What is the system that I need to create in order to be able to take advantage of deductions and write-offs without fear of Uncle Sam? First, you need to understand the differences between tax preparation and tax planning. That's step number one. Then, step number two is I would... She told me this will be the most important tax code she ever teaches me for the rest of my life. And I want you guys to walk away from this knowing that this probably will be the most important tax code for you. The IRS does not have a list of all the things that you can deduct for your business. Okay, I run a tax and accounting business. What are all the write-offs for tax accountants? There's not a list I can get from IRS.com. Everyone's afraid of an audit, and it's like, what's the worst thing that happens if you deduct something and they say, oh, you can't deduct that? Are they throwing you in jail, Carlton, or what? No, they are not throwing you in jail. You can take the IRS to court, and with the proper legal counsel, you can fight the IRS. They're comfortable in their ecosystem when they're auditing you. But as soon as you bring them over to court and you actually use law against them, plus you have the documentation, they swivel up and they tuck their tail in between their legs like a little dog that's afraid of you. Are you bullish on crypto? Just long-term asset? I'm bullish on Bitcoin. You weren't charged taxes while it sat there. What's wrong with you? You're not. IRS allows penalty-free withdrawals from retirement accounts after the age of 59. Penalty-free, not tax-free. If you're bragging to me in an interview about how much money you have 401k taxable account. I'm sitting here looking at you like, what's up with you, bro? There's a lot of people using your name. You know who they are. And I asked, I said, as a friend, are you willing to be able to speak about it publicly on the show for the very first time? Oh, here we go. Here we go. Dude, I've listened to a lot of your podcasts. We're going deep, brother. This is a masterclass. The man, the myth, the legend himself, Carlton Dennis, welcome to the Better Wealth Show, man. It has been a while. Welcome to the show. Dude, thank you so much for having me on, man. It's been long overdue. I'm excited to be on here with everybody. Man, I'm so pumped. I know that you're a new dad. It's been fun to see you develop in that. You're crushing it in business. You've been just continuing to grow your brands, Tax Alchemy. You've got a book coming out later this year, so just stay tuned for all the people that are like, finally, I have a book that I can get from Carlton. and all. Before we jump in, just let's lay the groundwork of like... Being a tax strategist, where's your headspace at right now with all the exciting things? We're moving fast. Trump's been in office over 100 days. How are things going? I'm acting as if things are already happening for us in the sense of what Trump has promised going back to 2024. If there's one thing I've known about him is when he makes a statement publicly that He is a man of his word. He typically comes back and actually implements those things that he has stated that he is passionate about. And so I'm excited to see if we're going to get his Tax Cuts and Jobs Act to become permanent. I'm operating as if it is going to become permanent, which means that we might get that 100 percent bonus depreciation coming back. So a lot of exciting things that are happening right now. And like you, I'm just waiting to hear when it's all going to get released. So the Tax and Jobs Act is set to expire, but it's like pretty much I mean, he said since you ran on. bringing it back. So do you imagine any crazy changes or do you think that he's just going to renew what he essentially started in the first place? Yeah, there's two changes in a monitoring that I think he is going to change. So when he implemented his Tax Cuts and Jobs Act in 2017, went live, he limited itemized deductions and particularly the SALT cap, state and local tax, to $10,000. The reason why this is such an issue. is because across the United States, there's so many homeowners that were able to write off their property taxes and their state taxes without this threshold. But when he created a $10,000 threshold, that hurt so many taxpayers from saving money from itemizing their deductions. A lot of homeowners didn't benefit as much from being homeowners on their tax returns anymore, as well as the mortgage interest deduction. He capped the mortgage interest deduction up to $750,000 of a loan. So you can deduct interest up to $750,000 of a loan. It used to be a lot higher before that. So those are the two things that I'm monitoring outside of the bigger ones like are we going to get 100% bonus depreciation back? And is there the possibility of him roping in no taxes on Social Security or no taxes on tips? Those are some exciting changes that I'm waiting to hear. When you think about limiting some of the salt deductions and all, why do you think the was it because he wanted to like give the middle finger to the liberal states like New York and your lovely home in California and all? Or do you think is there is there actually a reason for for that? I mean, obviously, they raise more money. And so I don't know if they're they had to put money in some people's pockets. But then this was one of the things that they had. It's like a give and take. Yeah, it is a give and take. It's more taxpayers dollars that they were able to collect. And they gave you something in return. What they essentially said was. Here's double the standard deduction. So if we go all the way back to 2017, the standard deduction around that time period was like $12,000 for married couples, $6,000 for single couples. Well, right as tax cuts and jobs that came to be, they doubled the standard deduction. So if you're married, that means you went from $12,000 back in 2017, 2018 to $24,000 in the standard deduction from $6,000 as a single filer to $12,000 as a single filer. But on the caveat side is. If you owned a home, you used to be able to write off all your property taxes and your state taxes. no more. Here's your double standard deduction instead. We don't want you itemizing your deductions as much anymore. So did it hurt a lot of people? Absolutely. It hurt all of those people that were putting so much money into a primary residence and viewing their primary residence as such a strong asset. It became less of such a strong asset. when those tax changes came because you weren't able to really deduct all of your mortgage interest and all of your property taxes. That's right. That's right. Love that. Thank you for breaking that down. Trump said something on Tuesday, according to you, as it relates to bonus depreciation. Why don't you share that? I know that you're making a video later on your channel. But you literally, I think that was the first thing that you said to me when we hopped on. You're so fired up. Yeah. Yeah. So Trump addressed Congress Tuesday afternoon. And as a part of his tax cuts that he did in 2017, he wants to bring them back and make them permanent. What he did state, which is something that a lot of us business owners and investors are looking to, is he stated, and just as we did before, we will provide 100% expensing. It will be retroactive to January 20th, 2025. So what he's talking about is 100% bonus depreciation. Code section 179 plus code section 168k. We saw a lot of business owners in 2018 rush to Mercedes or rush to go buy equipment for their businesses because they were able to take bonus depreciation 100% of that cost in year one as a tax deduction. We recently started seeing bonus depreciation phase down. As a matter of fact, in 2023, bonus depreciation was at 80%. Last year in 2024, bonus depreciation was at 60%. So with interest rates being so high and bonus depreciation coming down. It does not help out the entrepreneur and the investor. We saw less spending, less people buying vehicles that weighed over 6,000 pounds and less people purchasing investment properties and doing accelerated depreciation via cost segregation study. So if he brings this back, I'm expecting a boom in purchases for vehicles, equipments for small-based entrepreneurs, and more importantly, a boom in the real estate market for people jumping back into real estate as a means to offset their active forms of income. I love it. With that, let me tee up this first video from your favorite network, CNN, baby. But it's covering what Trump said just recently. Let's see this. We're going to cut taxes for the people of this country. It'll take a little while before we do that, but we're going to be cutting taxes. And if possible, we'll do a complete tax cut because I think the tariffs will be enough to cut all of the income tax. Were you able to hear that? Yes, I was. What's your thoughts on him hinting? Because you literally said when Trump tries to say something, he tries to back it up. He's been hinting about potentially tariffs replacing income tax. Yeah, so how I look at it is Trump is swinging for the fences, and if he lands on third base, he's happy about it. He knows that he has to get the sentiment out there that you have been overtaxed and the government hasn't been spending money the way that you thought they've been spending money. As a matter of fact, I got Elon Musk, my best friend over here. created a whole department called Department of Government Efficiency. We're just going to start posting stuff online to just get people pissed off about government spending. And while Elon's over there entertaining you with the Department of Government Efficiency and the website and everything going on over here, I'm