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Speaker 1: Welcome to How to Money. I'm Joel and I am

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Speaker 1: Matt and today we're talking tax planning to shrink what

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Speaker 1: you owe with Sean Mulaney.

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Speaker 2: That's right, Joel, We've got Sean Mullaney back on. He

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Speaker 2: is a repeat guest and we've talked about his accolades

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Speaker 2: a previous episode. You s work for the irs back

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Speaker 2: in the day there, but he now writes over at

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Speaker 2: five tax guy dot com. He's a fiduciary financial advisor.

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Speaker 2: And indeed we are going to be talking about the

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Speaker 2: importance of long term tax planning today. And so let's

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Speaker 2: start with a quick analogy. Right, Imagine you've got a

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Speaker 2: nail in your tire. Imagine it's slowly leaking air. Joel,

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Speaker 2: maybe I'm thinking of your car which recently had this.

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Speaker 2: If you just notice that this is the case, right,

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Speaker 2: that your tire is looking a little bit flat, then

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Speaker 2: of course you're gonna want to bust out the air

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Speaker 2: pump or find some free air at a gas station

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Speaker 2: or something, or costco, Costco, get that tire back to

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Speaker 2: the proper PSI so you can move on with your day.

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Speaker 2: And you can do that a couple of times, but

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Speaker 2: it's not a permanent solution. In a similar way, if

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Speaker 2: you are only looking to the short term fixes, if

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Speaker 2: you are only looking at the current year, you're not.

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Speaker 2: It's not a permanent fix. And when it comes to

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Speaker 2: making sure that you're fully optimized to pay as little

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Speaker 2: tax as possible, you need to take more of a

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Speaker 2: long term look. That being said, today we are gonna

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Speaker 2: talk about some of the year in tax moves you

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Speaker 2: can make, because the urgent is also still important in

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Speaker 2: the here and now. But we're gonna discuss why a

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Speaker 2: long term approach is best. We're gonna discuss why Sean

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Speaker 2: favors a traditional over rough account at least in one

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Speaker 2: specific instance. We're gonna talk about the best retirement account

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Speaker 2: if you're self employed. I'm sure we'll talk about plenty

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Speaker 2: more today. Sean, thank you for joining us to on

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Speaker 2: the podcast.

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Speaker 3: Joel, always a pleasure. Thanks so much for having.

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Speaker 1: Me, of course, Shawn, we're glad to have you man.

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Speaker 1: Always good to chat with you, and we got to

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Speaker 1: catch up recently at finn conon New Orleans, which is

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Speaker 1: a good time. You didn't have this smashing go tee

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Speaker 1: that you now have, but you look magnificent.

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Speaker 2: It is all clean cut professional and now he's in

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Speaker 2: his uh winter hibernations.

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Speaker 1: Right, that's right. Well, obviously, Sean, you've been ont before.

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Speaker 1: The first question we ask everybody as Matt and I

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Speaker 1: drink a craft beer while we talk money, Well, it's

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Speaker 1: something we splurge on in the here and now while

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Speaker 1: we're also trying to be smart, save and invest for

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Speaker 1: our future. What's that for you? What's that splurge? I

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Speaker 1: think last time it was going to Hawaii, but those

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Speaker 1: splurgs just change over the years too.

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Speaker 3: Absolutely, And so for me, the splurge right now is

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Speaker 3: four flying Dutchmen at in and Out Burger, very California answer. So,

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Speaker 3: the problem with the splurge is it's both money and time.

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Speaker 4: Right.

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Speaker 3: So, where I live in the West Valley in Los Angeles,

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Speaker 3: we have a limited number of in and Out Burgers,

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Speaker 3: and you can spend twenty minutes plus in the drive

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Speaker 3: through waiting for your four flying Dutchmen, which costs sixteen

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Speaker 3: forty three. I believe you know it's it's by the way,

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Speaker 3: it happens to be Joe Rogan's favorite fast food item

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Speaker 3: these days too, which I'm okay psyched.

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Speaker 2: It, But I don't know what that okay, So I've

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Speaker 2: heard of like animal style or yeah, what is for

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Speaker 2: flying Dutchmen?

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Speaker 3: So a flying Dutchman is two burger patties and they

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Speaker 3: put American cheese in between the two burger patties and

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Speaker 3: then on top of the two burger patties. So when

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Speaker 3: I get it, I get it in an unmarked box.

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Speaker 3: It's so weird, right, no branding, no logo, no nothing, right,

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Speaker 3: So it's you know, very carnivore. Now I'm able to

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Speaker 3: get it, even though I don't have the wealth profile

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Speaker 3: of Joe Rogan, but you know it's a splurge, right,

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Speaker 3: so they taste great and yeah, no carbs, right, trying

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Speaker 3: to avoid cars, sol oil and stuff like that.

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Speaker 1: So it's literally just literally not a burger, Like there's

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Speaker 1: no bun.

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Speaker 3: Yeah, there's no bun.

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Speaker 4: Right.

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Speaker 3: Apparently you can get it like mustard style, where they

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Speaker 3: grill it with mustard on the grill. I've never done that,

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Speaker 3: but I'm yeah, I love the flying Dutchman, but like

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Speaker 3: in my area, you have to spend some time on it.

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Speaker 3: They are fortunately putting in a new in and out

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Speaker 3: burger near to where I live, so I'm looking forward

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Speaker 3: to that. But until then you have to time.

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Speaker 4: It's just right.

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Speaker 3: If you go at four pm, it's too late. You're

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Speaker 3: spending twenty or thirty minutes. And I usually don't have

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Speaker 3: that time in the afternoon to spend, so I try

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Speaker 3: to get there, you know, too too thirty ish after

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Speaker 3: the lunch rush, but before the dinner rush, before school's

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Speaker 3: let out, and you got a shot to maybe be

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Speaker 3: there for ten minutes or so. In the drive through,

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Speaker 3: I was thinking, you know, that's going to be a

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Speaker 3: great time to catch up on my How to Money episodes, right,

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Speaker 3: maybe it's gonna be me and that and Joel waiting

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Speaker 3: for my four flying Dutchmen.

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Speaker 1: There you go. I was gonna say, Sean, you're you're

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Speaker 1: known for your optimization. I love that you even like

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Speaker 1: to optimize when you go to burner to avoid too

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Speaker 1: much time.

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Speaker 2: And while he's getting his protein fixed.

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Speaker 1: Yeah right, all right.

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Speaker 2: So I I feel like in the entro I kind

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Speaker 2: of bashed the short term fix, right, like I bashed

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Speaker 2: Joel and his multiple fill ups on his flat hire

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Speaker 2: as opposed to actually getting his hire fixed. But it

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Speaker 2: is important to look at some of those short term

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Speaker 2: tax moves that folks could potentially make this year. If

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Speaker 2: they find themselves in a situation where basically they've made

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Speaker 2: more money than they thought, that's certainly a good problem

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Speaker 2: to have. But that can result in a larger tax book.

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Speaker 2: Maybe it could even because of those HIGO savings account

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Speaker 2: rates that are contributing to a higher AGI.

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Speaker 1: Yeah, but what levers.

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Speaker 2: Are there, sean at this point in the year that

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Speaker 2: folks can pull in order to reduce their taxable income

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Speaker 2: before the end of the year.

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Speaker 3: Yeah, there's a few matts. So what I'd say is

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Speaker 3: for those who are in the accumulation phase, right, we're

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Speaker 3: still working, look at maybe maxing out those traditional four

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Speaker 3: to one k's at work. Right, we'll come back to that.

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Speaker 3: But maybe your end, you're going to get a big

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Speaker 3: bonus and you say, oh boy, that's gonna shoot up

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Speaker 3: my income this year. So maybe maxing out the traditional

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Speaker 3: four to one k maybe too late at this point,

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Speaker 3: depending on when you're listening to the episode. But there

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Speaker 3: are other things that could be done, right, something called

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Speaker 3: a donor advised fund. I'm a big fan of this

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Speaker 3: tactic where hey, you know what we want to do

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Speaker 3: a year end charitable contribution, and we're not even sure

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Speaker 3: which charity. We want to get that money. So maybe

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Speaker 3: what we do is we move money or maybe even

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Speaker 3: better appreciated stock from our taxable brokerage account to a

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Speaker 3: donor advice fund. We take the deduction in this year,

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Speaker 3: which might be very impactful depending on our circumstances, and

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Speaker 3: then over the next few years we can dole that

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Speaker 3: money out to charities from the so called donor advice fund.

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Speaker 3: What it does is accelerates a big tax deduction for us,

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Speaker 3: but it also normalizes our relationship with the charity, right,

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Speaker 3: because we don't only want to go to our favorite

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Speaker 3: charity and say, hey, you know what, here's a very

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Speaker 3: large donation December of twenty twenty three, and please don't

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Speaker 3: contact me. I'll be back in touch in four or

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Speaker 3: five years. I'll start giving again. Right. We like to

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Speaker 3: generally give, you know, on a consistent basis. The donor

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Speaker 3: Advice Fund lets us do that, but up you know,

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Speaker 3: accelerates puts up front that big tax reduction.

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Speaker 4: So we like that.

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Speaker 3: And then in terms of another thing that some folks

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Speaker 3: in the audience might be able to pull a plug

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Speaker 3: on is tax loss harvesting. Right. That's where hey, we

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Speaker 3: have a built in loss. It could be an old

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Speaker 3: cat and dog in our portfolio. It could be some

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Speaker 3: other assets in our taxable account where hey, look, if

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Speaker 3: we sell this will trigger a loss. That loss can

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Speaker 3: do one of two things, right, It can offset other

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Speaker 3: capital gains we happen to have this year. So if

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Speaker 3: we had a big capital gain earlier in the year,

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Speaker 3: maybe we should be looking through our portfolio to find

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Speaker 3: some losses and maybe we sell that before the end

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Speaker 3: of the year. If we didn't have capital gains or

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Speaker 3: only a limited amount of capital gains, we still might

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Speaker 3: want to do this tax loss harvesting because we can

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Speaker 3: deduct every year up to three thousand dollars against our

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Speaker 3: ordinary income. What is our ordinary income, our W two income,

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Speaker 3: our self employment income, our retirement account distributions, our interest income,

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Speaker 3: those sorts of things. We could take a small deduction

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Speaker 3: against that too through tax loss harvesting. So it's a

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Speaker 3: few things to sort of keep in mind as we

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Speaker 3: approach your end. Maybe we could pull the trigger on

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Speaker 3: some of those things and get some nice benefits now,

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Speaker 3: which doesn't hurt, And why not think about it when

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Speaker 3: the year is about to be over, and maybe this

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Speaker 3: year is a much higher income year. Than maybe next

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Speaker 3: year is going.

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Speaker 1: To be Yeah, yeah, No, I like that there's at

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Speaker 1: least a few levers that you can look to right

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Speaker 1: now in order to reduce the taxes that you're going

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Speaker 1: to owe. What come filing time next spring? Right, But

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Speaker 1: drill down on giving a little bit for me, Sean,

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Speaker 1: because I too, am kind of obsessed with donor advice funds.

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Speaker 1: Once I kind of figured out what those were, how

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Speaker 1: to use them effectively, and that there was actually, you know,

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Speaker 1: a great low cost provider out there, I was like

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Speaker 1: hook line and sinker. I'm sold. But in order to

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Speaker 1: take advantage of the tax benefits of charitable giving, it

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Speaker 1: takes donating a pretty massive chunk of money in order

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Speaker 1: for itemizing to make sense for a whole lot of folks.

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Speaker 1: Most people are taking the standard deduction, which means a

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Speaker 1: charitable giving doesn't offer them any sort of a tax break.

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Speaker 1: And what do you think about batching as you're giving

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Speaker 1: strategy in order to help some of those folks itemize

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Speaker 1: in one year and take the standard in another.

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Speaker 3: Yeah, great question, Joel. So when we think about deductions, right,

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Speaker 3: we're either going to take the standard deduction on our

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Speaker 3: tax return Federal tax return or we're going to itemize.

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Speaker 3: And for itemization today, we have what I refer to

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Speaker 3: as the Big three. We have state and local taxes,

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Speaker 3: but those are limited to what we actually paid or

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Speaker 3: ten thousand dollars. So for the high tax states, a

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Speaker 3: lot of folks are just limited at ten thousand dollars.

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Speaker 3: Second thing we've got is home mortgage interest, right, so

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Speaker 3: if you already have a paid off home, well, there's

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Speaker 3: no deduction there. And then the third thing are these

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Speaker 3: charitable contributions. And we live in an environment with very

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Speaker 3: high standard deductions. So if my itemized deductions are italium up,

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Speaker 3: it's only fifteen thousand dollars, and I'm married, and I

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Speaker 3: believe the number is twenty seven two hundred for the

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Speaker 3: year twenty twenty three. Well, I'm just going to take

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Speaker 3: the standard deduction that twenty seven thousand, two hundred. So

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Speaker 3: if I'm thinking about a donation to a donor advise fund,

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Speaker 3: I sort of need to get to critical mass for

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Speaker 3: to make the most sense. So what I mean by

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Speaker 3: that is I should take a look at where my

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Speaker 3: deductions are today on the itemized side, Right, what's my

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Speaker 3: home mortgage interest this year? My other charitles. I've already

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Speaker 3: made any state local taxes, and am I close to

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Speaker 3: the standard deduction? Or am I way below the standard deduction?

