Transcript
Speaker: Welcome back to the Tax News Now podcast. I'm Mark Gallegos. And today, I'm especially happy to welcome a friend of mine and an incredible woman, Marit Bermude. Marit is a CPA and role agent with a master's degree in taxation, and she is the founder and president of Flair Financial.
Speaker: She launched the firm in 2023 and works with business owners, entrepreneurs, and content creators on tax preparation, proactive planning, advisory, bookkeeping, CFO-level advisory, and All the things is why she does. And it's amazing, right? She also brings her passion for education to national conference stages and to social media, where you may know her as the extroverted and accountant.
Speaker: um She also makes complex financial topics approachable, which is always good. And her work centers around helping people make decisions that support long-term wealth. She's the author of the Influencers Tax Playbook, which we'll spend some time on today. And we'll talk about building a business using AI and what it takes to turn financial knowledge into action.
Speaker: So, Marit, I'm glad you're here. i want our listeners to get to know you, the person behind the firm, the speaking, the content. So welcome to Tax News Now. Yeah, thank you for having me. That was a great introduction. And also you said my name perfectly, which is really hard for people to get. So I appreciate that. You know you nailed it.
Speaker: You're welcome. You're welcome. And i ah you know I've been excited to have you on because you know the work that you have done and you continue to do really is changing what we do in this industry. And you know and obviously things change daily.
Speaker: But before we get into all of that, want to go kind of go back to the beginning a little bit. Let's go backwards, right? What drew you into accounting, let alone tax? And what made you want to build a a career helping people with their money and finances?
Speaker: Well, it's kind of funny because you said I started my firm in 23, which is true, this latest firm. But I hear you say that and I'm like, oh, I sound like a newbie, but I've actually been doing, I've been in the tax industry for, I counted the other day and it's 14 years. And so I kind of got into it on accident.
Speaker: I've always been an entrepreneur ever since I was a child. I, you know, loved you thinking about little business ideas. I'd outsource my work. Like my stepdad would tell me to mow the lawn and I'd pay the neighbor boy.
Speaker: half of what my stepdad was going to pay me to mow the lawn, I'd contract my workout. And I've always had that entrepreneurial spirit. So I got into the tax industry because I had wanted to start a business. I was about 29.
Speaker: And I realized I really didn't have any financial education. I wasn't raised, you know, in a family where we had a lot of money. i didn't have financial literacy. So I went to college to get my bachelor's in accounting.
Speaker: thinking I needed that solid foundation for whatever business I was going to start. And I didn't know what it was. And throughout that course of being in college, I started doing taxes for, i i got and i got to audit an internship doing internal audits.
Speaker: And I started doing taxes on the side for the CPA who was there. So I turned around one day and he had passed over his clients to me throughout the years after I graduated and realized I had been running my business for years, doing bookkeeping and taxes and accounting for other business owners. But it took me a while to connect that I had that business I dreamed of all along. It was just helping other business owners. So kind of a cool story, cool evolution.
Speaker: That's awesome. and Thanks for sharing that. And, you know, in that process, was there a person or an experience that, you know, once you go in to get your accounting degree and obviously have that entrepreneur mindset, is there a person or experience that really helped you see that calling or really kind of push you forward a little bit?
Speaker: Yeah, i really think it was that supervising CPA of mine because without him, i don't really know what I would have done. He just he had a tax practice on the side. He was working in the at the university and he was the one who kind of started teaching me about it.
Speaker: And when he just passed his clients on to me. and helped me kind of get going on my own business. And then later, he actually signed off on my supervision hours to get my CPA license. So he was very he's always been a very impactful person in my life, a mentor. And he saw something in me when I did that application for the internship because I was just a bartender, a waitress going to college, kind of didn't have a super set plan yet. And he told me later after he hired me, I was a little rough around the edges and they weren't sure they wanted me in there. But he said he saw something in me and I really ah he he inspired me to rise to the occasion.
Speaker: That's so good. And I love that. yeah You know, and I think everyone's got those people and, you know, it's just, it's part of the story and it's part of the journey. And I love that. Now with FLIR Financial, kind of tell everyone about who do you work with and what what does that work look like for your firm and what you're doing?
Speaker: Yeah. So for... The first, I don't know, um I would have to do the math to tell you, but maybe the first eight years, I was just a solo practitioner.
Speaker: And then I started to kind of take it seriously. And it was just me. And I named my first real firm Soulmate Tax and Accounting because there were so many people that I felt were very triggered by this area of doing business, very frustrated all the time and I have that empathetic nature. And so I was like, oh, I can be their soulmate for their tax and accounting.
Speaker: So I had that business for a few years. And over that course of time, I transitioned from, you know, hourly billing, doing bookkeeping and accounting and tax preparation separately to a full service CAS model.
Speaker: And as I transitioned to that, I realized I needed some help. And my husband is an enrolled agent as well, but he was working a full-time job doing taxes and account or accounting for another company. So I basically retired him. I said, I need you to come help me.
Speaker: No more working for someone else. You got to work for me now. And that was how we changed the firm because he said, we can't be soulmate tax and accounting. Everyone's going to think we're talking about us.
Speaker: So we got rid of that and started Flair Financial where we do, like I said, the full service cast work. services. And then we have some standalone tax prep still. And we're also adding tax resolution to our service roster right now. So lots of exciting things. The company's been growing and it's just been a really great experience.
Speaker: I love that. And that's a, you know, that's just a great way to continue to, you know, help your clients and and even prospective clients that are out there and really bring that value to who you are. And again, back to why you got into this in the first place, which is kind of an amazing thing.
Speaker: Now, I want to talk about another part of your work, right? So you get you get out in front of audiences and, you know, a lot of people don't do this, but you speak at national conferences, spend a lot of time helping people, talking to people, understanding subjects that many may find intimidating, but you get out there and you kind of show us how it's done.
Speaker: How did speaking become part of your career? And what do you want people to walk away with after hearing you talk about it? So I've always been a very outgoing person, very talkative. That's why I called myself the extroverted accountant on my social media.