reminding you that we used to never pay taxes. The United States was not founded off of taxes. We were founded off of tariffs. So I'm going to go initiate my tariff initiative like I said I was going to do when I was running for office. And I'm going to start creating this equal playing field and show you guys I can get tax dollars without formally increasing federal tax rates. I'm going to do it by tariffing people. And although it may not be something that's permanent in nature, we're already seeing him repeal back a lot of these tariffs. The idea has already been set. You as the American people feel like you're being taxed too much. You feel like everything is unfair and unjust. And if there's a way for me to lower your taxes, would you be happy about it? And I would say 99% of taxpayers that voted for Trump were voting for that reason. Right. What would you say if you had to just give him a rating first 100 days plus in office? What rating would you give the president of the United States? I would give him probably a C plus. And here's the reason why I wouldn't give him an A plus, right? I think that. In order for people to buy in for what you're trying to accomplish, you have to communicate very clear. And I think initially him coming out, putting his foot down with these tariffs, it was very clear what he was trying to do initially. But then now he's kind of backing off and he's pivoting and the economy is kind of at a standstill. The markets are kind of at a standstill. Interest rates have been at a standstill. So now people are kind of confused. What are we doing? What's the direction? What are you doing about the debt that is just hovering there? And so people are kind of wanting to know what exactly is the direction going to look like for the remainder of 2025? Because for these first 100 days, we've just kind of been sitting here kind of being told all of these things and still feeling the impact of inflation and the impact of the cost of living rising. So I don't know, man, I don't I don't feel like it was an A plus grade. But I absolutely wouldn't give him a D or an F either. Right, right. No, I love that he's we're bringing a lot of awareness to things, which I think is great. I don't get the whole Canada being the 51st state. I would love someone to pitch me on why that's a good thing or what his angle is because it's the same thing with tariffs. It's like he's probably playing 4D chess behind the scenes, and maybe this whole like leading with tariffs is getting some other things. But definitely the him. His rhetoric sometimes gets very much taken out of context, and I'm not sure with this whole tariff thing if we're I would love to hear from their organization to be like, hey, this is like here's the strategy or here's the end result, but they almost have to be playing games. And so, yeah, it's very interesting, and what would you like to see him do differently going forward? Like, would you like him like, what would you if you were advising him or here's some talking points. Like what were some of the things that you'd get across set dates on when you're planning on rolling things out? It seems like we're all, we're all floating around with this mystery timeline around when things are going to happen. Yeah. And I, I know as a tax advisor, I get tired of telling people, just be patient, just be patient. It's like, when are things going to happen? Can we at least get some ballparks? Hey, by June 1st, my tax initiative is going to be rolled out. And I know it's kind of hard because there's so many things that play into that, factors, whether it's from the Senate, Congress, you name it. But I know for 100 percent fact, if you give people timelines, people ease up around what their expectations are around things because now you've given them something to look forward to. Yeah, an example of that could be until it's for sure people may not want to go buy vehicles that are over 6,000 pounds because they're just not sure. But it's the moment that there's like that stamp of approval. Now you give people the ability to relax a little bit and start shopping. Oh, without a doubt. That's a good example across the board around stability. And I think that's what the stock market really shows is your confidence level going forward. And I got to buy some stocks on sale recently, but it's definitely that doesn't scream confidence. And I think one thing that Trump is attuned to is a lot of times you could think that he doesn't care what people think. He cares a lot about what people think, and approval ratings matter a lot. And so I think that is. That is one of the things where he will pivot if he needs to because he wants to be popular. That is true. And one thing I do commend him for is understanding that you do need to pivot. I think with the last presidency, my frustration was that there was zero pivoting, period. Whereas if Trump sees something not working so well, first off, he's going to let you know, hey, I don't think this is working so well. I'm going to pivot. Here's me letting everybody know on Twitter about it. You know what I'm saying? So I do think there is more transparency, but even more so understand the type of turmoil the American people have gone through over the last four years and how unclear things have been. I love that you are helping communicate clear expectations, but also dropping down some dates on when things are rolling out. Man, that would also really be a win for the American people. I love it. I love it. Before we talk about cryptocurrency and some of the ins and outs, I actually had Mark Moss, who I met through your events. Thank you very much. on the show. And I think he's got our entire audience convinced that Bitcoin's going to a million. And so I definitely want to talk about the tax aspects there. But what I have, and I want you to grill me, okay? I want your feedback on this. I have a checklist, a one pager. It's called the five fundamental ways to pay less in taxes. It's the thing that we give out when I speak around tax aspects. And for any of you that are watching this and want this, we'll have a link down below. But there's five fundamental ways for people to pay less in taxes. Would love your feedback on this. Number one is entities, making sure that you have the right entity. Number two is understanding deductions and understanding like ordinary, necessary, reasonable, like in all of that. Number three is tax credits. I find that tax credits is just like a open, open world. And like a lot of times you need to find someone that specializes directly in that credit. And we'd love to hear your thoughts around that. Number four is depreciation. I know you're a big fan with W2 people and entrepreneurs on how they can utilize depreciation. And then number five is kind of like my cop out. It's kind of like my miscellaneous. It's kind of like advanced strategies. And so within the advanced strategies, you have like the Augusta rule, paying your spouse and children, private family foundations, using home office deductions and and like even using like a reimbursement plan. What are your thoughts over all of those five categories? And I want you to be critical. And then if you had to like if we had to flesh out some of these categories, where would you where would you start if someone's watching this and saying. I want to pay as little tax as possible. Maybe we'll start with entrepreneur and then we'll go into the W-2. But out of those five categories, where would you start? I wouldn't flush out any of them because those are the five categories that I focus on when I'm teaching and when I'm providing tax education. I love that you started off with entity structure because most times when we're saving somebody money who's a self-employed owner, it's literally just switching their entities. It's switching tennis shoes that they're operating in. They thought they were supposed to be an LLC when truth of the matter is they're going to save more money being an S corporation. So absolutely love entities. But the next two you said is deductions, understanding deductions, and then tax credits. Most people don't even understand the difference between a tax deduction and a tax credit. A tax credit is a dollar for dollar. You want those more than you want deductions. But the other issue here is that people don't know what's deductible versus what's not deductible. For example, if I go make an investment on my property and I go to Home Depot and I buy all new windows, that's an investment that I spent money on that I don't get to write off all in one year because that's a capital expense. It's not just a... Basic expense. It's an improvement. I have to depreciate it over time. So you see a lot of business owners that spend money all the time inside of their businesses, Caleb, and then they get around to tax time. They're like, hold on a second. Why is my tax bill so high? I thought I spent all the money inside of my business. Brother, meals are not 100% deductible. They're only 50% deductible. The money you spent at Home Depot is not all written off. Those have to be depreciated over five or seven years. And so a lot of business owners get caught up. And trying to spend a whole lot of money because they don't understand their deduction. So love that you hit on that. Love that you hit on tax credits. You went into depreciation, which is absolutely my favorite thing. If we have the ability to accelerate depreciation on the tax returns, I am excited about that because I like to leverage depreciation to create losses. Hopefully an active loss that we can use to offset your active forms of W-2 or 1099 income. We can do that by managing your investment property. Um, as a real