Sarah Brown's CPA Journey: From UM Grad to Missoula Tax Expert + Self-Employed Tax Savings & Retirement Strategies | Nexus Insights

Published: January 19, 2026

By: Nexus Wealth Management Team

Location: Missoula, Montana

https://www.youtube.com/watch?v=o65hBrOBSKw

In this episode of Nexus Insights, hosts Robert Montes and Josie Allred from Nexus Wealth Management in Missoula, Montana, sit down with Sarah Brown, CPA from Sax CPA (Missoula). Sarah shares her personal story of becoming a CPA, from her roots in Missoula to her education at the University of Montana and early career in Portland. The conversation dives into the realities of the CPA exam, the growing shortage of accountants, and practical tax strategies for self-employed professionals and small business owners in Montana.

We cover key topics like transitioning to an S-Corp for tax savings (ideal at $85,000–$100,000 in net profit), retirement plans such as Solo 401(k)s and SEP IRAs with 2026 limits, depreciation rules for vehicles and equipment, navigating IRS audits, and health insurance challenges. Whether you're a Missoula entrepreneur, a self-employed individual seeking 2026 tax deductions (like QBI, home office, and mileage at 70¢/mile), or exploring a career in accounting, this episode offers actionable insights from local experts.

Tune in for Montana-focused advice on reducing taxable income, building wealth, and preparing for retirement—all while staying compliant with IRS rules.

Episode Timestamps

Jump to specific sections for quick access (timestamps are approximate based on the episode's flow; adjust as needed for your player):

• 00:00 - Intro & Welcome to Nexus Insights with Sarah Brown, CPA

• 02:30 - Sarah's Background: Growing Up in Missoula & Path to Accounting at UM

• 07:45 - Why Choose Accounting & CPA? High School Influences & IT Focus

• 12:15 - The CPA Exam Process: Requirements, Challenges, & Changes

• 18:00 - CPA Shortage in Montana: Retirements, Job Security, & Opportunities

• 23:30 - AI's Role in Accounting & Emerging Areas Like Crypto Taxes

• 28:45 - IRS Guidance Gaps: Student Loans, 401(k) Matches, & Secure 2.0

• 34:00 - Dealing with IRS Letters, Audits, & Backlogs (Post-COVID Tips)

• 39:15 - What to Save for Taxes: Records, Proof, & Avoiding Pitfalls

• 44:30 - Red Flags for Audits: Credits, Deductions, & Education Credits

• 49:00 - Building a Book of Business in Missoula & Transitioning from Audit to Tax

• 53:45 - S-Corp vs. Schedule C: When to Switch (85-100k Profit Threshold)

• 58:15 - Tax Savings Strategies: Retirement Plans, HSAs, & Health Insurance

• 1:03:30 - Networking in Missoula: BNI Groups & Referral Tips

• 1:08:00 - Depreciation Rules: Vehicles, Equipment, & 2026 Bonus Depreciation

• 1:13:45 - Depreciation Recapture, Self-Reporting Sales, & Vehicle Limits

• 1:18:30 - Final Advice: Client Education, Asking Questions, & Comprehensive Planning

• 1:23:00 - Wrap-Up & How to Contact Sax CPA in Missoula

Key Takeaways

• CPA Career Path: Sarah's journey highlights the value of early exposure (like Hellgate High's Finance Academy) and combining accounting with IT. The CPA exam is rigorous (4 four-hour tests, 120+ credits required), but changes are making it more accessible amid a national shortage—many CPAs retiring in the next decade.

• Tax Savings for Self-Employed: Switch to an S-Corp around $85,000–$100,000 net profit to reduce self-employment taxes. Pay yourself a reasonable salary (e.g., 55k on 80k profit) and take distributions tax-free from payroll taxes.

• Retirement Strategies 2026: Maximize Solo 401(k)s (up to $72,000+ limits) or SEP IRAs for tax-deferred growth. HSAs offer triple tax benefits if eligible—pair with high-deductible health plans to combat rising costs (e.g., $1,500/month for some families).

• Depreciation Tips: Buy needed equipment/vehicles in high-income years for 100% bonus depreciation in 2026 (vehicles over 6,000 lbs qualify fully if meeting bed/weight rules). Recapture applies on sale, but it's a great deferral tool.

• IRS Realities: Audits are rare (<0.5% for most), but letters are common—save past returns, bookkeeping proof, and use certified mail. Red flags include large credits/deductions; education credits often trigger scrutiny.

• Missoula Networking: Join local BNI groups for referrals—one person per industry fosters community ties and business growth.

• Pro Tip: Educate yourself slightly—ask your CPA about QBI deductions, mileage (70¢/mile), home office, or crypto rules. Comprehensive teams (CPA + advisor + attorney) beat siloed advice.

Guest & Host Bios

• Sarah Brown, CPA: A Missoula native, Sarah earned degrees in Accounting and Management Information Systems from the University of Montana (2022), followed by a Master's in Accountancy (2023). After passing the CPA exams and working as an IT auditor at PwC in Portland, she returned to Missoula in 2024 to join Sax CPA, focusing on tax services for local businesses and individuals. Connect with Sarah for tax optimization in Montana.

• Robert Montes: Financial Advisor at Nexus Wealth Management in Missoula. With a unique background (biology major turned gunsmithing via GI Bill), Robert specializes in retirement planning, tax-efficient investing, and helping self-employed clients navigate S-Corps and 401(k)s.

• Josie Allred: Financial Advisor at Nexus Wealth Management. Josie brings fresh perspectives on small business strategies, health insurance challenges, and building client relationships in Missoula.

Resources & Links

• Sax CPA Website – Contact Sarah or the team for Missoula tax services.

• University of Montana Accounting Program – For aspiring CPAs.

• IRS 2026 Tax Deductions Guide – QBI, mileage (70¢/mile), home office.

• Solo 401(k) Limits 2026 – Up to $72,000+ contributions.

• Secure 2.0 Act Overview – Student loan/401(k) match rules (limited guidance—consult a pro).

• BNI Missoula Chapters – Join for local networking.

• Nexus Wealth Management – Book a free consult for financial planning in Montana.

Full Episode Transcript:

