How the Rich Use Tax Strategy to Build Long-Term Wealth | Mark J. Kohler

Stop delegating your destiny and start documenting your empire because the secret to the 1% isn't just making money It's keeping it through high-level tax strategy. In this episode We talked to Mark J. Kohler the main street tax attorney who's demystifying the tax code Help you turn side hustles into seven-figure wealth machines get ready to stop being a sheep start acting like a lion and learn How the rich get richer by geeking out on the rules of the game that starts right about now This is hard hitting people that don't make a lot of money don't want to look in the mirror and own that whether it's lack of Determination laziness or just knowledge they'd rather blame or put this wealthy person in a box and say oh They're unethical and bad rather than look in the mirror and go you know what I could learn a few things Maybe I'm not gonna watch TV every night for three hours And I'm gonna learn how to digitally mark it online or this weekend I'm gonna drive Uber for seven to eight hours and take that money and go buy a rental property next year Can we get off our ass and do something rather than blame the rich for being determined? This is right about now with Ryan Alfred a radcast network production We are the number one business show on the planet with over one million downloads a month Taking the BS out of business for over six years and over 400 episodes You ready to start snapping necks and cash and checks? Well, it starts right about now What's up guys welcome to write about now we're always talking about how to get right and what's working now I can tell you about what the future is I can tell you about the past is But we want to tell you how to get ahead now. We're going deep today in business We're dealing with a one percenter. I'm telling you we got both a rare breed and we got the main street Coming right to you. It is Mark J. Kohler. He is a tax attorney He is the main street tax attorney and he's gonna tell us today how to get it all right You got to put more money in your pocket, baby. That's what we're here to do. What's up, Mark? Hey, thanks for having me Ryan. This is awesome and love that your focus is on this so important We want to give actionable advice ultimately I have a lot of people on and our focus is how to get a head in all things small business is the fabric of the US We can talk the high end we can talk the low that is what drives America is small business How the hell do you get one percent lawyer and a tax guy all I want I was always an entrepreneur I was the kid with the lemonade stand It had a small business in high school and hiring my brothers friends and screwing things up And I mean it was Tom Sawyer painting white fences whatever it was But I just loved entrepreneurship and when I went on to school I went into business and then I thought hey, this accounting thing no fence to anyone out there marketing class finances tough sure, but I don't want to work for Wall Street I'm gonna go accounting because I can stand out there if I can just get a see in accounting All the other higher all the other a accountant sure enough I stood out in the accounting group as the party planner is super fun And then I had this teacher who was a lawyer and an account and I was like holy crap this guy can take over the world So you had all the benefits of understanding the numbers sitting at the table and business And then I could freaking file a lawsuit fight the IRS do whatever. I want to be that guy So when I'm a law school computer fan of a hundred lawyers one of them has any tax background And I freaking said I'm going to Main Street screw Wall Street and here I am You know how many times I've asked a question of my accountant you'd have to consult your lawyer on that I like to push the limit. I could admit it and that take long to figure that out about me But I want to do it legally. I want to get all I get out of it. The moment you said that I If heard that a thousand times consult your lawyer taxes our law It's tax law and understanding it and only the big dogs or big companies have been able to afford taxillers So I worked really hard over the last 25 years building a model based on volume and A boutique where we can help clients around the country been doing that But the important thing here is the number one cost in our lives or taxes and people don't want to talk about it It's too boring. It's too complex. What the hell do I do? Well, we're gonna freaking demystify that That's my whole career is to say it's not that hard and you're the captain your ship quit looking for an accountant To do it all for you you can freaking run the ship here hire the first mate and you can control your destiny What's the most common thing you deal with mark working with Main Street working with small businesses What are some of those key things that you're always tackling or working with clients on sense Covid we've had the great formation We're pushing up to almost 45% of working Americans have a side hustle and that's a small business That's a gateway drug. It's not a burden We should look at as an opportunity to use those funds to get out of debt build wealth create assets and One in five Americans own a rental property in some form or fashion if I've got a rental property in a little small business People you're not quitting your day job. Let's just tap into that And so a common common theme and what we do every day is meet with that community Those people and that are the backbone of this country that are starving for simple answers to get their kids on payroll Save some taxes right off the rot of and I love that bread and butter stuff There's no mystery It's not like there's this secret thing like mark out-of-way save tax It's just doing the basics and knowing it understanding it own in it And there's no sexy secret there except that you really can build wealth that you maybe never imagined with just those simple base hits It's not about getting rich quick. It's not getting rich slow. I want to get rich slow Adding them on and saving the most with that extra time If you're going to moonlight over and above the daytime job It's keeping as much of that as possible correct. Oh, yeah And there's nothing wrong with that W2 day job work corporate America. That's cool. It's great Let's go to your taxes bend over. I can't do anything. You're screwed But if