Speaker: i long ago, like we all do, I kind of gave up those dreams of being on a stage and I always loved to be on a stage when I was younger. I was in choir and I did some plays. And then one day i was on tax Twitter. This was, you know, back when tax Twitter was really hot. And I saw Nicole Davis and I did not know who Nicole Davis was, but she was this powerhouse actress.
Speaker: tax lady out there speaking at all of these events, teaching, and it blew my mind. I actually DM'd her, random, some random nobody. And I said, how did you get into this?
Speaker: And she kind of gave me a few suggestions and then just told me to be brave. And from there, it just, I started to put myself out there and submit to conferences and I've really found a passion in helping tax practitioners in general understand these complex topics because I have a master's degree in taxation.
Speaker: I've been in the tax world for so long and i don't have... The natural, like, I don't have your mind, Mark. I'm not just like a trap for tax. You know, there's those people that are just so, so good. They remember it. They can really apply it quickly. And I always looked at that as a downside of my brain. Like, I'm not as quick and smart and sharp as all these people that are out there speaking. And then I realized maybe the fact that it does take a different perspective for me to learn it.
Speaker: can be helpful for other people whose brains work similar to mine. And I've gotten great feedback from the attendees, you know, saying that I've really helped them understand the topic. So it feels really good.
Speaker: that's so good and i know nicole is nicole davis is fantastic and really a pioneer and really just bringing you know um you talk about an influencer someone that really is moving the needle in our industry she for sure is and so that's a great person to uh recognize and for yourself though obviously you know you always wanted to be on stage and then you kind of maybe gave up on the dream and then Tell me about when you when you give up on a dream and then all sudden it starts to kind of, you know, it never really goes away. It just keeps, you know you know, nudging at you saying, hey, maybe you should do this.
Speaker: what What did that look like for you? And then were there a catalyst that kind of got you going again? Well, I tell you, it takes a lot of bravery, especially when it comes to teaching tax. I mean, if you get one little tiny thing wrong, your whole thing could blow up in your face.
Speaker: ah The first time I ever spoke on stage, the presenter notes weren't working. And so I have never used presenter notes because I just am not going to rely on those. So I think it's just...
Speaker: When it comes down to it, I just started to put myself out there because she told me that was what I needed to do. I just needed to push through all of those fears, all of those things that I had telling me could go wrong. And that was just kind of seeing her was really my catalyst. And then I joined the Theater of Public Speaking, which is a public speaking group for women, and they helped refine my skills. And I've gone through their intermediate and their advanced program. So I have put in a lot of time and dedication into becoming a better speaker, a better educator. And it's really been a lot of investment of time and money up front.
Speaker: I'm still working to see it come to full fruition, but I can see that it's happening. So it's been really nice to just kind of follow that passion, but it takes time on the side and it's taken me time on the side.
Speaker: Weekends, nights, mornings, finishing things on airplanes. You know, it takes a lot of hustle because it's not paying the bills per se. so kind of just keeping the dream alive by pure dedication.
Speaker: No, that's so good. I love that. um And and it it takes a lot, you know, like you said, i mean, to just get out there, to you know, people get nervous and some people can't even get to the point where they want to be nervous, right? So takes a lot.
Speaker: Now let's talk about the extroverted accountant, right? you You're sharing your personality and your expertise online. You're also experiencing the creator side of your business yourself. But what led you to put yourself out there as a content creator and what are you hoping to do with that platform?
Speaker: I remember when my children, i have twins, and they were my babies. They went to kindergarten, and that was when I started The Extroverted Accountant. I came home.
Speaker: i was all alone except for me and the dog, and i just kind of thought the time has come to make myself more visible because I had clients, and i wouldn't say, i think, Mark, this is a common misconception that Social media is just you're going to get all these clients from it.
Speaker: I think that's sometimes an unreasonable expectation. But at that time, I thought I just need to start making myself seen up to that point. I had been juggling so many different things. I was honestly afraid to grow the business.
Speaker: And so I had the time and i just started putting myself out there. And it was kind of the same with speaking. It's hard. It's you're uncomfortable on the camera. I remember I took the girls to swim lessons and I had a little tripod and posted a reel about schedule A deductions at the pool. And I was like, this is so embarrassing, but just trying to get the content out. And someone who is a very smart influencer told me it's going to get buried.
Speaker: Like if you just post it even if you're embarrassed, keep going and eventually it will be so far down, no one will ever see it. So I just kept telling myself these embarrassing videos will be buried, but you guys can find them if you go to my Instagram, they're way down at the bottom.
Speaker: ah That's so good. And yeah how has being a creator yourself shaped the way maybe you advise or even, you know, mentor other creators that ask you questions out there?
Speaker: Well, I think it's been really great. So it's provided me a lot of perspective and it's provided me some understanding in so many ways, Mark, because, for example, the things that they want to write off that they simply cannot write off.
Speaker: are things that I wish that I could write off as well. You know, I'm also in front of a camera. I also will do, you know, sponsorships or things where I get paid for doing it.
Speaker: I also have kind of similar, i would love to be able to go and write off my clothes or my makeup or my Botox or whatever. So it's provided me understanding in that way. And then also just seeing how it works on the back end, which is why I've been teaching a lot of these influencer classes. Well, one of the reasons I have many, but for the pure fact that and with any client, they want to feel like you understand their industry.
Speaker: And they want to feel like you understand how they make their money and how the mechanics work behind their business. And you don't know and unless someone tells you like how I'm telling everybody in my classes, or if you actually have a platform yourself and you're seeing how are brands getting in touch with you? How are the payouts happening? Are they asking for W9s and 1099s?
Speaker: Is a Snapchat crystal really a crystal or is it a USD equivalent? Yeah. So that's kind of what a few ways i feel like it's really helped me with those clients.
Speaker: So good. So good. Yeah. When you decide what to, you know, create a video, maybe at a pool or or you write something, when you decide what to post, how do you make the topic interesting while keeping the explanation accurate? What's what's your methodology for that?
Speaker: That is the hardest question. We get max, I mean, max 90 seconds. And no one ever watches past about eight if you're really good. I've looked at my analytics. And you know what? That actually reminds me that was one of the reasons why I started the social media. I forgot till you said that.
