. You're absolutely right. Yeah. A $50,000 unexpected tax bill can cause a lot of problems with the company. Oh, heck yeah. I mean, that impacts every facet of the business, what you've got planned, to suddenly come up with a chunk of change like that that puts you in.

And especially if you're following a CPA's advice and not invoicing or leaving your invoicing until later and disrupting your cash flow already, that can be a real challenge. I ask this each episode, if somebody's listening and they're still awake, because we're talking about tax, but this is interesting stuff, and they've never had a tax planning conversation, what's the first move here? Call your CPA this week. Tax season's over.

Vacation hopefully is over. Ask one question. What's one thing I should do this year before year end to reduce my tax bill? If they give you a clear specific answer with dollar amounts and deadlines, you might have a planner. Buy them lunch, they're rarer, and they deserve a sandwich or wherever it is that they, you know, CPA agents work, you know, eat. If they pause and say, well, we'll see how the year shakes out and offer to circle back in January, you have a filer.

Circle back in January as CPA for I'm not going to save you any money. So keep the filer if they're good at what they do but you need someone else in the room. Someone whose job starts where your CPA's job ends. The money isn't hiding, it's sitting in plain sight. You just need someone whose job it is to look for it. Your current CPA's job is to count it after the IRS already took their cut.

But then the parade's already over and you're picking confetti off your shoes. Jon, the problem is that filers, they fall into a rut, they just want to have the information because then when they're done filing their returns, they made hundreds of thousands of dollars throughout the season. They paid all their payroll. They just want to go sit on the beach and then when they come back, they want to do what they were trained to do, financial reviews or audits or those kinds of things.

When you have that 7% out there that does the preparation and does the planning, you've got a good CPA. Gotcha. All right. Great words of advice. This stuff really affects the dollars and cents in an organization. Let's have the takeaway. Ryan, what is the takeaway for this episode? Generally speaking, your CPA's job ends where tax strategy should begin. If you've never had a planning conversation before year-end, with dollar amounts, deadlines, and specific moves, you're not being advised. You know, you're only being processed, as is your return. The money you're overpaying isn't hiding. It's sitting right there in plain sight. You just need someone whose job it is to look for it before the IRS takes their cut. Your CPA should not work for the IRS. Your CPA could be working for you. Awesome. Let's hope there are very few CPAs listening to this conversation because your inbox will be whole. Look, if you're a great CPA, I will

refer you personally. Right. Yeah. The world needs great CPAs and no more jail time. Absolutely. Exactly. I'm not going back, Jon. No, no please. That's a wrap. Thanks, Ryan. See you next episode. Hootles. That'll do it for this episode of From Burnt Out to Bought Out. If anything we talked about today hit home, do us a favor. Share this episode with another owner who needs to hear it. And if you're sitting there thinking they're talking about me, good. That's the first step. Head to the show notes and book a free triage call with our team. No pitch, no pressure, just a real conversation about where you are and what's possible. You can also find us on LinkedIn and at wearesynergysolutions.com. New episodes drop every week. Until next time, stop running the treadmill and start building something you can actually sell.