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Speaker 3: And if I'm way below the standard deduction, maybe the

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Speaker 3: donor avice fund doesn't make a.

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Speaker 4: Lot of sense.

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Speaker 3: But maybe oh boy, you know, I'm at say twenty

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Speaker 3: four to twenty five thousand already in itemized deductions. I'm

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Speaker 3: not quite the standard deduction. But if I did, say

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Speaker 3: a twenty thousand dollars donor advice fund, now I'm over

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Speaker 3: forty thousand dollars, and I'm really getting a lot of

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Speaker 3: benefit from having done that donor advised fund. So this year,

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Speaker 3: what I'm gonna do is I'm going to do a

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Speaker 3: large contribution to the donor revised Fund. Great, I'm going

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Speaker 3: to take a forty four forty five thousand dollars deduction

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Speaker 3: in my example this year, and then next year I'm

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Speaker 3: going to go back on the high standard deduction.

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Speaker 4: Am I you know?

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Speaker 3: I believe it's over twenty nine thousand next year? It's

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Speaker 3: some big number for if we're married. So I'm basically

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Speaker 3: playing this game. And what I've done is I've essentially

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Speaker 3: bunched deductions by doing that now in theory, you don't

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Speaker 3: need a donor Revised Fund to do that. You could just,

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Speaker 3: you know, in December, find you your favorite charities and

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Speaker 3: bunch and just do a whole bunch this year and

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Speaker 3: not as much next year. I mean, that's possible. But

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Speaker 3: that's part of the reason I like the Donor Revised

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Speaker 3: Fund is it normalizes the relationship between donor and charity.

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Speaker 3: One last thing just to keep in mind, though, as

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Speaker 3: much as we're all fond of the Donor Revised Fund,

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Speaker 3: you do have to remember that money is no longer

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Speaker 3: your yes, so it can't come back to you to

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Speaker 3: fix the roof or put it in a pool or

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Speaker 3: you know, go to Vegas or whatever it is you

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Speaker 3: might need. So you do want to be just you

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Speaker 3: want to be careful, right, Can I really afford to

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Speaker 3: separate myself from these particular assets.

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Speaker 4: Yah?

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Speaker 2: It's not like a roth Ira where you're, yeah, can

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Speaker 2: I just go ahead and pull out my contributions?

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Speaker 1: It's like, sorry, that as a backup emergency.

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Speaker 2: Fund, you can't do that. Se what about donating securities?

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Speaker 2: When does that make sense? Or actually, maybe, like who

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Speaker 2: does that benefit the most? When it comes to finding

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Speaker 2: a way to reduce your agi.

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Speaker 3: Matt, great question. There are going to be some people

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Speaker 3: who should only be donating securities, in my opinion, and

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Speaker 3: then there are going to be some people who should

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Speaker 3: never donate security.

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Speaker 4: So let's do the never right.

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Speaker 3: The folks who should never donate securities are people with

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Speaker 3: built in loss positions, right. So what you you should

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Speaker 3: do is if you're thinking, Hey, you know what I

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Speaker 3: want to give to charity, but I am thinking about

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Speaker 3: giving XYZ stock and it has a built in loss,

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Speaker 3: what you should do is sell it first, trigger the loss,

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Speaker 3: and then give the cash to the charity. Because if

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Speaker 3: we just give those uh that x y Z stock

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Speaker 3: with the built in loss, that loss goes away. We've

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Speaker 3: eliminated that loss, we've helped the.

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Speaker 1: Irs have harvested it.

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Speaker 3: Yes, we haven't harvested it. So if we have built

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Speaker 3: in loss securities, we want to sell those first and

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Speaker 3: then give cash.

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Speaker 4: Right.

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Speaker 3: So that's one person who should never give, at least

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Speaker 3: with respect to that built in lost stock. They should

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Speaker 3: never give, appreciate, or depreciate securities to charity. But what

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Speaker 3: if we have ACME stock instead, And ACIME stock is

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Speaker 3: a big built in capital gain and by the way,

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Speaker 3: there are people for whom this applies. There are people

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Speaker 3: who bought you know stock in the eighties or nineties

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Speaker 3: and it's you know, gone up twenty five fifty, one

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Speaker 3: hundred x. That's the sort of stock that should be

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Speaker 3: donated to charity because what you what you do is

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Speaker 3: when you don'ate appreciate stock to charity, you get rid

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Speaker 3: of the capital gain for all of human history. It's

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Speaker 3: really cool. So it can be a double benefit. When

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Speaker 3: we're thinking about charitable contribution strategies, we should look through

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Speaker 3: our portfolio. Is their stock that maybe I don't want

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Speaker 3: to invest in right now for whatever reason, and it

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Speaker 3: has a built in capital gain. Boy, that's a nice

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Speaker 3: asset to move directly, either directly to the charity or

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Speaker 3: directly to the donor advised fund. Do not sell it first,

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Speaker 3: right If we sell it, that triggers the gain, even

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Speaker 3: if we donate the resulting cash to a charity or

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Speaker 3: to a donor revised fund. So most donor advised funds

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Speaker 3: will accept publicly traded stock individual equities. That's something I

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Speaker 3: myself do. I've actually I just did it this week,

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Speaker 3: literally moved some appreciated stock from my taxable portfolio to

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Speaker 3: a donor advised fund and you eliminate the built in

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Speaker 3: capital gain for all of human history. So it's a

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Speaker 3: really it's a double benefit of using a donor revised

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Speaker 3: fund or even a charitable cond you know, just a

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Speaker 3: direct contribution to a charity.

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Speaker 1: Yeah. So I guess just streams like streamlines things when

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Speaker 1: you're using the donor advice funds kind of, and then

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Speaker 1: you can decide where you parse off those donations to

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Speaker 1: after the fact. And I love those the Great Year

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Speaker 1: and advice like, but we want the main thrust of

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Speaker 1: this conversation to be about optimizing tax rate tax rates

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Speaker 1: over the years in the decades, right, We're not just

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Speaker 1: thinking like, oh, how do I maximize just a minimize

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Speaker 1: taxes for tax you're twenty twenty three. We're thinking about

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Speaker 1: tax minimization over the long haul. And I know you're

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Speaker 1: all about that, Sean. I know that's kind of where

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Speaker 1: your brain naturally goes to. What are the broad strokes

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Speaker 1: of thinking holistically about our tax situation. If someone comes

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Speaker 1: to you and say, like, tax planning, what do you

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Speaker 1: mean by tax planning and how does that differ from

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Speaker 1: just kind of trying to reduce current year taxes.

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Speaker 3: Yeah, so what I'd say is this, you should be

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Speaker 3: thinking about how do I reduce my total lifetime taxation

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Speaker 3: and think about that in terms of a world with

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Speaker 3: imperfect information. We don't have perfect information, but we have

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Speaker 3: good information. I'll come back to some of that information

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Speaker 3: in a moment. Second thing I want to say is this,

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Speaker 3: having money in a traditional retirement account and having money

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Speaker 3: in a wrath retirement account are both good things.

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Speaker 4: Right.

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Speaker 3: So I'm going to give you some analysis and some opinions,

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Speaker 3: but do keep in mind an overarching principle, which is this,

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Speaker 3: it is not a bad thing to have money in

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Speaker 3: a traditional retire account, and it's not a bad thing

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Speaker 3: to have money in a wroth retirement account. But now

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Speaker 3: let's step back and say, well, what information do we

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Speaker 3: have we what we know is this, when we contribute,

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Speaker 3: say at work, to a four to one k, we

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Speaker 3: get a deduction at our marginal rate. So I bet

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Speaker 3: most of the listeners are familiar with the progressive tax rates. Right,

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Speaker 3: If you make one hundred million dollars, the rate you

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Speaker 3: pay on that last you know, million is a lot

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Speaker 3: different than the rate that the secretary pays at work

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Speaker 3: on their w two right now, sure.

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Speaker 4: How you do?

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Speaker 1: That's income there, Sean, but way to go.

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Speaker 3: But we have these progressive tax rates, and what happens

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Speaker 3: is when you're thinking about, Okay, do I do a

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Speaker 3: traditional four to one K contribution at work? Well, what's

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Speaker 3: the upfront tax benefit of that? You have to look

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Speaker 3: at your so called marginal rate. What's the rate you

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Speaker 3: pay on.

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Speaker 4: The last dollar.

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Speaker 3: I bet for a lot of folks in the audience,

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Speaker 3: it's going to be for federal purposes, twenty two percent,

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Speaker 3: twenty four percent or thirty two percent. Right, that's a

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Speaker 3: number we can for many in the audience, and look

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Speaker 3: for some in the audience, it's going to be smaller.

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Speaker 3: For some in the audience, it's gonna be greater. But

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Speaker 3: I'd say twenty two, twenty four, thirty two.

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Speaker 4: Is probably going to be where a lot of the

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Speaker 4: audience lands.

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Speaker 3: Okay, great, that's the benefit upfront of a traditional four

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Speaker 3: to one K contribution. But Sean, what about withdrawals in retirement? Well, yes,

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Speaker 3: that's very important because what happens is we have these

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Speaker 3: traditional four to one ks, maybe they're traditional irrays, whatever

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Speaker 3: it is, but you got to pay the piper at

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Speaker 3: some point. So in retirement, you've got to take that

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Speaker 3: money out and it's fully taxable. Isn't that a problem? Well,

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Speaker 3: let's think about what that taxation looks like. And you

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Speaker 3: got to remember when you're retired, other than maybe some

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Speaker 3: social Security, although that could be delayed all the way

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Speaker 3: to seventy other than maybe some social Security, and that's

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Speaker 3: not going to be a huge amount. Most retirees do

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Speaker 3: not tend to produce a lot of taxable income. There

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Speaker 3: might be some interesting income, some dividend income, but even

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Speaker 3: for the relatively affluent, that's going to be a small number.

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Speaker 3: So all right, I want to live off my four

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Speaker 3: to one K or traditional IRA. I know it's taxable. Well,

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Speaker 3: how is it taxed? Well, it comes back into taxable

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Speaker 3: income going through those tax brackets, and in fact, some

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Speaker 3: of it might just go against the standard deduction, like

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Speaker 3: we mentioned, can be very high. So some of it's

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Speaker 3: going to be taxed at zero percent rate, a bunch

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Speaker 3: of it's going to be tax in the first tax bracket,

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Speaker 3: the ten percent rate, and then the twelve percent rate,

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Speaker 3: and then the twenty two percent rate. And it turns

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Speaker 3: out most retirees have an effective tax rate in the

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Speaker 3: high single digits or low to mid maybe upper teens.

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Speaker 3: So what that's telling us is, while there's no risk

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Speaker 3: free position here, why are we not deducting at twenty

400
00:18:45,359 --> 00:18:48,920
Speaker 3: two percent, twenty four percent, thirty two percent when even

401
00:18:49,000 --> 00:18:52,720
Speaker 3: many affluent retirees pay an effective tax rate on those

402
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Speaker 3: four to one K withdrawals in the high single digits,

403
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Speaker 3: low mid high teens. If I if I take a

404
00:18:59,480 --> 00:19:03,200
Speaker 3: deduction twenty two percent and then years later have taxable

405
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Speaker 3: inclusions at maybe a nineteen or eighteen or seventeen percent rate, and.

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Speaker 4: By the way, for many Americans, it's going to be lower.

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Speaker 3: But even that example, I'm making money off the IRS,

408
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Speaker 3: I'm winning and the IRS is losing. And what I

409
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Speaker 3: think that tells us is, for many Americans, an optimal

410
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Speaker 3: path from a tax perspective is going to be take

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Speaker 3: those deductions in your working years while you're at work,

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Speaker 3: and then you know, okay, fine, we have traditional retirement

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Speaker 3: account distributions to live off of, but they're not that

414
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Speaker 3: big a deal because many Americans are making money. That's

415
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Speaker 3: called tax rate arbitrage. And you know, I think for

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Speaker 3: many Americans that's going to work out very well.

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Speaker 2: Yeah, this kind of segues perfectly into a conversation that

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Speaker 2: we had at fin Con. But you were kind of

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Speaker 2: talking about this and specifically like you're a fan of

420
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Speaker 2: the roth Ira but less enthusiastic about the roth four

421
00:19:56,680 --> 00:19:59,919
Speaker 2: oh one k. That many folks now have access to

422
00:20:00,080 --> 00:20:02,840
Speaker 2: the Wroth four o one K, and we talk about the

423
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Speaker 2: benefits of roths, and so I think a lot of

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Speaker 2: folks might hear, oh sweet, well, now I have a

425
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Speaker 2: Wroth four one K, it's even better, right, But it

426
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Speaker 2: sounds like oftentimes you're probably going to steer folks away

427
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Speaker 2: from the Wroth four one K and instead towards a

428
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Speaker 2: traditional four one k.

