EP 137 - Finding Your Tax Planning DNA

Feeling whiplash from “too good to be true” tax ideas? We break down a practical Tax DNA framework that helps high earners sort hype from value by weighing five levers: compliance risk, economic risk, tax ROI, economic ROI, and return on time. With that lens in hand, we compare real estate, oil and gas, advanced charitable strategies, and solar so you can see exactly where each shines, where it breaks, and how to mix them for durable savings.

We start by defining the tradeoffs behind popular techniques—why a dazzling deduction can backfire through recapture, penalties, or negative cash flow—and then show how to design a plan you can sustain year after year. Real estate gets a deep look: cost segregation, material participation, short term rental rules, and a strong “second home + furnishings” play that can create hefty front-loaded deductions. We explain when real estate produces medium tax ROI but exceptional economic ROI through appreciation, leverage, and tax-smart exits—and where the time burden becomes the limiting factor.

For those who want speed and simplicity, we unpack oil and gas: generally lower tax ROI up front, but strong economic ROI potential and tax-advantaged depletion on the back end, with minimal time required. We put advanced charitable ideas under the microscope—acknowledging their powerful tax ROI and equally real compliance risks—plus a sober take on what’s legitimate versus risky gray areas. Then we map out solar credits and depreciation for predictable, high tax ROI, explain carrybacks, and clarify why profits often rely on incentives and modest participation.

We finish with the playbook high earners actually use: stack strategies to protect liquidity, time the aggressive moves for peak-income years, avoid over-deducting past your sweet spot, and harvest the “boring” foundation—entity optimization, pass-through entity taxes, accountable plans, Augusta rule, family payroll, and timing of income and gains. Subscribe, share with a colleague who hates overpaying, and leave a review with one question about your Tax DNA you want us to tackle next.

f you’re overwhelmed by the noise online and want clarity on what actually fits your situation, go to http://prosperlcpa.com/opportunityreport
Answer a few questions, and I’ll personally send you a video showing what may be possible with advanced planning based on your numbers.

Transcript

A tax strategy can STILL be a bad decision

SPEAKER_00 0:00

So there's hundreds and hundreds of tax strategies out there for high-income earners and different ways to implement them. And just because a tax strategy saves you money doesn't mean that it's a smart tax strategy. And if it is a smart tax strategy, that doesn't necessarily mean that it's the right tax strategy for you. I've seen many high-income earners save six figures in taxes and lose seven figures in bad investments trying to do it. And there are other risks that they may not factor. You can generate a 40 to 100% tax deduction and then find yourself creating negative cash flow and potential recapture of those tax savings down the line. You could defer your taxes, but then find yourself destroying your liquidity and stunting the growth of your business. You can be aggressive in a high income year, but then find yourself buried in tax penalties and fees and debt for the failed tax strategy. So today I want to give you a framework that we use evaluating the tax strategies for high income earners. I call this assessing the tax DNA. And this is our framework for making sense of all that is out there in diagnosing which of the many tax strategies best fits our high-income earning clients. We're going to discuss and stay tuned, because this is going to be really helpful if you are feeling a little overwhelmed by all the information out there, because we are going to discuss how to evaluate the tax strategies that are out there for high-income earners. And we're going to apply different criteria that we evaluate and share with you how that applies to certain examples of commonly used potential tax reduction strategies. And we're also going to share with you how you can make sense of all this and understand which strategy is best for you. And not only that, but also understanding how to make sense of the information and make effective decisions for permanent long-term tax reduction and wealth creation. Now, before I jump into this, just remember if this is a little bit over your head at any time and you want to get more custom feedback and you want to get a free opportunity report for me where I will evaluate your information and I will personally send you a video illustrating what may be possible to reduce your taxes using advanced tax reduction strategies. I want you to go to prosperocpa.com slash opportunity report. That's prosper with an LCPA.com slash opportunity report where I will evaluate the information and personally send you a video illustrating what may be possible when we start finally using advanced tax reduction strategies. So let's get into this here. When it comes to evaluating high income earners and what strategies are available, there are a few different elements we looked at here. One is compliance risk. So what's the probability that whatever potential strategy out there could go wrong? And sometimes you're gonna find that there is a risk, and there are some very aggressive strategies out there that haven't been court tested, and the tax reduction could be life-changing for the