you've got that small business Oh, now that little 1099 some of you are getting that's a golden ticket now. I'm riding off home office auto dining computers electronics Your cell phone family members. I'm funding a Roth IRA. You can set up your own damn 401k now We're gonna take all that money and start deploying it and we're gonna be fishing We're gonna be the lean and mean you can pay 30% less in taxes on that money than your day job your day job You're screwed. Let's go get this other money. That's a lot cheaper to get everyone's talking about making money Why don't we talk about saving money? It's easier to save money than make money. Yeah, that's true It's not always easy to make it for the average small business guy and even the W2 because we have people that listen to our show That are small business owners and that maybe our W2 thinking going small business. What's the least you could truly get away with Legally, you know doing it the right way. What kind of tax brackets should the average small business guy be there? There's seven tax brackets out there and the highest being 37 and a half no one pays In total 37 and a half percent in federal taxes because it's graduated when we have brackets That's our bracket on the next dollar after a certain limit once everybody kind of gets that that this is a graduated bracket That's point number one then what we want to look at is what is your effective tax rate after we take all the killer write-offs We can think of outs lots of options What's that affective rate and for some people it could be zero for others. It could be 35% now It is generally true the more money you make the more tax rate you're gonna pay a larger percentage of your income in taxes But then we've got strategies and tools for example Why Trump was such an anomaly and he really wasn't it's just the Wall Street Journal wanted to point this out is that he is a real estate Professional I've got his tax return here on my laptop. I got Joe Biden's and he has from 2016 He was a real estate professional now you've talked about here on your show all the time If you want to invest in short-term rentals long-term rentals do real estate and deploy money in real estate It's not for everybody But we have depreciation strategies and investment strategies that can offset my income over here Trump had so much in depreciation from his hotels and real estate investments He was able to wipe out his income from the apprentice and his retail his effective rate at the end of the day was very low Now someone else that just works a day job has no write-offs makes 500 grand a year at Verizon as a VP Okay, you're gonna be paying 30% or more in effective rate because you're not using the strategies in the best way You're talking about hey don't aim the player just hate the game if you don't like the Trump paid 6% don't be pissed at Trump Yeah, just learn the rules and so when you understand the rules Okay, I could invest in oil and gas. I can invest in a little solar. Oh, I'm gonna build a Roth IRA Peter Teal's got a $5 billion dollar Roth is a tax-free ATM. Oh, I'm gonna invest in my health savings account Never pay tax on health care again and these little tools that are out there are amazing and they're not complicated There's last point rich people geek out on tax strategies If you want to be rich start geeking out on some of the stuff and it'll blow your mind because this is where the rich get richer Here's what I don't like and this is why I really love your energy and your pasture on this because it's so real and raw and true The rich geek out on it and everyone else almost criminalizes write-offs You'll be talking to someone unethical and why the hell does that proliferated? This is hard-hitting people that don't make a lot of money don't want to look in the mirror and own that whether it's lack of determination laziness or just knowledge they'd rather blame or put this wealthy person in a box and say oh They're unethical and bad rather than looking the mirror and go you know what I could learn a few things Maybe I'm not gonna watch TV every night for three hours And I'm gonna learn how to digitally mark it online or I'm gonna this weekend I'm gonna drive Uber for seven to eight hours and take that money and go buy a rental property next year Can we get off our ass and do something rather than blame the rich for being determined? I tend to do that you went right where I wanted you to go because it's the truth the truth hurts sometimes You gotta talk about these things and I know that a lawyer is gonna tell me what legal was not legal is cheating the system and Using the system You just hit the word I wanted to say I got to dive in here because this is exactly the word you say the tax code This is so important you want to get theoretical the tax code is built to motivate people to do things get married pay less tax A married couple will pay less tax than in single or married filing separate go put handy cap access in your business Get a tax credit go buy a solar water heater or efficient water heater at Home Depot get a tax credit go buy an electric vehicle Get a tax right go buy real estate and help others have affordable housing take depreciation go do this go do that The tax code all you're doing is using it to help America get better and we'll give you a tax break You get a tax break for doing good things to help the economy and that's the mind shift the rich are figuring out hold I can make money doing this save tax and make mainstream America better holy shit sign me up It's not what we've been conditioned by media or whatever else to which is when for me lose for the government Breaking law pushing the limit. No like you said it's set up because people smarter than me New that we needed actions to make this country run Everything that you named mark actually drives an action that keeps the economy and everything else moving doesn't it? Yeah, there's another classic one right now It's the oil and gas tax credit and there's depletion credits and all this if you want to go drop at any income level You don't have to be materially participating you don't have to be quit your day job There's funds you can invest in for oil and gas royalties depletion Exploration and invest 100 grand and probably get a $90,000 tax right off make cash flow and resell it for 150 grand four years from now The government needs drillers to go get natural gas