Speaker: I was so annoyed at the other tax influencers, those big ones who are out there just giving half-truths making everybody think they can do things that they actually can't, having clients come to me and sending me, you know, oh can't I write off my spa?
Speaker: And I was so annoyed. i initially started to make videos of you can't do this videos. And i have to say through that trial and error, it was the passion of mine to educate, but it falls flat on social media because people don't want to hear what they can't do.
Speaker: They want to hear what they can do. And so I think there's two groups of kind of when people get on social media where they'll say everything you can and should do or they just want clickbait.
Speaker: And I've tried to find my way in the middle where is it something that I can talk about quickly, hit those high points. I always try to give more information on my caption and then always try to give them a call to action where they can learn more. And I'm very specific that this is not all that because I don't want to lose my reputation in the tax industry with my colleagues by putting out clickbait. And that is what happens because some of these tax influencers, I don't have a lot of respect for when I see what they're doing just to get views.
Speaker: Yeah, no, it makes sense. That's yeah. Now, let's connect those different parts of your work to the business over listening, right? Which is always a key thing. um They may have a growing business, these business owners, a busy calendar. We know lot of of money moving through bank accounts. But I want to talk about how you help them understand what it means for their own financial future.
Speaker: And how can an owner have their best revenue year? We hear this a lot and still feel financially behind. Like, do you run into that at all? yeah Yes, of course. I think every tax advisor runs into that and every CPA. You know what I think the biggest,
Speaker: ah ah not not aspect, but the biggest issue with the business owners who have their best revenue years but feel broke is that they do this bank balance accounting process.
Speaker: where all they're doing is looking at their bank account, right? So one day they have a lot of money, they spend a lot, they go out to eat, they buy some assets, they get bonuses. And then the next day they have nothing and they're struggling to make payroll. And there's just no planning and there's no you know There isn't an ongoing relationship with their accountant to kind of keep them in check because they really, in my advisory practice, we have quarterly meetings. Some of my clients get monthly, the really high revenue, but they don't, those quarterly clients, they have no idea what their revenues, even though they have access to their QuickBooks, just like everybody else.
Speaker: And so I see that a lot and I am just always trying to educate people. my clients specifically on keeping them and on track. I think what really gets us behind and what I used to hate when I was just doing the ah annual taxes was the fact that they didn't know.
Speaker: They didn't know until it was too late that they had made so much money and that there was all this impact or they had made a wrong decision about what they purchased. It was so unfulfilling For me, I just hated it. And when I switched to advisory and I was able to be more proactive and help them along, it was just better for everyone, including the accountant. You know, we don't want to deliver those bombshells. Those are terrible.
Speaker: I'd rather deliver tiny bombshells every quarter. I agree with you. Yes. and And again, you know, you said something that's very powerful there, and that is you meet with people, right? You're not just meeting with them once a year. You're meeting with them sometimes quarterly, but, you know, some of them monthly.
Speaker: And the more you meet with them, right, the more, you know, you you understand their business, they understand you, and there is a better flow of, you know, advice going both ways, right? Mm-hmm. Yeah, and I think there's been this is something I've also been really passionate about.
Speaker: And i think it stems back to the fact that I always wanted to be an entrepreneur is the fact that a lot of tax people are really, really good at advising business owners, but they don't always spend that time to grow and develop their own firm.
Speaker: And then we see this dis this juxtaposition and this discord between the client and the tax professional where the client is wanting information. They're wanting advice. They bought a house or they want to buy a truck or they want all these things. and they're asking their tax professional and then their tax professional is frustrated. They feel taken advantage of. They're busy. They don't have the time to answer the client's quick question and everybody loses. And so that's another thing I've been really passionate on educating about is building that advisory service package or something that looks, however that looks in your firm, because you can pretty much take anything that the client needs and and turn it into a paid engagement for yourself, and they will pay it. They don't know that it's available for them to pay, so they're just asking for help, and you're feeling frustrated because you're not offering them something where you're getting compensated.
Speaker: So yeah, having those meetings has not only been great for the client relationship, but it's also been amazing recurring revenue. It changed my life when I changed to that advisory practice.
Speaker: You know, it gave me that consistent money to come in, just focusing on my business for a while so that I can help others more efficiently. That's so good. I agree with that 100%.
Speaker: And you know, and i and i know i see a lot of people that are really good at tax and they can tell you what what tax provisions make a lot of sense, but to be able to advise clients and meet them where they're at and help them through that to make decisions is is a different um set of skill that really, you know, it kind of evolves you as a tax advisor along the way.
Speaker: Now, one of the things I want to talk about, and I get this question a lot, and I'm sure you do too, but like there's a decision that comes up in tax planning that where should I, so you know, someone calls me, hey, Mark, should I spend money now? Because I think I was told there's a tax deduction. And so in people's minds, maybe the financial decision is, hey, spend the cash because I'm getting it back in taxes, right? Do you ever run into that question from various clients?
Speaker: You know, I do. Yeah. And we always say you should not make a bad investment or do a bad purchase just to save on taxes, right? We all know as tax professionals, these are deductions. They are not dollar for dollar.
Speaker: They need to think about more than just saving on taxes. There's cash flow, right? Like, how is this going to affect your liquid cash? How is this going affect your ability to pay payroll? or you're putting it on credit. Well, the credit alone, I can't tell you how many people I have seen who will have distributions in excess of basis for their S-corps because they put so much on credit and they take all of those expenses and then they have all that cash and they take out more cash and then they end up owing taxes anyway.
Speaker: So it's a lot to explain to a client in a simple way, but I try my best. And actually, I started recently a school community for business owners to educate them. It's called Business Empire, just to educate them about these concepts because I have many friends in the tax industry and the complaint is always the same.