429
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Speaker 1: Is that accurate?

430
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Speaker 4: Matt?

431
00:20:18,560 --> 00:20:21,480
Speaker 3: Absolutely? So let's step back and we have to think

432
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Speaker 3: about a roth Ira contribution versus a Wroth four one

433
00:20:24,840 --> 00:20:29,000
Speaker 3: K contribution. Roth four one K contribution again, not an

434
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Speaker 3: evil thing, right, It has attributes, it has benefits, But

435
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Speaker 3: there's a trade off there. Every dollar I put into

436
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Speaker 3: my Wroth four one K is a dollar I cannot

437
00:20:38,320 --> 00:20:41,360
Speaker 3: deduct today at work into my traditional four to one k.

438
00:20:41,680 --> 00:20:44,720
Speaker 3: So there's a real opportunity cost. Right, there's a real

439
00:20:44,760 --> 00:20:47,720
Speaker 3: trade off there. Well, let's think about at home, right,

440
00:20:47,800 --> 00:20:51,840
Speaker 3: wroth Ira people love wroth iras myself included. Well, let's

441
00:20:51,880 --> 00:20:54,520
Speaker 3: think about well, if I contribute to my roth ira,

442
00:20:55,440 --> 00:20:59,040
Speaker 3: is that a foregone tax deduction for most Americans? The

443
00:20:59,040 --> 00:21:03,960
Speaker 3: answers No. If we have a workplace retirement account based

444
00:21:03,960 --> 00:21:07,440
Speaker 3: on income limits, it's very difficult to deduct a traditional

445
00:21:07,520 --> 00:21:11,560
Speaker 3: IRA contribution. So there's not that trade off that I

446
00:21:11,600 --> 00:21:14,679
Speaker 3: have at work. At home, it's either do a wroth

447
00:21:14,720 --> 00:21:17,840
Speaker 3: ira contribution or maybe something called a backdoor wroth ira.

448
00:21:18,040 --> 00:21:21,399
Speaker 3: We can talk about that, or just invest in a

449
00:21:21,440 --> 00:21:25,680
Speaker 3: taxable brokerage account. Because I can't deduct my traditional IRA contribution,

450
00:21:25,760 --> 00:21:28,800
Speaker 3: I can do a non deductible IRA contribution that has

451
00:21:28,800 --> 00:21:31,160
Speaker 3: a limited benefit unless we're doing the back door wroth

452
00:21:31,240 --> 00:21:34,919
Speaker 3: But boiling it down is I like to do what

453
00:21:34,960 --> 00:21:39,000
Speaker 3: I sometimes refer to as dynamic duo planning. Optimize for

454
00:21:39,080 --> 00:21:41,840
Speaker 3: the tax deductions at work, so traditional four to one k,

455
00:21:42,359 --> 00:21:44,959
Speaker 3: and then at home do the wroth ira or the

456
00:21:45,000 --> 00:21:48,480
Speaker 3: back door wroth if I can, because I generally speaking

457
00:21:48,560 --> 00:21:50,760
Speaker 3: can't deduct into a traditional.

458
00:21:50,280 --> 00:21:51,000
Speaker 4: IRA at home.

459
00:21:51,240 --> 00:21:54,520
Speaker 3: So now I'm doing a large traditional deductible four to

460
00:21:54,560 --> 00:21:56,359
Speaker 3: one k. And oh, by the way, I've got my

461
00:21:56,400 --> 00:21:59,480
Speaker 3: wroth ira and I'm doing some dynamic duo planning there.

462
00:22:00,400 --> 00:22:04,000
Speaker 1: Well, you also you talk about rothification risks, right, how

463
00:22:04,480 --> 00:22:07,480
Speaker 1: people then if they're funneling more into their traditional four

464
00:22:07,480 --> 00:22:10,000
Speaker 1: O one K, they have to pay attention right when

465
00:22:10,040 --> 00:22:13,000
Speaker 1: they opt to convert pre tax dollars, the traditional four

466
00:22:13,040 --> 00:22:16,280
Speaker 1: oh one K money into ROTH dollars later on down

467
00:22:16,320 --> 00:22:18,800
Speaker 1: the road. In your opinion, is that like a DIY

468
00:22:18,840 --> 00:22:20,600
Speaker 1: maneuver that people can figure out? Do you need the

469
00:22:20,600 --> 00:22:23,840
Speaker 1: help of like a tax professional? How do people eventually

470
00:22:24,119 --> 00:22:26,840
Speaker 1: eventually down the road convert those dollars in lower earning

471
00:22:26,920 --> 00:22:29,000
Speaker 1: years without kind of screwing things up?

472
00:22:29,560 --> 00:22:31,919
Speaker 3: Look, I myself use the wroth iray.

473
00:22:32,320 --> 00:22:34,480
Speaker 4: I'm a fan of the wroth diarray.

474
00:22:34,560 --> 00:22:36,680
Speaker 3: But I'm saying let's not have all our eggs in

475
00:22:36,720 --> 00:22:39,160
Speaker 3: the wroth basket. And part of the reason I'm saying

476
00:22:39,200 --> 00:22:43,480
Speaker 3: that is roth contributions end the planning, right. It basically

477
00:22:43,520 --> 00:22:45,399
Speaker 3: means we're never going to be able to do a

478
00:22:45,480 --> 00:22:49,359
Speaker 3: wroth conversion with that money. Why don't we get a

479
00:22:49,440 --> 00:22:51,960
Speaker 3: bunch of money in those traditional retirement accounts so that

480
00:22:52,040 --> 00:22:55,400
Speaker 3: when we get to retirement, we've got planning opportunities. Right,

481
00:22:55,520 --> 00:22:58,200
Speaker 3: we can do wroth conversions when our tax bill income

482
00:22:58,240 --> 00:23:00,520
Speaker 3: is otherwise low. They're gonna be t plenty of people

483
00:23:00,520 --> 00:23:02,640
Speaker 3: in the audience who get to retirement, say at age

484
00:23:02,680 --> 00:23:05,600
Speaker 3: fifty five and sixty something like that, and they've got

485
00:23:05,640 --> 00:23:07,920
Speaker 3: a bunch of taxable assets. They'll just live off those

486
00:23:07,960 --> 00:23:11,040
Speaker 3: for the first few years of retirement. Capital gains tend

487
00:23:11,119 --> 00:23:14,160
Speaker 3: to be lightly taxed. You have basis recovery and capital gains,

488
00:23:14,160 --> 00:23:16,240
Speaker 3: so you might be in a very low tax bracket.

489
00:23:16,520 --> 00:23:18,560
Speaker 3: And oh, by the way, I could do ROTH conversions

490
00:23:18,560 --> 00:23:20,960
Speaker 3: at that point because I don't even need the traditional

491
00:23:20,960 --> 00:23:23,800
Speaker 3: retirement account to live off of. So there's just a

492
00:23:23,840 --> 00:23:26,760
Speaker 3: lot of opportunity with these traditional retirement accounts, and I

493
00:23:26,800 --> 00:23:30,560
Speaker 3: think folks should not overlook that opportunity, even though ROTH

494
00:23:30,560 --> 00:23:31,920
Speaker 3: gets all this great publicity.

495
00:23:32,000 --> 00:23:36,520
Speaker 2: Yeah, exactly, well, and it does, because it truly is fantastic.

496
00:23:36,560 --> 00:23:39,280
Speaker 2: But like you said, not putting all of your retirement

497
00:23:39,640 --> 00:23:42,520
Speaker 2: eggs and a single basket as a good approach, and

498
00:23:42,560 --> 00:23:44,320
Speaker 2: it just leaves you with a lot of options down

499
00:23:44,359 --> 00:23:47,639
Speaker 2: the road to optimize. Sean, We're going to continue talking

500
00:23:47,680 --> 00:23:49,439
Speaker 2: with you. We're going to discuss some changes that are

501
00:23:49,480 --> 00:23:52,160
Speaker 2: going to be coming to four to one k's as

502
00:23:52,160 --> 00:23:53,919
Speaker 2: well as just an excellent retirement account.

503
00:23:53,960 --> 00:23:55,560
Speaker 1: If you've got a side business. We'll get to all

504
00:23:55,560 --> 00:24:05,520
Speaker 1: of that right after this. Right, we're back. We're still

505
00:24:05,520 --> 00:24:08,280
Speaker 1: talking with Sean Malaney about tax planning in order to

506
00:24:08,320 --> 00:24:11,280
Speaker 1: shrink your taxes, but not necessarily just for twenty twenty three,

507
00:24:11,520 --> 00:24:17,080
Speaker 1: hopefully shrinking your overall tax bill over for forever exactly.

508
00:24:17,440 --> 00:24:21,119
Speaker 1: And Sean, I wish the tax landscape wasn't this like

509
00:24:21,200 --> 00:24:23,560
Speaker 1: ever shifting sort of sort of thing, Like it feels

510
00:24:23,600 --> 00:24:27,080
Speaker 1: like shifting sands sometimes, but tax policy and rates change

511
00:24:27,080 --> 00:24:29,960
Speaker 1: over time. The Tax Cuts and Job Act is set

512
00:24:30,000 --> 00:24:32,320
Speaker 1: to expire. Who knows what politicians are gonna that's supposed

513
00:24:32,320 --> 00:24:33,679
Speaker 1: to expire at the end of twenty twenty five. So

514
00:24:33,760 --> 00:24:36,640
Speaker 1: in the not too distant future, how would you say,

515
00:24:36,680 --> 00:24:39,399
Speaker 1: how does not being able to predict future tax rates

516
00:24:39,440 --> 00:24:43,200
Speaker 1: inform how you think about shifting your tax burden from

517
00:24:43,240 --> 00:24:44,640
Speaker 1: the here and now to down the road.

518
00:24:45,040 --> 00:24:49,760
Speaker 3: That's a great question. And all financial planning has imperfect information, right,

519
00:24:49,800 --> 00:24:52,719
Speaker 3: because we don't know future outcomes. We don't know future

520
00:24:52,800 --> 00:24:56,439
Speaker 3: spending perfectly, we don't know future stock market, bond market

521
00:24:56,480 --> 00:25:00,639
Speaker 3: returns perfectly, right, So we're always working with imperfect information.

522
00:25:01,640 --> 00:25:04,000
Speaker 3: And you mentioned tax cuts and job back, which has

523
00:25:04,040 --> 00:25:07,400
Speaker 3: been very helpful to many Americans, particularly early retirees.

524
00:25:07,520 --> 00:25:08,600
Speaker 4: Right, we have a higher.

525
00:25:08,400 --> 00:25:11,080
Speaker 3: Standard deduction because of that bill. We have a twelve

526
00:25:11,160 --> 00:25:14,160
Speaker 3: percent bracket instead of fifteen percent bracket because of that bill.

527
00:25:14,880 --> 00:25:17,919
Speaker 3: That's very helpful for early retirees, people looking to do

528
00:25:18,000 --> 00:25:21,120
Speaker 3: affirmative tax planning in terms of roth conversions and those

529
00:25:21,160 --> 00:25:21,720
Speaker 3: sorts of things.

530
00:25:21,800 --> 00:25:23,400
Speaker 1: A lot of low income earners too, right.

531
00:25:23,480 --> 00:25:27,239
Speaker 3: Yeah, absolutely, one hundred percent. So we say, well, wait

532
00:25:27,280 --> 00:25:29,359
Speaker 3: a minute, what's going to happen in the future. And

533
00:25:29,960 --> 00:25:33,720
Speaker 3: all I can do is I can look at congressional motivation,

534
00:25:34,119 --> 00:25:37,000
Speaker 3: and I can look at what they've done in recent vintage.

535
00:25:37,040 --> 00:25:37,159
Speaker 4: Right.

536
00:25:37,200 --> 00:25:40,040
Speaker 3: And this is both Democrats and Republicans. So I'm not saying, oh,

537
00:25:40,080 --> 00:25:43,280
Speaker 3: it's this party to that party. If you look at

538
00:25:43,320 --> 00:25:47,879
Speaker 3: what they've done in recent tax bills, they keep uncutting

539
00:25:47,960 --> 00:25:49,399
Speaker 3: taxes for retirees.

540
00:25:49,560 --> 00:25:49,760
Speaker 4: Right.

541
00:25:49,920 --> 00:25:53,119
Speaker 3: They delayed r and ds first from age seventy and

542
00:25:53,160 --> 00:25:56,080
Speaker 3: a half to seventy two. Well, they weren't satisfied with that.

543
00:25:56,320 --> 00:25:58,040
Speaker 3: Then they said, well, no, we're going to do it

544
00:25:58,080 --> 00:26:00,440
Speaker 3: from seventy two to seventy three, and then for many

545
00:26:00,440 --> 00:26:05,520
Speaker 3: Americans to seventy five. Right, they increase the standard deduction.

