Narrow Down Your Niche

Episode 893: Narrow Down Your Niche, with Craig Cody

Narrow down your niche and see your profits grow! Craig Cody shares more secrets on why you should narrow down your niche.

Got advice from someone saying that you should narrow down your niche? Well, Craig Cody explains why that is and why you need to take that advice seriously, especially if you want to save money in the process.

Craig Cody is a Certified Tax Coach and the owner of the New York City based accounting firm, Craig Cody & Company. Craig belongs to a select group of tax practitioners who’ve undergone extensive training and continued education on various tax planning techniques and strategies. Craig is passionate about helping business owners understand the difference between tax planning — and tax paying — by helping them save significant money. Craig is also the co-author of the Amazon bestseller, “Secrets of a Tax Free Life.”

What you’ll learn about in this episode of narrow down your niche:

• What has changed for Craig since his last appearance on Onward Nation in episode 530, including the launch of his Progressive Dentist Podcast
• Why Craig began guest starring on other podcasts, and what those experiences taught him about business development
• Why you should narrow down your niche the moment you see an opportunity
• How Craig began niching down to specializing in helping dentists better manage their practices and save and make more money
• What challenges Craig and his team had to face when niching down, and why focusing on an extremely narrow group caused a degree of fear
• Why Craig struggled with imposter syndrome after he decided to move from being a frequent podcast guest to hosting his own show
• Why the new tax laws have benefited business owners more than anyone else, and why people receiving W-2s were hardest hit by the changes
• How the new tax rules allow business owners to claim significant new tax deductions to reduce their tax liability
• How Craig helps his clients maximize their tax savings and reduce the amount of liability they carry
• Craig offers a specific example of the kinds of deductions a business owner can find in the new tax code, complete with examples
• Why things like pools and home gyms can now be tax-deducted, and why there are many more strategies beyond these that can be employed to save you money
• How you can narrow down your niche and start saving more money than what you normally would

Resources:

• Free Course: www.craigcodyandcompany.com/course
• Email: [email protected]
• Website: www.theprogressivedentist.com
• LinkedIn: www.linkedin.com/in/craigcodycpa
• Want to narrow down your niche? Listen to this podcast with Nicole Mahoney

Additional Resources:

• Sell With Authority by Drew McLellan and Stephen Woessner: https://amzn.to/39y7x13
• Predictive ROI Free Resource Library: https://predictiveroi.com/resources/
• Stephen Woessner’s LinkedIn: www.linkedin.com/in/stephenwoessner/
• Learn more about how to narrow down your niche by listening to this advice from our guest, Parker Stevenson

 

 

Narrow Down Your Niche: Full Episode Transcript

 

Get ready to find your recipe for success from America’s top business owners here at Onward Nation with your host, Stephen Woessner.

 

Good morning Onward Nation. I’m Stephen Woessner. And before I introduce you to our very special encore guests today, let me share some insight in some context, some. Well, maybe context is the right word around why, when Craig Cody said yes, he would come back for this, which will now be his third episode here at Onward Nation.

 

Why I was over the moon excited. Why I was thrilled. Why I knew that this was going to be an exceptional learning opportunity for you and for me as well, and just all of us within the Onward Nation community. So you may recall from his previous couple of visits, Craig is a certified public accountant, so CPA, he’s also a certified tax coach, and he’s a business owner and the host of the newly released and launched Progressive Dentist podcast.

 

Now that in and of itself is awesome, we can have a great conversation around tax planning and we will do that. But here’s what’s really, really interesting. And one of the lessons that I was asking Craig’s help in teasing out to share with you, and that is Niching Down, what was the title of his podcast? It’s the Progressive Dentist podcast.

 

Well, through his podcast, he helps dentists grow their practices through making smart financial decisions through financial education. And this is stuff that’s not taught in dental school. The sophisticated tax planning that Craig and his team do. So that’s an opportunity for us to have this great conversation with Craig about, you know, getting super intentional about his own thought leadership.

 

He had guested on many business podcasts before, and he’s an exceptional guest. You hear in just a few minutes in guesting all of those appearances. Absolutely drove Biz Dev for his firm. Fantastic. Then he decided, you know what? I’m going to up my game. I want to host my own show. Well, what was that like? And then what was there fear?