and oil in the United States on U.S. Soil and we'll give you a tax credit and all of a sudden your effective tax rate goes from 25% down to 10% You're making money. You're helping America be self-reliant on natural resources and everybody wins And you're the bad guy. Did you find this kick-ass strategy? You know, yeah, but it's right. I'm not crazy but proliferation of the wealthy getting ahead That's a real thing and that drives me crazy Lion you're not a sheep you're alive. That's it. I love it I'm gonna ask you two questions small business owners one thing They should stop doing the most stop thinking you're going to find an accountant to do all of this for you Stop thinking that oh, yeah, as soon as I find that account. I don't have to worry about this anymore I'm gonna find that perfect account that speaks Mark Kohler You're not gonna find someone that's gonna care as much about your finances and future than you now You need a good account. They're your first mate But where are you steering the ship? Are you do understand what strategies they're doing? Are you understanding what structure you are and why you don't have to know how to do an effing tax return people? You need to know what numbers are on it and how to read it a rich person knows their tax returns So you just start doing what rich people do is super easy and they work with their advisor They don't have an account that just plugs all that crap in and you pick it up two months later They have meetings with their accountant throughout the year at least quarterly and going hey, I'm gonna do this I'm gonna do that. I'm gonna start that. I'm gonna sell this and you're there's it's synergistic So stop thinking you're gonna hire someone to take all of the software plate You're taking the number one thing you should be doing and think you're gonna delegate it. It doesn't work You need to be the CEO of your tax team that you start building today And so your accountant is on the team, but you're the CFO or CEO See both yeah both of the team and you have to think about it that way because you're just like your own business I'm armed your own five companies now. I've gone down this road I try to delegate the business away doesn't work Good luck. No, it doesn't right, you know, it's like you're in trouble. Yeah got all the scars I've done it too. You cannot delegate and the tax is you need to be the CEO of your own tax team And it might be a two person three person team But that's what I just heard you say and I think we try to delegate the taxes away And you lead right into my second point and it's so easy people this mind shift change number one You're not gonna delegate away This tax and legal topic although you're gonna build a team So I love the way you said that CEO that team what you are gonna do That's a little different though is I need you to treat your side hustle your business Like a business. We've got to start knowing there's a set of books. There's a methodology here I've got to put in tax deposits. I've got to be engaged in the process So many people that have a side hustle they get this mysterious 1099 from selling something on got a 10 I'm from Etsy or eBay or whatever they're getting a little 1099 for side hustle somewhere And they see it as a burden went no no no that's a business treat it like that treat your rental property like a business When you start to treat your operation like a business It now starts to work for you and the profit from it can be redeployed into assets that work for you While you're asleep and that money can be used to expand and scale But if you don't treat your business like a business it does you know good It's just a news around your neck the opportunities for the right office and other things There's just things that the account is not gonna know they're not in your business every day They don't know how this was used or that was used and receipts not gonna tell them that you have to be evolved All of you at the very least should have a spreadsheet where you track all of your expenses Number two use a credit card or debit card exclusively for your business If you got an amx use it for business use your visa for personal try to start separating your accounting If you're using QuickBooks online or some of the easy software platforms great But just start tracking your expenses You don't know if they're a write-off or not But if you don't track them you can't meet with your account at the end of the process And carve out the ones that are really work for you bad bookkeeping loses money So start with some decent bookkeeping. Stop delegating. Start documenting Dude, dude, dude, I got to write that down. I got to write that down Stop delegating. Start documenting That's good Hey, Mark, work here. I keep up with what you're doing everybody easiest place in the world marcha color.com Mark jay is and jolly color kohlr.com and if you're a tax advisor out there Want to be a tax advisor. I'll equip you right now holy crap to go out and make money to industry need you the tax industry is on fire Ryan it's just really ugly right now and people need good tax advisors who are out there business owners My podcast is there are law firm. You can get a consult with one of our lawyers right now to help build your plan Very affordable. We'd love to be a boutique for the small business owner across America directed Anyway, all the resources are at marcha color.com workshops the social media I'm just honored to be here. Ryan. Thanks so much for having me. Hey, Mark My pleasure, man. We'll do it again if you're up for it and we'll have show links to all of mark stuff Mark jay color would need more mark We appreciate your brother. Thank you man. Hey guys, you know to find us Ryan is right.com You'll find highlight clips links to mark stuff of course social media That's where we're growing. That's where we're blowing up and check us out on youtube get a watch this episode So mark looks so good. We'll let them forgive the rock star, but you know We'll give them all the exponent. We'll get if we'll get them switched But there you go. We appreciate mark for bringing it for mainstream to your home We got you next time anytime right here on right about now This has been right about now with Ryan Alfred a radcast network production Visit Ryan is right.com for full audio and video versions of the show order one choir about sponsorship opportunities Thanks for listening