All right, guys. Welcome to our episode of Nexus Insights. Today, we have our guest, Miss Sarah Brown, on from SAK CPA, and we are going to be talking to her about a lot of different things. So, we'll be talking about taxes in general, your story, and just things that people can do to put themselves in the best possible position. I'm really excited to have you here and to get a chance to chat. And, um, I know when we first were talking, we talked about having you just kind of go through, um, you know, your origin story. It's always funny to say that like it's like oh so the origin story but um we're just going to kind of start there and so uh yeah please tell us about yourself. Tell the guest who you are, what you do and how you got to where you're at. Great. Um well yeah like Robert said my name is Sarah. I work at SAC CPA. Um I grew up in Missoula, Montana. So I've lived here pretty much my whole life. Moved to Portland for a few years to try and escape, but of course I ended up back here. Um, so yeah, I went to school here, elementary, middle, high school. Um, and then I went to the University of Montana and I studied accounting and management information systems were my two majors. And so I graduated from that in 2022, I think. Yeah. Um, and then did the Masters of Accounting program here at the University of Montana as well. Um, and graduated from that in 2023. And then right during the master's program and right after I was taking all the CPA exams and passed all those and then moved straight to Portland and started working for PWC as an IT auditor. Um and then did that for almost two years and came back to Missoula and wanted to get into tax. And so that's how I ended up at SAC CPA. And so that's kind of where I am now. And so and we talked a little bit about this and just kind of bouncing around from some of the things we're going to talk about. um you know tell us about why you went into you know be accounting at first why being a CPA you know you've kind of done both sides of it where you've done the corporate side now you're working more with individuals um what was it about going into that field that you know kind of got you excited because I know one of the goals that we have with the podcast is giving people the opportunity who are maybe looking at going into something in finance or just kind of you know giving them that option to have like be a fly on the wall and and have the opportunity to hear conversations that maybe they're not exposed to as much. tell us a little bit about that and why it was the fit for you. Um, my I I guess I kind of got lucky my freshman year of high school. I took an accounting class and Hellgate has a program called the finance academy and so I got really involved in that and so it's just you took a bunch of, you know, financial classes in high school to kind of get into that and I really liked the accounting side and so I decided I was just going to do that in college. Um, so I kind of feel like I got lucky and just kind of knew what I wanted to do. Um, and so I went I knew I wanted to do accounting and then um, I also did the management information systems because it is just such a big thing today. Like everyone we use it all day every day and so that felt like a good kind of supplement to accounting. Um, and I liked my IT classes a lot more than accounting classes. They're just more fun, not so boring and monotonous. But yeah, I'm sure a lot of people would describe it as fun. You're like accounting is so much more fun. You like what? What? Yeah, there's not that many people out there that have a good time in their accounting classes, I don't think. But, um, so that's why I ended up at PWC in audit, specifically the IT side of audit. Um, it's cuz I just liked those classes more. Yeah. And in college, I hated my tax classes. Like, I was I hated tax. Wasn't good at it. It was hard to learn. Um, just so many rules and regulations and everything. And that was it was the hardest CPA exam I took for sure. Um, so I knew I didn't want to go into tax like when I was coming out of college. And so I went to Portland. Um, wanted to work for a big company. You have to get a year of experience to get your CPA license. Um, and I knew I wanted to get out of Missoula because I'd been here my whole life. And so ended up at PBC and that was a really really cool opportunity because you get to work with big clients um, and be exposed to a lot of kind of big things that you don't see in Missoula necessarily. Um, so that was fun, but I wanted to come back to Missoula just to be closer to my family. And there's not a lot of audit opportunities in Missoula. There's a couple big firms where you can do that, but I kind of wanted to get out of audit and more at that point. I was kind of thinking about tax just because it's more of a community based field. I get to work with um people I know in Missoula, businesses I know in Missoula. Um, it's a cool way just to kind of see behind the scenes on lots of things that I never knew were happening. Lots of businesses in Missoula. So, it's been really cool. I'm I'm curious about I know that before we started recording, you and I were talking a little bit about like building your book of business. And so, you said you moved to Oregon. Um, and then I'm kind of curious honestly about what the that first year right out of college looked like for you because I know for a lot of people right out of college it's so hard to get that book of business. But you said you worked for a bigger company and so maybe was it when you moved back to Missoula was what that maybe that first year looked like for you starting um completely fresh, completely new in a small rural city. Yeah. Yeah. Definitely in Portland it's not you're not trying to get your own clients because the firms have, you know, multi-million dollar clients. We're not bringing them in. Um but then back in Missoula, I started working for Kelly Saxs at Sax CPA. I knew her from playing pickle ball with her. And so she's the owner of Sachs. Um, and so I didn't really have to come in bringing clients in. I'm an employee. Um, she already has a large book of clients. We're kind of maxed out um on capacity and so we're not trying to bring in a ton of new people. Um, so I didn't really didn't really have to do a ton of work around like building a book, which is nice because I kind of just got to focus on learning how to do taxes and learning all the ins and outs of taxes. And um I started doing payroll and bookkeeping for the firm for my first year, which is just a really good way to get more of like a full picture of clients and how their business works and it makes it a lot easier to do their taxes when you know kind of what's going on behind the scenes. Well, and that's something too. I mean, you've mentioned a couple different times about getting, you know, going through the CPA licensing process and what that looks like. Talking with CPAs pretty regularly, that to me is always like a scary exam. Um, you know, I was just talking with another CPA buddy of mine and he was asking about, you know, getting his uh his investments advisory license and he was like, "Yeah, I'm gonna have to study this much." And he was he was talking about it like it was a CPA exam. I was like, "It's hard, but it's not that hard." He was saying, you know, he spent, I think, 100 plus hours on average per block. So, why don't you just for the people who don't know, like what does that exam process look like when someone's working with the CPA? you know, what is just the barrier, the entry level that someone has to pass through? Because we see that there's people who work as CPAs, but then you also see people who um and I'm drawing a blank you might remember, but there's tax professionals who are not CPAs, but they're like a what is it? Enrolled agents. Enrolled agents. Thank you. And so maybe you can just kind of talk about the difference in licensing and just expertise and kind of fit on that what the process looks like. Yeah. Um so when I took the CPA exams is different than what they're doing now. They've changed it a little bit to make not easier but to make it I guess to encourage more people to take the exams because a lot of I mean there's a shortage of CPAs and the really difficult exams and the requirements to take the exams were definitely a barrier to a lot of people. Um but the requirements are still pretty rigorous. you have to have 120 credits um and some specific accounting credits I believe to take to even sit for the exams. Um which when I did it it was you needed 150 to even sit for the exams. So you pretty much had to have your master's program or like a triple major kind of um and so then there's four exams. They're each four hours. Um I think now you have I had 18 months to take them all. I think they've increased the amount of time you can take them now. Um, and yeah, you sit down for each exam for four hours, take it, and wait like a month. I think now you wait even longer. It's like 3 months that you wait to get your results back. It's really ridiculous. So, in that time, you have no idea if you've passed. You're just hoping and praying. Yeah. Hoping. And the the really tough part is knowing like because you don't know whether you passed. So, you kind of have to just move on to another exam and studying for that. And so if you do end up failing, you kind of have to go back and restudy everything. And it would be really nice if you knew the score right away. So you could just continue on with that same material and like restudy right away. But the the setup for exams is tough. And that's pretty different. Like you've just went through your exam, you know, finishing all that. And so like maybe the difference you could talk about with us like you go in and what that's like and you know if you f you know passed failed immediately like the screen on the computer is like oh you pass you fail. It doesn't exactly I don't think it tells you your score unless you get below a passing but it's not it's not even near as bad. And I think it's something like that we've alluded to or that you've alluded to is that the industry is like um and I was watching a video this morning actually because I was like oh CPA like what's what's some good questions? Um, and she was saying that most CPAs are going to be retired in 10 years. And so that to me is crazy because I'm like, "Oh my gosh, so many younger people are looking for jobs. They're looking for opportunity." Um, and there's so much opportunity in this field, but it's just like not happening for younger people. Yeah. And do you know why? Like I know that you've alluded to it, but like can you tell us more about why that is? You think a lot of it is because of the exams there? I mean, it was like a full year of studying, school, just like straight grind for a year. Um, and it was a ton of work. Yeah, it was hard. It was not fun. A lot of people don't want to do that. And there's other fields they can go into like finance where it's not so much of a barrier to get into a field that's growing and like um is not difficult to find jobs in typically. Yeah. Um, and I don't know if accountants just kind of had like a bad stigma kind of, but like a lot of people think it's really boring work and don't want to go into it and don't think it's like a growing field like it is, but there really is like a huge shortage of accountants and that's true that a ton of them are going to retire in the next 10 years. Yeah. And there's that's going to create an even bigger