 

Was there trepidation? Was there some skepticism about niching down? He knew that that might be the right decision to make. But what were all of the factors that influenced his decision to decide to say, yeah, I’m going to host my own show, but it’s going to be called the Progressive Dentist Podcast. Well, that’s a big move. It’s a bold move, and it’s really open doors for him.

 

And we’ll talk about that. And then and then we’re also going to pick his brain about the new tax law. There’s been so much. And you know when the first tax law was first passed, it was like the wild, wild West. No, nobody knew what was going to happen. How is this going to be impacting business owners?

 

It was just kind of this. I don’t even know what the right word is, just wide open. So many unknowns. And so now we have more knowledge. And so Craig is going to come back and give us his insight, his expertise around how you can take some of these things and apply them through the latter half of this year and be better for it.

 

So without further ado, my friend Craig, thank you so much for coming back. Welcome back to Onward Nation. 

 

Learn more about how to narrow down your niche in this podcast

 

Narrow Down Your Niche: Craig Cody’s Introduction

 

Well, thank you, Stephen, so much for having me. I’m really psyched, as usual, to be here. Truly an honor to be here. And for three, three episodes. Oh, my gosh, it’s just a pleasure and an honor to have you here.

 

So let’s dive in with what’s new. And I know for you, a big piece of that is the progressive Dennis. And we’ll certainly chat about that. But bring us up to speed with what else is new. And then we’ll certainly talk about thought leadership and so forth. But overall what’s been new over the last couple of years since we’ve had a chance to do this.

 

Oh, geez. We’ve moved into a bigger space. We’ve hired new staff. We’ve niche down, which we’ll talk about and we’re just moving forward and, you know, doing, you know, we listen to your podcast and we do a lot of things that you tell us to do and they work well, very kind of you to say but, you know, you’re executing, right.

 

You’re taking advice that you’re learning from, from other guests and other experts and who have done some of the things that you want to do and you’re taking that advice and applying it. So, good on you. So what? Let’s think about getting intentional about the podcast. So give us some additional context here behind the curtain for Onward Nation business owners to know, like you had been a guest on many other shows, dozens and dozens and dozens of shows and so first take us into that strategy.

 

Why did you decide that maybe guesting on other shows would be a great way to impact business? Well, what we learned when we were on over 100 shows was that we actually just did it the first time, almost on a whim, with no real thought or a plan behind it. And as we did it and we learned, we kind of learned, okay, we need to do things a little bit differently.

 

And, you know, about sharing information. And we wound up doing about 100 episodes on various types of podcasts across different, you know, different types of business podcast rental, real estate and stuff like that. And obviously, you know, we figured out that, you know, they don’t teach, you know, people, they go to dental school, they don’t really give them a whole lot of business training.

 

Learn more about how to narrow down your niche in this podcast

 

Narrow Down Your Niche: The Events That Led to Craig’s Success

 

So we learned we were able to help them, which led to us niching down. But in the interim, we learned that we needed to, you know, put content out there and content that was helpful. And then if we did that and we did it long enough, you know, people would call and they’d want to talk to us and we’d talk to them and we’d find that, you know, we could be helpful for them.

 

And they liked what we could do for them. And, you know, it broadened our client base over the last four years. I think it is to have clients all across the country. Wow. So let me give a piece of that back to you and make sure I’m tracking with you. So over 100 shows. Yeah.

 

And started out, you know, as a whim. So not not just real fleshed out, pounded into stone strategy. It was, hey, this might be an idea. I’m going to try it and see if there’s any traction. And then you got some traction. It sounds like you started with more kind of general, I’ll just say kind of quote unquote general business shows.

 

But through that process, you started kind of uncovering this niche. Was it because you were a guest on a dental podcast and then you got some good feedback from it? So what I did is I tracked all the so we would give a copy of our book. And I think it’s important to note that I think almost maybe it was our first nine months or our first year, we didn’t even get somebody to request a copy of our book.

 

So we realized we needed to be doing things a little bit differently. So we kept refining the message. And, finally, you know, we changed it enough that we started getting people requesting a copy. We give a free copy of our book, and then we’d be on different shows, and I tracked all my metrics, and we noticed that I may get if I was on a dental podcast.