estate professional or utilizing a short-term rental strategy. And last but not least, some of the advanced strategies that you covered in there that I remember is shifting income. I love income shifting strategies because if I can shift income to my children, um, who have a lower tax jurisdiction than I do, I keep money within the family, teach them a skillset while also being able to build their wealth. So some of the things that you mentioned, like the Augusta rule are, are, are more niche specific strategies relative to the type of business owner that you are. but all things that you should be taking into consideration if you want to save the most amount of money on your taxes possible. Dude, number one, I love your recall. The fact that you recalled all of what I just said is pretty impressive in itself. Deductions, what's your framework on deductions? Because they can be very overwhelming and it can be very much like, all right, yeah, good luck. And what is how would you when you train, okay, I get the big picture. Now, how do you actually implement it in real life? Okay, so I have this concept and It really started off when my mom taught me this. So for those of you guys that don't understand how I got into the tax and accounting space, my mother has been a tax and accountant for 35 years. I'm 32 years old, so you can imagine how long she's developed her skill around this. When my mother taught me this tax code called Code Section 162A, she told me this will be the most important tax code she ever teaches me for the rest of my life. And I want you guys to walk away. from this knowing that this probably will be the most important tax code for you. The tax code, Code Section 162A, lets a business owner, so you have to understand this, it lets a business owner deduct ordinary expenses, necessary expenses, reasonable expenses to the business owner in the pursuit of income. What Caleb just asked me is, Carlton, how do you figure out the deductions? How do you know what's a deduction, how to deduct it? The issue with deductions, as many of you guys are probably aware of, is the IRS does not have a list. Of all the things that you can deduct for your business. Okay, I run a tax and accounting business. What are all the write-offs for tax accountants? There's not a list I can get from irs.com. Oh, Carlton, I'm starting a YouTube channel. What are all the write-offs for YouTubers? There's not a list online. What you do have is you have code section 162A. Can you identify expenses in your business that are ordinary to your business, necessary to your business, reasonable to your business in the pursuit of income? And what the IRS is going to really harp on if you're ever audited with claiming an expense is, what is the expense that you're taking? Who is with you or is there somebody that you are doing this for? Where is the expense happening and why the expense? So anytime that I'm making transactions, I have to ask those questions to myself because if I'm in an IRS audit, I know the IRS is going to want to know the what, the how, the who, the where, the when, and the why behind the deduction. So Code Section 162A is your best friend. Use it as a sword to block you paying from the IRS because it empowers you to take deductions that you thus wouldn't have been able to know how to take. And you want to make sure that you always document your expenses because the IRS, when they come knocking, it's normally three, sometimes four years down the road. And you're not going to remember the what, the how, the who, the when, and the why in 2028. Yeah, and that's where most people get themselves in trouble is we all laugh like, oh, this is business deductible, but it's not documented. And again, this is not tax advice. Don't listen to me. I'm just an educator on YouTube. But I'm like If you have those reasons documented, it's hard to imagine that like everyone's afraid of an audit. And it's like what's the worst thing that happens if you deduct something and they say, oh, you can't deduct that? Are they throwing you in jail, Carlton? No, they are not throwing you in jail. What happens if you technically it's like number one, nobody is going above and beyond and actually having that documented. But let's just say you do document it and they say, no, that's not like I think people are afraid like you're losing your family. They're taking your kid. What's happening when you lose yeah. Go to tax court. People think that an IRS audit, if you lose an IRS audit, first off, it's over. Like it's officially over. Now you just owe money and all these penalty fees, and if you don't give it over to the IRS right then and there, you're in jail. That is not the case, and I know so many people live in fear of some random guy named Uncle Sam that you never met before in your life, and he's not your uncle. I get it. Here's what happens. If you lose an IRS audit, you come up with a plan on how you're going to pay back the IRS. Either you have the money where you can just send it right then and there, or you can get on a five-year payment plan. You can literally pay it off over five years, what you were supposed to owe relative to your expense that you tried to claim that they said you're not allowed to claim. Guys, all it is is removing something that wasn't supposed to be there and then refiling the tax return and paying the difference. It's like, oh, sorry, I made a mistake. I didn't know I was supposed to do that. Here's the money that you're owed now. It's not the end of the world. And they may factor in some like 8% or something interest on top of that. Yeah, you'll get some interest tacked on to it. But you can also do what's called a penalty abatement. Maybe this is your first time getting into a situation with the IRS and you're like, oh, my gosh, I didn't know I wasn't supposed to do this. You can apply for what's called a one time penalty abatement. You can use this once in your entire lifetime, one time, and you can abate all of your penalties. and avoid penalties on all of it. But Caleb, let's just say that the audit didn't go in your favor and you lose in the IRS audit. Is it over? No. This is when the tax courts come into play. You can take the IRS to court, and with the proper legal counsel, you can fight the IRS. And this is where I feel like a lot of my confidence got built in the tax and accounting space was seeing how little the IRS knew when you take them to court. like They're comfortable in their ecosystem when they're auditing you. But as soon as you bring them over to court and you actually use law against them, plus you have the documentation, they squivel up and they tuck their tail in between their legs like a little dog that's afraid of you. And so you want to make sure you're working with professionals that know how to approach the IRS the right way. Keith Cunningham is noted for saying, know the upside, know the downside. Can you live with the downside? And what's so interesting is so many people are so afraid it seems like. And I've had people that are like, I'm not going to. deduct anything because I'm just and I'm just like I just I can't even believe it number one but then number two it I think sometimes like when you when you think you could lose your firstborn or go to jail or get like like I can see where it's like I don't even want to flirt with that but at the end of the day it's like when you start looking at like even the odds of being audited okay then it's like let's say you lose every single audit which you won't and then did it like then it's just being like okay like let's let's understand that you're not going to win all the hands, all that stuff. But it's like have... Have a system, have a strategy. And I think that's where most people get themselves wrong is they may even been in the right, but if they are not documented well, that's so it's like get a system for documenting. And I don't know if you have any recommendations on the documenting system, but like that's where if I'm being honest, that's where I've dropped the ball in the past where it's like, you know, I'm not perfect. And that's where I'm like. It's less of is this deductible or not and more of like do I have a system so that 40 years from now I can say this is exactly what we are doing and why. It's less about is this deductible or not and do I have a system to be able to say this is why I did what I did and when I did it. You just nailed it on the head, brother. And most people never adopt some type of system. They just stay stuck on the concept of, well, the IRS could come after me one day, so I don't want to deduct anything. What is the system that I need to create in order to be able to take advantage of deductions and write-offs without fear of Uncle Sam? First, you need to understand the differences between tax preparation and tax planning. There are people out there that will guide you through how to leverage strategies, and then there are people that are just simply there to file tax returns. That's step number one. Then, step number two is I would highly, highly encourage you to get organized. When you get organized, what does that actually look like? That means Everything from a bookkeeping and accounting perspective is caught up in real time. Today is April 30th. We're about to cross over into May. A business owner's books need to be caught up as of April 29th, as of yesterday. Somebody needs to be inside of your QuickBooks categorizing all of your income and all of your expenses so that way you are caught up in real time. Now, to take it to the next step, and this is what can really protect you if you're moving at 1,000 miles per hour like... Caleb and I am utilize your cell phone. It's with you every