shortage. That's with what you're saying there too. It makes me because you're saying you have to have you said when you did it 150 credits. Is that right? You still have to get the 150 to get your license, but it doesn't have to be through a master's program. So, I mean, that right there is a big difference, too, because in our industry, a lot of people do go to college to work as a financial adviser, but you don't have to at all, which is huge. Like, I have my degree is not in finance at all. I was originally a biology major. And so, um, it's one of those things that I'll talk to people trying to get into this industry and they think they have to go to college and have all this, you know, college experience just to get into our field. And that's just not the case. And so, I can see how that would make it hard because again, you know, there's a lot of people like me who are who are advisers who are just like, I didn't go to school for that. I was a biology major and then I switched and I ended up getting a degree in all things of like uh firearms technology is what I think it is in technically. Yeah. So, when I got out of the military, I used my GI Bill to get um to get a degree working on guns, like gunsmithing, just because I thought it'd be fun. So, nothing to do with finance at all, you know, but I do have a degree. My mom was so proud of that. I like, "My son has a degree." And I was like, "Yeah, I really needed this, mom." Um, but you kind of were alluding into some of the challenges. I know um as we transition and we might hop back and forth on some of the things we're talking about, but um you know the challenge as a whole, I think this would be really good because again for younger people um we want to kind of paint a picture for people to see like hey there's opportunity out there and so maybe talking about where you see that as far as like with your field with the fact that so many people are retiring. you know, we t we've talked, you know, and we didn't really go into how we met, but we met through, you know, a business development group and just, um, you know, being in different groups, but, you know, different chapters, but the same group. And so, um, you know, that was one of the things you brought up to me is just how because the industry is losing, you know, CPAs, it's like people are kind of getting to the max of what their capabilities are and there's a shortage. So, what are you seeing there? Um, well, I think especially in Missoula, a lot of CPAs that at least when I was in the master's program at the university, I would say probably majority of our class left the state, um, and went to work somewhere else just because the opportunities are bigger, the money is typically better in bigger cities. Um, and there's not a ton of people that go into tax right out of school. I don't think a lot of them go into audit or some other kind of accounting related field. And so there's not just not a lot of opportunity in Missoula for that. And so I think for anyone anyone that's thinking about going into accounting and going the CPA route, it's definitely a really good path because there's going to be job security jobs available. And I think sometimes people are worried about like AI taking over accounting. And there are aspects that it can definitely take over and help with, especially like bookkeeping, payroll, simple tax returns. Um there's also a lot of like new complex things that are happening especially around crypto and um like decentralized finance where there's a lot of tax rules around that that just there's like pretty much no guidance and so those are like some of the really complex things that are just starting to happen and I think anyone going into the field like focusing on that would be a really good way to kind of put yourself ahead of the game and um bring in some probably pretty big clients. What what do you see with that? Because and I know that's got to be frustrating because you kind of alluded to I know with us the IRS or Congress will pass something and they'll like for us when we saw it with 401ks where they were talking about how hey now you can qualify for your match by paying your student loans. And so there's this huge thing of like oh you know because people be put in this spot where it's like I have to choose if I contribute to my 401k but then I'm not paying my student loans you know but then I'm missing out of the match for my 401k. So people are like in this weird spot and so uh with secure 2.0 they passed a law saying oh if you if you pay your student loans off then you're still eligible to get the match from your 401k but there's no guidance. Yeah. We just had a client asking us about that and I spent like hours trying to find anything and there's so little out there about it and and that's I've got I'm imagining because like we have a lot of overlap. I always feel like our careers are two opposite sides of the same coin. you guys, I feel like, are looking, you know, like what's happened, but then what can we do moving forward to to mitigate the taxes that you're paying and let's always playing by the rules, but operating within the rules that we have to to pay the the lowest amount. I have sorry, I want to learn more about what you were saying with the 401ks. I'm curious. So, is that still with corporate like private company 401ks too? Like how does that work for them as a like a business owner or as a a company? So it again there's there's not really any link guidance and so this is the hard thing that we have with our vendors as well is that it is allowed but then there's not really a way to document or prove it. So you're trying to do it through payroll where you you essentially have to get proof from the the employee who is also the previous student showing that they've made their payments on a regular basis. But again because that's not linked through payroll. How do you prove it? You know well and how does that work for the company? Are they going to start discriminating against people who have degrees because they're like, "Oh, like I mean, that's a good question. No one's ever asked me that." I mean, but again, it's one of those things where I think that you as the employee provide proof to the company. The company typically has a schedule they follow for making their matching contributions, but they can do it. It's kind of at their discretion. So, it just gets into this weird space where it's like, well, if they're doing it every payroll, but then you only get proof from people on a quarterly basis. It's like, well, when do they get their matching contribution then? Like, and then how do we track that? And like dotting all the eyes, crossing all the tees. So, again, I'm sure you see that. And that was kind of going to my original question is like it's got to be frustrating for you when the IRS essentially like lords over us and then especially with COVID, I saw where we were sending things and and we were getting communication from the IRS, they were so backlogged because of COVID that they weren't even getting to things for years. I mean, do you deal with that on a regular basis or what is your your interactions with the IRS on an ongoing basis? I mean, how how does that work for you? We deal with it pretty regularly. People, some of our clients will get letters for tax returns in 2021, 2022, the IRS is just suddenly catching up to and when they do their matching process, they'll find something that's missing and send a letter and then it I mean, the letter says, "Well, you need to respond within 30 days." I mean, this is from three years ago. Yeah. and then trying to call them is a whole another beast. And they're especially with um the government shutdown recently and there were a bunch of layoffs within the IRS because I know there was a huge kind of hiring push for the IRS a few years ago where they hired a ton of new agents. Yeah. And then a lot of those people got let go. Uh I just think with the new administration, they weren't looking to keep as many of those people around. Um, and I don't really know why cuz it's really like their main way that they earn money. Yeah. Um, they get I think I don't remember the number, but they earn a lot um of tax revenue by sending letters out and ask getting the money they owe. Um, so well, and and not to interrupt, I apologize, but like I'm just thinking of me myself, like the problem I've had too is that I had I believe it was last year within two years again, um, I got a letter from the IRS saying that we owed more in taxes because we had contributed to a traditional IRA for my wife. All right? And at that point of time, our income was under the income limits because we have a 401k. So we we were still under the income limits where we could deduct both. and they said she was not eligible to put money into the 401k because our the way our business is structured, I take a salary, but she just takes draws. Uh so she's taking distributions, you know, but she's still we still have household income that was above the minimums. And so like crawling the IRS to sit on hold for 2 and 1/2 hours to then have someone tell me that we weren't allowed to do this. And I was like, I know 100% we are allowed to do this. This is my job to know this. And it was really frustrating because essentially what they did, I was fighting it, but they told me they were going to put a lean against me. So what I ended up doing was I was like, "Oh my gosh, I paid it. I paid the penalty and then sure enough, I submitted all the paperwork to show them this is how it works. Oh, and then I got it back." But it's like this is ridiculous. Like there has to be a better way. And so I I can only imagine with you the amount of frustration that you have dealing with stuff like that. It's got to be I don't know. I don't know if there's any interesting stories you have that uh that maybe stand out, but I I that to me is just like the IRSMR is like I just despise dealing with them, you know? I don't think I have any stories that are too much more interesting than that. It's pretty much that same thing like like we'll get the letters, we'll call them, try and figure it out. They don't know what's going on either half the time. Yeah. Um, well, one of the things that really got me frustrated in that experience is that when I called and I was talking to this guy and he was asking me questions from tax returns that were from years ago and he's like, "Well, if you can't find the answer in 3 minutes or less, then I have to hang up and continue this call with some or have to go to another call." And I was like I I was getting frustrated. I was like, "Well, you're asking me questions I don't know. Just let me pull it up. Give me a sec here." You know, and so that was, you know, always fun. I guess that like leaves me to question what do people need to save as far as like preparing for tax returns or preparing to like have that um letter be sent to them and then having to be like okay what information do I need to have and I need to save um in order to protect myself. The main thing that would be good to save was is just past year's tax returns. A lot of times they'll need numbers from other years. um if you have like a schedule C um as a business or an S corp as a business saving like all your bookkeeping documentation so you can go back and like show proof of what your income was um proof of what your expenses were if you're like trying to push maybe some more risky tax strategies through um it'd be really good to document those like completely