 

Maybe I get five requests for my book but, you know, three of those people are qualified that I could really help. Whereas maybe if I was on, you know, real estate, I might get 100 requests for my book, but maybe only one person I could have. So that’s what led us into, you know, niching down. And we also already had clients that were dentists.

 

So, you know, we already had a foot in the door, I would say of that industry. And the more we did it, we realized, okay, this is a great place where we can help people and we could save people a lot of money. 

 

Learn more about how to narrow down your niche in this podcast

 

Narrow Down Your Niche: Refining The Message

 

Okay. So some really, really stand out lessons there. So I love the fact a couple of things about refining the message, the fact that you did it for about ten months, even though you didn’t get any requests that still says to me that, you know, early on, it started to feel good.

 

It started sharing messages. You were feeling that you were helpful. And I’m sure you’re getting feedback, even though it wasn’t a request for the book. And so that just speaks to your commitment and then also discipline. So that’s awesome. And then the second piece, the business owner in you was like, well, wait a minute. We’re tracking the metrics.

 

There aren’t a lot of metrics. So are you setting ego aside, let’s refine the message. How do we do that? And then obviously refining, refining, refining. And then boom. So really, really smart to think about it. So analytically correct. That’s the pocket protector in me.

 

That’s awesome okay. And then thank you for taking us inside the you know, three out of five might have only received five requests, but three of them were qualified versus an abundance of requests, 100. And then having only one person qualified like on a real estate show. And because those those those 99, they’re not qualified.

 

That’s just a cost. Right? Right. But you know, if we look at it from a purely business perspective, it was still worthwhile, you know, that that the cost we were spending to get that one client. 

 

Learn more about how to narrow down your niche in this podcast

 

Narrow Down Your Niche: Starting A Podcast

 

Okay. Well that one real good lead, it was still worthwhile. Okay. So then take us inside your decision to decide.

 

Okay. Yes. I’m going to now have my own show. So let’s talk about that and then we’ll get to the niching of your show here in a minute. But then how did you come to the decision? You know what, I’m going to have my own show. I’ve been doing this now. I’ve been on, you know, 100 plus episodes.

 

Now it’s time for me to have my own show. How did you come to that decision? Well, I was definitely much more comfortable in what I was doing. After being on over 100 shows, I felt comfortable in front of the mic. I also realized, there were a lot more people starting to guest on podcasts, which is a great thing.

 

I mean, because I believe podcasting is still the Wild West. And I thought, okay, let’s try and, you know, maybe target a little bit more than the dentist. And the best way to do that is having our own podcast. And then we can have various dentists on and talk about, you know, how they built their practice.

 

And that would really niches down. And I mean, that sounds really simple. It wasn’t as simple as that. But, you know, it took us some time to figure that out. Okay. So how is that not simple. And what were some of the obstacles, roadblocks. What are some of the things that you guys had to figure out along that path?

 

Well, it was scary for one. Now all of a sudden we were just going to be, I’ll say, targeting dentists and the information we were giving out versus, you know, one week I’d be on a real estate show, a small business, a construction. I had all these little irons in the fire. You can say. Yeah. And now I was pretty much going to say, okay, we’re just going to be giving out, doing a podcast on dentists, focusing on dentists, trying to help dentists and like niching down into a real, real narrow group.

 

Learn more about how to narrow down your niche in this podcast

 

Narrow Down Your Niche: Craig’s Unique Approach on The Podcast

 

So, if I’m tracking with you here as well, it sounds like there was even though your gut was telling you, look, dentists are going to be a good spot for us. But it seems like, you know, by focusing solely on dentists, there’s a piece of you or maybe your team that was like, yeah, but yeah, but we’re giving up all of this other opportunity or potential opportunity, by focusing here.

 

And will there be enough abundance in this dental bucket? Am I tracking with you? Correct. That’s exactly it. And, you know, I mean, I do have an abundance mindset. So, we were able to get past that. Okay. All right. And so, again, I know it’s early on, that your show recently launched about a couple months ago.

 

So but what has been maybe some of the initial response or feedback that you’ve received. You know, it’s just more content out there. You know, we still get you know, people requesting stuff. I see the stuff that’s going on on social media because we’re kind of following the things, you know, you’re producing it for us.

 

All right. And so you were doing for us the things we’ve heard on your podcast, I think at 85 and a more recent one, slicing and dicing. So we’re seeing that, you know, in the information that you get from the, not the analytics that, you know, dentists are listening to our show, dentists are requesting, you know, a copy of the book.