single day. Rather than having to save every receipt every time you travel or every time you're buying food. Why don't you just turn around and flip the receipt over, right? Who you were with and what it was for. Take a picture of the front of the receipt because the receipt has the date, the time and what you spent your money on. And then take a picture of the back of the receipt because then it has who you were with and what you were discussing. Those are the five elements that the IRS is looking for in an IRS audit that will protect you. And if you get audited come 2028 for tax return 2025, you will be thinking yourself that you took photos of everything as opposed to saving all these receipts in some shoebox somewhere. Yeah, if you ever had questions why Carlton's on top and one of the most viewed people. around taxes you get. You're making something that's so boring, so fun and exciting, dude. I'm ready to go run through a wall to take pictures of my freaking receipt. Let's talk about credits. There's obviously a lot, a lot of credits. You're not going to name all of them, but is there any credits on the business side or personal side that are like, hey, you should be aware of this or double tap this or maybe do your own research on this? Because this could literally put money in your pocket. Yeah. So there's two credits that have been coming up recently. Um, we've had some clients that have been investing in movie films and movie films can provide you with tax credits as well as tax deductions. Pretty awesome. The IRS created a, a tax code called IRC 181, where they carved out an area in the code that incentivizes everyday taxpayers, W2 and 1099 to invest in the production of movie films, because most of these movie films have to be financed. You could choose to just go to a bank. Or you can choose to go to regular investors, everyday people that are looking for business deductions, and you can claim a business deduction for contributing to the production of a movie film. IRS has not only created the ability for you to receive tax credits, but you also can receive tax deductions for that. Dollar for dollar or the portion of A portion of it, up to 30 percent, correct. Okay, but then you also get a credit. That's correct. You can receive a credit and apply for a credit. If you're investing in a movie film. That is in a distressed area built here in the United States. Okay. Okay. And then the obviously next question is you would be investing to get a return. Yes, absolutely. How much returns on movies? I would imagine that they're pretty it varies. They're hit or miss to be honest with you. The goal for many of the people investing in these movie films is they're playing into the IRC-181 tax play because sometimes you're receiving sometimes a multiple on your investment. I've seen some people park $100,000 into a movie film, but then on the outside when they receive their K-1, they're receiving a $300,000, $400,000 business loss from the investment. They're doing it as just a it's a wash for them. They don't care if there's any return. It's a plus if there is, but they're getting a tax benefit that makes sense. Yeah, but they are getting a return of their capital. Maybe they're only earning maybe 5% on their invested money. But in the year in which they had a big liquidation event or they sold their company or had capital gains, they were able to utilize this strategy to pocket more of those savings in real time knowing that they're going to eventually realize that income coming back to them in future years from the film. Fascinating. And then what was the other credit that you The other yeah, the other was the R&D, R&D, so research and development. I don't know why it's not as popular anymore as it was when. It first got rolled out or even when Trump came out with his tax cuts and jobs act and more people were kind of pushing for R&D tax credits. I feel like R&D tax credits have kind of cooled off. R&D tax credits, in my mind, should be what every business owner is looking into, especially if you're using AI inside of your business. If you're utilizing AI inside of your business, I can almost guarantee you there's a component of R&D that is being done that you can apply for. with the right type of research that you're doing. qualified underneath the tax code, you can receive a tax credit of up to 30%, if not more sometimes, depending on the expenses being allocated to research and development. And some of that can also include the payroll costs of you paying employees to help you conduct the types of research and development that you're doing inside of your organization practice or products and services you're providing. We'll link any videos that you have in addition to that for if you have any ones on RMD. And if you have someone that I can interview to go deeper on that, I've always heard of RMD as one of those like go to. But then when you actually ask, how does that work? Then you're just like, well, like I've been deferred to like 10 people. No one can tell me what the hell RMD like how to actually work it. So I I'm very much looking forward to like seeing how this applies. But you're totally right. Like the, this is, this is what takes an ordinary. you know, doing your thing to the tax strategy to the next level is when you understand all of this. And the beautiful thing is you can apply for this and this and this and this, you can stack them. It's not a pick your favorite five, you know? I think that's where people, um, don't think, deeply enough about tax strategy. Tax strategy isn't a one strategy and you're good. You can stack seven, 10, 15 strategies all into one tax return, right? You can invest in oil and gas, own real estate. have some money in a movie film, doing R&D with your entity, and all of that combined can help you offset your tax bill. And you had a video the other day that I thought was really good. It's like sometimes people in the art of trying to get to zero go broke. Yes. So sometimes when we watch you on the hard knocks video, it's like, man, I want to pay no taxes and all. And that's possible. but also like talk to me about why that can be a red flag or a problem if someone's whole goal is to be. pay no taxes, but in the process they have no liquidity. Yeah. Cause you can go, you can go cash broke trying to get to zero with your taxes. I've seen it happen so many times before where entrepreneurs will essentially spend all of their business profits and take it out of the business in the form of distributions to then make investments into assets such as real estate, locking up their money inside of real estate, which is super illiquid to then get to zero to offset their taxes. to then run into another situation in their operational business where they need the liquidity to not have access to the liquidity that they need because they park so much of that liquidity into a syndication, for example, where they can't get their money out of a syndication or into a short-term rental where they locked up so much money into a short-term rental for accelerated depreciation. And now you're kind of stuck. You want to be able to expand and jump into opportunities. But you can't because you were so focused on trying to get to zero that you literally bled all of the free cash that you had in order to get to zero. Listen, I understand that saving money in taxes requires you to invest money, but it's about making the right types of strategic investments and figuring out, do we really need to be at zero? What exactly would make us feel comfortable financially, whether it's 12 percent, 22 percent? What makes us comfortable? While also still having the comfortability of money in the bank account to survive a rainy day or, God forbid, another pandemic situation. Who knows, right? And there's another aspect of like you could be doing all these things, but then when you really need capital to invest in an amazing opportunity that could double your money because of people that you know, business, but you don't have access to that because you might have your money tied up into a syndication that is legit. but you're earning 12%, which is okay. It's great. But now you're not. So it's like, there's everyone's in a little bit of a different situation and it's understanding those costs because, you know, that paying money to the IRS, there is a compound effect to that. Those are dollars that will never able to work for you ever again. So I understand the desire to, to want to be creative. And, and you have a percentage base where it's like anyone that, you know, could get to this percentage if you're at least it's not zero zero is not going to be it but is it like 15 20 12 like if they're doing proper tax planning i know you have an amazing mastermind and you do some like if they're following directions what is like a percent percentage wise uh that they should be shooting for yeah our goal in our office is to help all of our clients get to under 12%. marginal tax. And it's feasible to do that while keeping them in a place where they still have enough income on the tax returns to qualify for loans if they need to buy things in the following year, but also keeping their tax bill low enough to where they feel like they have enough liquidity still to make additional investments and or have that emergency and some in the event that they need to, you know, ever. pull the plug on that money and roll it into something that could be an emergency type of situation. We had a client one time that, you know, had an unforeseen circumstance happen. And, you know, next thing you know, they found out their spouse had, you know, terminal cancer. And he was willing to do everything that he possibly could to throw