and be able to have proof around everything you're trained we've talked about things like the Augusta rule. It's like, hey, if you're going to do it, it's like you're shining a light on yourself like, hey, the the IRS is probably going to be curious about this. And um and you can correct if this is, you know, you know, if this is right or wrong, but I'm pretty sure because I I I did some a little bit of a deeper dive into this probably about two or three months ago just to kind of see like what the percentage is of people that are actually getting audited. And from what I understand, it seems like a very very low amount every year. It's like half a percent of normal Main Street Middle America. So like there's like a 99.5% chance that most people are not going to get audited. And then it looked like if people's incomes got over about like 1 to$1.5 million then it starts to step up to close to maybe 2%. But for the most part it sounds like unless you're going crazy it's not something where people are just getting audited left and right. So and maybe this is something we could talk about as well. I know for us when we're dealing with 401ks when plans get audited it's typically because there's a couple of red flags. So there are red flags that the do will get hits on and then there will be complaints. So there might be a formal complaint from an employee who left or something that they said happened and so then you stack up two or three different things and now it triggers an audit. Do you see it's something similar for you guys where people is there like things that happen usually in conjunction like hey if you have a you know maybe but if you have a b and c happen you're probably like now you're getting in the higher likelihood of the IRS paying attention to what you're doing or any ideas there. Yeah, we don't I haven't seen an audit since I've been working there. Like, knock on wood. Um, but we do see a lot of people get letters. Yeah. And there's definitely things that trigger people to get letters. And a lot of times it's credits or deductions. Um, the education credit is a big one that they look at pretty consistently because you have typically they require a 1098T showing the tuition you paid to a university. Um, if you have scholarships, that reduces the amount of credit you're eligible for. if you like the most recent one was we had a client who has a um child who goes to a foreign university um in the UK and she was technically eligible for the credit through some like the lifetime learning credit and so we got all this documentation together everything and didn't have the 1098T cuz they're not in the United States and of course they got a letter from the IRS saying we don't have this we need this this and this from actually they didn't even say what they needed they said we need you need to yes you should Oh yeah. Yeah. And we called them and they said, "Well, just try and get something together." Yeah. That was we had again for us just now we're just kind of bitching about the IRS. Sorry, IRS. Don't audit me. Um but yeah, that was the same thing thankfully like and I always tell people if you're sending something, it needs to be certified mail. Like you need to have copies. You need to make sure that you can prove that you sent this. And and I'm speaking from experience because that's what happened to me. And when I uh when we went from being just on a schedule C to taking our escort election, um they the year that after we did that, they tried to say that we didn't qualify because they and this was during COVID. And thank God, my CPA at the time, he had the copy of the receipt showing that we sent it certified mail showing that it had been received. And it was just like, oh Lord, thank you. Because then again, it was like, hey, sorry, sucks to suck. Like we did what we were supposed to do. And so then they did, everything worked out. But I was just like, oh, thank God. because I didn't have it anymore, but he had a copy of it. Well, I'm curious, too. Is there like a website or a program or some sort of software that you recommend to keep track of all these different things, especially for smaller business owners who maybe like just don't know enough about taxes and and everything pertaining to that? Yeah, I guess as a small business owner for keeping track of stuff, we don't really have a good system. We do we use paper mostly. people bring us stacks of their tax documents and uh but for small businesses, QuickBooks is the tool we recommend to everyone. It's kind of the biggest bookkeeping tool out there. They have a monopoly kind of there. That's what I was asking because it seems like every CPA, every bookkeeper, the overwhelming majority seem to use QuickBooks. Is it that much better or they're It is It really is that much better. And they charge for it. They are able to kind of charge whatever they want. QuickBooks is so expensive. Um, yeah, and they're you need to get them as a sponsor. Yeah, true. Quickbooks, what's going on? Let's go. And like as a most accountants you'll talk to will love QuickBooks Desktop because it's just a lot better and easier to use. I've heard that too. We don't like the online version. Yeah. And we we don't like online. Um, sorry QuickBooks, but they're definitely pushing everything online. You can't even download QuickBooks Desktop anymore. Yep. And so eventually we're going to be completely online and we're kind of just having to deal with that and figure it out as we go. But it's a big transition. And um are you guys working a lot with AI and with newer technology to push your firm excessively higher than other firms that maybe are still using slower methods? Not really. Like I I think almost every single firm in town uses QuickBooks as their main software for bookkeeping at least. Um, we don't use a lot of AI in our work right now. I think eventually we could get to that, but for now it's mostly just still manual entry for us. And AI could help a lot with that. Bookkeeping, it could help a lot with bookkeeping, but we kind of do it all manually still through QuickBooks. QuickBooks does has have AI that you can integrate with it. We just haven't kind of explored that yet. have you seen like uh and that's one thing I did want to get into because again I know you've talked about working when you were at PWC obviously working for bigger clients um and that experience in more the audit world versus doing what you're doing now with more working with individuals. What are the two experiences been like in that like I'm sure there's things that you've kind of learned on both that you wouldn't have learned unless you had been there. Like what did you take away from working with some of those bigger companies and just like oh that's kind of cool. I never thought about that or this is a good lesson and then same story. What about working with individuals? I mean, are there things that you've kind of seen that you're like, oh man, I never would have known this unless I worked for this big organization? That's a good question. I guess at the big firms just like the amount of money they have to put towards everything they do essentially like they built PWC built their own AI platform that they use within the firm. Um, and yeah, I think just like the amount of resources they have to build you up as an employee is really cool. And they're constantly sending you on trainings all over the country. And the client I was with, I was traveling all over the country. Um, doing their audit work, which was just a really cool opportunity. I guess that's not necessarily like learning, but I got purposfully not saying the client, and that's cool if you are because I got a video. This is their comp their their campus while I was in the army. And it was so cool and it was like people playing frisbee out and about like in the middle of the day and I was like, "Oh, this is a cool place." You know, they gave me a lot of cool gear because basically they pulled us over and they had things they were trying to break into in the military space where um they're like letting us in the Ranger Regiment test stuff. And so it was stupid things like socks or boots or things like that. And I was like and so me and a handful of guys got to go to their campus and got us like felt like we were like professional athletes. I was like, "This is fancy," you know? So, yeah, it was really cool. I don't I don't necessarily know the rules about talking about clients after working there, but most people can guess it's a large shoe company that's based out of Portland. Well, they sell everything now, but yeah, we worked on their campus a couple days a week, which is uh incredible. Just very cool. And then I guess coming like to Missoula, working to for a much like way smaller firm. There's just four of us there, five of us now actually. Um, and so that's just a completely different experience. And it was just it's really cool. Like I really love it because I get to work so much in the community that I know, like where I grew up. And so for me, like the best part about it has just been getting to like meet with clients from Missoula, meet with people I know from Missoula, bringing like my friends and family members that are in Missoula to the firm to do their taxes. So that's been the best part for me. That's really cool. I had a question, but I wasn't going to ask it. I was just give you a chance. I feel like I've been talking a lot, so I was just like, okay, you I know that you mentioned helping your friends. You just barely said you want to help your friends and your family come into there. I've heard that a lot of CPAs are raising their minimums just because the the demand for CPAs is going higher and so a lot of individual people aren't able to afford those minimums. How can maybe someone who is a really small business owner um do you still recommend QuickBooks or how to get into like CPA work or start learning about more things like that? Um yeah, for small business owners who aren't ready to kind of take the jump to a CPA because it's definitely not inexpensive. It's an expensive service to use, especially if like we're doing your bookkeeping, payroll, taxes, if you have like an escorp and we're doing a couple different kinds of tax returns, it gets pretty expensive. Um, but for a small business who's not ready to make that jump yet, I would definitely recommend QuickBooks, it's worth the money just to be able to have your books in such good order like that. Um, you have your profit and loss statement, your balance sheet, and if you have those pretty clean and like your your books reconciled, um, I would definitely recommend reconciling. That's kind of a whole different topic. Feel like this is already just an ad for like QuickBooks. Yeah. Sponsored by QuickBooks. Yeah. Oh jeez. QuickBooks for real. Come on, guys. Come on. Yeah. And sorry, were you done? Yeah, just having your like books in order is going to be the biggest thing to be able to do your own taxes and it gets more comp like if you have your own business doing your taxes on Turbo Tax. I think it's possible. I don't know how easy it is. Um they'll definitely charge you for it and I don't know the rates or anything. I think it's really inexpensive because I have a 1099. I do or I do Turboax still. Yeah, your your situation will be simpler though just because like again how it's it's pretty basic still and like you schedule C everything and easy that's like really really small schedule C pretty simple tax return um yeah definitely possible