client. However, you're taking a stance that is more aggressive, it is harder to prove and substantiate the validity of these opportunities. Now, another potential risk that we evaluate for our clients is the economic risk. What is the potential for losing your money in this strategy? So, what is the economic risk that we may not see profit on these decisions that we're making to reduce our taxes? So, what is the overall impact and what is the potential that we can wind up losing money on these concepts? What is the economic and financial risk? Are we so some examples of this that we'll drive into in a little bit is if it involves taking on lots of debt on assets that we're not really familiar with? Or are there other types of risk where we're relying on the economic performance of an investment in future years? And debt oftentimes will increase the economic risk that is involved in a lot of these strategies. Another factor that we look at, and we can oftentimes quantify this factor, is the tax ROI. What I mean by the tax ROI or the tax rein return on investment is what is the amount of tax savings we get compared to the amount invested? So, for example, you may find that putting money into a solo 401k is gonna have a lower tax rate, tax ROI than solar because a 401 is gonna let's say we put$100,000 in a 401k at a 30% bracket, we're saving$30,000. That's a 30% tax ROI. But let's say we put money into solar, we put$100,000 into solar and we turn that into$125,000 of tax savings. That's a 125% tax ROI. Big difference. And then there is the economic ROI. So are we doing these strategies just for the tax ROI? And sometimes we are. Some of our decisions and strategies are gonna create lots of tax savings, but we're not really gonna see tremendous cash flow and impact from whatever we're putting money into. If if whether it's putting money into something that creates a charitable deduction or depreciation or credits, there may not be ancillary benefits in the form of wealth creation and future cash flow. So the economic ROI could be really low, but other investments or decisions could create high economic ROI. Maybe we are purchasing assets or starting businesses that can not only reduce our taxes, but create opportunity for future cash flow, profit, and wealth creation. And then there's the return on time. And we have lots of busy professionals, lots of high-income earners who are getting hit in the head, especially our clients out there with W-2s in California. They work incredibly hard, they're very good at what they do, and they love all these ideas, but some of them require time commitment, and they simply don't have the time. So, what is sometimes we're looking at what is going to create us the greatest return, whether it's economic or tax savings, in the least amount of time. Because a lot of people can't be bothered with some of our strategies when it requires a certain amount of time commitment to qualify for the deductions for the credits, and also to see profit in whatever activity you may need to invest into or create to create the tax savings. So every person's situation is different. And what you are gonna find when you look at these different variables: the compliance risk, economic risk, tax ROI, economic ROI, and return on time, what you're gonna find is everybody has a different tax DNA. Back to that concept here. So you're gonna see some of our clients have a very, very high risk tolerance on the compliance side. They want to do the aggressive strategies, they can't afford their tax bill right now, or they see such a high ROI by reinvesting into their businesses and other activities, they're okay with taking the tax risk now because they're gonna make so much profit with their tax savings that under worst-case scenarios, they're gonna be alright. And some just want to have access to those more advanced, more aggressive tax strategies. Other folks are gonna want to take the less compliant, the less riskier type of strategies with compliance. They don't want to have to explain to their wives and husbands how they're reducing their taxes and what they're doing. They don't like taking risks, they want to have a very predictable outcome. So, on the compliance side, these folks are often going to be more interested in concepts that are clearly going to be uncontested on the tax side, like putting money into retirement accounts, oil and gas investing, those incentives have been around since the early 1900s. It's black and white, no one's ever gonna contest the legitimacy, the legitimacy of you creating deductions from oil and gas. And an S-corp tax selection, and sometimes we can be really effective and have minimal risk because we are just having strong implementation of time-tested foundational tax strategies. And then the tax ROI. If you really want to have capital and if you want to have the most effective growth, and if you want to have the highest return on investment of anything you'll put in money into besides your own education, there are potential tax strategies where a dollar could turn into$2.50. And obviously, at scale, when you are a high incomer making as much as$750, a million, three million, five million, those investments can have such a profound impact on your ability to reach your goals, retire, spend more time with your kids, you know, build the business, or own whatever you'd wanted to own, that they're really looking for that high tax ROI for the opportunities. And then other people will say to themselves, Well, I don't really like