 

So while it’s new, it feels good because people want more information. Yeah. And I think one of the things that is inspiring is that the right word? I think it is. I think the way that you approach each of your episodes is like each episode is almost like this mini course. And because you’re in full on teaching mode, you’ve never been one to like, hold back information.

 

You always just want to share. And that comes through loud and clear. You know, to your listeners, that you’re there to serve that community. And if you’re doing an exceptional job, my friend. Well, thank you. And it’s such a different mindset back in the day. It’s, you know, somebody would come into your office, you would not tell them what to do, you know, because the thought was if you tell them what to do, they’re going to go and they’re going to do it themselves.

 

Right now, the mindset is, you know, we give it all away. Give it all away. We want to work with the people that, you know, want our help and want it done the right way. Yeah. Because by doing that, you really establish the fact that you know what you’re doing. And then because you’ve given so much, you really also establish credibility and trust and quite frankly, the dentist has absolutely no interest in doing it themselves.

 

They want to be able to find a super competent person like you and your team. Right? Right. And, you know, all the money in the world cannot buy us more time. So, that’s our client, the client that, you know, wants more time and they obviously want good numbers to look at so they can make good sound decisions.

 

Learn more about how to narrow down your niche in this podcast

 

Narrow Down Your Niche: The Imposter Syndrome

 

So were there any. So let’s go back into the piece where, okay, you’ve had you’ve been on 100 shows now like intellectually you are thinking about maybe having my own show. Was there any piece of I don’t know, maybe it’s imposter syndrome. Is it fear? Is there anything that you really had to think about?

 

Can I do this? Yes. It’s one thing to be a guest now. It’s going to be, I’m going to be the host. It’s a different role. Was there any of that kind of self-doubt or imposter syndrome that you had to work through? Oh, yes, the imposter syndrome. You know, I actually had my daughter, she’s a first year associate at a big six firm, and she came home one day and, you know, I had her listen to the episode that you did on imposter syndrome.

 

It is so, you know, so many people that affect them. And, yeah, we had that and we just kind of just had to push through it. So, you know, we could do good work. Okay. You know, it may not be the first episode but it may not be the best episode ever. All right. But we’ll get better.

 

And that’s what it takes, isn’t it? Just, you know, practice and repetition. Right. Exactly. I mean, when I think of the first podcast I was a guest on, you know, and the nerves and everything like that versus now, you know, I’m relaxed, you know, I’m answering questions. I’m, you know, giving out information. You know, it’s just, you know, but then taking the next step and now being the actual host, you know, it revived itself, the imposter syndrome.

 

And then, you know, we talked about it and, you know, fortunately we’re working with Predictive ROI, who was a really good team. And you know, they walk us through a lot of different parts of it. And we’re confident that, you know, we can deliver, you know for the listeners. Well very kind of you to say thank you for that.

 

Learn more about how to narrow down your niche in this podcast

 

Narrow Down Your Niche: Handling The Transition Very Well

 

And then, you know the walking through the process and all of that, when it comes down to it though, you know, you’re the one behind the microphone. You’re the one who needs to believe in yourself and trust the depth of expertise that you’ve built over decades and then just be confident enough to share it.

 

I mean, there’s certainly no question in the world that you’ve got decades and decades of experience, but sometimes Onward Nation business owners forget all of the amazing, wonderful, awesome, beautiful things we do every single day. And because when that microphone gets in your face, it’s like all of a sudden we forget the expertise. But yet if somebody walked into your office and said, well, tell me about tax planning, you know, we’d have no problem with being able to share the depth of expertise.

 

You made that transition really, really well, Craig, in a show because you’re building an audience and so forth. But so kudos to my friend for getting over that hurdle. Thank you. So let’s chat a bit about tax planning. I just want to say one more thing that, you know, we have so much content now from every episode.

 

There is so much content that we’re able to produce and, you know, so now instead of, you know, through LinkedIn or Facebook or whatever it is, Twitter, you know, of, you know, putting out maybe, you know, one piece or two pieces every now and then. Now we have stuff going out, you know, every day. And instead of seeing maybe ten people seeing our content, we’re seeing, you know, maybe hundreds of people seeing our content every day.