546
00:26:06,119 --> 00:26:08,720
Speaker 3: They issued a new R and D table which lowers

547
00:26:08,840 --> 00:26:09,320
Speaker 3: rm ds.

548
00:26:09,400 --> 00:26:11,840
Speaker 4: Now that wasn't Congress, but it was still a government, right.

549
00:26:11,920 --> 00:26:15,919
Speaker 3: So every time Washington sneezes, it seems like retirees are

550
00:26:15,920 --> 00:26:18,879
Speaker 3: getting another tax cut, right, and you look at the

551
00:26:18,880 --> 00:26:22,600
Speaker 3: political motivation, right, retirees tend to show up on election day.

552
00:26:23,040 --> 00:26:26,760
Speaker 3: So my thesis is that these so called expiring tax

553
00:26:26,800 --> 00:26:30,159
Speaker 3: cuts that from the Tax Cuts and Jobs Act that

554
00:26:30,200 --> 00:26:33,160
Speaker 3: are scheduled to go away January first, twenty twenty six,

555
00:26:33,200 --> 00:26:36,280
Speaker 3: are most likely not going away, particularly in terms of

556
00:26:36,320 --> 00:26:38,880
Speaker 3: things like the standard deduction, the twelve percent bracket, those

557
00:26:38,880 --> 00:26:42,760
Speaker 3: sorts of things. Look, if you disagree with my thesis

558
00:26:42,800 --> 00:26:45,879
Speaker 3: and you're in early retiree right now, yeah, you'd probably

559
00:26:45,880 --> 00:26:48,320
Speaker 3: want to do more roth conversions in twenty three, twenty

560
00:26:48,359 --> 00:26:51,359
Speaker 3: four to twenty five because you're worried about future tax

561
00:26:51,440 --> 00:26:54,399
Speaker 3: rates increasing. But if you agree with my thesis, then

562
00:26:54,440 --> 00:26:56,439
Speaker 3: I think what you'd do is you'd step back and say, well,

563
00:26:56,440 --> 00:26:59,439
Speaker 3: what are my personal circumstances, right, what does my income

564
00:26:59,480 --> 00:27:01,440
Speaker 3: look like in twenty three, twenty four to twenty five,

565
00:27:01,480 --> 00:27:03,720
Speaker 3: and what's gonna look like in twenty six twenty seven,

566
00:27:03,760 --> 00:27:06,760
Speaker 3: twenty eight, and I'm gonna do roth conversions as an

567
00:27:06,800 --> 00:27:10,840
Speaker 3: early retiree based much more on my personal circumstances than

568
00:27:10,880 --> 00:27:13,040
Speaker 3: on speculation in terms of future tax rates.

569
00:27:13,080 --> 00:27:15,800
Speaker 2: Which makes a lot of sense to base your decisions

570
00:27:15,800 --> 00:27:18,280
Speaker 2: on what you know and or at least what you

571
00:27:18,359 --> 00:27:20,080
Speaker 2: know that you want at least in the in the

572
00:27:20,080 --> 00:27:22,399
Speaker 2: here now. But like you said, trying to predict what

573
00:27:22,440 --> 00:27:26,240
Speaker 2: the government's going to do, that's a perpetually losing battle.

574
00:27:26,600 --> 00:27:29,200
Speaker 2: But what you're saying, I think is generally true, because

575
00:27:29,240 --> 00:27:31,480
Speaker 2: like what we're talking about is austerity and cutting back,

576
00:27:31,600 --> 00:27:35,719
Speaker 2: removing benefits from individuals, whether that's a benefit in the

577
00:27:35,720 --> 00:27:38,360
Speaker 2: form of actual payouts or whether that's in the form

578
00:27:38,359 --> 00:27:40,840
Speaker 2: of tax cuts. It's difficult that once those have been

579
00:27:40,880 --> 00:27:42,560
Speaker 2: let out of the bag, to put them back in

580
00:27:42,720 --> 00:27:46,000
Speaker 2: the bag. It takes the rare Margaret Thatcher type, right, Yeah,

581
00:27:46,040 --> 00:27:48,600
Speaker 2: and maybe who does Maybe we will actually experience that,

582
00:27:48,640 --> 00:27:52,520
Speaker 2: but gosh, it really does seem like it's difficult. As

583
00:27:52,600 --> 00:27:55,560
Speaker 2: a country, we get used to some of these quote

584
00:27:55,600 --> 00:27:59,560
Speaker 2: unquote luxuries that then turn into needs as viewed through

585
00:27:59,600 --> 00:28:02,480
Speaker 2: the eyes of the public. So one of the different

586
00:28:02,960 --> 00:28:04,520
Speaker 2: changes to the law that we've seen was with the

587
00:28:04,600 --> 00:28:07,679
Speaker 2: Secure Act. It made a lot of changes to the

588
00:28:07,720 --> 00:28:10,719
Speaker 2: retirement system. But that being said, the changes are being

589
00:28:10,800 --> 00:28:13,240
Speaker 2: rolled out gradually. It's sort of like student loan repayment.

590
00:28:13,720 --> 00:28:16,359
Speaker 2: There's a nice long on ramp here, but there's going

591
00:28:16,440 --> 00:28:18,199
Speaker 2: to be a few new rules that are going to

592
00:28:18,200 --> 00:28:21,959
Speaker 2: be coming into being soon. For instance, companies are going

593
00:28:22,000 --> 00:28:26,639
Speaker 2: to be able to match student loan payments with retirement contributions.

594
00:28:26,800 --> 00:28:29,280
Speaker 2: That is that right, And so employees they're not even

595
00:28:29,359 --> 00:28:31,199
Speaker 2: going to have to make a contribution to their four

596
00:28:31,240 --> 00:28:32,440
Speaker 2: to one k. All they got to do is work

597
00:28:32,480 --> 00:28:34,280
Speaker 2: on paying off those student loans.

598
00:28:34,440 --> 00:28:37,160
Speaker 3: Yeah, there's a provision in SECURE two point zero, which

599
00:28:37,240 --> 00:28:40,880
Speaker 3: was passed December twenty twenty two, which says that for

600
00:28:41,000 --> 00:28:46,400
Speaker 3: purposes of determining a employer matching contribution into something like

601
00:28:46,400 --> 00:28:49,080
Speaker 3: a four to one K, what they can treat as

602
00:28:49,120 --> 00:28:52,080
Speaker 3: a four to one k contribution is a student loan repayment.

603
00:28:52,360 --> 00:28:54,719
Speaker 3: And I don't know all the mechanics of that, and frankly,

604
00:28:54,760 --> 00:28:56,800
Speaker 3: I don't think even the IRS knows all the mechanics

605
00:28:56,880 --> 00:29:00,080
Speaker 3: of that right now, But that is coming into play,

606
00:29:00,080 --> 00:29:02,040
Speaker 3: and I think it may be for twenty twenty four.

607
00:29:02,200 --> 00:29:03,000
Speaker 4: Don't quote me on that.

608
00:29:03,040 --> 00:29:06,480
Speaker 3: Because, like you said, Matt, unfortunately there are all these

609
00:29:06,480 --> 00:29:09,600
Speaker 3: different effective dates, so I'd have to go back into

610
00:29:09,640 --> 00:29:12,840
Speaker 3: the bill text. But that is absolutely out there. And look,

611
00:29:12,880 --> 00:29:15,680
Speaker 3: if you're repaying student loans, you should look into whether

612
00:29:15,760 --> 00:29:18,920
Speaker 3: your four to one K plan has that feature because look,

613
00:29:19,080 --> 00:29:22,480
Speaker 3: matching contributions matter from employees into four to one K.

614
00:29:22,640 --> 00:29:25,360
Speaker 3: So that's absolutely out there something to be thinking about

615
00:29:25,680 --> 00:29:28,280
Speaker 3: in terms of a positive change from Secure two point zero.

616
00:29:28,320 --> 00:29:31,560
Speaker 1: Yeah, there's I think a mandate to about auto enrolling

617
00:29:31,600 --> 00:29:33,320
Speaker 1: all employees into four to one K accounts, but I

618
00:29:33,320 --> 00:29:35,200
Speaker 1: don't think that one hits till twenty twenty five. For

619
00:29:35,240 --> 00:29:36,840
Speaker 1: some reason. Now one got delayed a little bit further

620
00:29:37,120 --> 00:29:40,280
Speaker 1: talk about. There's another change in Secure Act two point zero,

621
00:29:40,320 --> 00:29:44,640
Speaker 1: like penalty free withdrawals for emergency expenses from your four

622
00:29:44,640 --> 00:29:46,400
Speaker 1: to one K. That's a new thing, I think starting

623
00:29:46,480 --> 00:29:48,880
Speaker 1: in twenty twenty four. I think it's just a thousand

624
00:29:48,920 --> 00:29:51,800
Speaker 1: bucks or something like that. But Matt and I we're

625
00:29:51,840 --> 00:29:54,360
Speaker 1: typically loathed to tell anyone to take money out of

626
00:29:54,360 --> 00:29:57,360
Speaker 1: a retirement account for any reason, but this seems like

627
00:29:57,560 --> 00:29:59,920
Speaker 1: a place, I guess where people could have used their

628
00:30:00,080 --> 00:30:02,560
Speaker 1: retirement account as an emergency fund.

629
00:30:02,760 --> 00:30:05,040
Speaker 3: So a couple things on that, and this one gets

630
00:30:05,040 --> 00:30:07,959
Speaker 3: so complicated in detail. I have a separate blog post

631
00:30:08,120 --> 00:30:09,800
Speaker 3: I could give you guys for the show notes.

632
00:30:09,880 --> 00:30:10,680
Speaker 1: Nice, we'll share it.

633
00:30:11,000 --> 00:30:14,320
Speaker 3: Because there's so many new provisions in Secure two point zero.

634
00:30:14,320 --> 00:30:18,080
Speaker 3: So one provision. I refer to this as minor emergency withdrawals.

635
00:30:18,440 --> 00:30:18,600
Speaker 4: Right.

636
00:30:18,680 --> 00:30:21,520
Speaker 3: This is a one thousand dollars provision, and this applies

637
00:30:21,640 --> 00:30:24,920
Speaker 3: to my understanding to all retirement accounts where you're going

638
00:30:25,000 --> 00:30:28,440
Speaker 3: to be able to take one thousand dollars out of

639
00:30:28,520 --> 00:30:32,880
Speaker 3: any retirement account for an emergency situation and not pay

640
00:30:32,920 --> 00:30:35,680
Speaker 3: that ten percent early withdrawal penalty. So that's out there,

641
00:30:35,720 --> 00:30:37,920
Speaker 3: and in fact, there's usually a mechanism. I believe it's

642
00:30:38,280 --> 00:30:40,760
Speaker 3: a refunding mechanism. You have three years to put it

643
00:30:40,920 --> 00:30:43,760
Speaker 3: back into the retirement account. So that's one. But then

644
00:30:43,800 --> 00:30:47,320
Speaker 3: there's another thing. It's an emergency account that's going to

645
00:30:47,360 --> 00:30:50,800
Speaker 3: be added to for one k's but it's up to

646
00:30:50,840 --> 00:30:54,360
Speaker 3: the employer. It's a twenty five hundred dollars maximum on

647
00:30:54,400 --> 00:30:55,959
Speaker 3: my account.

648
00:30:55,480 --> 00:30:57,120
Speaker 4: So it's not a very large number.

649
00:30:57,160 --> 00:31:00,280
Speaker 3: But I recently saw a YouTube video that claim that

650
00:31:00,360 --> 00:31:02,760
Speaker 3: Starbucks and Delta are adding this to their four to

651
00:31:02,840 --> 00:31:05,520
Speaker 3: one K plans. I suspect many four one K plans

652
00:31:05,520 --> 00:31:08,880
Speaker 3: will not add this, but I mean apparently Starbucks and Delta,

653
00:31:08,920 --> 00:31:12,080
Speaker 3: those are two large employers as we know, they've apparently

654
00:31:12,120 --> 00:31:15,040
Speaker 3: added this. I believe it's effective twenty twenty four where

655
00:31:15,160 --> 00:31:18,400
Speaker 3: you can contribute to an emergency account up to twenty

656
00:31:18,400 --> 00:31:21,080
Speaker 3: five hundred dollars. It's a WROTH account. It has to

657
00:31:21,080 --> 00:31:26,120
Speaker 3: be invested in like cash and cash like investments, but

658
00:31:26,280 --> 00:31:28,920
Speaker 3: you can then take that money, no tax, no penalty,

659
00:31:29,000 --> 00:31:31,600
Speaker 3: for an emergency situation. So that's something that at least

660
00:31:31,680 --> 00:31:34,200
Speaker 3: look into. And in fact, even if you're not too

661
00:31:34,240 --> 00:31:37,080
Speaker 3: worried about emergencies, you might want to look into that

662
00:31:37,160 --> 00:31:40,480
Speaker 3: because maybe you work at Starbucks for five years and

663
00:31:40,520 --> 00:31:43,160
Speaker 3: you have a twenty five hundred dollars WROTH four one

664
00:31:43,200 --> 00:31:46,280
Speaker 3: K emergency account you leave there, you could just roll

665
00:31:46,320 --> 00:31:48,720
Speaker 3: that out into a ROTH iratum my understanding, So it

666
00:31:48,720 --> 00:31:50,520
Speaker 3: could be just another way to get some money into

667
00:31:50,560 --> 00:31:53,040
Speaker 3: a ROTH account where hey, you know what if you're

668
00:31:53,080 --> 00:31:56,160
Speaker 3: maxing out the deductible account. Anyway, maybe that makes a

669
00:31:56,160 --> 00:31:58,080
Speaker 3: lot of sense. I'd have to think about it, and

670
00:31:58,640 --> 00:32:01,280
Speaker 3: you have to look at each individual situation. So there

671
00:32:01,320 --> 00:32:06,240
Speaker 3: are these emergency withdrawal provisions, and frankly, to my mind,

672
00:32:06,280 --> 00:32:08,920
Speaker 3: they're a little too complicated and a little too lengthy.