putting money into things that don't make me money. I'm not really interested in these charitable ideas or these credit ideas. What is this investment? What is this deployment of my cash gonna do from me in the future? How am I gonna see an ROI compared to I would see how I would see an RI ROI in the stock market or an index fund? And a lot of these potential investments are gonna pull from various features, they're gonna have a charitable deduction or a tax reduction, business deduction, or credit, and could potentially create future future equity, cash flow, and profit to justify the expenditure from an economic perspective. And return on time again, we do have a handful of clients that have the time or they can leverage the time of their spouse, and they will do whatever is necessary between them because they really want that tax savings and they see the value of tax savings. And remember, tax savings is always gonna be more value than valuable than profit. Obviously, you need profit in your life and you need income. However,$20,000 of tax savings is always gonna be more valuable than$20,000 of profit because that profit is eventually going to be taxed. And if you're in a high income bracket, that$20,000 of profit might only really mean$10,000 of actual take home wealth creation. Meaning, however, at the same time, your twenty thousand dollars of tax savings is pure wealth creation. So we have a mix of where people stand within the spectrum of high to low on where they're willing to take on these risks or what their desires are on the potential benefits and ROIs. And I want to share with you how can we look at these different these different areas that we look at, these different gauges, as it applies to some commonly used tech strategies with our clients. So the four strategies I want to share with you that are going to that I'm gonna walk through what that means when we look at the the tax planning DNA from the client are going to be realistic investing. Advanced charitable strategies and then solar creation. Real estate investing, oil and gas investing, advanced charitable structuring, and solar. So let's dive into what these mean here. So, first off, one of our most common strategies with our clients is real estate investing, and we have saved our clients tens of millions of dollars with real estate investing, with the short-term rental loophole, or the real estate professional tax status. Just search it on our YouTube site or podcast. You will see me talking for hours, diving into those topics there. And let's dive into this. So, from a compliance risk, let's say we are interested in real estate investing and we are looking at how it fits in from a compliance perspective. Well, I would consider the compliance risk for real estate investing to be relatively low here because we are not really gonna debate the legitimacy of real estate professional tax status, a short-term real loophole, or maybe even you have other strategies that you're taking advantage of to create tax savings with real estate. Maybe you have other sources of passive income, the real estate losses can offset, and maybe even you're taking advantage of certain credits like low-income housing tax credit, historical tax credit, and maybe the 45L credit here. Well, these are all time-tested, well-regarded strategies and opportunities. And as long as you understand the law and what it means to materially participate, you really aren't stressing out on the compliance risk here. There's no red flags that come up because you're taking advantage of these incentives that have been used year after year after year. Cost segregation, while it can create an enormous deduction on your 1040, just because you have a couple hundred thousand dollar deduction on your 1040 doesn't mean you're gonna raise a red flag to the IRS. It is commonly done. We've done it all the time. In fact, we've never raised a red flag for clients where we've used cost segregation studies to create deductions as high as$5 million on a 1040 tax return. It didn't really raise any red flags because it's a commonly accepted process of evaluating the assets and how much they're worth within your real estate. Now, the economic risk, let's talk about this. I think that the economic risk may be around medium here because yes, you are taking on the risk that the real estate can be unprofitable, but at the same time, you are putting money into an intangible asset that is shown to have value year after year after year. And what I've often found with real estate investors and is that, well, while they may not see the cash flow they were hoping for the results, if you hold on to the real estate long enough, it's still gonna grow in value over time. Now, if you're expecting that rental income to replace your salary and provide for your livelihood, you now you might be a little more concerned about the potential opportunities and the variability and what you're gonna get and potential for things to go wrong and cost for maintenance. But a lot of our higher income earner investments can stomach potential downsides in the earlier years. And if they get that initial tax savings, they're building equity, they're paying down the rent, and they're using strong foundational decisions, they're usually all right here. So I would consider the economic risk to be around medium low. Let's talk about tax ROI. The tax ROI can vary depending on what your strategy is and what type of real estate you're investing in. So I would consider the tax ROI compared