to do it on your own um once you start getting more complicated um like just bigger businesses and payroll payroll is pretty complex well that's I'm sorry I'm interrupting, but that that is really it. I mean, like that's like as I've seen for myself even we're not like a huge huge organization, but like there's files, there's forms you have to file, there's, you know, there's things that you have to have done in a timely fashion. There's this, there's that. And like so even with the clients, I'll talk to them about is like if you're not ready to do anything, maybe start with a bookkeeper. Yeah, definitely start with a bookkeeper because then you get someone who's paying attention doing all those things you were just talking about so your books line up. So then when you go to your CPA or however you're doing your taxes at the end of the year, even if they're not working with you all year long, you can be like, "Here's something neat, clean, tidy, this is everything. Here we go." And I feel like that has to make your job a lot easier versus the business owner who shows up with a shoe box of receipts. Yeah. You know, and even from a cost standpoint, like I'm sure you have to charge a lot more for those people versus those who keep it organized. So it's like, pay me now or pay me later. like, hey, maybe hiring a bookkeeper, spending the $1, $150 a month versus having to pay your CPA, you know, however many more hours to organize everything. It's like, well, what are you charging per hour now? It's like, you probably would have actually saved money and been much more organized just to do it right the first time. Yeah. Yeah. And that's it's a I think a good service that we offer as a firm is that we do bookkeeping and peril inhouse. So, clients could kind of have it all done in one place. But, we do have a lot of clients that have bookkeepers around Missoula um that then bring us their books and that's great, too. So, kind of talking about uh best practices, too. I know we were going through and just, you know, simple steps that individuals can take to better position themselves financially. Um, you know, again, looking from a tax standpoint, are there any things that stand out that you're like, you know, hey, when we talk to people and and I know later we're going to go more into specifics on like tax saving tips. So you can allude to that and you know feel free we can go wherever we want to but like are there anything that stands out to you like hey if I was giving someone best practices especially as a younger person like hey pay attention to these things. Um is there anything that stands out to you that you're seeing like this is kind of a a good place to start for people who aren't sure what they should be doing yet. Yeah. Um I think this kind of like ventures onto your side of the thing. At least the notes I made. I don't necessarily have a bunch of taxsaving tips for young people that are just starting out. um especially if you're a W2 employee. Taking standard deduction. Yeah, taking standard deduction. There's not too much you can do. You can contribute to a traditional um IRA if if you're qualified to do so, if you're not contributing through your job. Um but some notes I made was just like putting money towards retirement every month is a really good place to start for younger individuals. Utilize the 401k and the match if your company has it. Um we always encourage that. Open a Roth IRA as soon as you have earned income is always a good idea. That's not going to save Roth doesn't save you money on taxes um on your tax return. Yeah. Not this year. Yeah. Not this year. Maybe as you're doing that because this is something that we were talking about and um just kind of diving into one of those silly questions like, "Oh yeah, this is something that we should go through." Explaining the difference between above the line and below the line deductions because that's something that people will ask about and especially when they're maybe on a W2 and they're just taking a standard deduction. I'll have people say, "Well, does it even make sense for me to contribute to an IRA, especially if they're going to go the pre-tax route and they're going to try and take that deduction?" They're like, "Well, do I even get a benefit if I'm just taking a standard deduction?" Would you mind just explaining that to people? Yeah. So, above the line deductions affect your AGI. So, that's going to be eligibility for credits like child tax credit, uh, education credit, um, health insurance premiums. So those are above the line and they affect your adjusted gross income, your AGI. And so your AGI impacts your eligibility for some of those credits. Um, so what if you can do things to lower your AGI, that's usually better. So that's above the line deduction because it's going to mean that if your income is below a certain amount, you're still eligible to get the child tax credit. You're eligible to take the education credit. Um and so what you to you want to lower your above the line deductions and then your below the line deductions, right? So um yeah, your above the line you can take regardless if you're taking the standard deduction or itemizing. So then below the line that just affects your taxable income. So that's what's going to lower like the tax that you're or the income that you're taxed on. Um, and so that's stuff like your home mortgage interest, your real estate taxes, your state taxes, charity, but that's only if you're itemizing. Yeah. No. And just so and to make sure I understand because like the way I look at it is that if someone for example is making 100 grand and they contribute pre-tax assets to their 401k or pre-tax dollars, excuse me, of 10 grand above the line, even if they were just taking the standard deduction, their adjusted gross income, the AGI is going to be reduced from 100 to, in this example, 90 because they put in $10,000 of pre-tax money. Um, and so now when they take their standard deduction, it's off of that 90, right? And so then, and there's things that they can do like I I know things that people can do. I I am going to be limited in my knowledge because I'm thinking of like the investment world where they can put into, you know, a traditional IRA, you know, pre-tax 401k, they can contribute to an HSA. Um, what are are there other things out there that are kind of those above the line type deductions? Yeah, the main ones you mentioned, IRA, um, the self-employment tax. So, if you have a schedule C forever, um that's an above the line deduction, uh student loan interest is above the line. And then this year, the new ones um are the deduction for tips, overtime, and car interest. So, those are going to be above the line, too. And there's kind of a whole new form for those this year. So, it's going to be different for us. We have to do some learning and CP classes to kind of get all caught up on that. And of course, there's not that much guidance out on that either. Yeah. Yeah, that's good to know. I didn't realize that. Um what about so we were talking about things that people could do u to put themselves in a better position. What about some of the common pitfalls you see especially for you know younger business owners. I mean again for people who are on a W2 um it's pretty standard. It was pretty straightforward. But like for people who are maybe starting a business because I see this and I think I told you the story before of I have um a client where uh his wife and him I have this gentleman I've worked with who he just decided he was not going to pay taxes. And he didn't pay taxes, no joke, for probably 15 to 20 years. And I I told this gentleman, I was like, "Hey, you're this is going to catch up with you." Yeah. And his wife was like, "This is going to catch up with you." He was like, "I don't I'm not doing it." And so guess what? it caught up to him and sure enough like he ended up having you can imagine you know 15 plus years of back taxes is insane amount and you know I don't know the complete complete details however in talking with his wife like they ended up separating and I'm very confident that this had a lot to do with it because it's like I'm not getting dragged into your tax debt because you're never going to get away from this. So like what are some of the things that you see for people that as they're starting the business maybe common mistakes that they're making that kind of get them into trouble longer term? Yeah, kind actually kind of just what you were saying is like not filing taxes. We have a lot we see it pretty often people come to us that haven't filed taxes for pretty good number of years and it's usually right when they start their business. they suddenly have all this work they're trying to do to get their business going and they have income and expenses and they're not keeping track of it and it just kind of goes by the wayside and they want to get to it and they they know they need to. Um, and it's just so hard for them to then have to go back and add up all their income, add up all their expenses and get their taxes filed. So, that's definitely a common one we see is just kind of lacking in the tax organization side and bookkeeping side when they start. Mhm. Um, another thing that's common that can create problems down the line is taking loans out to cover like operating expenses. Um, especially for escorps because then you get into some problems with basis and um taking distributions over basis which then creates gains and it gets pretty complicated and um so if you're using loans to kind of cover your your own pay and your income and your operating expenses, you can get into trouble there. Of course, small businesses sometimes just need to to get started, but it definitely can create problems. Well, and I feel like there's like two different types of ex like sides of extremism where people are like, "Nope, I'm not paying taxes ever. I have too much to worry about." Um, and then they come to you and they're like, "Oh, I actually never paid taxes. I should probably um figure out my life at some point." Versus you have the other type of people who um believe that tax planning is tax avoidance. Yeah. and have this idea that, you know, making money is evil, like avoiding paying taxes is evil. And so, what do you see with that as far as like um I guess how would you explain that to people? Yeah, I think a lot of it would just be like kind of general education about what tax planning is. And a lot of tax planning is just kind of timing, honestly. figuring out timing on if you're selling assets or if you're going to take a big distribution from your IRA or something and kind of figuring out timing on when some years that you might have lower income is a better year to take a distribution from your IRA or roll over into a Roth when you're going to have lower income. There's a lot of planning tools and like tips we can give out to people like that. tax avoidance is different be like if you are you know earning cash under the table and just putting it under your mattress or something and not reporting it. Um but yeah I think like once we sit down with clients and kind of tell them the different tools they have to plan out how to reduce their taxes in a legal way. I mean, they understand and are usually pretty I definitely feel like it's the government's in way of incentivizing people to start businesses by saying like we're like we're going to incentivize you to do all these different things um and build our economy if you can just get going. And so