money to try to help his spouse get through that situation. But in the following year, or sorry, in the previous year, he had went pretty aggressive. and his tax strategies, buying up a bunch of properties, tying up a bunch of money. And so when this situation happened and he was faced with these circumstances, he had to essentially file for a BK. And it really put him in a very difficult financial situation because he had to start selling some of his assets and try to liquidate to try to be there for his spouse medically. And so I say this to warn anybody that is so, so driven around trying to pay the least amount of tax as possible. You're talking to the goat of wanting to pay the least amount of tax as possible. Believe me, I'm about trying to get you to zero. We have to be strategic in what we're doing. And I always believe in the concept of protecting home plate. At the end of the day, I'm working so hard so I can spend time with my family. At any given moment, my business becomes an asset for me to keep my family alive. any given moment if something happens, right? And if I don't have that liquidity to be able to keep a family member here longer, I'm going to resent all of the things that I did to put tax plays into play just to get to zero, just to say I was at zero. You know what I'm saying? So we have to really kind of balance out saving money and building wealth versus why we're building the wealth and protecting our family. Dude, I've listened to a lot of your podcasts. We're going deep brother This is a masterclass and I really, really appreciate you just being so generous with all these hacks. Let's get to topic number two, which is cryptocurrency. Okay. So there's a concern of just like, how does cryptocurrency taxation work? How do losses work? How do people account for that? Talk to me, riff for a sec on just how we should be thinking about cryptocurrency when it comes to tax strategy. Yeah, I mean, it's viewed as real property. I would highly recommend anybody that is getting into cryptocurrency to just go watch our video on how taxes work for cryptocurrency. What you'll realize is that it's a lesson on understanding short-term versus long-term capital gains and then realizing that all of the information that you've heard about decentralize this, decentralize that really is all taxable to you. Like literally all that stuff. Staking. I'm earning interest off of this. You are going to have to report everything that you are earning in the decentralized space or, you know, what you are earning in your Coinbase account. The issue that most people have with cryptocurrency is because it's decentralized, Carlton, who knows that I have a wallet sitting out there with, you know, $10 million in Solana that's being staked. And I'm earning 5%, 10% going directly to this cold wallet that I never touch, right? And I would tell you that Congress and the IRS are normally and I know it may not sound like this. I know it may not look like this. They're normally three years ahead of you in what you think they know what you think you know about them. When cryptocurrency came out… IRS had already built systems to track cryptocurrency. This was years ago, years ago. They are going to make sure that they get their tax dollars out of this. That's right. And they're going to build systems and software that is going to allow for them to see and track absolutely everything. So if you're somebody that's passionate about crypto, Bitcoin, highly recommend that you first just adopt the idea that I'm going to report everything. Yeah. Yeah. Step number one. Step number two, understand the difference between short term and long term capital gains. If you're trading, it's ordinary income to you. You're going to report it and you'll most likely get a 1099 from Coinbase or Robin Hood or wherever you're choosing to use your brokerage, letting you know your short term gains that year because you decided to make trades in less than a 365 day calendar period. But if you held on longer than that, great, congratulations. You have the more favorable tax rates of 0, 15, and a maximum 20% long-term capital gain rates. And I'm all about those long-term capital gains because when I invest money into assets, I'm typically going to hold them for long periods of time. We have seen fluctuations in cryptocurrency over the last year, two years, last five years as more and more money has been poured into crypto, more and more institutional dollars have been poured into crypto. We have just seen nothing but fluctuations everywhere. That being said, more mass adoption than ever before. Are you bullish on crypto, just long-term asset? I'm bullish on Bitcoin. I think cryptocurrency as a whole is going to rise, but Bitcoin in my eyes is a hedge against inflation and a true asset. I was talking to someone the other day who had a large portion of their assets in Fartcoin. And I was like, well, this is not financial advice, buddy. But I asked him, like, what is the underlying? He's like, well, I don't really know. It just is good. And I'm like, that's when you see a problem. That's when I have a problem with something, when someone doesn't really, they're investing in maybe an idea around something. But like, and supplying demand and like a meme coin versus like Bitcoin. Like there's a lot of people behind it to be like, and that's where even with Mark Moss, my time with him. And like he. put an argument to be made with just just if as we continue to print money like bitcoin as a result even if it doesn't create more adoption is going to grow um and yet some of these other mean coins like i think crypto is going to get a bad rap because i think people are going to lose their shirt on a lot of things but when you actually ask like where's the value they're just in it for a quick win and i think greed is greed is uh underlying a lot of poor decisions. And so that's, that's my, It's so hard, right? Because you see so much happening on the internet, so many people becoming millionaires overnight. Yeah. It almost feels silly not having some money just in some random projects. And if it goes to the moon, great. Oh, my gosh. I parked some money there. But what you have to realize is like a lot of these people that are becoming millionaires in the cryptocurrency space are doing deep, deep gambling. That's essentially they're doing deep research on gambling projects. It's like, bro, if you just spend enough time on a casino floor, you're going to have a few nights where you're going to win too. It's no different. So sure, fart coin, butt coin, whatever coin, should you have some money there? That is totally up to how you feel. Don't call it a investment. That's my line. How comfortable you feel when you show up to Vegas. Do you show up with only $1,000? Do you show up with $100? Do you show up with a briefcase with $100,000? What's your comfortability level and how long are you going to stay in the casino? because we're We're all in here gambling. Yep. I'm with you. I appreciate your answer there. With the possible government Bitcoin reserves, should we be concerned with the IRS involvement? It's your belief that they're ahead of the game and they're already involved. So I would imagine that you're not worried about the IRS getting involved? No. I mean, we have a president right now that's actively trying to shut down IRS facilities. That being said, that's another conversation. But am I worried about the IRS getting involved on the cryptocurrency side, Bitcoin reserve side? No, I think regulation provides more adoption. And the more we can regulate Bitcoin and cryptocurrency and create strategic reserves and move forward in that capacity, the more mass adoption there will be and the more my portfolio will rise and so will my clients. I love it. I love it. All right, now we're going to get into a portion where we're going to do reaction content. Is there anything else that you want to talk, Carlton, any other points that you're like, hey, let's make this before we go into reaction? No, this is great. I love this. I'm ready to react to some videos. Just moved to Florida to spend more time with dad. Isn't that sweet, Stephen? Isn't that nice? No, it has nothing to do with his father. Give me a break. He aggregated $160 billion in wealth. He would pay about another 8 or 10% in state taxes in Washington. But in the US, you're allowed to peace out to Texas or Florida and pay no income tax. The 25 wealthiest Americans pay between 6 and 8% tax rate. What are the tax games they're playing? You buy stocks, you never sell them, you borrow against them. Okay, explain that to me like I'm a 10-year-old. Sure. You own $100 in Amazon stock. You need money to buy something instead of selling the stock. And say it's gone up 50%. I say it's doubled. You would have to realize a capital gain and pay long-term capital gains on that $50 gain. No, just borrow against it and let the stock continue to grow. What rich people do is they'll buy a stock. So I'll spend $10K on Amazon stock. And then I go to a bank. and the bank give me a $5,000 loan against my Amazon stock tax-free, and I just hold the Amazon stock, now I've got $5,000 tax-free. If the Amazon stock goes to $20,000 in value, I can go to the bank and say, it's gone up now, give me another $5,000, and I just spend and live off that money. Now, if the Amazon stock collapses, I'm fine, because the loan was against the stock, so they'll sell the stock at a certain point as it's collapsing to get their money back. One of the great tax schemes in history is that stocks grow, Think of yourself as a stock. You're making a million dollars a year doing a very successful podcast. Every year, the government in the UK is going