Speaker: i don't have the time to teach the client about this. I do not have the time to teach them about mileage versus actual auto expenses or all of the things. So I've taken these concepts that we talk about over and over and I'm packaging them into a school community So that the business owners can get educated enough that when they go to their tax professional, they can make decisions together that serve them both. It's not to replace the tax professional, but to give that extra support to the tax community and to the business owners filling that gap of all of these little tiny things that they need to know. I haven't hit distributions in excess of basis, but I'm sure I'll get there. ah
Speaker: I'll get there eventually. I'm sure. Absolutely. I'll say it in a super easy way for them. Oh, yeah. And once you meet with clients and, you you know, yeah you kind of get their financial picture and they they they're they're getting cash, they're freeing it up. How do you help them decide what to do with that money? Because I know some clients going to come to you and say, hey, should I, you know, should I buy equipment? Should I invest more in my business? What should I do with this money? Right. Right.
Speaker: Yeah, I have to be careful with that. And because I'm not a financial advisor, I'm a CPA and I have my ethical obligations and my everything that that I have to follow my guidelines from the ASCPA to stay within my limitations. A lot of my clients have financial advisors also. And so I will work together with the financial advisor, right? We have meetings where we're working together with the client, because we have very different goals, right? The financial advisor is give us everything, draw everything out of your business, let us invest it.
Speaker: And my goals are hold on, we need to look at basis. Hold on, we need to set aside for taxes. Hold on, we need to look at assets and purchases within the business to invest help the business continue to grow and to save on taxes. So there's so many different aspects. I usually will work with the financial advisor if they have one. And if they don't have one, then we take kind of more of a traditional route. And I start with the basics For example, do you have a retirement plan?
Speaker: And what does that look like? And you know, these influencers, ah because I don't niche in influencers, but I have a decent amount just because word spreads. So they are difficult to get to think about long-term investments and long-term goals because they're so young that I'll be like, please, you need to save for your retirement. They're like, I'm 23. That's forever a away.
Speaker: And so I try my best with all of my clients, regardless of their age or their industry, work with the financial advisors. But in the end, it's going to be their own decision. And so I can only do, I just had a client who bought a $720,000 Lamborghini cash.
Speaker: It was three days ago. His financial advisor told him not to do it. I suggested many other things he should do with the money He put his foot down and said he was going to buy it. So I calculated the basis, calculated the tax implications, told him how the luxury limitations on vehicles work, and he bought the Lambo anyway. So we do what we can. But I mean, in the end, it's their decision, which I think is almost freeing, right? It's almost freeing to say,
Speaker: I can advise you, but in the end, whatever you decide to do, it's not on me. Like you're a big boy or girl. You own a business. You can ultimately make the final call. Yeah, no, that's, and thanks for sharing that. That's, this stuff happens all the time and we deal with it. and And you said something very important there, and that is, you know, you are a CPA, right? And you're an accountant and you are not a financial advisor and you leave that for those people, you know, in their lanes and you stay in your own lane. And I, and I think that is something that um everyone needs to hear and, and really deal with know,
Speaker: I'm sure, you know, there's times where we're working with our clients on the accounting and tax side of things and planning from that standpoint, but maybe a legal issue comes up or a structuring thing or an insurance issue or retirement or financial management that is outside of the lane. And obviously, you are very aware of where you fall within that umbrella and where you need to bring in and have the relationship with their other advisors or at least make a recommendation to somebody.
Speaker: Yeah, and I think that's very hard because a lot of business owners think their CPA is the end-all be-all. And it was something I definitely learned over time and trial and error was that not only could I not be everybody's end-all be-all in the land of finance, I'm not supposed to be and it's not the best for the client.
Speaker: So I hope someone listening who's in that similar situation where ah I'll just ask my CPA every single thing ever on the planet. You know, you don't you shouldn't have to take that burden on yourself. And you're right. I've also had calls with lawyers, with insurance agents, definitely. And so you and there's nothing wrong with saying that's outside of my scope.
Speaker: I, for a while, felt like, oh, if I said that, they would think I wasn't capable or competent. And that was long ago, right? But I realized over time, what you're really doing is telling the client, we are going to set you up for success, and I care about you, and I want you to have the best of the best in all aspects, and we will work together as a team your team. And they love feeling like they have a team, right? Business owners love me. oh i have a I have a lawyer and a CPA and a financial advisor. And so just, you know, so framing it in that way, again, takes that pressure off you and is is best for everybody.
Speaker: that's so good. I love that. Now, kind of shifting gears a little bit, we work in a world where AI has come. It's it's been the topic of everybody everywhere, right? And we, no matter where you turn now, the term is coming up, whether it's on TV, you're reading about it, you're listening to a podcast, or you're actually working in it.
Speaker: um So talk about, you know, building wealth in an AI first world. What does it actually look like for an ordinary business owner out there that's like, I don't know if I use AI or should I?
Speaker: I think that's so great because i I love that you asked me that. I've really been diving deep into that and teaching not just my clients, but I have been wanting to make it more of a focus of my Instagram, building wealth in an AI first world. I almost feel like that was one of my taglines on my bio. I've changed my bio a million times. Did you get that from my bio two months ago?
Speaker: No, but i think it's so important, right? You're right. We are seeing everywhere, everywhere about AI just blowing up. And my opinion is that we use it to our advantage. We take things day by day.
Speaker: i don't want to worry about the future. I know there's a lot of fear out there for people. What we can do now is exactly what you said. We can build wealth, stack as much as possible. And while there is a lot of fear around what's going to happen in the future, we've also never lived in a time where it is so easy to make money. And I can attest to that because I have all of these clients, especially Gen z who know how to harness the power of AI, and they are just building things all over the place to make their lives easier.
Speaker: Now, with that being said, i think we need to make sure we're harnessing that power, right? Because people think they can go and just have AI create a digital product and I'll sell it.
Speaker: Well, people are onto that these days. They know it's written by AI. They're not going to pay money for something they could have AI make as well. There's other ways you can use it, though, to grow your business for sure.
Speaker: Yeah. And I, and this is, this is a fluid conversation that's out there and, ah in and maybe some people deal with it more than others, but it will continue to escalate. And we as professionals need to be able to respond to it. Right.
Speaker: um Let me ask you this. So a client sends you an AI generated tech strategy you know that they came up with or someone, however they got it, and asks you, why haven't you ever recommended this to me?