to some of our other strategies to be around a medium. But it could really depend on the type of property. So here's how you could have a really strong tax ROI with real estate investing. The highest I've seen is if you could find a way to acquire real estate that gives you a tax deduction and you put little or no money down. So if you could find a way to owner finance or creatively finance a deal where you have equity in it, and then you do the cost segregation study, you're accelerating the depreciation, and you're capable of using this loss that you're creating with a depreciation to offset your other sources of income, you could potentially have a really high tax ROI. We've seen this with real estate syndicator who raise capital with other people's money and get equity in these deals, and then they are also entitled for the tax inductions. I've also seen this with short-term relevant investors where you'll buy a home with a second home mortgage. And for those of you looking to really create massive tax savings and who are really excited about real estate investing, but maybe don't have a whole lot of cash they want to put into this, here could be a really awesome cheat code. The second home mortgage. If you can buy a home as a second home, I believe it's 50 to 60 miles from your primary residence, you only have to put 10% down on the real estate. Now, typically you have to put 20% down. So you put 10% down on the real estate, and you then do the cost segregation study. And if you buy this real estate furnace, the cost segregation study not only will allow you to write off what we would expect to be at least 25% of the purchase price, and that can vary, but you're also going to get to write off all the items that were all the furnishings that came with the property. So if it came with a with a bed and TV and silverware and all these items, you're financing the purchase with that second home mortgage, and you are deducting immediately the value of all these items that came with the property on your federal taxes. So you may see an instance where you put in 10% down, but right off 30% of the purchase property. So getting a 3x deduction can give you a really high tax ROI. We don't often see that though. Now, typically, what we'll see is maybe 20% down on a piece of real estate, and you'll get a deduction of 25% typically of the purchase price, and that can vary. Sometimes it'll be a lot less. So I would consider the tax ROI on real estate to be around medium, but it could vary from low to high. Now let's talk about the economic ROI. And I just did a podcast on this, and I think that real estate among our tax reduction strategies has the highest or one of the highest economic ROI because you have a lot of things going for you. You can build cash flow, you can have you're paying down the mortgage, you're building up equity, and there's all these tax advantage ways to get out of it. You can borrow from the built-up equity and not pay taxes on it. There's just so many amazing things that you can do as a wealth-building vehicle where even if the real estate didn't save you a dime in taxes, you would still consider doing it because of all the wealth-building opportunities. And you compare this to some other things that we've discussed or will discuss, like solar panels, we love them. However, at the end of five to ten years, no one's gonna really value those panels very much, but you could potentially see the value of your real estate realistically can double in that amount of time. And now let's talk about the return on time. The return on time is gonna be one of the lowest with real estate because you likely have to materially participate to use your losses, and it takes time not only to do that, but even evaluating the real estate and making sure you're right making the right decision and underwriting deals can be very time intensive. You can find yourself going down lots of dead ends looking for deals, and sometimes you may not even be able to find a good deal. So it is going to be among our strategies, if not the most, one of the most time-intensive tax reduction strategies. Now let's look at oil and gas. Compliance risks again are going to be relatively low here because it's rare that we've seen uh our clients when they invest in oil and gas have those numbers uh adjusted or contested by the IRS. It is not an aggressive strategy. Now the economic risk. I would say it is a little higher than most because you're the tax deductions aren't enough to justify the investments, and you're relying on the outcome and the cash flow and future profitability to justify this investment. So you are taking a risk, you are relying on the performance of that investment to justify what you're doing here. Tax ROI. The tax ROI is a little bit lower. I would say is around low to medium low, because your deduction is usually less than what you invest into the oil and gas. I've seen it occasionally come out to 100%, but oftentimes it's around 75 to 90% of your investment. So every if every dollar turns into a deduction of 75 to 90 cents, that's going to be lower than some of our other strategies that give you a dollar for dollar deduction or a tax deduction that is far greater than your investment, and some that will give you tax savings that exceed your investment. That's not going to happen with oil and gas. However, again, we're doing this. Oil and gas is in many ways equal parts tax strategy and investment strategy. So when it comes to the economic ROI, this is going to