673
00:32:09,080 --> 00:32:10,800
Speaker 3: But I do have a blog post that goes into

674
00:32:10,840 --> 00:32:11,760
Speaker 3: detail and a lot.

675
00:32:11,640 --> 00:32:12,280
Speaker 1: Of nice Yeah.

676
00:32:12,280 --> 00:32:15,360
Speaker 2: Again, we'll certainly link to that if folks are if

677
00:32:15,360 --> 00:32:17,720
Speaker 2: folks do find that interesting, because on one hand, I

678
00:32:17,920 --> 00:32:20,040
Speaker 2: like it because it's like, Okay, let's go ahead and

679
00:32:20,040 --> 00:32:23,760
Speaker 2: get folks started investing, and let's assume all goes well

680
00:32:23,760 --> 00:32:25,280
Speaker 2: and they don't have to draw on that. Well, guess what,

681
00:32:25,320 --> 00:32:27,880
Speaker 2: they've already got a head start in effect when it

682
00:32:27,920 --> 00:32:30,560
Speaker 2: comes to investing. But if something were to happen, okay,

683
00:32:30,600 --> 00:32:32,800
Speaker 2: you can pull that out without penalty. I don't like

684
00:32:32,920 --> 00:32:35,479
Speaker 2: that though, because it seems like it's a retirement account.

685
00:32:35,480 --> 00:32:38,240
Speaker 2: The whole point of that account is that you don't

686
00:32:38,280 --> 00:32:41,480
Speaker 2: touch it. It could be a behavioral nightmare, yes, until retirement,

687
00:32:41,520 --> 00:32:44,680
Speaker 2: and so it feels like potentially the waters could be

688
00:32:44,680 --> 00:32:47,400
Speaker 2: gett muddied a little bit, and I guess from that aspect,

689
00:32:47,440 --> 00:32:47,959
Speaker 2: I don't like it.

690
00:32:48,080 --> 00:32:50,880
Speaker 3: Yeah, I think it solves for something that isn't that

691
00:32:51,000 --> 00:32:53,960
Speaker 3: much of an issue, right, because there's something that could

692
00:32:53,960 --> 00:32:56,920
Speaker 3: be used for emergencies very easily, and that's called a

693
00:32:57,000 --> 00:33:00,479
Speaker 3: savings account or even a checking account. Because here's the thing.

694
00:33:00,520 --> 00:33:03,160
Speaker 3: If I had an emergency situation, do I want to

695
00:33:03,200 --> 00:33:06,680
Speaker 3: now interface with my employer four to oh one K? Right,

696
00:33:06,720 --> 00:33:09,400
Speaker 3: I probably don't want to interface with them. They're not designed,

697
00:33:09,440 --> 00:33:13,040
Speaker 3: like you said, they're retirement plans. They're not designed for

698
00:33:13,120 --> 00:33:15,920
Speaker 3: emergency withdrawals. That's the other thing too. If I'm an employer,

699
00:33:16,280 --> 00:33:18,479
Speaker 3: do I want my employees coming to me in an

700
00:33:18,640 --> 00:33:21,480
Speaker 3: urgent situation where they're looking to get two thousand bucks

701
00:33:21,520 --> 00:33:24,080
Speaker 3: out of my plan on an urgent basis? My plan

702
00:33:24,200 --> 00:33:26,280
Speaker 3: generally isn't set up for that. I'd rather them go

703
00:33:26,360 --> 00:33:29,320
Speaker 3: to their online savings account and those things are set

704
00:33:29,400 --> 00:33:31,920
Speaker 3: up to take money out pretty quickly. So that's my

705
00:33:32,000 --> 00:33:35,320
Speaker 3: own personal perspective on it. But look, we're not here

706
00:33:35,320 --> 00:33:36,760
Speaker 3: to give individual advice.

707
00:33:36,480 --> 00:33:37,400
Speaker 4: To anybody in the audience.

708
00:33:37,400 --> 00:33:40,200
Speaker 3: We're here to raise awareness and look, it's something at

709
00:33:40,280 --> 00:33:43,240
Speaker 3: least worth considering if your employer happens to offer.

710
00:33:43,320 --> 00:33:45,600
Speaker 1: Yeah, all right, let's talk about solopreneurs. So just a

711
00:33:45,640 --> 00:33:47,520
Speaker 1: second ago, we're talking about people with traditional foural one

712
00:33:47,560 --> 00:33:50,560
Speaker 1: K plans W two sort of employees and their ability

713
00:33:50,600 --> 00:33:52,800
Speaker 1: to take money out of these retirement accunts and stuff

714
00:33:52,800 --> 00:33:54,840
Speaker 1: like that. But this is something you've got a lot

715
00:33:54,840 --> 00:33:57,920
Speaker 1: of expertise on, Sean, you even wrote the Definitive book.

716
00:33:57,920 --> 00:34:00,360
Speaker 1: I would say about solo four one K accounts, which

717
00:34:00,360 --> 00:34:02,040
Speaker 1: I want to talk about in just a second, but

718
00:34:02,880 --> 00:34:05,120
Speaker 1: before we get to the specifics of the solo for

719
00:34:05,320 --> 00:34:07,280
Speaker 1: one K and why it's such a great account, what

720
00:34:07,360 --> 00:34:11,400
Speaker 1: are solopreneurs usually doing wrong from a tax perspective? And

721
00:34:11,520 --> 00:34:13,400
Speaker 1: you might be able to highlight actually a number of

722
00:34:13,440 --> 00:34:14,560
Speaker 1: things on this front. I'm not sure.

723
00:34:14,800 --> 00:34:17,960
Speaker 3: Yeah, So being a solopreneur is a great way to

724
00:34:18,000 --> 00:34:20,040
Speaker 3: pay a whole lot of taxes, right, and so what

725
00:34:20,080 --> 00:34:22,520
Speaker 3: are folks doing wrong? I would say the first thing

726
00:34:22,680 --> 00:34:25,800
Speaker 3: is not having the right systems and processes in place

727
00:34:25,880 --> 00:34:28,840
Speaker 3: in terms of their accounting, right, because you start running

728
00:34:28,920 --> 00:34:31,319
Speaker 3: up expenses and it can be a difficult way to

729
00:34:31,480 --> 00:34:34,160
Speaker 3: sustain those or it could just become a mess.

730
00:34:34,239 --> 00:34:34,399
Speaker 4: Right.

731
00:34:34,480 --> 00:34:37,719
Speaker 3: So thinking about things like hiring a bookkeeper, I think,

732
00:34:37,800 --> 00:34:40,120
Speaker 3: depending on the enterprise, that might be a really good thing,

733
00:34:40,200 --> 00:34:43,520
Speaker 3: or at least having some accounting software where you're entering

734
00:34:43,560 --> 00:34:46,640
Speaker 3: your expenses and your business bank account, having a business

735
00:34:46,640 --> 00:34:49,000
Speaker 3: bank account, those sorts of things. That's the first thing

736
00:34:49,040 --> 00:34:51,880
Speaker 3: I think a lot of solopreneurs get wrong. So just

737
00:34:51,920 --> 00:34:53,920
Speaker 3: having the right systems in place, and it doesn't have

738
00:34:53,960 --> 00:34:58,040
Speaker 3: to be that complicated, right. There are bookkeepers who work virtually,

739
00:34:58,120 --> 00:35:01,400
Speaker 3: there's online accounting software, there are solutions that are not

740
00:35:01,560 --> 00:35:03,719
Speaker 3: that painful in that regard. So that's the first thing.

741
00:35:04,239 --> 00:35:06,799
Speaker 3: Second thing is the tax planning. And I'll give you one.

742
00:35:06,840 --> 00:35:09,840
Speaker 3: And you alluded to my book on solo four one ks.

743
00:35:10,440 --> 00:35:14,160
Speaker 3: A lot of self employed folks use something called a sepira,

744
00:35:14,640 --> 00:35:17,279
Speaker 3: and look, a set ira is not a bad thing, right,

745
00:35:17,280 --> 00:35:19,399
Speaker 3: But let's step back and say, well, if we're looking

746
00:35:19,440 --> 00:35:23,040
Speaker 3: to optimize for our retirement account contributions, wouldn't it be

747
00:35:23,080 --> 00:35:25,279
Speaker 3: better to have an account that allows both so called

748
00:35:25,320 --> 00:35:30,200
Speaker 3: employee contributions and employer contributions? I think for those looking

749
00:35:30,239 --> 00:35:35,000
Speaker 3: to maximize retirement account savings, that's probably true. Set Ira

750
00:35:35,160 --> 00:35:39,080
Speaker 3: is an okay account, but it only has employer contributions.

751
00:35:39,120 --> 00:35:41,440
Speaker 3: So I give an example of well, what if you

752
00:35:41,480 --> 00:35:44,680
Speaker 3: had one hundred thousand dollars They call it Schedule C income, right,

753
00:35:45,120 --> 00:35:48,319
Speaker 3: so you know what's your sep ira max contribution. It's

754
00:35:48,360 --> 00:35:50,960
Speaker 3: a little over eighteen thousand, five hundred dollars. A lot

755
00:35:50,960 --> 00:35:53,279
Speaker 3: of money where I come from. But what if you

756
00:35:53,280 --> 00:35:55,680
Speaker 3: had a solo four one k instead, Well, that would

757
00:35:55,680 --> 00:35:58,600
Speaker 3: be over forty thousand dollars because you can contribute as

758
00:35:58,600 --> 00:36:02,879
Speaker 3: both an employer and an employee. Right, So I would say, look,

759
00:36:02,920 --> 00:36:05,840
Speaker 3: you know, for a lot of solopreneurs out there, thinking

760
00:36:05,880 --> 00:36:08,239
Speaker 3: about something like a solo for one k makes a

761
00:36:08,239 --> 00:36:11,360
Speaker 3: whole lot of sense because it can be a user

762
00:36:11,400 --> 00:36:16,200
Speaker 3: friendly account and it can offer very generous tax deductions.

763
00:36:16,320 --> 00:36:18,480
Speaker 3: Or hey, maybe you disagree with me on ROTH, Well

764
00:36:18,520 --> 00:36:19,880
Speaker 3: guess what, maybe you can get on a bunch of

765
00:36:19,920 --> 00:36:22,200
Speaker 3: money into a ROTH solo for a one K. That's

766
00:36:22,239 --> 00:36:23,680
Speaker 3: a valid planning tactic too.

767
00:36:23,719 --> 00:36:25,200
Speaker 1: All right, John, we got a few more questions we

768
00:36:25,200 --> 00:36:27,040
Speaker 1: want to get to with you, including like how to

769
00:36:27,200 --> 00:36:30,520
Speaker 1: find the right tax professional to help you think more holistically.

770
00:36:30,600 --> 00:36:32,480
Speaker 1: We'll get to a few questions on that right after this.

771
00:36:40,440 --> 00:36:42,440
Speaker 2: All right, we are back and again we're talking with

772
00:36:42,480 --> 00:36:45,440
Speaker 2: Sean mulaney on how you can play in your taxes

773
00:36:45,440 --> 00:36:47,120
Speaker 2: so that you can shrink what it is that you

774
00:36:47,239 --> 00:36:48,120
Speaker 2: owe the irs.

775
00:36:48,239 --> 00:36:49,840
Speaker 1: Can I just say, we tried to get John m'laney

776
00:36:49,880 --> 00:36:51,840
Speaker 1: for this episode, but he said no, and so we

777
00:36:51,920 --> 00:36:53,640
Speaker 1: had to go with Sean. But The good news is

778
00:36:53,680 --> 00:36:54,120
Speaker 1: I don't.

779
00:36:53,920 --> 00:36:56,520
Speaker 2: I would much rather be talking to Sean mlaney about

780
00:36:56,560 --> 00:36:57,640
Speaker 2: taxes the John Mullaney.

