This is an essential topic to cover because paying taxes is something all entrepreneurs and self-employed people have to do. Making a lot of money is great, but you have to plan for paying taxes. This includes putting money aside, keeping track of expenses, and working with a seasoned CPA. In this episode, Joe offers great advice that will hopefully save you time, money, and hassle.
Joe Saul-Sehy is the creator and co-host of the award-winning Stacking Benjamins podcast, one of the top personal finance podcasts in 2016. Joe is a former financial advisor (16 years) and represented American Express and Ameriprise in the media. He was the “Money Man” at Detroit television WXYZ-TV, appearing twice weekly. He’s appeared in Bride, Best Life, and Child magazines, the Los Angeles Times, Chicago Sun-Times, Detroit News and Baltimore Sun newspapers. He’s also appeared online in more than 200 different places, including CNBC.com and WSJ.com.
Time Stamped Show Notes
[4:30] Having no background with money education, Joe was hired by a friend as a financial advisor for a firm. His first year he made $85,000.
[6:20] Since a license is not hard to get, be sure to hire a financial advisor with at least 10 years of experience.
[9:20] Now knowing how taxes work, Joe didn’t know he had to keep track of every business expense, he wasn’t withholding money. When a CPA told him how much he would have to pay, he got angry at him.
[11:07] Being debt free is good but he owed over $20,000 of taxes. Had to think of a plan to pay.
[13:46] Joe’s thought were, if I don’t pay, I’ll make more money and pay later. Didn’t file taxes for two years and didn’t know about the failure to pay penalties.
[16:15] On the second year, he earned more money but didn’t put any away. At month 21, letters from the IRS started coming, after 4 or 5, Joe decided to look for help.
[18:35] Found a much better CPA who also was a counselor. They made a payment plan, filed paperwork to have some reductions and he was learning had taxes work.
[22:24] For his mistakes, Joe had to pay about half more than what he would’ve if he had filed on time.
[23:30] Learned to build income streams to make money in different ways and had better money management systems.
[23:04] Everybody makes mistakes and we don’t talk about those mistakes, but some don’t learn from them. Follow a process and talk about money.
[28:08] Failing Forward Segment
- What is the bottom line reason of this failure? – “I didn’t know how the rules work, when I do things now I make sure I know the lay of the land. Do some basic homework before you do anything.”
- What is the single most important lesson they and you learned from this? – “Not the mistake that I made but learning the lesson afterwards. Whenever I get payed to take a percentage in put it in a tax fund. Automate.”
- What are the major ways you protect yourself from future failures? – “Know how the rules work, have people that are more knowledgeable than you.”
- Who do you turn to when you need help? – “Roger Whitney, a CPA buddy who’s great, Of my co-host in the podcast and my coach for over 20 years, Mary Lou.”
- What advice would you give to someone in a similar position? – “Don’t bury your head. There’s this great quote from Jack Welch when he was at GE and he said something to the tune of: Don’t confront reality the way you wish it were, confront it the way it is.”
[34:55] late thirties mentor wrote a note leaving to do something else he like what he was doing but didn’t love it build up a pile of money other mountains to climb Everest twice, sold my business at 40, went to school to become a teacher. Financial stuff light way entertained learning by play
[38:55] Connect with Joe at firstname.lastname@example.org and find him on Twitter @AverageJoeMoney.
[40:12] Joe’s final thought: Pay the IRS and learn from my mistake. Get good help on your corner and keep listening to this podcast.