Maximizing Business Growth Through Strategic Tax Planning: Insights from Expert Jason

Unlock the full potential of your business with strategic tax planning that can boost profits and drive growth. In this gripping episode of Reach Your Summit, I, Jessica Magnuson, team up with the astute tax expert Jason to unravel the complexities of tax strategies, demonstrating their crucial impact on a company's success. We delve into why a well-crafted tax plan is not just a legal necessity but a competitive advantage, propelling your business ahead by smartly reinvesting savings.

Here is more about Jason:

Jason is a Senior Financial Advisor in the Denver, CO office and Vice President of Summit Wealth Group. His work experience has been focused in the financial services industry since 2006. He held positions as a Financial Advisor in both a national firm, as well as an independent Registered Investment Advisor (RIA). Additionally, he participated as the Director of Business development for a private equity firm and an Advisor Relationship Manager for a national custodial institution.

Jason received his Bachelor of Science degree in Economics from Texas A&M University. He holds the FINRA Series 7 and 66 securities registrations and he is a registered representative with Commonwealth Financial Network® (a registered broker/dealer, member FINRA/ SIPC).

Throughout his career Jason has helped young professionals and families establish day-to-day habits and plans that will impact the entirety of their financial future. They are often surprised at his ability to interpret, analyze and translate complex financial concepts in a way that helps them feel comfortable and secure about their finances. By delivering an approachable and comprehensive plan, Jason helps clients clarify the path to their goals. He has assisted mature couples by confirming their diligence and persistence have paid off and they are ready to retire. And he has helped small business owners review their current operations, the impact on their personal standings, and how to take care of themselves, as well as their employees and clients in the long run.

Being an active member of his community is a passion of Jason’s, having previously helped establish and coach the Four Corners Rugby Club and San Juan Spartans Rugby Club of Farmington, New Mexico. Additionally, he has been active with Habitat for Humanity, Big Brothers Big Sisters of America and a board member for the Institute for Attachment and Child Development. He is a current member of Sons of Norway. However, Jason primarily focuses on spending time with his wife, Kendra and daughters, Ava and Anya, but also enjoys cooking, playing rugby, snowboarding and taking advantage of his private pilot’s license given the opportunity.

Securities and Advisory Services offered through Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. Fixed insurance products and services are separate from and not offered through Commonwealth Financial Network®.

Thanks for listening! Make sure to follow us on all the socials at @summitwealthgroup, so you don't miss an episode!

Chapters

• 0:02 Importance of Business Tax Planning
• 10:43 Tax Planning Strategies and Advice

Transcript

Jessica : 0:02

Welcome to the Reach your Summit podcast, where we help you navigate the path to a better, more secure future. We are brought to you by Summit Wealth Group and I'm your host, Jessica Magnuson. Two weeks ago, we talked about tax planning and how it fits into the overall picture of your financial journey. Well, we are back today, talking with Jason again, to give us another side of tax planning, which is tax planning for businesses. So thank you for being with us again, Jason.

Jason: 0:37

Thank you for having me, Jessica.

Jessica : 0:39

Yeah, you're welcome. We're happy to have you here with us breaking this stuff down. In the last episode we kind of talked about the importance of tax planning for individuals and individual financial planning, but there's this whole other side of tax planning for businesses, which can, I mean, we could go on, I feel like probably forever with you, because this is a specialty of yours and you've been doing it a while and seen a lot of situations, I'm sure. But I guess I'll start with how important is it for a business to evaluate their tax planning opportunities.

Jason: 1:18

Very yeah, are we all done there.

Jason: 1:23

Yeah, I figured that would have been a quick answer, right, all right, so we're all done. Very important, it's incredibly important to focus on tax planning for a business. I mean, ultimately, when you're building a business or establishing or maintaining a business, you're putting all of your heart and soul into that thing. Typically, I mean that seems to be the case most of the time and the goal is to be successful in what it is that you're doing, and tax planning as much as providing a decent product or service or any of those types of things is very important.

Jason: 2:06

Tax planning can also aggressively help with how productive or how successful that business is going to be. It just compounds itself. So when you sit there and you say, all right, well, now the business is paying 10% less in taxes, all right, so now that 10% extra is 10% extra profit, and that 10% extra profit is 10% extra that you're going to pay your employees or pay yourself or put into whatever product it is or whatever development process it is that you are engaged in, and every additional 10% is going to compound itself. And it's 10%. It's not just 10% now, it's 10% this year and next year and the following year, and that 10% becomes 11% and that 11% becomes 12%. It just keeps growing and growing and growing, and so if you're effective in that space, then you can have a profound impact on your entire success of your business.