be on the high scale. This is going to be far higher. It's going to produce far more return on investment and cash flow than a lot of our other opportunities because you are investing in a piece of a business that will hopefully be cash flow positive and produce significant profits. And also, when those profits come in, though, they are tax-advantaged profits. So while we have a lower tax ROI in the front end and the back end, when the money starts coming in, we have that beautiful depletion deduction where you're actually not paying taxes on all the revenue that hits because we have that depletion typically offsetting 50% of revenue. Now, return on time is going to be high, the high one of our highest with oil and gas. You just got to find a deal, put the money in. We sign off your accreditation, you get the tax deduction. This is really great for our clients that don't want to do anything or want to do minimal. They may want to have some advice on how much to invest to optimize for tax savings based on their potential tax incentives and tax brackets, etc. etc. But at the end of the day, they really don't need to do a whole lot. So this is really great for our clients who are busy doing other things with their lives. They don't want to start businesses, they don't want to materially participate, they just want the tax savings and future profits. Now let's go into advanced charitable. When it comes to advanced charitable strategies, there's a wide variety of things you can do to create charitable tax deductions. Some of them are going to be relatively well known, donor-advised funds where you're putting money into an account and then you decide where it goes, as best as simply as I can explain it. Some of it's going to be just general deductions where you're putting money into a charitable organization. But for this conversation, we're going to talk about the more sophisticated, advanced charitable deduction strategies reserved for the higher incomers. And these are typically going to be more aggressive here. And when you're taking a more aggressive stance here, where maybe you invest into something that will create a deduction that's five times that amount. So spending$100,000 for a half a million dollar deduction. Imagine spending$100,000 for a half a million dollar deduction, and that half a million dollar deduction saves you$200,000 in taxes. So your money is doubled. Well, you can imagine this type of outcome may sound a little too good to be true, and sometimes it is, sometimes it isn't. And so there are areas of the law and there are strategies that can be abused, and then there's a lot of gray area where we don't know how the courts would decide on it. So there's this whole spectrum of opportunities to create massive charitable deductions, but you may find that with many of them, you are taking a stance that hasn't been court tested and that may be reversed in the future. So the compliance risk on some of these advanced strategies can be very high. And while it can be high, and some of these strategies would get audited, we still may find, many people will find that it is worth the risk because they are going to redeploy their tax savings and grow and compound it over time. And that gives them future liquidity to hedge against anything going wrong against the future. And they often may find that the risk is worth the reward because of the incredible amount of wealth they can build. Now, when it comes to the economic risk for advanced charitable, there is none because you're not going to make any money on this thing in many times. Occasionally, there are strategies that combine charitable deduction strategies in profits. But generally speaking, for these advanced charitable strategies, you are going to see minimal economic risk. Most of the clients we have and high-income earners out there are not really interested in an ROI for uh profitability when they've executed on these strategies. Now the tax ROI. Tax ROI is going to be the highest because some of these strategies can legitimately eliminate the taxes on as much as 60% of your income. And if you are especially in a high bracket and then in a high state tax bracket like California or even a regular state tax bracket, this could be incredibly transformational on your abilities to retire earlier, do whatever you're looking to accomplish. Now the economic ROI is low. In fact, it oftentimes will be zero economic ROI. Some of these investment strategies or tax strategies are gonna have a result where you're actually not gonna find any profits coming out of it. And the only motivation of how things shake up oftentimes turns into solely tax benefits. And the return on time is usually extremely high. Usually minimal fall action is needed here. Now, back to the compliance risk. Uh you know, obviously, you can tell that there's lots of details that we aren't going to dive into so heavily in this conversation just because we're continuously evaluating all these concepts. Uh, right now, uh, there's something in the works where people are discussing a gift card donation strategy, and we really have to be careful on how we advise our clients on these concepts. And some of the clients will bring them to us and they ask for our opinions. And sometimes there is no clear answer on whether or not this will survive the scrutiny of the IRS. Sometimes we find these strategies and we say, This is just stupid. Don't do it. It is these guys are insulting your intelligence by making these recommendations. And by the