Speaker: how do you How do you respond to that or how do you start the conversation from there? Because sometimes that strategy may be something that you can't do and and they're just assuming, hey, if AI created it or someone gave it to me, that it has to be right.
Speaker: Well, i don't do this right now, but I should. So I, over the past, I don't know how long, as I've been working with ai on things, it will, we'll talk tax and we'll talk, so you know, I'll have it help me research or I'll have it help me work out a problem and it will be wrong. It'll be incorrect.
Speaker: And I've started to take screenshots when it apologizes because it will tell me something and I'll say, hmm, Isn't it this and this? I don't think so. Oh, you're right. I apologize. I was incorrect. I've started to take, I have AI screenshot number blank and I have them in a folder and I'm not sure what to do with them. Maybe that's what I would do is send them the pictures.
Speaker: Of the AI apology. Not really, but I actually recently read a study about tax firms and AI, and they had done this study about how useful it was for preparers and tax professionals at different levels. And everybody thought that the younger preparers were going to just knock it out of the park.
Speaker: and But it actually turned out that AI was the most useful for the senior tax people because they know enough about actual tax law, tax strategy, tax mechanics to catch it when it was incorrect and fix it and work with it. Whereas the younger ones were just kind of taking it by what it said and not really understanding. So when you apply that same concept to a regular business so owner,
Speaker: will be given a strategy versus a tax manager. I think you have to really just put aside your ego because it feels almost like a personal attack. And it's the same way when they send you a reel off TikTok or Instagram. And I mean,
Speaker: ah i don't even want to say these tax influencers who send them, but I had one recently who sent me the one about writing off your spa and your Pilates. You can write off your Pilates. And it is so irritating. And I totally, totally get that it's irritating. So for me, I take those deep breaths.
Speaker: I realize the client is just... you know, they don't know, they're ignorant, they don't understand. And then I try my best to tell them, I'm taking care of you. I've already, you know, done the analysis, this isn't going to work for you because of X, Y, or Z. And it also comes down to me to that level of respect. I can tell when someone's asking me because they don't quite trust me. And they're like, hey,
Speaker: you're not you do you really have my best interest at heart versus I saw this and this is crazy what is this and I will make my determination on keeping that client as well by how they treat me when they're asking me these questions so it's a very multifaceted my response but it's kind of where I land with the whole thing yeah no I get it I mean it it comes from all different angles and you know There's truth in it, there's non-truth, and there's sometimes things that are mixed up between the two. So it yeah takes a lot of discussion.
Speaker: Now, you're the author of the guide, The Influencer's Tax Playbook, right? How to Understand Your Taxes, Claim Write-Offs, and Avoid IRS Drama. um And what made you write this playbook and who did you want to reach with it?
Speaker: So I wrote the playbook after I taught at Taxposium the first year. And I wrote the playbook for influencers, although I have heard tax professionals also find it very helpful. It's it's just right now, it's just a PDF. So it's an e-book. But I've thought as well about expanding on it.
Speaker: And what really prompted me to do it and to do these presentations in general was the fact that I started to get more and more influencer clients. And complete difference between tax returns that I have seen come across my desk, it would blow your mind. I had in my first TaxPosium presentation,
Speaker: I cut out, you know, the sensitive information and just put two screenshots. And I had one influencer who had made almost a half a million dollars and her CPA had told her she, because of her industry, there were no deductions available for her.
Speaker: And she had hundreds of thousands of dollars of deductions. She had management fees. She had all kinds of stuff. And then I had another influencer come to me and it was like, $12,000 of makeup and $14,000 of clothes and tanning on there and gym. And I realized even by looking at comments on these tax clickbait tax influencers posts, well, my CPA says that I can write this off, da, da, da. And someone else would come in and say, there's no way you can do that. And so the whole thing spurned from the fact that I would love
Speaker: for tax professionals specifically to get on the same page, because I know the tax law around these deductions. I have read very similar court cases. You know, maybe they're not influencers, but they're newscasters or they're actresses.
Speaker: i have researched enough to know in general what the consensus should be on most of these gray deductions. But so many tax professionals don't that the ones who do, we look Terrible, right? Like we totally look like bad guys and we're putting the client at risk, big time risk, and they don't even know they're at such big risk. So unity was why I started my, you know, my big get on my soapbox about influencer taxes, but I didn't think it would take off the way that it has.
Speaker: No, that's so good. And here's the thing, people that whether they're influencers or they're or they're just doing something in any form of work and generating income.
Speaker: There's a lot of misconceptions on write offs that you were talking about. But also, you know, there's also income that gets created that often gets overlooked. Right. I mean, you know, I get clients will say, i never receive a 1089. So I assume they didn't I didn't have to report it. Right. I mean, like, do you run into that as well?
Speaker: Oh, yeah. you know You want to know a crazy story? Right this year, i have a client who, ah he's not an influencer, but in terms of income not being reported, he had $3 million dollar capital gain of selling crypto.
Speaker: Three millions of gain in crypto and it is not on one 1099 DA. So talk about having that ethical question of do we need to report this? It was $2.87 million dollars of gain that I see in his coin Coinly account.
Speaker: It's there. It's a gain, but it is not on any form. And so, yes, that's a very extreme example of a client saying, hey, do I need to report this?
Speaker: And then, you know, you have your smaller examples, but not really so small. Influencers can get hundreds of thousands of dollars of product and never see a penny. And it's very taxable. And having that conversation with them is hard. It's another reason why I wrote the playbook.
Speaker: Because they might think no one can see it. But in, you know, my in my Taxposium presentation, I talked about brand audits. So say I have a client who is getting e-bikes and each e-bike is about twelve thousand dollars. i have a lot of clients who are influencers and athletes.
Speaker: And so they'll get these e-bikes for free, but not really because they're sponsored by the company. Well, if the IRS goes and audits the actual company, they're going to see a bunch of e-bikes written off as marketing or advertising or whatever. And they're going to want to know, well, who got those e-bikes? And now my client is at risk if I haven't tracked it and reported it properly.