Jessica : 3:05

All right. So in the last episode we kind of touched on how somebody could know when they're ready to start talking to somebody about tax planning From a business perspective, how does a business owner know when they're ready to start talking to someone to see where their tax opportunities are?

Jason: 3:26

Oh, I mean, if you have the ability, you should do it before you establish your business. I mean, you just start from the outset. It's kind of like learning good behaviors. Learning good habits, establishing good patterns. I mean, if you're trying to go ahead and do those things, then you start at the beginning and when you're establishing your company, then you want to make sure that you're implementing strategies that are specific to success.

Jason: 3:54

Tax planning is one of those I mean, and it's a little bit distracting to think about, because typically when you're starting a business, your focus is on whatever product or whatever service or whatever it is that you're doing, and it's just about doing that thing and doing it well and doing it effectively. And so it's hard to expand outside of just thinking about that one thing, and the most successful business owners that I've run into are generally pretty obsessive about that one thing. So they don't want to think about tax planning and doing all those types of things. But the recognition that if you take a little bit of time to do this, then you can make your life easier, you can make your employees happier, you can make your product better, you can make your company more successful. You can make all these things happen if you're more effective with how you're planning. So just start doing it early and make sure that you're doing it effectively.

Jessica : 4:57

Right. Well, and it seems like you know, if you're regularly meeting with your advisor, you can continue to find opportunities along the way. But if you're starting before you even jump in and are putting all your effort towards just trying to make your product or service successful, if you already have it set up from the start, then you are already kind of ahead. I would say like in that realm it seems like.

Jason: 5:24

Absolutely, absolutely ahead.

Jason: 5:27

You know, it goes back to one of the things that we discussed before, which was proactive versus reactive, and so when you're sitting here and I don't know if you've ever, you know most people have heard that variation of the fact that when you write something down and you create a plan, then you're much more likely to implement it and you're much more likely to have success.

Jason: 5:45

In that it's the same way with if you have a financial or a tax plan. If you have a strategy in place in advance of when you start implementing it, then you're being proactive and not reactive. You're not just making money for the business and then trying to scramble around trying to figure out where a deduction is so that you can save money on taxes or whatever it is. It's more along the lines of this was always part of the plan, this was always part of the strategy in the very defined path of how you wanted to grow your business and how you wanted to develop it and how you wanted to have success, and you just plug this piece in as one of the tools that you have. So, whatever service it is, whatever product it is that you're generating. This is just another aspect of making that a better service and a better product for the people that you're serving.

Jessica : 6:37

Yeah, it's kind of like if you set up the plan to begin with, then you just have to let the plan work you know, from that point?

Jessica : 6:47

So for a business owner, I feel like a lot of people know that you probably are going to need an accountant or something with your business, someone to do the bookkeeping, that sort of thing. How do you feel like having a financial advisor helping you with your tax planning can be also beneficial to add to that group of people?

Jason: 7:07

It's a little bit funny because you always need an accountant generally when you're doing these things. They're helping with the bookkeeping, they're helping with the financial report, they're helping with the day-to-day operations sometimes, I mean, it all depends on the size of the company and, funnily enough, accountants generally do not like financial advisors. They just don't. They think of financial advisors as out there. It's more like financial advisors from 30 years ago. They're out there trying to sell them on something or, you know, get them in some commission product or whatever.

Jason: 7:48

And there's still some of those advisors out there, but there's such a standard these days that you know you have to be a fiduciary. You have to go ahead and use the appropriate levels of assessment on figuring out what's right for somebody.

Jessica : 8:03

Right.

Jason: 8:04

That it's taken some of that away. So that's positive. But you really need an advisor who can work well with that accountant and who can interact well and have open and effective communication on that side. And it doesn't mean that they're going to be chit-chatting every week or anything like that. That's generally not the case. But things are going to come up where there are strategies from a financial aspect that accountants are not aware of, and then there are accounting aspects that financial advisors are not aware of, and the better that they communicate, the more effective it is for the business owner, for the person who's hiring both these people. So they just need to be able to interact very effectively.

Jessica : 8:49

Yeah Well, and it seems like, like you were saying, there's things on both sides that the other might not know about. So having both of those people kind of on your team, having you know, having the accountant and a financial advisor that you're also consulting, I mean it just seems like why would you not have more people giving you good information about what you could be doing with your business, right?

Jason: 9:15

Absolutely. I mean, why not? Okay, so when is more information ever a bad thing?

Jessica : 9:21

Yeah right.

Jason: 9:24

I want the least amount of information possible to make a decision. That would be great, Right? You know that's not effective.

Jessica : 9:30

Yeah.

Jason: 9:31

We want good information, we want good communication, we want people working together, yeah, and so if an accountant and a financial advisor can work together and that's the thing is establishing that relationship is paramount. I mean, it's very important and making sure that those three pillars of the business owner, the accountant and the financial advisor the fact that they're all working together, really helps to make everybody have much more success in what they're trying to achieve.