 

And eventually, you know, that’s going to bring more listeners to our podcast and just kind of fuel the whole fire. Is there an interesting way there really is that, you know, compounding or, you know, just it builds over time, but isn’t it really interesting how just being consistent with creating cornerstone content creates that effect? Yes. And doing the podcast makes it, I don’t want to say simple, but so much easier to create, you know, that content to get out there versus trying to sit down.

 

And what am I going to say? Yeah for sure. In Onward Nation, Craig was referring to, you know, slicing and dicing. And so, if you go back to episode eight and 91, just a few weeks ago, you know, we aired a solo cast on nine different examples for slicing and dicing your content. In fact, if you go back through the last several solo casts, it’s all about slicing and dicing to Craig’s point to really illustrate how one thing a podcast episode in this case could then turn into five, six, seven, 20 different things but with just a little bit of creativity.

 

So thanks for bringing that up, Greg. So let’s shift gears over to tax planning. So I know when the, the, the, the new tax law was you know first pass is like, what in the holy heck is this thing. And so now we’ve had, you know, a little bit of traction and a little bit of time under our belt, with it.

 

Learn more about how to narrow down your niche in this podcast

 

Narrow Down Your Niche: Tax Planning Discussion

 

So what are some of the things that have stood out to you? And, and then we’ll maybe slice those apart a little bit, but what are some of the key takeaways or observations so far with the new tax law. Well, I mean the big one is you know what, if you have your own business, you know, the government is going to give you ways to reduce your tax liability, versus, you know, somebody that’s purely a W-2 or you’re going to, you know, get hit the hardest by this tax, the new tax law.

 

So we just finished up our first, you know, real season under the tax law. And the people that paid more tax typically were those people that were receiving a W-2. Whereas the small business owner who had whether it was an LLC or an S corporation or corporation, they had the most they received the best benefit. And part of that benefit goes back to creating jobs, etc..

 

But, you know, like you said, it was the Wild West. I mean, there was so little information out there. I was lucky enough to know a bunch of people and we created a mastermind about the new things. The tax law allows us to do so. And the big one, as a business owner is qualified business income and section or section 199, which is basically, a 20% deduction that the government is giving you.

 

Okay. So take us inside. That is so I’m you and I have talked before about the 20%, but that was that was early on before, you know, you’d been through a season of the actual application of it and so forth. So how are you seeing that worked out? I mean, my guess is it’s been a pretty big benefit.

 

But it’s inside that. Yeah. So let’s just go. Let’s just say you’re a business owner and let’s just say your W-2 is $100,000 and then you get a K-1 for another $100,000. So under the old rules, you’d pay tax. Let’s just say there were no other deductions or anything on $200,000. Under the new rules, you get an extra $20,000 deduction.

 

So instead of paying tax on 200, you’re paying tax on 180. And the more money you make, the bigger that number happens to be. And it also allowed for a lot of planning opportunities because as that K-1 number or that profit number from your business increases, there could be a limiting fact that keeps you from getting that whole 20%, which then allows for planning to make sure you get the full benefit of that.

 

Okay. An example I’ll give an extreme example of the business owner that, you know, typically makes $120,000 a year in the W-2. And, you know, he has a profit of say, you know, $1 million if under those circumstances his deduction is limited to $50,000, the way the tax law is written. But if that same owner, through planning wins a bonus thing himself, let’s just say another $300,000, all right?

 

And he pays some extra figure, but he winds up with a $200,000 deduction, you know, and if he’s in, let’s just say that 33% rate. Okay. That’s a $60,000 savings. Okay. This is a really cool example. Take us by the hand here, step by step. You know, walk us through this example again.

 

Because I want to make sure that we’re tracking with you math wise. That’s really cool. So let’s have this business owner, and he’s got a very good business. And I am just trying to really give you an extreme answer here but, yeah, he’s taking a salary of $100,000 a year. Okay. And his business is. And that’s reasonable compensation for what he does.

 

And his business is generating another million dollars in profits. Okay, under the current rules, his section 199 deduction, which would be 20% of a million, is 200,000, is limited to 50% of salaries. And in this case salaries were $100,000. So it was limited to $50,000. Okay. Now through some planning, we looked at that and said, okay, let’s bonus ourselves in the last quarter and bring our salary up to $400,000.