when people are like starting up that business for the first time, what are some benefits for them? Because you said they take out loans on them. What else have you seen where it's like these are some things that'll benefit you? Yeah, I think businesses that are just starting out will typically have quite a few expenses. They might have losses in their first few years. Um, and so that's not necessarily a benefit to them because they might not be earning as much income as they want, but their taxes are going to be low in those years just because they don't have a bunch of income. And so that can definitely be a benefit to businesses starting out because they're not burdened by all this tax in their first few years. They can be. I mean, if they're making a bunch of income, of course. Yeah. I've seen too for like that's kind of the path that I've and I followed this myself and I've kind of walked through with people is like look when you're first starting you're probably just going to 1099 everything you're going to get schedule C you're not making a ton of money yet so like you probably don't really have to worry much about taxes because you're going to be in a very low federal bracket and honestly after your standard deduction like I know when I first got the army my first few years I think I was making like after everything like $30,000 $35,000 you know was my my like net and then it's like oh wow That was fun. Um, but then you do you start and and what I found for my own self personally is that I didn't do as good of a job planning ahead for my taxes. I always retroactively learned the hard lesson. And I think that's something I wish people would learn a little bit better and I try and coach some of our clients is that if you're doing things right, your income's going to start spiking. And so you have to preemptively start planning for that. So it means you have to preemptively, you know, go from being on a 1099 to setting up an S corporation. You have to preemptively set up those employer sponsored plans that maybe setting up a simple IRA or maybe even a 401k so that you have those vehicles where you can start putting more away and you're not like scrambling. Like literally after this right here, I'm heading over to meet with a gentleman who's rushing to try and get uh some type of simple IRA set up before the end of before the end of the year because he's got like 20 grand. he wants to drop into it and it's like all right we can do it because he's a solo corporation but if he had employees I there would basically be like we're past the deadline bro there's nothing we can do because there's there's disclosure periods that we have to follow and so um well really quick too while we're on the S corporation what are the benefits with that because I don't think a lot of people yeah we should think a lot of people understand what that means and it's just kind of a word or like a different way to say you know you're self-employed yeah so an escorp the main tax savings on an escort is going to provide a self-employment tax savings. So, most businesses when they start out, they are schedule C on their tax return, which means that you report all the income on your individual tax return. And all of that profit that you receive from your business is subject to the self-employment tax, which is social security, Medicare. Um, yeah, just those two. And you pay the employee and the employer portion on that because you're not a W2 employee. Um, so you pay both, which is I think 15.3%. 15.6. 15.6. Yeah, somewhere in the 15. And so that's 15. It says 7.6 to something. So yeah, it's somewhere around. Yeah. Yeah. And so that tax is pretty high if you have a big profit um on your business. That's Yeah. 15% on top of the income tax you pay on that. So selfmployment tax is in addition to your regular income tax rate. And so when you become an escorp, um, you basically transition your business to its own tax return. It's taxed on a form called 1120S. And when you move to an S corp, you have all your income and expenses still the same, but you end up paying yourself a salary. You put yourself on a W2. So you're a W2 employee of your own business. And so when you do that, you only pay the self-employment tax on your W2 income. And so then the rest of your business's profit is not subject to self-employment tax. It passes through to your personal tax return where it's taxed at a regular income tax rate, your whatever your marginal effective rate is, but it's not the rest of that income isn't subject to selfmployment. So it's a huge tax savings. Um, and the IRS is like they do scrutinize it pretty well because of how much tax you can save. Well, do they audit you personally or do they audit the business? Because I think that would be good to know, too. I think they could do both. Probably. They can do both. Yeah, they would do both probably if they're auditing one. But so when you start putting yourself on salary, the IRS has guidance out there about how much you have to pay yourself. You can't just say, "Well, I think I'm just going to pay myself like $10,000 and then my tax is only like, you know, $1,500." You have to pay yourself a reasonable compensation. And so that's they have some guidance about how to determine that. And um basically, it's just what you'd be paid if you were a W, like an employee of another company doing the same thing. I think you can look around to like other businesses that are also paying that same employee. Well, there there's different things that we'll do. So in Montana, and I'm imagining it's the same in other states, there's an actual Montana wage law or want they have a a document every year that they put out that that literally basically every walk of life and career. They give you a lower yield and then a higher or higher amount that the average person in that industry will make. And then they give you a median. And so it is really nice because you can go and just kind of look at the low end, the high end, and just play it kind of safe like, oh, I'm going to play myself around this amount, which is within the limits. So if I get audited, I'm doing this the right way. Um, you know, and I think that's that's kind of that's what I've done. Um, and yeah, looking at that too, one of the things that I'll have clients really struggle with is why that difference and, you know, your, you know, your social security, your Medicare taxes kind of just disappears into the ether, you know. Um, but it's also too the understanding the power of being able to take the distributions. And so what I what I try and really get people to understand is the reason you're not um you know those distributions can save you as well is because and you can correct me if I'm wrong because if I'm wrong then I might just edit this out. All right because I've been telling everyone this but that's treated as unearned income as well, right? So that's why you're not paying some of those taxes because like if you're taking a distribution it'd be no different than if I owned another company, you know, as part of a partial owner if I'm not working there but I still get to participate in the distributions. It's unearned income. And so that's one of those things too that's like the escorp gives you the ability where yes, part of your income is going to be earned on your W2. Part of it's in the form of distributions, which is technically unearned income. So again, that's why it's not subject to your payroll taxes like social security and Medicare. Yeah. I mean, I would say, no, you're not wrong. Distributions there. I mean, they're taxed, but they're kind of not taxed. It doesn't feel like they're taxed because you're taking it from the profit that you earn. But you still have to report all of that income. Your distributions don't count as an expense against your business. And so they're not reducing your profit for your business. You can just take out however much money you need. I mean, if you have it, you can take it, but you're still reporting all your income, all your expenses. Um, and so there's there's a point where like it makes sense to go to escorp and there's a point where it makes sense to stay as a schedule C because if you're a schedule C and your profit is 60,000 and you're like doing a counseling business where your reasonable compensation is also 60,000. You're still paying self-employment tax on the full profit. I mean your wages are going to bring your actual like business profit down to zero because you're going to deduct that from your that's an expense. your wages are an expense, so that's zero. But then you pay 60 you pay self-employment taxes on $60,000 of W2 income. So that's like a wash basically. Another thing I've seen too is that like I'll have people who ask me that exact question like when should I start, you know, when should I form an S corporation? And there's two different parts of that because there is the liability side which is a whole another conversation. And I' I've mentioned that to people too is that if you ask your attorney that question, your CPA that question, your financial adviser that question, you might get different answers because the attorney is looking at things from a liability mitigation standpoint, the CPA is going to be looking at it from a tax mitigation standpoint, and the financial adviser is going to be looking at it from an investment standpoint. And so there could be different answers. So, you need to get counsel from all of the above. Um, but when you're looking at making that move, that can be one of those things that if you do it too early, it it can kind of hurt you because there are additional expenses like you have to pay for an additional tax return. Um, and if you're like for me earlier on in my career, just keeping a schedule C made sense because I had so little income that my income was actually below the reasonable real, you know, the reasonable paid thing. And then, you know, like a lot of times it didn't even make sense to itemize yet because my expenses were less than the standard deduction. So, it's like there's no real reason to form an S corporation yet because the tax savings isn't better than what I'm just doing over here because my income was still so low. But then when you do start getting to the point where after your expenses, maybe you have $60,000 of profits or $80,000 of profits. Well, now you can start looking like, okay, well, maybe I form an escort because maybe I'm making 80 grand, but a reasonable wage I could pay myself is 55. That's reasonable. And now I can pay less self-employment taxes by doing it this way. So, it is kind of that balancing act, you know, and what are some of the things that you guys look for as far as when you're telling people to transition from being on a 1099 to looking at doing something? Let's let's stick with escort because that's going to be the primary one. We don't see a lot of CC corps out here. Yeah, we don't do C corps, so I don't I don't know. You don't know. I have one client that has a C corp. Yeah, one guy. Yeah. But for S corps, we typically recommend that transition when clients are earning between 85 and 100,000 in net profit. So after all their expenses, they still have like yeah 85 to 100 in profit. And that they're expecting to consistently earn that much or more in future years. That's when it makes sense because it is it it does increase cost. Payroll is really expensive to run for businesses. Um especially if you have someone else do it, if you use QuickBooks, however you do it, payroll