Speaker: So, you know, you you have to just have those conversations. Yeah. Yeah, no, I think so, so relevant because sometimes we focus on what people can and cannot deduct.
Speaker: And then also there's the other side of the coin, which is what is income? You know, I received cash or maybe I received, you know, property like an e-bike in exchange for services. Right. So there are things that also define income that we also have to be careful with.
Speaker: Yeah. I mean, i i was teaching a CE class and they were talking, they had said they had talked to AJ Reynolds previously about laundromats and AJ had been telling them how the IRS will do audits on laundromats because obviously they're a cash coin based business and how they'll look at, you know, the utility bills and the water that was used and the power and how many machines to figure out how much cash they should have been reporting.
Speaker: And I just think that's such a good example of the IRS can find out that $3 million dollars of crypto income. It is so painful to report that gain because there is not one form. I looked on the transcripts. It does not exist.
Speaker: But can you imagine what would happen? it does not take rocket science or is not very hard at all for the IRS to find that gain. And then where would the client be? Right. And that's and that is the value that we bring to the table of talking to our clients, meeting with them, having frequent conversations and understanding them to help them in these situations. Right.
Speaker: And have that fluid conversation back and forth. Yeah. And then they trust you more when they see those dumb things on TikTok or from ai because you're meeting with that. They know you're they know you're smart. They know you're on top of your stuff. I get a lot less of those sent to me than I used to.
Speaker: and I'm sure. Absolutely. Now, obviously, you know, we've talked about, you know, planning and we're talking about the influencers and AI, but really helping owners face tax problems.
Speaker: So, you know, you also help people who are already behind, you know, in the tax world, right? And I want to speak to the owners who feel embarrassed or overwhelmed or afraid to open the next IRS letter because they're like, I just don't want to know what they're saying to me, right? How do you start that conversation and determine what needs to happen first with those clients?
Speaker: Well, I'm a very empathetic person, and so I'm very good to have on the team when it comes to the correspondence with the client. I can do a phone call with myself, the client, and my husband who handles more of the negotiation and the, you know, working with the IRS, and I can see the body language shift. I can tell from a tilt of the head or a tone of voice that we're getting into sensitive territory.
Speaker: So I really try to guide those clients. It's my own personal way of doing it. I know there's other, especially when it comes to resolution, other tax professionals that are very much like this just is what it is.
Speaker: Let's rip that bandaid off, you know, and it also does depend on the client. Some of them don't want to be handled with so much care. But I do think most of them, you're right, it is very traumatic to get that letter or have the IRS start breathing down your neck. They're always, you know, in high alert mode. So my goal is to just kind of say, hey,
Speaker: There's nothing we can't work out together. There's nothing that we can't fix one way or the other. Can we always promise a zero tax bill? No. But can we promise a good payment plan, a good installment agreement yes so you can sleep at night, something that you can do, like we can help you.
Speaker: But there's also those clients who just hide their head in the sand and You know, they just will not even come to the meeting. So it's a it's a difficult it's a difficult area, but I do my best to just kind of put them at ease. It feels like the end of the world, but it's not.
Speaker: Yeah, no, I think that's, and again, I know talking to people sometimes, you know, you have that fight or flight instinct on things. And some people, when it comes to, um you know, receiving a letter from the IRS or even some more scrutiny or an audit, you know, they may want to, they're not going fight it. They want a flight. and And that's where we come in to say, hey, you know what?
Speaker: You got to notice and it says you owe tax, but let's look into this. And, you know, i always tell a lot of my clients, a lot of times, you know, that could be explained. And a lot of times maybe you don't even owe the money. And so it's just a matter of, you know, using professional judgments like you have in order to determine, hey, where's this sit? Can we write a letter back? Can we deal with with the situation and help you resolve this quickly?
Speaker: Yeah, and actually one of the things that we offer in our advisory services is that transcript monitoring. All of our clients get it. It has been an absolute just saving grace. We use tax status. And so we know, at least with our advisory clients, the ones that we are talking to all the time and helping them along, that they're going to be getting the letter.
Speaker: We know it before they get the letter, right? We have the alert. We check on their transcripts. We know if something's off. And so that's also very helpful when you can start that conversation first and say, hey, there is a letter coming. This is what it says.
Speaker: This is our next steps. Just cutting it off at the pass has been an absolute game changer for us in our practice. And I've even gone so far now to where for most clients, I'm not quite there with 100%, but even clients who are maybe just like a one-off taxpayer. prep that I don't have on advisory, I will still have them pull their transcripts from their irs.gov, the IDME website, because I want to make sure that what we are reporting on the tax return, we're not missing anything. A lot of those letters can be, net you can never even see them. It's just that the client thinks they've given you everything and they haven't. And then you see the transcript and you're like, hmm, you have something from Robin Hood that I need or, you know, you have this statement we didn't get. So with those two things combined, just being proactive, getting requesting the transcripts or, you know, having them on a tax monitoring software, it cuts down on a lot of the letters as well, which is nice.
Speaker: That's good. And, you know, once you get someone set up and, yeah you know, you bring them in, and maybe you help them with, you know, an IRS issue or a state issue or whatever the case may be.
Speaker: And you you really kind of dug deep into who they are because you see all their financial records, there's transcripts, you're monitoring things. How does that relationship go then? I mean, I would imagine that, a you know, they automatically kind of like gravitate towards, I'm going to listen to what she has to say because she's helping me here.
Speaker: I mean, i think that's really funny because we actually had this conversation on Sunday. We have some friends in town. There's an IRS resolution conference in Park City, and they were talking about that exact thing. And it's so true. You have two different types of clients when it comes down to it. And I know people in resolution who actually will not work with the client on an ongoing basis after the case has been resolved. Yeah.
Speaker: Or there's people who will, depending on the type of client they are. But it's very, very hard to vet those clients because some of them will get right back into the same trouble that they were in before.
Speaker: They will continue to not be proactive to fix things or to send you letters or to be compliant. And then you're right, there's those other clients that are now scared straight. they realize it's, you know, an actually a big deal and moving forward, they're great clients. And so I don't think anybody yet has found a perfect way to determine how the client is going to act as an ongoing client when they've already had an issue.