Jessica : 10:03

Do you feel like with the business owners that you've worked with in the past, do you feel like there is ever a common theme when it comes to tax planning that you are, like have been able to really help a lot of people specifically with that they didn't know before, maybe that they didn't know before maybe that they didn't know.

Jason: 10:24

I don't know. You know, the common theme is everybody wants to pay less taxes yeah, you know you sit there and you can be like republican democrat, all that kind of stuff. It's like nope, nope, everybody just wants to pay less taxes yeah, right, it's pretty consistent, common.

Jason: 10:37

Yeah, it's everybody's it's it's have in common? Yeah, it's everybody's, it's all in common Everybody wants to pay less taxes. Yeah. As far as a specific theme of things that they learn, really it's just about the introduction of strategies that they weren't aware of, or kind of viewing things through a tactical lens. Kind of viewing things through a tactical lens saying you know, here's an opportunity. Tell me a little bit more about your day-to-day operations and then I can tell you where there's inefficiencies and if there's opportunities from a financial standpoint.

Jason: 11:15

I remember I had this professor back in college. He actually wasn't a professor, he was a guest who came in and he was talking to us about efficiencies and some of the. It was during one of my industrial distribution classes down at Texas A&M. He came in and he was inspecting some kind of factory and they were building some significant parts, some type of auto part that required a lot of precision, and they were wearing these pristine white gloves and you know they were.

Jason: 11:45

They said we're looking for efficiencies and ways where we can be a little bit more efficient in any kind of way. And you know we just can't figure it out, we just can't trim a little bit off the edges. And so he's walking through the factory he sees everybody working on these parts and wearing these pristine white gloves and he goes why are the gloves white? Yeah, so they look into it and, yeah, sure enough, like, black gloves are less expensive than white gloves and they end up saving a ton of money, for whatever reason it is, Just by switching from white gloves to black gloves. It's like, okay, well, that's. That's one of those things where you have to have a little bit of a new set of eyes.

Jessica : 12:30

Yeah, just someone from an outside perspective to look in.

Jason: 12:34

Exactly, yeah, what's there for you?

Jessica : 12:37

Yeah, that's great. Do you think there's anything overall between the tax planning for businesses or just tax planning for individuals and families, like advice or tips? You would want our listeners to know about their own tax planning.

Jason: 13:07

Well, the main thing is being proactive, you know so just thinking ahead and addressing it not as something that you have to do in March before you. You know your deadline is up in April.

Jason: 13:15

You start thinking about it in advance and saying I want to pay. So look at it right now. We're in April, so look at whatever you're paying or whatever you're getting back now and everything that you're dealing with now and rather than wait until next year to deal with the same thing, start saying how do we make sure that we're not dealing with the same thing next year that we're dealing with right now? We don't want to deal with the same thing, so how do we go ahead and make it different between now and then?

Jason: 13:36

And so doing. That is a key part. So engage in that process, start it and realize that there is a process to start, and then you can go Now as far as specifics of one thing or two thing, or invest in an IRA or deduct vehicles or those types of things. Those are specifics that are going to vary from company to company and person to person. So those, those start getting too into the weeds and those are conversations where you want to have uh, you want to discuss it with an advisor. But right now, as a general statement for everybody, when it comes to this, when it comes to personal business, anything, be aware of the fact that this is going to come around again next year. So the IRS surprise is going to want the taxes again next year as much as they want them this year. And that is their job and they're good at it, they're consistent. And so what? How do you prepare between now and then? And what do you do for yourself, for your family, for your business, between now and then?

Jessica : 14:43

That is a lot of good information that you have given us over this episode and the one two weeks ago which, if you have not listened, I do encourage you to go back and listen to the part one of this where Jason has been talking to us about kind of your individual financial journey and how tax planning works into that. So thank you again so much for being with us, Jason. And if you can't tell our listeners that Jason has had many years of working with business owners and their tax planning and his passion for navigating people through their tax planning journeys I feel like is very evident in this. So if you do not have a financial advisor and you would like to reach out and maybe talk to Jason, see if it could be a good fit for you to work together, we would be so happy to get you in touch with him.

Jessica : 15:36

We are at Summit Wealth Group on all of our social media and our website is www. summitwealthgroup. com. Jason is in our Denver Tech Center office, so if you do go to our website, you can find him there and schedule a meeting. So that is all for this episode of the Reach your Summit podcast. Thank you so much for listening. We'll see you next time. Thanks for listening to the Reach Your Summit podcast, brought to you by Summit Wealth Group. Please email us at info@ summitwealthgroup. com.