781
00:36:57,640 --> 00:36:59,400
Speaker 1: Don't think John would have had much to offer on this, Yea.

782
00:37:00,600 --> 00:37:03,560
Speaker 2: You know, Sean, I saw a quote recently that was

783
00:37:03,600 --> 00:37:06,920
Speaker 2: talking about how we should certainly pay the irs what

784
00:37:07,160 --> 00:37:09,799
Speaker 2: we owe them, but anything that we don't have to

785
00:37:09,840 --> 00:37:12,400
Speaker 2: pay them, it's sort of like a tip. And with

786
00:37:12,640 --> 00:37:15,800
Speaker 2: tipping culture today, I don't think anybody wants to pay

787
00:37:15,800 --> 00:37:18,160
Speaker 2: more than what they feel like they have to or

788
00:37:18,160 --> 00:37:20,480
Speaker 2: what they should. And that's what you're all about, is

789
00:37:20,480 --> 00:37:22,319
Speaker 2: trying to find ways to make sure that we're not

790
00:37:22,480 --> 00:37:26,359
Speaker 2: over paying our taxes to the government. But we've talked

791
00:37:26,360 --> 00:37:29,200
Speaker 2: through some complicated I guess maneuvers. In particular, we're kind

792
00:37:29,200 --> 00:37:32,160
Speaker 2: of talking about roth conversions. I think a lot of

793
00:37:32,160 --> 00:37:34,799
Speaker 2: our listeners they're gonna hear all of this and they're

794
00:37:34,840 --> 00:37:36,799
Speaker 2: gonna say, Man, this all sounds great. I love it,

795
00:37:37,080 --> 00:37:39,480
Speaker 2: but I'm pretty sure I need some help. How can

796
00:37:39,520 --> 00:37:42,200
Speaker 2: someone out there decide whether or not they need a

797
00:37:42,280 --> 00:37:45,279
Speaker 2: human professional to help them file their taxes, Like what

798
00:37:45,440 --> 00:37:49,840
Speaker 2: situations should maybe tip people off that or kind of

799
00:37:49,840 --> 00:37:51,400
Speaker 2: like even tip them over the edge a little bit.

800
00:37:51,440 --> 00:37:55,160
Speaker 2: From a DIY approach to actually needing to hire a pro.

801
00:37:55,640 --> 00:37:59,000
Speaker 3: Yeah. So, and this is a tough question, right. I'll

802
00:37:59,000 --> 00:38:02,799
Speaker 3: give you a start off with four indicators that sort

803
00:38:02,800 --> 00:38:05,080
Speaker 3: of say, you know what, I might need a professional here.

804
00:38:05,600 --> 00:38:09,520
Speaker 3: The first indicator is early retirement and we're doing things

805
00:38:09,560 --> 00:38:12,239
Speaker 3: like ROTH conversions, and we're thinking about things like the

806
00:38:12,280 --> 00:38:16,560
Speaker 3: premium tax credit because we're on a ACA medical insurance plan. Right,

807
00:38:16,640 --> 00:38:22,719
Speaker 3: early retirement ROTH conversions ACA insurance. That's a great indicator

808
00:38:22,760 --> 00:38:23,560
Speaker 3: maybe I need.

809
00:38:23,360 --> 00:38:24,440
Speaker 4: Some professional assistance.

810
00:38:25,000 --> 00:38:27,879
Speaker 3: Second one is what we just talked about, self employment. Right,

811
00:38:27,920 --> 00:38:31,040
Speaker 3: if I've got a business, I'm thinking about retirement plan

812
00:38:31,160 --> 00:38:34,200
Speaker 3: contributions with respect to that business. Those sorts of things

813
00:38:34,560 --> 00:38:38,360
Speaker 3: absolutely a great indicator that I need a professional. Third

814
00:38:38,400 --> 00:38:41,359
Speaker 3: one would be rental real estate. Right, I think most

815
00:38:41,400 --> 00:38:44,120
Speaker 3: folks should not be going it alone. When they've got

816
00:38:44,160 --> 00:38:46,880
Speaker 3: rental real estate and it's showing up on their tax return,

817
00:38:47,200 --> 00:38:49,520
Speaker 3: that's a great indicator that they might need a professional.

818
00:38:50,120 --> 00:38:53,799
Speaker 3: And then the fourth one would be a sizable inheritance,

819
00:38:53,840 --> 00:38:58,320
Speaker 3: particularly a sizeable inherited IRA inheritance. Right, and this is

820
00:38:58,360 --> 00:39:00,919
Speaker 3: going to be out there more and more, Right, your

821
00:39:00,960 --> 00:39:04,400
Speaker 3: parents do not need to be very rich or affluent

822
00:39:04,480 --> 00:39:07,719
Speaker 3: to have three hundred thousand dollars in a traditional IRA right.

823
00:39:07,960 --> 00:39:11,120
Speaker 3: That does not make them a Rockefeller right, that makes

824
00:39:11,160 --> 00:39:14,920
Speaker 3: them a rather average person. They pass away, they leave

825
00:39:14,960 --> 00:39:17,080
Speaker 3: it to you. You now have a three hundred thousand

826
00:39:17,120 --> 00:39:19,600
Speaker 3: dollars tax time bomb right that you need to manage

827
00:39:19,600 --> 00:39:22,640
Speaker 3: and you may need some professional assistance there as well.

828
00:39:22,760 --> 00:39:24,759
Speaker 1: Yeah, and there's what a ten year timeline on the

829
00:39:24,840 --> 00:39:27,960
Speaker 1: drawdown of that inheritance tire, so you definitely want but

830
00:39:28,080 --> 00:39:30,120
Speaker 1: he doesn't have to be equal distribution. So it makes

831
00:39:30,120 --> 00:39:32,319
Speaker 1: it the potential to do some tax planning there with

832
00:39:32,320 --> 00:39:33,719
Speaker 1: the help of a pro as opposed to trying to

833
00:39:33,719 --> 00:39:34,640
Speaker 1: figure out on your own.

834
00:39:34,760 --> 00:39:34,920
Speaker 4: Oh.

835
00:39:34,960 --> 00:39:38,759
Speaker 3: Absolutely, And that's an area that is very convoluted in

836
00:39:38,880 --> 00:39:42,399
Speaker 3: terms of just tax rules, even for professionals. So that's

837
00:39:42,440 --> 00:39:44,960
Speaker 3: an area I would say, Boy, that says to me,

838
00:39:45,719 --> 00:39:49,799
Speaker 3: I ought to be thinking about hiring a professional, and

839
00:39:49,840 --> 00:39:52,760
Speaker 3: then folks worry about, well, what where do I find

840
00:39:52,800 --> 00:39:55,560
Speaker 3: the professional, and how do I find the professional, and

841
00:39:55,600 --> 00:39:58,080
Speaker 3: what's even the services I need? Right, Different folks need

842
00:39:58,120 --> 00:40:02,880
Speaker 3: different services when we think about maybe doing our tax return.

843
00:40:03,280 --> 00:40:06,239
Speaker 3: There's actually a model that I think is emerging out there.

844
00:40:07,000 --> 00:40:11,040
Speaker 3: There's a woman named Andrew MacDonald. Her firm Steadfast Bookkeeping,

845
00:40:11,160 --> 00:40:13,799
Speaker 3: has this model where they say, we're going to do

846
00:40:13,840 --> 00:40:17,560
Speaker 3: the tax return as the end of a defined process.

847
00:40:17,920 --> 00:40:20,319
Speaker 3: It's not just its own thing, and it's not going

848
00:40:20,400 --> 00:40:23,080
Speaker 3: to be the beginning and the end. What they do

849
00:40:23,239 --> 00:40:26,560
Speaker 3: is they say, Okay, during the year in question, we're

850
00:40:26,600 --> 00:40:28,520
Speaker 3: going to do some consulting with you. We're going to

851
00:40:28,520 --> 00:40:31,879
Speaker 3: talk to you about your circumstances, what's changed this year,

852
00:40:31,960 --> 00:40:35,680
Speaker 3: what are your goals, And there's planning during the year,

853
00:40:36,239 --> 00:40:38,960
Speaker 3: and then in the next year we do the tax return.

854
00:40:39,080 --> 00:40:42,080
Speaker 3: And the tax return is completing the sentence, right. We

855
00:40:42,239 --> 00:40:45,080
Speaker 3: worked on the sentence during the year, and then we

856
00:40:45,120 --> 00:40:48,600
Speaker 3: complete the sentence and get the punctuation right at the

857
00:40:49,040 --> 00:40:51,759
Speaker 3: in the next year by doing the tax return, but

858
00:40:51,840 --> 00:40:54,080
Speaker 3: we already are familiar with everything because we looked at

859
00:40:54,160 --> 00:40:57,560
Speaker 3: it during the year. So I like that process. The

860
00:40:57,600 --> 00:40:59,279
Speaker 3: other thing I would say for folks looking for a

861
00:40:59,320 --> 00:41:03,680
Speaker 3: tax return is consider asking them to prepare the return

862
00:41:03,920 --> 00:41:06,960
Speaker 3: on extension, right, because you have to step into the

863
00:41:07,000 --> 00:41:10,480
Speaker 3: shoes of a potential tax return preparer and think about

864
00:41:10,480 --> 00:41:14,000
Speaker 3: what is there. Late February, March, early April, look like

865
00:41:14,480 --> 00:41:18,839
Speaker 3: it looks terrible, right, So why do you want your

866
00:41:18,960 --> 00:41:22,560
Speaker 3: return preparer's time and attention in that timeframe? Why don't

867
00:41:22,600 --> 00:41:26,440
Speaker 3: you instead say, you know what, tax return preparer, here's

868
00:41:26,440 --> 00:41:29,320
Speaker 3: my information. What I want to know from you before

869
00:41:29,360 --> 00:41:31,560
Speaker 3: April fifteenth is do I owe any money?

870
00:41:31,600 --> 00:41:31,680
Speaker 4: Right?

871
00:41:31,719 --> 00:41:34,600
Speaker 3: Because we can extend the time to file the tax return,

872
00:41:34,680 --> 00:41:37,400
Speaker 3: we can't extend the time to pay. So can I

873
00:41:37,440 --> 00:41:40,239
Speaker 3: get some time and attention now? Not to dot eyes

874
00:41:40,280 --> 00:41:42,880
Speaker 3: and cross te's, but rather just take a look at

875
00:41:42,880 --> 00:41:43,560
Speaker 3: my information?

876
00:41:43,920 --> 00:41:45,160
Speaker 4: Do you think I owe?

877
00:41:45,200 --> 00:41:48,040
Speaker 3: And I can make an estimated payment by April fifteenth?

878
00:41:48,160 --> 00:41:50,480
Speaker 3: But where I want your time and attention is to

879
00:41:50,560 --> 00:41:52,239
Speaker 3: dot i's and cross tea's on.

880
00:41:52,280 --> 00:41:53,120
Speaker 4: The tax return.

881
00:41:53,400 --> 00:41:57,000
Speaker 3: But let's do that in May, June, July, August, when

882
00:41:57,040 --> 00:41:59,680
Speaker 3: you're on a much more normal sleep schedule and you're

883
00:41:59,760 --> 00:42:02,640
Speaker 3: less frazzled, and I'll get your time and attention on

884
00:42:02,680 --> 00:42:06,120
Speaker 3: the return when you're in a better place. And I

885
00:42:06,120 --> 00:42:11,160
Speaker 3: think that optimizes the chances that both return preparer and

886
00:42:11,440 --> 00:42:14,000
Speaker 3: taxpayer are going to have a good experience with that

887
00:42:14,040 --> 00:42:15,120
Speaker 3: particular tax return.

888
00:42:15,160 --> 00:42:17,360
Speaker 2: I love that, yeah, And I really do like that

889
00:42:17,400 --> 00:42:22,399
Speaker 2: process too, of providing some consultation throughout the year and then,

890
00:42:22,640 --> 00:42:25,080
Speaker 2: like you said, just adding that period at the end

891
00:42:25,080 --> 00:42:27,760
Speaker 2: of the sentence. Otherwise the tax preparer becomes the bearer

892
00:42:27,760 --> 00:42:30,839
Speaker 2: of bad news. And I'm guessing that's not something that's

893
00:42:30,840 --> 00:42:32,479
Speaker 2: not a position you want to put yourself in. Sean

894
00:42:33,200 --> 00:42:35,040
Speaker 2: somebody that comes to you, it is just like, all right,

895
00:42:35,239 --> 00:42:36,800
Speaker 2: go ahead and just tell me what it is that

896
00:42:36,920 --> 00:42:40,480
Speaker 2: I owe as opposed to having been able to work

897
00:42:40,560 --> 00:42:43,120
Speaker 2: with that person and to make some strategic changes the

898
00:42:43,120 --> 00:42:45,680
Speaker 2: previous year that would then allow you to deliver that

899
00:42:45,719 --> 00:42:46,080
Speaker 2: good news.