way, that's not just charitable strategies. There are some other wacky investment strategies where you pretend to be, you know, getting involved in a farm, and you know, you're you're trying to say that you're running a farm even though you live hundreds of miles away, and while other people are picking up the poop of the animal, there's just so much wacky stuff out there. Uh and one of the things you want to keep in mind is it's pretty much illegal or it's non-compliant to promote investment where or you're just selling a tax deduction. Now, if there is a tax component of it, or it's tax advantageous, or there's a possible the result of a possible investment, could be potentially being able to make a decision or vote on something that's going to create tax savings, that very well may be compliant. So there's a there's a lot of gray area on how people define this, and so you really want to be in touch of how the court cases are deciding on these things and what's the legal environment. Um, but these power these are incredibly powerful strategies. And the last potential strategy I want to share with you and and how this ranks in these different factors is solar. With solar, our compliance risk is low. Uh, the wonderful thing about our solar strategies is we can predict with pretty solid accuracy what is gonna be the deductions we get in the tax credits. The economic risk is I would say low to medium here. A lot of the times it's very predictable what the rent revenue is gonna be. And we have a strategy where you're actually collecting the rent revenue all up front and taking on no debt, so the economic risk can be relatively low. The tax ROI is high, may not be as high as these advanced charitable strategies, but it is high because typically every dollar will turn into about$1.20 to$1.40 of tax savings. So anytime you can exchange a dollar for that high amount of tax savings, you think to yourself, well, if every dollar could be turned into$1.25,$1.30, how many dollars do I want to put in? Well, as many as I can come up with. And the really cool thing about solar is you're not just chipping away about current year taxes, you can even go back three years, offsetting the taxes from prior three years with the investment tax credit. So we have a few of our clients that got hammered with taxes and they want to get their revenge, and their way of getting that money back is with solar. Um, the economic ROI is very low. What you will often find is that while you can make some cash flow and profit on the solar, it really doesn't make sense without the tax incentives. It oftentimes is around just above a break-even, it's not nearly as profitable as oil and gas. However, those tax incentives can make it very powerful. And then the return on time is I would say low to medium. You do have to materially participate, you have to put in at least 100 hours. It's not nearly as uh time intensive as real estate investing or starting a side business of some sort. However, it does require some amount of time commitment, certainly more than passive investments or investing as a passive and passively or putting money into some sort of charitable structure. On a side note, one really cool strategy I that's on my back burner personally, I eventually want to coach our clients through this more, is starting their own nonprofits. I think is a really cool idea where you can you can promote a cause that's really valuable to you, and now you can create tax deductions and you can kind of time uh let's say you have an extra cash flow you can put into that nonprofit, and over time you can you can spend money from that nonprofit in ways that'll further your cause. And sometimes there will be ancillary benefits of the networking and what that can do for your image and just the impact you have on the people around you. So, on a side note, that's a really cool charitable strategy that is time intensive, uh, but we are not gonna have time to discuss all of that today. But hang hang in there with me, I'll give you some stories and you know, give me some good hires, set some good hires to prosper so I can delegate more stuff and put more time into these back burner ideas on my bucket list. So let's talk about what this means and how you can decide if this is right for you. Uh, we want to evaluate the sustainability. Are you gonna have the ability to buy a rental property every year? That's the only way that you can reduce your taxes. Well, maybe there's gonna be some years that you can't buy another, you can't find one, you don't have time, right? And then what's the liquidity? Are you always gonna have the cash to put it into that real estate? Because maybe sometimes you're putting money into renovations, or are you gonna have cash to put into this charitable strategy, or are you always gonna be interested in deferring your taxes? So when you look at all the strategies out there, you want to consider your liquidity because it's really important to have that liquidity, to have some cushioning, peace of mind, or money for other things that are more important than tax reduction. And then also considering what are your interests are is this tax strategy aligned with your interests? Are you actually interested in real estate and sole owned? And are you passionate about learning passive investments? Is this tax strategy aligned with who you are and what you're interested in doing and where you're looking to go? And we love it when we do align our clients' interests with a tax strategy that is immersed