Speaker: But you definitely need to, if you're thinking about taking them on as a you know, a recurring client after the case, I would say to look closely at those flags and signs and kind of see how they act as you're getting everything together, because it will generally be a reflection of how they're going act in the future.
Speaker: Absolutely. You know, when you work with influencers um and, you know, entrepreneurs and people like that, I would imagine that choice of entity comes up quite a bit because, you know, some people may have a Schedule C um that they just have no legal entity set up. Some people may have a single member LLC. Maybe some people have an S-Corp.
Speaker: Some people may be a partnership with other partners. Yeah. Do you run into this where people just don't know what they have? They just know they got to file a tax return and they're earning income and and you're trying to help them in that situation as well?
Speaker: Oh, yeah. Well, that is one of the ways that getting those transcripts are helpful because you can say, how are you filing your business? And they don't know. And then you get the transcript and there was a K-1 on there. And you're like, they do, in fact, have an S-Corp, right?
Speaker: So that's helpful. But, you know, I can't tell you how many people I have seen and influencers and everybody really, you know, the S Corp.
Speaker: I'm so glad you brought this up because S Corp in general, I have seen partnerships as well. But right now we're seeing so many S Corp's coming across our desk and they are not compliant.
Speaker: Maybe they were not the right fit. Maybe they're running loss years year after year. I don't know why accountants are so eager to elect S-Corp status. And then, you know, the client is, and then they don't, there there isn't an ongoing relationship with them to make sure that they're compliant.
Speaker: But this actually, Mark, I don't think you know this, but I've been working on a book. I am almost done. It's called Think Before You S-Corp. And it's written again for business owners, but i it's pretty technical.
Speaker: I think all tax professionals are going to maybe think about certain aspects that maybe they haven't thought about before when they're encouraging or advising their clients to file as an S-Corp. I think it's going to be super helpful for the tax professionals.
Speaker: I'm really hoping that the business owners can read it and understand it. It's kind of technical, but I've been trying to keep it as simple as, you know how it hard it is to keep that code and all of the regulations in there, but make it simple. So I'm working on building that and it is so close to being done. And I'm really, again, hoping it helps with the miseducation around entity structuring, specifically the S-Corp. That's good. read that book. I'm going to read that book. It's going to be so good. It's almost done.
Speaker: yeah close. I mean, anything about S-Corps, I'm definitely in for that. um You know, because I see, you know, a lot of times people, and I run this quite a bit, people say, well, see, why do you have an S-corp? Well, someone told me I can avoid paying, you know, the self-employment tax by being an S-corp. But what they also forgot to do is in the advisory along the way was, yeah, you could be an S-corp but and you're making money, but you You have to pay yourself a reasonable salary and and then defining reasonable, right? And then then I could take distributions and there's distributions in excess of basis and and then people's concept of where debt basis comes in and the whole thing. And I think in the S-corp context, right, this gets missed. And again, you can't blame the client because a lot of times these clients are like, look, I'm relying on people to tell me what I'm supposed to do.
Speaker: Yeah, they they really don't know. And I really do hope that there are business owners who take the time to read the book. I'm not making it super big because I don't want it to be overwhelming.
Speaker: But yeah, there's so many things they don't understand. Even to can they revoke it, you know, depending on when it was formed, revocation becomes a whole different conversation. There's retirement plans.
Speaker: planning that that changes from when you're a sole prop to now all of a sudden you have a W-2 and you have different types of limitations on how much you can contribute. And there's just so there's even state considerations. And it just isn't so easy as, oh, I decided I don't want to do it anymore. And so I'm not going to do it anymore. It's just not that easy. And I do think there's a lot of tax professionals out there, too, who are just missing some pieces of the puzzle And so I want to just put it all together in one compact way to just kind of say, have we hit all of these considerations? Because I do think it can be a very valuable tool. I mean, I've recommended it to clients before, but you really need to know what you're getting into. And yeah, i have the clients who will come and say, well, have an LLC. So that will that save me on taxes? And I'm like, oh, man, you got to head over to Business Empire. I'm going to teach you about different entity types in there. Yeah.
Speaker: I love that. That's so good. And that, yeah that is why you're a great advisor. So I love that. Thanks. Now, let me ask a few questions. One, what is the one financial habit you wish every business owner would adopt or least the or at least that you would love them to adopt?
Speaker: ah Well, this is so basic. i yeah every I mean, but we need separate accounts, right? We need separate accounts. We need to make sure that, first of all, we have a business account, right? And we're not commingling with our personal account, business checking. And then I would love for business owners to at least have a payroll account if they have payroll, and then also a tax savings account.
Speaker: I've seen those profit first methods and I've really seen clients go wild with a full profit first. That's too much, in my opinion, for most business owners. I don't believe they need, you know, i even the operating expenses account can backfire if you're not super clean on what's coming in and out of that account, when the money's being transferred over.
Speaker: So I don't think we need a lot of separate accounts, but I think if every business owner just had a dedicated business checking, a dedicated payroll tax account, and a dedicated so tax savings account, everything would just be so much cleaner and smoother. And it helps them know too, what can I actually take out that's available to me after things have been put aside for these other very important things in the business?
Speaker: No, that makes a lot of sense. Absolutely. Um, What is one tax misconception you would like to retire or get rid of that's out there that you see quite a bit?
Speaker: Oh, come on. Being the dancing accountant, we talk about this all the time, that tax accountants are boring, you know that we're no fun, that we're the killer of fun, right? like Taxes and accounting is cool.
Speaker: i I believe that. I think that it's a super fun group. If any business owners don't show up at our conferences, but tax accountants are super fun. Everybody, for the most part, has a really good intention to help.
Speaker: We put in a lot of time to educate ourselves. You know, we have CE requirements we have to meet every year. And I do actually think that that is changing that view of tax accounts. You'll look on social media and you'll see so many bylines and headlines that say, not your dad's CPA or not your dad's accountant, because we're really trying to get across.