900
00:42:46,120 --> 00:42:48,040
Speaker 1: Yeah, So, how do you then find someone who's not

901
00:42:48,080 --> 00:42:51,400
Speaker 1: just a tax preparer, a return filer, someone who is

902
00:42:52,080 --> 00:42:55,160
Speaker 1: a tax planning helper? Is it questions that you ask

903
00:42:55,480 --> 00:42:57,960
Speaker 1: when you're kind of vetting some folks or something like that,

904
00:42:58,280 --> 00:43:00,959
Speaker 1: or how you mentioned one person in her planning firm,

905
00:43:01,200 --> 00:43:03,239
Speaker 1: But how do you find more folks who think about

906
00:43:03,239 --> 00:43:05,400
Speaker 1: it more holistically, kind of like you and Andrea do.

907
00:43:05,640 --> 00:43:08,439
Speaker 3: Yeah, So what I would do on that is I'd

908
00:43:08,520 --> 00:43:12,840
Speaker 3: understand that there's no perfect answer here. There's no group

909
00:43:13,000 --> 00:43:15,440
Speaker 3: or credential I can just look to and that's going

910
00:43:15,520 --> 00:43:19,640
Speaker 3: to give me what I'm looking for. So I will say, Unfortunately,

911
00:43:19,680 --> 00:43:23,760
Speaker 3: the tax return industry, it grew up focused on getting

912
00:43:23,800 --> 00:43:26,160
Speaker 3: those returns out the door and getting paid for getting

913
00:43:26,200 --> 00:43:30,160
Speaker 3: those returns out the door. And that is a misincentive, right,

914
00:43:30,200 --> 00:43:33,080
Speaker 3: That incentivizes folks to focus on the returns and not

915
00:43:33,160 --> 00:43:35,480
Speaker 3: so much on the planning, because they focus on where

916
00:43:35,560 --> 00:43:37,640
Speaker 3: the check came from, right, and it's on the return.

917
00:43:38,360 --> 00:43:40,920
Speaker 3: What I would do is this, I would take advantage

918
00:43:40,960 --> 00:43:42,759
Speaker 3: of being in the year twenty twenty three.

919
00:43:42,920 --> 00:43:43,520
Speaker 4: Right. Think about it.

920
00:43:43,520 --> 00:43:47,080
Speaker 3: If you're looking for a tax return preparer who's planning focused,

921
00:43:47,560 --> 00:43:49,880
Speaker 3: you would you know, fifteen years ago, you would have

922
00:43:49,920 --> 00:43:54,040
Speaker 3: to drive all over creation around you, right, going and

923
00:43:54,080 --> 00:43:57,839
Speaker 3: getting off the highway, interviewing people going to their offices.

924
00:43:58,280 --> 00:44:00,600
Speaker 3: It's the year twenty twenty three. You don't need a

925
00:44:00,640 --> 00:44:03,799
Speaker 3: tax return prepare in your own state, right, think about that.

926
00:44:03,840 --> 00:44:06,080
Speaker 3: You can work virtually now with a tax return prepare.

927
00:44:07,000 --> 00:44:11,080
Speaker 3: What I would recommend is do some research and find

928
00:44:11,160 --> 00:44:13,279
Speaker 3: folks who are willing to have a thirty minute you know,

929
00:44:13,360 --> 00:44:17,480
Speaker 3: potential client meeting virtually, And you can now do this

930
00:44:17,520 --> 00:44:20,800
Speaker 3: from the comfort of your own couch. Right. Meet with folks,

931
00:44:21,160 --> 00:44:23,800
Speaker 3: see what their process looks like, see what their fees

932
00:44:23,880 --> 00:44:26,719
Speaker 3: look like, and see how you relate with them. And

933
00:44:27,120 --> 00:44:28,719
Speaker 3: just take advantage of the fact, I don't have to

934
00:44:28,719 --> 00:44:31,759
Speaker 3: get on the highway and you know, go to five

935
00:44:31,800 --> 00:44:35,880
Speaker 3: different offices scattered throughout my area. I can interview folks

936
00:44:36,000 --> 00:44:39,279
Speaker 3: all across this great country and figure this out from

937
00:44:39,320 --> 00:44:41,480
Speaker 3: the comfort of my own living room. I like that,

938
00:44:41,520 --> 00:44:43,359
Speaker 3: and so that's what I would do, is I would

939
00:44:43,400 --> 00:44:47,040
Speaker 3: interview a few potential providers and see what they offer

940
00:44:47,120 --> 00:44:49,520
Speaker 3: and see how I click with them, and make a

941
00:44:49,560 --> 00:44:50,319
Speaker 3: decision from there.

942
00:44:50,880 --> 00:44:53,520
Speaker 2: Nice I think that's awesome advice, Sean. Do you think

943
00:44:53,560 --> 00:44:55,360
Speaker 2: that is there anything else that we should be aware of?

944
00:44:55,440 --> 00:44:57,960
Speaker 2: Any changes that might might be coming down the pipe

945
00:44:57,960 --> 00:45:01,520
Speaker 2: that might impact whether it be retreronment or taxes. Do

946
00:45:01,520 --> 00:45:02,839
Speaker 2: you have any final thoughts for us?

947
00:45:03,000 --> 00:45:05,520
Speaker 3: I'll just mention two sort of current events for you.

948
00:45:05,800 --> 00:45:08,560
Speaker 3: One is my prediction for the year twenty twenty four

949
00:45:08,800 --> 00:45:11,360
Speaker 3: is it's an election year, so I tend to think

950
00:45:11,600 --> 00:45:13,560
Speaker 3: there's not going to be much in the way of

951
00:45:13,719 --> 00:45:17,759
Speaker 3: tax legislation coming out of Washington, DC. Look all free

952
00:45:17,760 --> 00:45:20,120
Speaker 3: predictions wrong, are your money back? But I think twenty

953
00:45:20,120 --> 00:45:22,120
Speaker 3: twenty five is where we're going to see some real

954
00:45:22,200 --> 00:45:25,520
Speaker 3: tax legislation that would affect retirement planning, those sorts of things.

955
00:45:26,000 --> 00:45:29,719
Speaker 3: Second thing, is there is a Supreme Court case on

956
00:45:29,800 --> 00:45:32,799
Speaker 3: taxes right now, which is very rare. It's very exciting,

957
00:45:33,320 --> 00:45:36,520
Speaker 3: and it's a case it's called More versus the United States,

958
00:45:37,160 --> 00:45:39,880
Speaker 3: and it deals with a very esoteric tax issue that

959
00:45:39,920 --> 00:45:43,640
Speaker 3: could have all sorts of ramifications for Americans in the future.

960
00:45:44,120 --> 00:45:46,839
Speaker 3: Oral arguments in that case are in early December, so

961
00:45:46,920 --> 00:45:50,520
Speaker 3: watch for some news around that, and the decision is

962
00:45:50,520 --> 00:45:53,200
Speaker 3: going to come sometime in twenty twenty four. It may

963
00:45:53,239 --> 00:45:56,319
Speaker 3: be a very narrow decision that has no impact on

964
00:45:56,400 --> 00:45:59,239
Speaker 3: most listeners, or it could be something that's a lot

965
00:45:59,280 --> 00:46:02,440
Speaker 3: more far r It's called More versus the United States.

966
00:46:02,440 --> 00:46:05,160
Speaker 3: Sort of an interesting case. I did a YouTube video

967
00:46:05,200 --> 00:46:08,560
Speaker 3: about a while back. So it's one of those things that,

968
00:46:08,719 --> 00:46:12,200
Speaker 3: in theory, could have wide ranging impact or it could

969
00:46:12,239 --> 00:46:14,640
Speaker 3: have absolutely no impact. It's just something to watch out for.

970
00:46:14,840 --> 00:46:17,080
Speaker 1: Nice love it all right, Well, maybe once that verda

971
00:46:17,120 --> 00:46:18,759
Speaker 1: comes down, we'll bring you on to talk about it.

972
00:46:18,800 --> 00:46:21,000
Speaker 1: So Sean, we always enjoy talking to you man. Thanks

973
00:46:21,000 --> 00:46:23,000
Speaker 1: so much for joining us. Where can our listeners find

974
00:46:23,040 --> 00:46:25,279
Speaker 1: out more about you, what you're up to and your

975
00:46:25,280 --> 00:46:26,680
Speaker 1: awesome book about solo for one.

976
00:46:26,640 --> 00:46:29,240
Speaker 3: Case, Thanks so much, Matt and Joel, So you guys

977
00:46:29,239 --> 00:46:32,120
Speaker 3: can find me at fi tax guide dot com. That's

978
00:46:32,120 --> 00:46:33,920
Speaker 3: my blog. I tend to refer to that as my

979
00:46:33,960 --> 00:46:36,680
Speaker 3: internet home. You can also find me on YouTube Sean

980
00:46:36,760 --> 00:46:39,960
Speaker 3: mulaney videos, and on Twitter Sean Money Intact.

981
00:46:40,080 --> 00:46:40,360
Speaker 1: Nice.

982
00:46:40,360 --> 00:46:42,760
Speaker 2: We'll make sure to link to all of that, including

983
00:46:42,800 --> 00:46:46,440
Speaker 2: that More versus Us video that you toss up there

984
00:46:46,480 --> 00:46:47,040
Speaker 2: on YouTube.

985
00:46:47,280 --> 00:46:47,560
Speaker 3: Sean.

986
00:46:47,600 --> 00:46:48,840
Speaker 2: Thanks so much for joining us today.

987
00:46:49,040 --> 00:46:49,719
Speaker 3: Thanks so much.

988
00:46:50,120 --> 00:46:53,359
Speaker 1: All right, Matt gotta love Sean Malaney, his sweet new

989
00:46:53,360 --> 00:46:55,600
Speaker 1: go tea that he sported and his wonderful advice you

990
00:46:55,680 --> 00:46:56,160
Speaker 1: text planning.

991
00:46:56,200 --> 00:46:58,480
Speaker 2: You can't tease. I mean you mentioned it earlier as well,

992
00:46:58,520 --> 00:47:00,480
Speaker 2: but we a little picture of it, a little people

993
00:47:00,480 --> 00:47:02,520
Speaker 2: behind the curtain. We always leave the video on for

994
00:47:02,560 --> 00:47:04,879
Speaker 2: a second when we started an interview.

995
00:47:04,520 --> 00:47:05,520
Speaker 1: With folks, just to say hi.

996
00:47:05,560 --> 00:47:07,839
Speaker 2: But we always cut the videos that because we sit

997
00:47:07,880 --> 00:47:09,400
Speaker 2: over here at our table and he wouldn't be able

998
00:47:09,400 --> 00:47:09,960
Speaker 2: to see us. Yeah.

999
00:47:10,000 --> 00:47:11,480
Speaker 1: If some folks would say, oh, you should put your

1000
00:47:11,480 --> 00:47:13,880
Speaker 1: podcast up on YouTube, but it's too much work or not,

1001
00:47:13,960 --> 00:47:16,120
Speaker 1: it seems kind of onerous. Yeah, we like the audio stuff,

1002
00:47:16,120 --> 00:47:18,160
Speaker 1: not the video as much. But yeah, no, this is

1003
00:47:18,200 --> 00:47:20,880
Speaker 1: a great combo. Love Sean, love his advice and a

1004
00:47:20,880 --> 00:47:23,040
Speaker 1: lot of practical stuff I think for for people to

1005
00:47:23,600 --> 00:47:27,080
Speaker 1: hopefully help benefit their tax situation so that yeah, they're

1006
00:47:27,120 --> 00:47:29,040
Speaker 1: they're paying less of the irs, they have more of

1007
00:47:29,080 --> 00:47:31,919
Speaker 1: their money to use for building wealth, for giving away,

1008
00:47:31,960 --> 00:47:33,600
Speaker 1: for whatever they choose to do with it. But what

1009
00:47:33,880 --> 00:47:35,280
Speaker 1: are your thoughts, Matt? Do you have a big takeaway

1010
00:47:35,280 --> 00:47:35,719
Speaker 1: from this one?

1011
00:47:35,760 --> 00:47:35,960
Speaker 3: Yeah?

1012
00:47:36,000 --> 00:47:39,480
Speaker 2: Mat, he gave some awesome takeaways. I mean, he mentioned

1013
00:47:39,640 --> 00:47:42,040
Speaker 2: sort of those four indicators as to whether or not

1014
00:47:42,200 --> 00:47:44,640
Speaker 2: you need to hire a professional. But I think my

1015
00:47:44,680 --> 00:47:46,600
Speaker 2: actual takeaway is going to be is going to have

1016
00:47:46,600 --> 00:47:49,719
Speaker 2: to do with starting your own small side business or

1017
00:47:49,719 --> 00:47:53,280
Speaker 2: if you're a solopreneur. And he mentioned a couple ways

1018
00:47:53,400 --> 00:47:56,399
Speaker 2: that small business owners make mistakes, and one of them

1019
00:47:57,000 --> 00:47:59,520
Speaker 2: was poor accounting practices basically, and he was just pointing

1020
00:47:59,560 --> 00:48:03,480
Speaker 2: out how with either free software that's available, I mean,

1021
00:48:03,520 --> 00:48:06,760
Speaker 2: gosh it, yes, or on Monday's episode, we talked about

1022
00:48:06,920 --> 00:48:10,799
Speaker 2: Lily and the features that it includes when it comes

1023
00:48:10,840 --> 00:48:12,080
Speaker 2: to keeping up with your books.