 

So now the Max section 199 deduction is 50% of salary, which is $200,000. Let’s just say his K-1 now is, if we’re going to keep it in the million. All right. You know, numbers don’t work out. Now he gets a $200,000 deduction. So instead of getting a $50,000 deduction he gets a $200,000 deduction. Holy bananas.

 

And it cost them a little bit more in like a tax but not significantly. And when you’re in a high tax bracket you know that the difference is huge. So I think he’s set a really key piece aside from the great example. Thanks for going back through that again. So I could track the numbers in my notes.

 

Learn more about how to narrow down your niche in this podcast

 

Narrow Down Your Niche: Proper Communication With The Client

 

But you said through planning like so my guess is in this particular scenario, working in the trenches with that business owner, this isn’t something that you concocted in like November 15th. No, this is something that we look at throughout the year and we work with the client and we kind of keep it, you know, in the back of our head how we’re going to, you know, make things happen.

 

And you know, just taking time and really communicating, you know, communicating. We typically have monthly meetings with our clients. So nothing jumps out at us out of the blue. Okay. So during those okay. So during those monthly meetings, because my guess is the majority of our business owners are not meeting with one. They probably don’t have a tax planner.

 

That is sophisticated like you or in and let’s say that they’re quote-unquote working with the CPA. They’re probably not sitting down with their CPA on a monthly basis, maybe do a quarterly review or maybe a couple times a year. But I think if I hear you correctly, you’re meeting every month and probably going through P&L balance sheet cash flow and maybe talking about biz dev where money’s coming in.

 

Are you expecting a campaign, you know, third quarter, fourth quarter, whatever, that’s going to bring in additional cash. Those are the types of conversations you are having. Exactly. And those are all done through zoom meetings. Oh, so nobody’s traveling to see anybody. It’s sufficient, you know, if the dentist wants to do it during his lunch break, you know, we’re doing it during his lunch break.

 

Learn more about how to narrow down your niche in this podcast

 

Narrow Down Your Niche: An Example of Tax Planning Computation

 

You know, we have clients that are non dentists, you know. So it’s very efficient for everybody involved. And it also gives them actionable intelligence. So they know what their numbers are. Every month. So they could see what’s working and what’s not working. You know they may know what’s in the bank okay. They may know what their top line revenue is, but they’re not seeing how much they’re spending on A, B, C, and D, and maybe they don’t need to be spending all that money on A, B, C, and D, actual intelligence, all of that.

 

Okay. So then let’s say that a dentist decides, well, you know, Craig, I’ve got, you know, one practice, like one physical location in my practice, I should say one practice. I have a practice with one physical location, and now I’m thinking about opening. Opening? Excuse me. Opening. Maybe 2 or 3 additional offices within my practice, either neighboring towns or whatever.

 

And so does that add my guesses? Yes. But does that add a whole nother layer of the necessity for tax planning almost definitely, because there’s so many different things to look at. Cash flow, you know, what kind of cash flow is going to come from typically to purchase, you know, what’s it going to cost us on a monthly basis.

 

You know, how is the marketing that I’m going to be doing? Is that going to am I going to get a like, let’s just say I’m getting a 2 or 3 X on a marketing, but now all of a sudden it’s the same marketing I’m doing, but I have a great a base that’s going to see it, you know, how does that affect things.

 

And we go through all those different numbers. Okay. So let’s go back to section 199. Is there anything else about the 20%, you know, the qualified business income and anything else about that, any additional perspectives that you want to share on that particular topic? Well, it also, you know, unfortunately, the way Congress put the bill out there, you know, if you are certain types of industries, such as the medical profession, legal professional, consultants, there’s a cap.

 

All right. So all the more reason to do some planning. So if you’re, let’s just say technically considered a professional or consultant, that 20% phase out if you’re married from $315,000 to $415,000. So if your taxable income is 315, you get the full 20%. If it’s 415, you get nothing. So you have to look at now, what can I do legally to get my taxable income down to that $315,000 number?

 

Learn more about how to narrow down your niche in this podcast

 

Narrow Down Your Niche: Saving Yourself on Taxes

 

Okay. So interesting. And in my guess, many of our Onward Nation business owners, because a lot of our listeners are owners of professional services firms, B2B professional services firms. So with that fit into this type of cap. Yes. And it really it we have to kind of go through them on a, you know, a business by business, it’s easy to say, you know, basically attorneys, CPAs and medical professionals all fall into that.