is expensive and you have to um be very compliant. The IRS is very strict about payroll. Um and so that's really important. And then yeah, you're paying for another tax return to be done. Um and so yeah, that's where we typically see the benefits kick in. 85 to 100 in profit. And that's when we'll tend to recommend it. Well, and and with that too, like we kind of talked about um you know, small businesses and I know we were talking about different things from a tax planning standpoint. Um when do you you kind of when we were talking off camera um and planning for this, you were kind of going through like what the steps are that you'll walk through if someone comes to you like, "Hey, I'm looking for ways to start cutting my taxes." And you said, "Okay, number one is we go through escort, then we start talking about retirement plans." Like what is what does that conversation look like typically for someone? Typically, no matter if they're CC Corp or S Corp, one of the first things is retirement and how they're saving because that can be a big deduction. You can I mean, depending on the different plan you choose, there's lots of different ways it can save you on taxes. Um, you typically ask about HSAs if that's if they're eligible for them. We will ask about health insurance a lot. That's one of the biggest barriers for self-employed businesses and that's kind of a whole different subject but health insurance is so expensive for small businesses. So expensive. Um and sorry like random story. I remember we didn't even have health insurance like like a lot of my life growing up cuz my dad was a small business owner and so it was either like Medicare and it wasn't like we were like poor or anything. It was genuinely like it was just so expensive. Yeah. Mine's $1,500 a month right now. That's insane. Yeah. So that comes out to however much per year. Like that's crazy. That's great. Yeah. Trust me. I'm I'm working on getting it lower today or I have another appointment today where I was like, "Oh, great. My health insurance is 20 grand a year now." That's insane. And we never go to the doctor. We're in great health. Yeah. And it's 20 grand a year. And if you do go to the doctor, you're still you're paying them more. So I know that you guys have mentioned it like a couple times that you guys met at a like a bizto business meeting. Can you tell us more about that? Because I'm really curious about that. I don't go to those yet. Um but yeah, what do you guys talk about there and like how did that kind of come into fruition? Yeah, it's a cool um kind of referral network group within town. I think there's three or four groups, four within Missoula. And so each group can have one person per industry essentially. So it'll be one CPA, one financial adviser, one realtor, whatever. And so I it's probably a little different how our meetings go. Maybe um Robert and I are different groups, but essentially typically a meeting will go we'll either do some type of training for how to, you know, get new clients or best referrals for each other or um just kind of trainings about business development in general. And other times we'll do presentations from different members in the group. And so we'll get to really know their business. And so then when we're talking to our own clients, we can e easily have a referral for them um for lots of different types of businesses in town. How did you first start going or how did you even hear about it? Um someone that I went to college with reached out to me and asked me to join the group and so I went and thought it was a really cool opportunity just to kind of get even more involved in the community and get my name out there. Um so it's been really good. I've been in there about I think a year and a half now. Yeah. And I think one of the powerful things that a lot of people miss with these groups is that because I'm Yeah, we're in different groups. I'm the president of our group. Um and so each group is like its own unique thing and that you can kind of build it the way you want to, but there's a framework that you we all follow. And so what I'll talk to people about with these types of groups is that it makes it really easy to like if I would have just called you out of the blue like without that because I did call her out of the blue. I literally called you one day. like, hey, I because I was I've been looking to network with younger CPAs because I have one CPA partner that I do a lot of business with. However, very similar situation, like he's pretty much tapped out on what he can do, so I need more referral partners. Yeah. Um, so if you're a good CPA out there, hey, maybe you could do that. Um, but uh but yeah, so I reached out and just being able to use the language of like, hey, you know, we call meeting up a power hour. It's just, you know, fun thing to say like, oh, it's a power hour, you know, but like using that and I was like, hey, I'd love to connect. Maybe we do a power hour. It makes it really easy where it's a very warm introduction because all of us understand the power of center of influence referrals, but it's just I think one of the secret sauces with biz that no one talks about is that if nothing else, you know that the person you're talking to can commit to showing up to a meeting at the same time once a week, right? Once a week they will be there. And and so at least if they say they're going to be somewhere, they're there. And in our world today, that's just not always the case. And so I think that ends up being a good starting point for people. Yeah. So I know that we've gone into how you started um we got into the S corporation and just kind of following that line of smaller business owners. How else and what are some other taxsaving strategies that they can use um to help them? Yeah. Um so definitely retirement. I know we've kind of covered that briefly. Um, but retirement's probably the biggest way that we recommend businesses save money after they go to escortp. Um, they can also depreciation is another big one. Um, and so depreciation is getting to expense assets basically over a period of time or in one year sometimes. Um, and so if there's equipment you need, vehicles you need, and if if you're in a high income year, we'll recommend buying the equip the things that you need. We don't we never recommend just going out and buying things that you don't need or aren't going to need for a few years just to reduce your tax. That can, you know, lead to some problems later down the line. But if you're in a high income year and you're like, "Okay, my work truck's pretty old." That's probably a good year to buy a new truck. Um, and I think in 2025 we can write off pretty much the entire amount in the first year. And so that can be a really helpful tool for businesses to lower their profit and pay less tax on that um because they're able to write off these huge expenses in the first year. There's things that you can't depreciate fully in the first year like luxury vehicles. The IRS doesn't want you to go buy your new RS7 by RS7 and be able to write off the whole thing. Could you imagine being a like a construction owner too and just going and buying like a Mercedes like, "Yeah, it's it's a G Wagon, baby. Let's go. 6,000 lb. Here we are." Hauling trailers. Yeah. So, they have some pretty specific rules around the auto depreciation specifically and they get kind of complex. They have a bunch of different rules for different vehicles, different weights of vehicles, different classes of vehicles. Um, but yeah, they're a good and I know because just so people know because this is one of those hot topics that people ask like um where do people who are looking for that like that's a specific section the IRS on what they can and can't do with vehicles. Where would they even start their search or if they're going to ask their their CPA about that? Could you just kind of go into what that is and maybe some of those like little rules on on what exists for different vehicles? Yeah, definitely starting the search would be to like Google your vehicle type and like what you can depreciate in the first year. The IRS doesn't really list specific vehicles, but you'll they list the types that are um like luxury or one example specifically is trucks. They have some kind of pretty specific rules about how you can depreciate them, especially in past years. Um there's two three types of depreciation. There's your regular depreciation, 179, and bonus or special depreciation. And so Congress kind of goes back and forth with how much you can take each year. And so I think this last year it was or in 2024 you could take 60% of some assets and then this year it's going up to 100 I think. So for a lot of things you're going to be able to take the full amount this year. But for trucks like if it's over 6,000 lb and it has a long bed then you can write off the full amount. In 2024 if it was over 6,000 lbs but didn't have a long bed then you could only write off up to like 31,000 or something some specific amount when that first came out. I don't know if this is true and this is just me repeating something that a friend of mine who tries to be savvy and I kind of take everything he says with a grain of salt like all right maybe but he bought an electric car because of the way it was built they were it was over 6,000 lbs and so he was able to fully depreciate it because it wasn't categorized as a luxury vehicle and he was like well I bought this because it's so heavy but it's still just a normal car so I was like I don't know yeah that that probably did qualify and then he also probably got the $7,000 electric vehicle. I think he did. Yeah, he was. So, that's a really good benefit that's going away. I'm really kind not happy that he did that because uh he's the kind of guy if he's watching I don't want to say his name because he g me crap, but he's the kind of guy he's like, "I told you. See, I knew I'm smarter than you." I was like, "Congratulations, bro. You did it." Um, no, that's so And then other than the vehicle stuff, like that's always something else I wonder about too, like because you were talking about with standard depreciation. So, let's talk about like when people can't like fully depreciate like a truck, like how does that work for a vehicle? Because because of me, like I bought a car. My my CPA pretty much was like, "Hey, dude. You like driving nice cars?" Like, "Yes, I do." Like, "Good. Every five years, you're going to buy a new car." And that's just kind of become part of the standard. Like with my wife, same story. We're going to be buying her a new car this year. And and again, there's other more effective ways that we could still reduce our taxes, but you also have to enjoy life. And so, it's like, hey, you know what? Could we take this money and throw it into a a 401k? Yeah, we could, but I want to drive a nice car, too, you know? So, like, what what does that look like for standard depreciation on vehicles? Um, typically it'd be over five years. Vehicles are depreciated over five years. So, you take however much you can in the first year. Um, and then whatever's left is going to be depreciated over five years. And most people, I think, will do the double declining depreciation method. Depreciation is so complicated. Yeah. Um, there's so many different ways you can depreciate things and like just it's so complicated. Yeah. Um, but then you'll get to depreciate a pretty good amount in the second year you own it, less in the third year, and by the fifth year you're