1024
00:48:12,200 --> 00:48:16,080
Speaker 1: There are other fairly inexpensive softwares too that are they're

1025
00:48:16,320 --> 00:48:17,160
Speaker 1: able to help people do that.

1026
00:48:17,160 --> 00:48:20,040
Speaker 2: There's solutions out there, and you want to make sure

1027
00:48:20,120 --> 00:48:22,359
Speaker 2: that you're keeping up with those expenses that you're able

1028
00:48:22,360 --> 00:48:26,040
Speaker 2: to deduct those so just the general accounting like that

1029
00:48:26,120 --> 00:48:28,759
Speaker 2: being a mistake, but then also the solo or the

1030
00:48:28,840 --> 00:48:32,400
Speaker 2: self employed for one K. If you are a solopreneur

1031
00:48:32,440 --> 00:48:34,759
Speaker 2: and you are not taking advantage of that account, you

1032
00:48:34,800 --> 00:48:38,680
Speaker 2: are missing out on an incredible way to sock away

1033
00:48:38,719 --> 00:48:42,080
Speaker 2: a ton of money. Because again we've mentioned this before,

1034
00:48:42,080 --> 00:48:44,839
Speaker 2: but Sean touched on it, the ability to contribute not

1035
00:48:44,920 --> 00:48:48,279
Speaker 2: only as an employer, which is what you would were

1036
00:48:48,320 --> 00:48:50,759
Speaker 2: to do if you were to open a sep ira,

1037
00:48:50,880 --> 00:48:54,279
Speaker 2: which stands for I think it's a simplified pension, right,

1038
00:48:54,280 --> 00:48:56,000
Speaker 2: and so that pension is the key word. You can

1039
00:48:56,040 --> 00:48:58,880
Speaker 2: only contribute as an employer. It's a plan that the

1040
00:48:58,880 --> 00:49:01,719
Speaker 2: employer sets up. But with a self employed four one

1041
00:49:01,800 --> 00:49:04,120
Speaker 2: K or solo four onin K, you can obviously contribute

1042
00:49:04,160 --> 00:49:06,680
Speaker 2: as an employee just like you would with a traditional

1043
00:49:06,760 --> 00:49:08,960
Speaker 2: four onin K. So there are a lot of avenue,

1044
00:49:08,960 --> 00:49:11,080
Speaker 2: there are multiple paths that you can take to be

1045
00:49:11,160 --> 00:49:13,080
Speaker 2: able to sock away a ton of money, and that's

1046
00:49:13,080 --> 00:49:17,400
Speaker 2: incredibly important, especially if you're interested in early retirement. If

1047
00:49:17,400 --> 00:49:18,759
Speaker 2: that's a goal of your it's going to help you

1048
00:49:19,280 --> 00:49:21,799
Speaker 2: throw more dollars into that account. And it's also going

1049
00:49:21,840 --> 00:49:24,719
Speaker 2: to reduce your taxable burden even more significantly in the

1050
00:49:24,760 --> 00:49:25,279
Speaker 2: here and now.

1051
00:49:25,360 --> 00:49:27,480
Speaker 1: So I think the less taxes, yeah, there you go,

1052
00:49:27,520 --> 00:49:29,080
Speaker 1: solo four one k makes sense for a lot of

1053
00:49:29,120 --> 00:49:31,799
Speaker 1: those folks when when although actually maxing it out on

1054
00:49:31,840 --> 00:49:36,560
Speaker 1: both both ends, I mean, it's incredibly hard, but even

1055
00:49:36,600 --> 00:49:38,960
Speaker 1: still the ability to go above and beyond. Yeah, all right,

1056
00:49:39,000 --> 00:49:40,880
Speaker 1: So I think my big takeaway from this combo was

1057
00:49:41,000 --> 00:49:43,319
Speaker 1: when Sean said that we have imperfect information, but it's

1058
00:49:43,320 --> 00:49:45,799
Speaker 1: still important to plan, and so we don't know what

1059
00:49:45,840 --> 00:49:47,360
Speaker 1: things are going to be, like I mean, like, gosh,

1060
00:49:47,360 --> 00:49:50,040
Speaker 1: you look back at tax rates from the nineteen sixties

1061
00:49:50,040 --> 00:49:51,840
Speaker 1: and seventies and eighties and stuff, and it's like, but

1062
00:49:51,880 --> 00:49:55,360
Speaker 1: things have changed a lot since then for the better

1063
00:49:55,800 --> 00:49:58,440
Speaker 1: for most American taxpayers, And we don't really know where

1064
00:49:58,480 --> 00:50:01,200
Speaker 1: things are going to go from here exactly, but there's

1065
00:50:01,200 --> 00:50:03,200
Speaker 1: still a lot that we can bank on. And I

1066
00:50:03,239 --> 00:50:06,279
Speaker 1: love kind of his philusphy on traditional four O one

1067
00:50:06,320 --> 00:50:08,080
Speaker 1: K through work, especially if you're in one of those

1068
00:50:08,120 --> 00:50:10,959
Speaker 1: higher tax brackets. And then roth I ray at home

1069
00:50:11,040 --> 00:50:13,880
Speaker 1: in that personal account that you can open. That's a

1070
00:50:13,920 --> 00:50:16,160
Speaker 1: good way to kind of mix up your tax planning.

1071
00:50:16,320 --> 00:50:19,040
Speaker 1: But it also gives you the ability to actually continue

1072
00:50:19,040 --> 00:50:21,279
Speaker 1: to plan over time, because he said, you know, when

1073
00:50:21,280 --> 00:50:23,240
Speaker 1: you stick it just directly in the rock in the beginning,

1074
00:50:23,400 --> 00:50:25,880
Speaker 1: you end the ability to plan. You end the ability

1075
00:50:26,000 --> 00:50:27,759
Speaker 1: no future moves that you can then make.

1076
00:50:27,840 --> 00:50:28,120
Speaker 4: You can't.

1077
00:50:28,360 --> 00:50:30,839
Speaker 1: You can't shift the amount of tax you owe. You've

1078
00:50:30,840 --> 00:50:33,120
Speaker 1: already paid the tax. And so it is. I think

1079
00:50:33,239 --> 00:50:34,800
Speaker 1: that that's a helpful way to think about it.

1080
00:50:35,040 --> 00:50:35,279
Speaker 4: You and I.

1081
00:50:35,360 --> 00:50:37,200
Speaker 1: We had a nice ten minute discussion with him in

1082
00:50:37,200 --> 00:50:39,080
Speaker 1: New Orleans about the very topic. We're like, wait a second,

1083
00:50:39,400 --> 00:50:40,000
Speaker 1: there's a lot here.

1084
00:50:40,040 --> 00:50:41,320
Speaker 2: This guta sounds like an episode.

1085
00:50:41,400 --> 00:50:42,560
Speaker 1: We need to talk to you about that. So I'm

1086
00:50:42,560 --> 00:50:44,120
Speaker 1: glad he was able to come on and talk about

1087
00:50:44,120 --> 00:50:46,959
Speaker 1: why that's so important. So yeah, big thanks to Sean

1088
00:50:46,960 --> 00:50:48,600
Speaker 1: for coming on, Matt. Let's get back to the beer, though,

1089
00:50:48,760 --> 00:50:51,520
Speaker 1: let's share it. We shared it, but let's see let

1090
00:50:51,600 --> 00:50:53,960
Speaker 1: folks know what we drank. This was a petit MC

1091
00:50:54,320 --> 00:50:57,480
Speaker 1: by Monday night, and this one was donated to the

1092
00:50:57,480 --> 00:51:00,520
Speaker 1: show by our friend Ryan, actually a real friend of

1093
00:51:00,560 --> 00:51:01,319
Speaker 1: mine since high school.

1094
00:51:01,440 --> 00:51:01,600
Speaker 3: Yeah.

1095
00:51:01,600 --> 00:51:04,160
Speaker 1: I actually think we might have gone an elementary sholder again. Really, yeah,

1096
00:51:04,160 --> 00:51:05,440
Speaker 1: he's a new friend of mine. We go a way

1097
00:51:05,440 --> 00:51:08,279
Speaker 1: of course, but Ryan, anybody that brings my beers, it's

1098
00:51:08,320 --> 00:51:11,160
Speaker 1: my new bestie. Yeah, exactly right. By the way, I

1099
00:51:11,160 --> 00:51:13,920
Speaker 1: think the MC, I think it stands for mixed culture.

1100
00:51:14,000 --> 00:51:17,480
Speaker 1: This is a table beer age in French barrels. But

1101
00:51:17,560 --> 00:51:20,640
Speaker 1: what your thoughts on it? I loved it. I so good.

1102
00:51:20,719 --> 00:51:23,200
Speaker 1: I thought it was like I had like fruit zest notes.

1103
00:51:23,560 --> 00:51:25,840
Speaker 1: It was light, it had a slight funkiness. It was

1104
00:51:25,880 --> 00:51:28,200
Speaker 1: exactly what I wanted a table beer where it's got

1105
00:51:28,239 --> 00:51:30,480
Speaker 1: some punch, it's got some pizazz, but it's also not

1106
00:51:30,600 --> 00:51:34,560
Speaker 1: like overwhelming, no palette fatigue, It's it's zero pallet fatigue.

1107
00:51:34,680 --> 00:51:36,400
Speaker 2: So it's all the table beer because oftentimes it's the

1108
00:51:36,440 --> 00:51:38,080
Speaker 2: kind of beer that you have at the table with

1109
00:51:38,160 --> 00:51:40,720
Speaker 2: a meal, so it doesn't overpower the flavors of the food.

1110
00:51:40,719 --> 00:51:42,600
Speaker 2: And typically they're low abb so you can drink a

1111
00:51:42,600 --> 00:51:44,160
Speaker 2: lot of it. This one was four percent, yeah, so

1112
00:51:44,200 --> 00:51:46,680
Speaker 2: you don't have to worry about especially for us. I

1113
00:51:46,719 --> 00:51:49,799
Speaker 2: mean it's a little risky for us to throw down

1114
00:51:49,840 --> 00:51:53,319
Speaker 2: a fourteen percent stout, but something like this, man, it

1115
00:51:53,320 --> 00:51:54,200
Speaker 2: puts us at ease.

1116
00:51:54,800 --> 00:51:55,120
Speaker 1: That's right.

1117
00:51:55,520 --> 00:51:56,880
Speaker 2: I'm all about doing our job.

1118
00:51:57,440 --> 00:51:59,200
Speaker 1: Beers, and I feel like in the past few years,

1119
00:51:59,200 --> 00:52:02,320
Speaker 1: we've just seen a resurgence of really high quality, really

1120
00:52:02,320 --> 00:52:05,200
Speaker 1: tasty beers that are low low, low in alcoholic.

1121
00:52:04,840 --> 00:52:06,719
Speaker 2: And Jim are really swung to that far end of

1122
00:52:06,800 --> 00:52:09,720
Speaker 2: high gravity beers thinking that that is what was required

1123
00:52:09,719 --> 00:52:12,399
Speaker 2: in order to have good flavor, and this just proves

1124
00:52:12,520 --> 00:52:13,000
Speaker 2: that that's.

1125
00:52:12,920 --> 00:52:13,839
Speaker 1: Not that's exactly right.

1126
00:52:13,880 --> 00:52:16,080
Speaker 2: There's a whole lot of oakiness that comes from those

1127
00:52:16,120 --> 00:52:19,000
Speaker 2: French barrels as well, which I absolutely love and.

1128
00:52:19,040 --> 00:52:21,200
Speaker 1: Just like, yeah, the mixed culture, just like the yeast,

1129
00:52:21,200 --> 00:52:24,279
Speaker 1: and it just really brings out a whole bunch of notes.

1130
00:52:24,320 --> 00:52:27,200
Speaker 1: So big thanks to Ryan for donating this one to us.

1131
00:52:27,280 --> 00:52:28,799
Speaker 1: We appreciate it. All right, mattlet's going to do it

1132
00:52:28,800 --> 00:52:31,240
Speaker 1: for this episode. We'll put links to everything that we mentioned,

1133
00:52:31,440 --> 00:52:34,640
Speaker 1: including Seawn's website and Shawn's book up on the website

1134
00:52:34,680 --> 00:52:35,680
Speaker 1: at how toomoney dot com.

1135
00:52:35,680 --> 00:52:37,839
Speaker 2: That's right, man, So that's gonna be it until next time.

1136
00:52:38,040 --> 00:52:40,040
Speaker 2: Best Friends Out and best Friends Out.