to take 40% of it. If you own a million dollars in stock and it goes to 2 million, you don't get taxed on it until you sell it. Yeah, so just never sell it. Never sell it. Thoughts? Yeah. Bro, I love this, man. I mean, we practice this in real estate just as well as we can practice it in business, right? I don't sell my real estate because of the IRC 1031 exchange and cash out refinances and HELOCs. If I take a loan against an asset that I own, I don't pay taxes on it. I get to keep the asset and it gets to appreciate over time. No different than if I have a business. If I decide to invest money into a stock, I can borrow against my own stock portfolio. Or if I have a large corporation, I can get paid in stock options and then borrow against my own stock options. I love this idea, but the issue is that many people get pissed off. when they hear about this. I would wonder why you would get pissed off about this. This is the law and this is how the law is written. Are you upset that there's billionaires that understand how to read? Are you just upset that you just figured out this code? And so I'm all for it, man. Yeah. I mean, one of the things like how, how do your clients apply to this? Cause it's easy to say like, yeah, Jeff Bezos and Elon Musk and all, but like, I know that there's insurance, there's real estate, there's... Ordinary people can take their stock account. So it's like how does this work and is there any downfall? And I guess the downfall would be if you're over-leveraging and your assets drop and you don't have a put on that, if you don't have a protection. I think most people that are in the middle or lower class can't even wrap their heads around it because their whole thought process around debt is misconstrued. They view debt as something extremely bad and something that you shouldn't try to go get or leverage. whatsoever. Whereas the wealthy class are focused on trying to use as little of their own money as humanly possible. Um, so they can continue to build their wealth with their own money. Um, and so that concept in itself is what prevents many people from understanding and bridging the gap to even being able to utilize strategies like this. Yeah. And my word of caution would be leverage is an amplifier leverage. If you're playing a guitar and you're really good at playing the guitar and you amplify it, it's amazing. If you're not great at playing a guitar, the last thing you want to do is amplify that sound and noise. And so that's the thing is when debt is an amplifier to the underlying asset or the lever that allows it to do that. And so that would just be my recommendation would be just to make sure that don't just look to leverage as a solution, but really understand it as a part of the tool in your portfolio. this next video, please help me understand what this guy's talking about. And I think this will create maybe a laugh or two, but, um, you know, Go to the bank, get you a Roth. Roth, brother RA. Put three grand a year in there. Don't touch it until you, until it matures. And it matures every day. All right. I guarantee you 3.7 million. You guarantee 3.7. What's your name? Kevin Johnson. Kevin Johnson. Now, listen, when I get that 3.7 million, I'm looking for you. I'll tell you something. Best advice I can give you, start looking at an investor. I'm going to show you one quick investment you will never imagine. All you got to do is go to Morgan Stanley. I got me a Morgan Stanley account. Okay, go to Morgan Stanley and ask them for mutual fund and enter. Right. Take 20 grand. You get three grand every 90 days. For forever? Forever. One-time payment? One-time investment. So me, I'm 23. I plan on living to 107. So three grand for 107 years for 90 days. Yep. Every 90 days. Here it is. It's $12,000 a year. All right. What in the world are they talking about? I don't know if I understand that Morgan Stanley play all that well. I might have to let you speak on that one. But when it comes to the Roth IRA, I mean, you can contribute up to, I believe, almost $7,000 into a Roth IRA. The issue is that many people that I work with are phased out of being able to contribute to a Roth IRA because they make too much money. So what we end up doing is we have to funnel some of it into a non-deductible traditional IRA and then back. backdoored into a Roth IRA, aka the backdoor Roth IRA strategy. And that's how we're able to get some money in the Roth IRA account. But from what this guy is stating is that one, put $3,000 in there and you'll have 3.7 million by the time you're, did he say 20 years old? Yeah, he didn't put an age. I guess he can't be wrong there because you can always, but my deal is like, yeah, you're totally right. The Roth is a great strategy. And if you make too much money, you can still get creative about putting your money in a Roth. My issue is like, I didn't understand it. As you put 20 grand and then you're every quarter, you're able to take three grand out. Like I would love to see underlying investment because the math just doesn't, you can't take out half your money every year and then have that work. So I didn't, I just, I think it's, it's a, it's the art of, I just was, you know, I don't know why the media team put this on our radar, but they wanted, I, when I, and I called them, I was like, Hey, like, what is this video of me? And they're like, exactly. We'd love to get Carlton's viewpoint on it. I was like, all right. I want to find this guy and have him take me to Morgan Stanley. I want to set up whatever deal he's got going. I deposit. You mean I deposit $20,000. I get paid $3,000 every 90 days. Sign me up. I'll deposit. Let's put some more money in there. $250,000. How much I get every 90 days. It's called Morgan Ponzi. That's what it's called. All right. We got another guy, and he's got this is the five ways to pay less in taxes. and let me, he I think you've probably seen some of his stuff. Let me pull him up. If I were in my 20s or 30s, here is exactly how I would avoid paying taxes on about 42% of my income. Legally. I'm Tyler. I'm a former financial advisor and portfolio manager. Now I make financial content for free so that you don't have to pay for it. Number one, let's assume I make $90,000 a year. Number two, I'd put $23,000 into a 401k and try to get the employer match. No brainer. And anyone who tells you not to is selling you insurance. Number three. Put $7,000 in a Roth IRA, invest it aggressively. There is an income cap to contribute to these. So do it while you can and do it while you're young and in a super low tax bracket. Number four, I would max out my health savings account with $4,300 if I had a high deductible health plan. Invest it in low-cost index funds and trust me, your future sick self will say thank you. Number five, then I'd turn around and take the $15,000 single-filer deduction. Tell the government I only made $47,700. went from the 22% to the 12% tax bracket, and at this rate will most likely become a millionaire in just over 15 years. Number six, on the words of Ferris Bueller, life moves pretty fast. If you don't stop to look around once in a while. Thoughts? Thoughts is that he's correct. What he's essentially helping you do is go from a high tax jurisdiction, like the 22% tax rate, down to the 12% tax rate. That's a delta of 10%. But how is he getting you there? He's saying, hey, I want you to contribute to a 401k, max it out $23,000, that drops your taxable income down, and then I want you to put money into an HSA. If you do these things that he's telling you to do, you're going to drop your taxable income. The one other thing that he threw in there is, hey, put in the $6,000, $7,000 into the Roth IRA. Let's grow some tax-free dollars right now. But he's combining it with a traditional 401k strategy and an HSA. So although you may pay taxes when you put money into the Roth IRA, you're offsetting that with what you're taking in a deduction with the $23,000 in the 401k and then obviously what you're putting into the HSA. On top of that. Something to just be aware of. Many taxpayers forget this. The standard deduction for a single filer is $15,000. What does that mean? By just having a pulse and making 15 grand, you automatically get a $15,000 deduction on your tax returns. If you're married, it's $30,000. That is called the standard deduction. It's automatically given to you when you qualify to file a tax return. So love this video and I look at it to be correct. Yeah. So my question is this. So all of this stuff is good. If you had it. What is your thoughts on deferring versus like 401k? Great for some people. HSAs are great, especially if you value your health. Yeah, I love HSAs. Awesome there. Roth is obviously great. I look at that and it's like, it's all good stuff. It seems pretty basic to me. And is there any downfall to deferring or is it like... Yes. You know, I've, I've, I've gone, I've come full circle. I used to be very, very against deferring tax. And now I'm like way more empathetic to the fact that there's lots of people that they're not entrepreneurial. So I have to, I was almost like looking through the lens as an entrepreneur when it was in all reality, like. That was my mistake, and so I've really toned my rhetoric down a lot and just being like, what's your situation? But that's question number one, and then number two is if you're making $900,000 a year, these type of strategies don't move the needle as much as the first $100,000. Yeah. So first off, these strategies are considered basic strategies. If your CPA is coming to you and charging you to tell you to put money into a 401k or an HSA, please run. chat GPT probably come up with some better strategies for you. I just wanted to say that. So