into what they're already doing. And then what are your goals? Again, aligning your goals with the right tax strategy. So I know I threw a lot at you here, and again, go to prosperouscpa.com slash opportunity report for me to help you make sense of this and navigate what particular strategies may apply to you. But let's also discuss how we can make sense of all this information and also how can we mitigate against the downfalls of some of these potential strategies. Well, one idea is we want to diversify and stack in many situations here. So maybe we're not relying on just real estate to reduce our taxes because we may find we run out of money for down payments or we don't have the capacity to build a massive real estate empire just to keep ourselves out of the 37% tax bracket. So maybe we stack it with solar and maybe we stack it with charitable because those are gonna preserve our liquidity because they provide a high tax ROI. We're also gonna consider when to be more and less aggressive. You may find that there is a year where you're just getting clobbered with taxes and you're gonna say, let's go for this strategy, let's take on this debt, let's take on this risk so we don't have to give all our money away, we could deploy it into this project, which we know is gonna be fantastic, etc. etc. But then you were you may find that after a while you're not really interested in racking up all this debt to have all these assets. Or maybe you may find that you want to also put money into things that are gonna give you money back in the future. So really assessing all these levels that are gonna change over time and your liquidity is gonna change over time. And also, here's another concept you you want to make sure you're aware of is navigating the sweet spot. Because at a certain point, you don't need much more of a tax deduction. At a certain point, in based on your status and your income, you may not really need a whole lot of deductions. You're not gonna get a lot of bang for the buck when you're already in a 10% tax bracket. And you gotta consider the phasing ins and outs of different incentives and deductions and credits. So you may find that when we factor in your QBI deduction, your itemized deduction, your child tax credits, you don't really need any more real estate purchases or oil and gas to reduce your taxes. And maybe you still want to do that, but certainly you don't need the deductions. And also, what are we doing to reinvest our tax savings to maintain that liquidity? And what is the cash flow that we want to keep on hand? And then what I also think is extremely important here is while we do talk about how we have access to these incredible strategies that could potentially change your life, we want to be aware of the low-hanging fruit. What are the strategies that are always gonna make sense for us? What are the opportunities that we're leaving on the table if we don't know any better? Being resourceful and knowledgeable and understanding what are we entitled to for write-offs. And sometimes we can be really resourceful and create additional write-offs that we didn't know were available just by understanding the tax law. Also, we want to consider some other examples of this is hiring the family and timing, simply waiting to sell an asset to drop from the short-term capital gains tax to the long-term capital gains tax, or maybe other timing strategies, moving your income into the lower bracket years and expenses into the high bracket years. There's so many amazing opportunities to reduce your taxes where you're saving millions of dollars in taxes, and we've done this with our clients simply with timing strategies, and then entity implementation. You'd be amazed by how much you can save with just effective implementation of your S corporation partnership and sole prop, understanding how they function, not only being more compliant with them, but understanding how do you pay yourself, the pass-through entity tax selection, if you're paying state taxes to offset federal, or maybe you're also considering something as maybe flashy on social media as the Augusta rule, but doing it right. And then other opportunities with that entity like fringe benefits, so many other opportunities that are gonna make that are always gonna make sense, regardless of your tax planning DNA, because it's just not gonna be impacted by the risks that we were discussing earlier. It's just no these some of these things are just no-brainer decisions. So I hope you got something out of this and how we make sense of all this noise and all this stuff out there, and we zero in on what is your tax planning DNA, right? What we want to know here is what is your your preference and you know what is your needs when it comes to the compliance risk, economic risks, the tax ROI, economic ROI, and the return on time. And based on those factors, you want to look at the combination of opportunities that are available and best fit that planning DNA, but also applying those foundational concepts and stacking and diversifying and continuing to have the conversation with the qualified advisor to help you navigate this space, which is ever changing. All right, hope you enjoyed again. And if you want to get a free personal video from me, I want you to go to prosperalcpa.comslash opportunity report, you know, fill out a survey, have a conversation with someone on the team, and I will personally help you understand how advanced tax reduction may help you in reaching your goals. Have a wonderful day.