Speaker: We understand that times have changed. We understand that we don't need to come to make you come into our office. We can do remote. We understand that we don't need to be, you know, buttoned up and very, very serious and make you feel bad about your decisions. We can have a relaxed conversation and we're here to help. I would love for business owners to realize that having an accountant and a tax person in your corner is an asset, not something for you to feel like you're going to the principal's office every time you have to meet with them.
Speaker: I'd agree. And yes, we are a lot of fun. For fun. um i Yes, i I would agree with that 100%. um What is one skill a younger tax professional should keep developing as AI and AI tools keep improving? Like what's that skill they should have?
Speaker: I think they should definitely continue to develop learning how to research and cross-check themselves. i When I started teaching... I would do Q&As for a tax group, open Q&A. I had no idea what they were going to ask me.
Speaker: And that super nerve wracking, of course. And I still don't love them. But over time of doing those, I had other tax professionals ask me, how do you know so much random stuff?
Speaker: And I think I was blessed that I grew up before there was AI. It was awful. I would have a client. I was blessed and it was awful. Yeah. I would have a client who would have a problem and I would literally spend ah sometimes up to two weeks in a rabbit hole trying to research what the heck I was supposed to do to get them out of it or fix it or help them along.
Speaker: And that is how it stuck with me. That's how I know so many obscure things because I haven't ever niched clients. I've looked in so I've just worked with so many different industries and I've had to research it myself And I think when you're leaning on AI to do all of your research without cross-checking it, without really understanding the decision that you're making, you know, it's not going to stick with you and you're not going to really understand the mechanics behind it, right? Like when when I was in um college for my master's in tax too, they made us hand-to-hand
Speaker: fill out the business returns because they wanted us to see the float, the 1065s. We had to read and mark yes or no, every one of those questions and understand what they meant. So I would say just continue to learn and work your brain. and And as we spoke about before, AI is many times not fully correct or it will pull... you know, old information or it will apply it in the way that it's not supposed to be applied.
Speaker: So use it. i think it's a great tool to speed up things, but continue to learn, cross-check research and really even with tax software, understand those mechanics instead of just saying, oh, it's put together. I'm just going to give it to the client because even talk tax software can be wrong.
Speaker: love that. That's a great, great answer. So thank you for sharing that. um Marit, I want to give you one last big question before we wrap up. And that is- Is it already time? we don't have another hour? Time flies, right? Okay. Exactly.
Speaker: When you talk about building a legacy and leaving one behind, what do you want people to think about beyond the dollars they leave behind? you
Speaker: Well, I think that it really depends on the person and their goals. You know, you've you can't do a one-size-fits-all. This is something I've learned with so many clients because sometimes clients, for example, they don't have children and they don't really know what what their you know where their money is going to go, how they're going to leave it behind.
Speaker: And so I'm always trying to encourage them to think on that bigger scope and We'll talk a lot about, for example, donations, donating money, generosity, and not just for the tax strategy aspect, but if you are a generous person, you know, how can you use what you're building to, like you said, create that legacy?
Speaker: Some people, it's definitely for their family. They want to leave their family in a better shape than what they came in. But for people who don't have that, what else are things that are is your individual passion? What is your thing that lights you up? What do you impact do you want to make on the world? can really be anything. There's so many things.
Speaker: And it's fun. It's fun to get to know your client on that level and help them to say, hey, we're not just helping keeping your business going. We're looking at the big picture and in the future.
Speaker: And you're right. What do you want to leave behind? What do you want to happen to this thing that you're building down the road? How would you like the exit to look? And we plan ahead for that as well. But based on their passions, not mine.
Speaker: If they want to buy 10 Lamborghinis, I'm like, what am I going to do? mean, can't stop them, right? is I want my legacy to be Lamborghinis. Okay. Wow. That's right. Got to take it slow. That's so good.
Speaker: Now, for someone who wants to work with you or Flair Financial or invite you in to speak at an event or follow your content um or even get your influencer's tax playbook, how do they reach you?
Speaker: So if you would like to work with the firm, either for ah tax advisory or tax resolution, the website's flairfinancial.net. And we have a contact form there. You can reach out to us that way.
Speaker: For me, for speaking and to purchase my digital products, that's at maritbermoodcpa.com. And then if you're a small business owner, Wanting more support, a network of other business owners, learn more, kind of take control of your business in that way to where you can make better decisions with your accountant.
Speaker: You can join Business Empire. That's on school. It's only $97 a month. It is a steal to get access to me and to other credentialed professionals, not just people that call themselves business coaches, but aren't actually in the trenches coaching people in their business.
Speaker: And for my tax professionals, we can always connect on LinkedIn because that's always a great place to find me too. Oh, and then my Instagram is The Extroverted Accountant. I think that's it.
Speaker: Awesome. Well... Marit, thank you for spending this time with us. It has been a pleasure having my friend on the show and giving our listeners a chance to hear your story and what you're doing.
Speaker: And I appreciate your heart that you bring to this profession and your commitment to helping people feel more confident about who they are, how they advise, and just, you know, how they take care of their legacy along the way. So thank you for being on the show.
Speaker: Yeah, thank you for having me. i had a great time. I have one more. I forgot. I am almost the official co-host of the She Counts podcast, which is a podcast for women in accounting. So make sure you check that one out too.
Speaker: Marit, thank you for spending time with us. It's been a pleasure having you, my friend, on the show and giving our listeners a chance to hear your story and what you're doing to help everyone out there. I appreciate your heart that you bring to this profession and your commitment to helping people feel more confident about their money and about their legacy.
Speaker: For everyone listening, whether you're advising business owners or building a business of your own, take one question from today's conversation and turn it into action. Maybe that means getting your books organized, reviewing your tax plan, or asking for help from someone that you've been putting off for some time.
Speaker: You can reach Marit out there and she's willing to help you. And she's all over social media and you're going want to reach out to her. Thank you for listening to the Becker Accounting Podcast Tax News Now. I'm Mark Gallegos.
Speaker: And if you enjoyed this conversation, follow the show, share it with someone, and hopefully they'll find it useful and helpful. We'll see you next time.