those aren't strategies. those are basically deductions that you can take on your tax returns. And someone who's making $900,000 a year is not going to save a lot of money by maxing out $23,000 into our 401k. But that being said, one of the things that we have to look at here is retirement counts are deferring tax. What you're essentially saying is, is that I'm not going to pay the tax now. I'll pay the tax later. And hopefully when I pay the tax later. I'm hoping that I don't pay as much. As I would pay today. So you're kicking the can down the road. There's a situation in which this does make sense for some taxpayers. But for most taxpayers, what you're essentially doing is you're stuffing money into a retirement account without a guarantee on what your tax rate is going to be later in retirement when you go pull those dollars. And that uncertainty around what your tax rate is going to be creates a lot of missed opportunity. It can't properly be factored over time. And for me, I understand the need to save money sometimes in the short term. But in the long run, if I have a retirement account with all of these taxable retirement dollars in there, then that may not serve me that well. So I love the idea of a Roth 401K biting the bullet when you're making income that qualifies you to contribute to a Roth 401K or a Roth IRA and maxing that puppy out. Yeah, I mean it. You're deferring tax. You look like a genius if Trump takes away the tax, you know, income tax. But I think even the most optimistic people that are the most libertarian of our friends would say like, hey, I don't think with where we are, that's even possible. But that's that would be the argument to defer, defer, defer and then hope that taxes are actually lower in the future. All right. We got we got Uncle G here. I know that you're. I know that you're, I know you're friends with him. He had this clip on 401ks. The team wanted us to react to it. And I, it would be interesting to hear your thoughts on this. Yeah. I have a lot of money in my 401k. Okay. I'm sorry for you. Why do you feel sorry for me? It's a way to put money in without paying taxes on it. It's a way for you to be trapped for 30 years. Well, you go pull it out when you're- 63. How old are you right now? 50. 13 years from now, will taxes be higher or lower? Higher. You will wish you would have sold them when you were 50. Because you'd pay a little taxes, dude. You don't pay any taxes when you pull out money out of your 401k if you wait until you're 63. When you start using that money, you're going to pay taxes, bro. You weren't charged taxes while it sat there. What's wrong with you? You're not. IRS allows penalty-free withdrawals from retirement accounts after the age of 59 and a half. Penalty-free, not tax-free. Penalty-free, not tax-free. So they're going to charge you a penalty. They're going to put handcuffs on you to sell it before then. But, dude, when you're 63 years old, when you start withdrawing, you're going to start paying taxes at that point. 401k withdrawals are tax-exempt. Exactly. I feel like I jumped into GC's body when he was talking to this guy because exactly how he responded is exactly how I would respond. If you're bragging to me in an interview about how much money you have in your 401k taxable account, I'm sitting here looking at you like, what's up with you, bro? Good for you, man. You are going to and I would do exactly what he did. Let's put you in a situation here. What do you think taxes are going to be in 10 years? Do you think they're going to be higher or lower than where they are right now? You know? You don't have Trump as your president anymore in 10 years. Do you think they're going to be higher or lower than where they are right now? 99% of the people I talk to with a brain on their, with light bulbs upstairs is going to say, Carlton, the tax bills, the tax rate's going to be a lot higher in 10 years. Why then would you lock up so much money into a qualified retirement plan that you're going to have taxable to you when you withdraw those funds? Make that make sense to me in an argument today in 2025, knowing you're not going to pull that money 10 years later. Yeah, I think it all comes down into your ability to invest and grow that money. And I'm talking to half the population who have zero skills when it comes to growth. The fact that they can put their money in a target date fund and have that money locked up and actually get penalized for touching that is actually a good thing. Like that's crazy for me to say out loud, but like they are literally like them controlling money is a disaster and they'll go spend it. And so that's hence the person that. Discover the 401k Ted Benna like that's what he'll say is one of the best things in the 401k I and then that's exactly why I'll just speak for myself is why I'm not in love with the 401k is like you're you're telling Me I have to I'm not just I defer to an unknown date at an unknown time And if I get that if I want to get access to that money early, not only do I have to pay taxes, but I have to pay a 10% penalty fee. And so it's like, okay, I can see both worlds. But for entrepreneurs and investors like Grant, you really think Grant is like, oh, the best use of my dollars is to lock them up into Wall Street's funds. I think he was pretty animated there. And then I always love the misinformation. I'm like this person thinking it's a total tax-free thing. But how many people, Carlton, literally think that Their 401k is tax free. I hear that all the time. And that just tells you the lack of education, period. What if the interview ended right there and you didn't even get to hear Grant correct him? So many people jump on Instagram and YouTube and they hear one little thing and then run off with it. Yeah. Right. Grant had to correct him. That's dangerous information right there. Hold on, buddy. Your 401k is taxed. You don't have to pay a penalty once you're 63 and a half. Your 401k is still taxed, though. Yeah. So absolutely. The details matter and the devil's in the details. I love it, dude. All right. We got one more reaction, and I got your permission to talk about this before because I love you, dude. You're on top. You're the punching bag. People are essentially, there are people behind the scenes that want to increase their status. And I said, dude, there's a lot of people using your name. You know who they are. And I asked. I said, as a friend, are you willing to be able to speak about it publicly on the show for the very first time? And so thank you. I'll let you take this where you may. But let me tee up a video that has gone crazy. crazy viral and i just want to give you your flowers before we tee this up um i bought my first watch thanks to you thanks to some encouragement so i'm not i'm not as uh i don't have the nicest watch collection yet but uh i'm on my way and let's go and uh but with all that let me uh let me pull this thing up oh here we go here we go i can't write off a rolex but if i start a youtube channel where i talk about watch trading and i start buying rolexes and watches and hold them as inventory. The Rolexes that I spent my money on are inventory for my business, which now makes my watches ordinary, necessary, and reasonable in the pursuit of income underneath code section 162A. Ladies and gentlemen, what do we have dead wrong? The YouTube channel distractor 162A, ordinary, necessary, reasonable, no matter how many times he says 162A, that doesn't make it the only code section for inventory. It is code section 471. And under code section 471, inventory is typically capitalized, which quite literally means it is not deducted. But let's say you qualify for one of the exceptions and deduct it. It doesn't really matter because when you resell the inventory, it's going to then be taxed and you won't even get the benefit of that deduction. If you're genuinely in the business of actually reselling it, you wouldn't typically have that long of a sales cycle. And for more accurate tax advice from a tax attorney, subscribe. Yeah. All right, dude. First time publicly sharing this. Oh, yeah, bro. First off, you know, kudos to Jasmine DeLuca for, you know, jumping on top of my videos and, you know, putting her expertise over it. I think that in this space, there is a lot of misinformation 24-7 that goes out, and all she's doing is trying to protect people. I've seen it happen where people have taken my videos out of context and have rushed off to go do things incorrectly, and I understand what my superpower is. My superpower is that of a marketer. I am probably one of the best marketers in the tax and accounting space, but that doesn't also mean that I am going to sit and explain something for 20 minutes over a 60 second video because I have the skill set as a marketer to know exactly what to say to get people curious. I lean in on that skill set and then you have people like Jasmine who are tax attorneys that want to come in and be politically correct. Actually, 471 F is inventory and if you held it for inventory. The chances of you actually holding it for longer than a year or two years is highly unlikely. Yeah, Jasmine, you're talking about a certain situation for a certain type of person. But I will say this. Code section 162A, still one of the most powerful tax codes in the United States tax code. That tax code is the reason why many entrepreneurs are able to take deductions. And I want to see more tax experts, including Jasmine, teaching entrepreneurs how to use code section 162A, how to use inventory to their advantage and capitalizing it over time. and teaching people the ways and how they can leverage the tax code instead of just saying, nope, you can't do