down to zero. And then depreciation, how it works is basically kind of like a temporary deduction that you get to take. And so when you go to sell that car, you sell your business, you have to do depreciation recapture. And so you kind of have to pay you pay ordinary taxes back on that depreciation. So the government lets you take this upfront deduction for these assets you buy, vehicles, equipment, and then when you go to sell it, you might have a if you have a capital gain, you have to pay taxes on that. Um, and then you add the depreciation back into it and have to pay ordinary tax on that. So, it's it's a good tool to use in high income years because you're going to reduce your income and then down the line if your business is kind of dwindling or whatever. Um, and you're going to get rid of those assets, those could be good years to pay back on the depreciation recapture. And going into the depreciation recapture, I've had clients ask me about this. I I know how I answer. I'm just curious to see what you say. I will have clients ask me, "Okay, well, how do they know that I've sold?" Like unless you're selling a car, and again, I'm not not telling you to cheat your tax guys, but I just want to hear how you answer this because I know what I say to my clients, but people ask about like, well, how does the government know if I bought a car and then I privately sold it to someone else? What's your answer to that? They don't know. No. Um, your CPA might know because we'll see like a, you know, 1997 truck on the books. We're like, what what happened to this? Like, it's gone. It's gone. Disappeared. Okay. Well, don't ask questions. Yeah. And that's kind of what I end up saying too is just like it's self-reported. Mhm. You want to play with fire though, like just be careful. Like you get caught on this. This is the type of stuff where if you're, you know, playing with fire and you get caught, like not only now are you paying all the taxes, but there's penalties and heaven help you if you get into fraud. Like, right. Well, won't they notice if there's like a a positive $12,000, you know, surplus in your income? No. It's so small to them. Not unless I mean, if you could ask about that. Um, yeah, they're not going to if if it's like a sudden like maybe probably over like a million dollar increase, those things might trigger audits. Like if there's something that's really inconsistent year to year if like your depreciation is like all over the place, they that might trigger something. But in general, it's a really tough thing for the IRS and the government to track because because it's so complicated and there's so many different routes you can take with it. This kind of goes back into what you were talking about earlier when we talked about how big some of these companies are like and you start to realize like how little money is sometimes like not to sound horrible but like I'm not we're not really all of us work with mainstream middle America people and so we're not working with mega mega wealthy like whale type clients. I mean don't get me wrong I have some clients who are independently wealthy but it's mostly because they saved over the course of their life. I don't have, you know, other than organizations we work with where there's any one person who's like tens of millions of dollars, you know, and so um and and that's what I've started to realize. I'll have clients who be like, "Well, I just is it okay for me to just I'm going to put this $90,000 check into my account that I I've earned this or I have one client who for years and years just saw cash away in a safe." And this guy legit had over $100,000 cash and he, you know, he'd earned it over the course of his time. And he was so scared to put it into his bank. He was like, well, I was like, look, man, you just be honest. Like, you've saved this money. You're allowed to put money into your safe. God bless America. That's okay, you know, but and in the scheme of things, like a hundred grand, it's a drop in the bucket, man. Like, when we're talking about these mega corporations that are, you know, multi-million billion dollar companies, then you really start to get an idea of like, oh, there's there's a whole another there's the big boy leagues and there's paying attention to that and then there's normal everyday person. And again, if you're not being crazy with your taxes, you seem to like you're you're probably going to be okay. Yeah. Um, with that, is there anything else too like that, you know, you were talking about as far as like that you want to hit on? I mean, we're kind of getting to the end of a lot of the questions we've talked about here. Is there anything else that you're like, man, this is something I wish people knew? Or we talked a little bit about self-development stuff. I know that's some things that people sometimes are wondering if there's any great books that you've read or things that have made a difference for you there. Is there anything you like want to share that you're like, man, I wish I knowing what I know now, I wish I would have known this earlier. Or any questions that you have? I don't know. I think something like not necessarily that I wish I wish that clients knew was just like how they don't need to know that much, but just a little bit of education can really kind of set them apart from other clients. what if they come to us and ask us questions about like different ideas they've heard like different retirement plans um like if they can contribute to their HSA and save money through that. Um sometimes it's hard for us to just like know about a client and like what options that they even want to go with. Like not everyone's eligible for an HSA so it's a hard thing for us to recommend to everyone. Um so I think just a little bit of education from that business owners can have is good. Yeah. Um, and it will really help your CPA and like help you get the most deductions and credits cuz your CPA only knows what they know. Um, if there's things you're doing that could save you taxes that we don't know about, um, then we can't really help you. Yeah. And so we I mean, we try and ask all the questions, get all the information we can to get everything that we all the tax savings we can do, but at some point like we only know what we know. Yeah. And and we see the same thing. thing I was just having this conversation literally yesterday with someone is that what we have been trying to do because I think in our industry with AI AI is taking the financial planning process from it used to be we could ask this set of questions and we could deliver you a result with these set of answers and so everyone's plan had the same answers the same everything um just custom based on how they answer their questions and now what AI is allowing us to do is it's allow us allowing us to really customize the financial plan where we'll still have a general set of questions, but we have expanded our set of questions so much so that we can gather as many data points as possible because when we can come back, we can now use our software to like tailor make that plan to their unique situation. So, we may end up talking about HSAs with one client and not the other, but then another client, we may be bringing up, hey, you need to have an umbrella policy because you're exposed to more liability because you work on a board or you're coaching little leagues. And so, like, it's really cool with the planning process that we're able to do that. And so, um, I think that a lot of people just kind of they don't realize though that we can't, we're not omnisient. We're not all knowing, you know, and so I I have clients and I encourage this too is that like if you see something like on a video, you know, because people be like, "Oh, I saw this crazy tax-saving strategy online and then they just like but there's there's things that they don't understand about that won't work for you because of this or this is how this works and so like bringing it up. Yeah, bring it up. just ask, send an email, you know, reach out. Um, and what I always encourage people too is like if you hear something, don't just go to that source because again in the world we live in, like unfortunately people can use things for good or for bad. And it's like I've seen a lot of people who push products that sound really well, but it's because they make the adviser a lot of money to sell those products and they're not necessarily what's in the best interest of the client. So just, you know, and there's also sometimes things that they don't know. I mean, especially with like life insurance and all that kind of stuff. Some life insurance agents genuinely don't know that some products are bad. And so it's not not even necessarily that they're bad, but just not the most appropriate for the person they're talking to. And what I'll tell people is like a hammer always sees a nail. So if you're talking to someone who only sells life insurance, guess what they're going to tell you? You need life insurance. Life insurance. If you're talking to someone who only sells investments, guess what you need? And so like having someone who is really comprehensive in their planning, but then also having someone like this is why we want to bring in people like yourself where we can start building those professional, you know, relationships where none of us can know everything all the time. So we need to be able to lean in on other professionals to get expertise because like what you know about taxes, I I I know enough to be dangerous and to be like you need to talk to a CPA, you know. Um but yeah, I really really appreciate you coming on and talking and um I think that this was really good. I know that like you you made me laugh earlier when you're like, "Yeah, you know, the accounting was way more, you know, is way more exciting and like I get excited with stuff like because I do like I think we all work so hard to make the money that we have." So to be able to keep as much of it as possible while still playing within the rules and doing the right things, like to me that's important and it's uh something I can tell you're very passionate about and doing some good stuff, too. So, as we finish up, if someone wanted to connect with you, they wanted to maybe reach out, maybe they're here locally and they're looking for a tax professional, what's the easiest way someone can contact you and how could they do that? Email is probably our best way to communicate. You can Google Sax CPA in Missoula. That's SAX. Yeah, SAX. And all of our profiles are on there. All of our emails. You can email me or Kelly or really anyone at the firm. We can help you get set up and started or answer any questions you have. Um, we are kind of maxed out of clients right now. We're hoping to hire another CPA next year. Um, but as we go into tax season right now, we're definitely slowing down on taking in clients, but we will be looking to take on more next year. Cool. Well, unless you have anything else you want to say, I think so. Thank you for having me. Thank you. This was cool. This is a great time and I really appreciate it. So, well, uh, that's what I've got. Josie, anything? Yeah, I mean if you want to connect, I mean I think we'll link her email and then the link to your company. I mean maybe they'll find it next year, but ours will also be linked. So if you need to connect with a financial advisor, our information is also down there. Yeah. All right, guys. Thank you so much and we'll catch you on the next episode. Take care.