that. Nope, you can't do that. No, you can't. Show us what you can do then. What is possible because your channel and what you're doing is really just coming off of somebody else's videos and saying, hey, in tax court, it would hold up like this. In tax court, it would hold up like that. Very valid, very respected, and grateful for that content. But I want to see. us kind of coming around to some content around where you're showing people how to actually leverage the tax. Listen, Jasmine, if you're watching this and you want to hop on, I would be honored to host a, an exchange where, where there, there can be back and forth conversations. That's an open invite. Here's, here's what I'll say is, and this is, I have this on a micro skull on the insurance side because we're doing things differently. We're going to events and people are feeling very threatened. They're feeling threatened that this young kids out there talking about things differently. I've heard things behind the scenes of people's, what they say about me. And I'm like, yikes. Like if they only knew, like, like, man, that's tough. That's tough. I'm not nowhere nearly as big as you and you're doing way more marketing. How do you handle that? Because I'm sure there are so many people that aren't even on YouTube that are like throwing your name under the in the mud because, you know, a lot of different reasons. Number one, how do you deal with that? And then how do you deal with like you see a lot of your content being taken? It's got to be in a world. It's got to be an honor to be like, hey, like people are talking about me like they're literally using me to grow their business. Like that's pretty neat. But then you also have to have some thick skin from a standpoint because people will take shots literally because taking shots at you increase their status, which is with the use of the internet and leverage is kind of an interesting deal. Yeah. Listen, man. You throw paint on my name, you give me more fame. That's just how it goes, man. And I've always been the type of person that has been a. appreciative for the things that I've asked for. You know, when I stepped into this entrepreneurial journey, I asked for God, I was like, Hey, I want to blow up in the tax and accounting space. I want to do whatever I possibly can to make sure that I speak concisely and that I share my ideas with the world in the right way. And I'm willing to, I'm willing to deal with whatever comes of that level of success. And what has, what has happened is I've been able to network and connect with people of status and recognition that. you know, most people can't get into the rooms with. And I've also had, you know, haters utilize my videos to grow their own businesses and create entire products and business models over my videos. I am grateful for it all. I'm grateful for the Jasmines of the worlds and the Edwards of the worlds and, and also all of the grateful people that have followed and subscribed to my channel and have allowed for me to rise to this platform that I have here today. I do view myself as a pioneer in the tax and accounting space. And so as a pioneer, I can't get caught up with what's going on with the waves. I just have to stay focused on the course that I'm on. And I think if you're an entrepreneur and you're striving for success, look at someone who you look up to. That person that you look up to better have a big enough platform to where they have the attention, but they also have people that probably don't like them too. And that's just the truth. Jesus was not liked by everybody, but we read his book. Every, every Sunday. And so I say that to say this, man, I'm doing everything I possibly can to change this tax and accounting space, and I will be the pioneer that I need to be. And if there's going to be people that come after me and attack me, so be it because my ideas that I'm sharing with the world is helping put more money back in people's pockets. And I think the underlying message, a lot of times people will come up to me and they know that we're friends. and I literally had someone the other day who was like, dude, I started watching, he was 19 years old and was like already crushing it in business. And he's like, Carlton was one of the people that I watched and he gave, and you gave him the belief to do what he's currently doing. And so I think it's, it's like in anything, it's like, yeah, we're all, I've, I make mistakes all the time and we have to be humble enough to be like, yeah, like great point. Let's get better. But we can be so afraid to act and not, and it's like, what's the ripple effect of you only making our videos that have to be compliance approved. It's like. No, we got to create content that gets people to start thinking differently, and the internet will humble us in a second. They'll keep us in check. So I just appreciate you sharing that because I know how you roll behind the scenes, and I just wanted to get your two cents on that. There's other videos of you talking about haircut and all. What would be your thoughts on it? I know that she I think Jasmine I saw a video that Jasmine was like, you can't deduct your haircuts and all. I can. I'm going to deduct my haircuts. I'm going to deduct my haircuts. Yeah, not every business owner can deduct their haircuts. Not every business owner is making a quarter million from YouTube videos a year, right? But my YouTube channel does, and I'm on YouTube twice, three times a week. So my barber is close to $500, $700 a month. Most people aren't spending $500, $700 a month on a haircut, let alone on camera 15 to 20 times a month. But I would argue that most actors and actresses. that are working in movie and film production are most likely getting their hair and makeup done on a day-in or day-out basis and are most likely spending more than the average folk to spend for their haircuts and makeup. So that's an ordinary and necessary expense for an actor and actress. I am not doing anything different than an actor and actress when I'm doing productions sitting here at the desk on a Monday, Tuesday, Wednesday, Thursday. So in my mind. If I were to be questioned by this, I have an approach that I would take if I were to be questioned by this. But if you're sitting here saying, oh my gosh, somebody told me I can never do this, that's totally up to you if you want to listen to their advice. I come from the advice there's always something you can do. There's always a way in which you can figure it out. And my channel and what my voice is going to be known for is for curiosity. I challenge people to get curious about the tax code. Go do research. Go figure out how are other people doing it. How did Donald Trump pay $600 in federal income taxes and you paid $60,000 in federal income taxes? I want you to question things. There's plenty of tax experts that are going to tell you no, no, no, you can't do that. There's tons of Jasmine DeLucas out there that are going to tell you no, no, no, no, no. I'm Carlton Dennis. I'm telling you, yes, you can, and there's always a way in which we can figure it out, and we can do so without Uncle Sam knocking on our door. It did. I couldn't have said it any better. And you've done that for so many people. And for all the messages and the videos that you see of people going at you, you probably get 10x or 100x of people that are like, thank you, thank you, thank you. I'm starting a business. You took this fear, even the fact that we opened this whole conversation up about stop being so afraid of the IRS. It's not like they're not Uncle Sam's not like coming out of his car and knocking on your door. Like there's, there's a way. And a lot of times, um, We want it to be taboo because if it's taboo, then you make people rely on you, the CPA or EA or whatever. And it's like more information. Like I think part of it is more information that gets out there is threatening because if you're not doing X, Y, and Z, you're keeping people accountable. And what do most people do when they're pushed on accountability? So Carlton, man, I love you, dude. I appreciate all the things that we talked about. Is there any final words that you want to say? as a dad, you got, you got a book coming out later. I cannot wait to promote that when it's, when it's official. Um, there's a lot going on. What do you want to say before we sign off? Yo, man, first off, you know, love you, bro. And grateful that you brought me onto this platform, you know, grateful for my faith, grateful for my family, grateful for the fact that me and you get to experience being fathers together and going through these, through these moments and experiences together. Um, you know, I hope that this podcast was a breath of fresh air for somebody that's been kind of struggling understanding. The complexities of the tax code, the complexities of how people utilize the tax code to bridge the gap to save money year in and year out. But more importantly, I want you to use this as a launching pad to go expand on the ideas that you did have, knowing that you can do that in confidence, knowing that Uncle Sam is not there to chop you at the knees. You can do this the right way, leveraging the tax code and build your business to serve you and your family. We'll have a book coming out soon that you guys will hear about, I'm sure. We'll be promoting it. Kayla will be promoting it. It's called The Art of Legal Tax Avoidance. It's almost ready to go. And if you guys need any support from us, you can go to our websites at taxalchemy.com or CarltonDennis everywhere. And you're everywhere, man. We'll have your links below. And until next time, see you. Until next time. See you.
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