 

All right. Other so-called consultants don’t necessarily fall into that, you know, and you have to kind of see what they’re actually doing. Okay. Got it. So let’s say that, in Onward Nation business owners are going to be restricted by the cap. And they’ve got $500,000 net, or they’re projecting about $500,000 net at the end of the year.

 

And they know that they need to. It sounds like if I’m hearing you correctly, they need to be under $400,000 if they’re filing jointly, is I right? Correct. They need to be under 415. And it phases out. So the closer you get to 315, you get the full 20% to close you. At 415 you get zero.

 

Got it. So that’s okay. That’s a phase out. So you see what there is you can do now. You know, maybe it’s, you know, buying a piece of equipment that year that you need to purchase. Okay. And then you get a big deduction for that and that puts you under. So, if you were planning on buying that equipment in January and you now buy it in December, you could possibly pay for a big piece of that equipment.

 

Now based on this new deduction you’re getting. So in your experience in working with business owners, what are some of those things like the equipment purchase and timing that properly don’t pay for it in January when you can really save yourself a tax hit, by buying it in December. What are some other things that maybe some of the non-typical, some of the things when you suggested to a business owner they’ve said, what?

 

Seriously, I can do that. Like, what might fit into that? I mean, these are some of the small things. The big things are retirement planning. Sometimes there’s, you know, if the numbers are much higher, there are things you can do, but some of the non-typical things and smaller things. How about the home athletic facility where you get to write off the cost of operating your pool and possibly the cost of constructing you?

 

Learn more about how to narrow down your niche in this podcast

 

Narrow Down Your Niche: Things To Consider as Part of The Law

 

So that’s still part of the new tax law. Yes, it is that they took it out and they put it back in before it was signed. So yeah. So that’s another thing. Okay. So because I’m you again, I’m sure some of our listeners are like, what? So tell us more about that. So basically if you have a home office, which is another thing, it’s a small number.

 

But now that home office opens up your travel from your home office to your other place of business, and you need to spend like 15 hours a week doing work in your home office. I don’t know any business owner that doesn’t spend about 15 hours a week working from home somewhere. Okay, so now they just have to spend it in that office.

 

It allows them to now write off part of the car. All right. The travel, the home office, the repairs and maintenance on a percentage of that on the house, your pool or your home gym. These are things that typically they would not be able to write off. Okay. So when we’re talking about, like, writing off, let’s try to put some numbers to it again to do some math.

 

Let’s say that one of our listeners is thinking, okay, wait a minute. So, if a pool is going to cost me $50,000, to put it in, to install and put in, like that, $50,000 now becomes a tax deduction or maybe a portion of it. How does that work? You could technically write that whole thing off okay.

 

You could depreciate that whole pool over how many years. You could depreciate that over, over the life of the pool. Or you could take section 179. Okay. We typically do it over the life of the pool, which is, I think, a pool or 15 year property. Okay. So but then there’s the operating costs, which are expensive, right?

 

You know,  $50,000 for a pool is a good deal. Okay. So I’m being a little bit naive on the cost of pools. What is a typical pool cost? So I don’t know, I, you know, it can be very expensive. I’ve seen some, you know, very expensive pools and so that it’s not like the IRS gives you a budget for the pool.

 

It’s just whatever the pool cost is what it is. Correct. And you have to document what you’re doing and you have to make sure your T’s are, you know, crossing your eyes a dotted line and do it. All right. And that’s part of, you know, those monthly meetings that we have to make sure that everything is done correctly because, okay, you know, you can’t just wing it okay.

 

Learn more about how to narrow down your niche in this podcast

 

Narrow Down Your Niche: Calculating The Tax Deduction

 

So let’s go to the home gym. Because here again I think that that’s probably going to be of a big eye opening interest to our listeners. So are you saying that if, let’s say that I have, a room inside their home and it’s dedicated to, I don’t know, maybe they have an elliptical and some weight equipment and that kind of stuff.

 

So that square footage and the cost of that equipment is a tax deduction. Right. So typically the cost of the equipment you’d write off that year on the section 179 and then you’d depreciate that, that percentage of the home. And then that would add to the percentage of the, you know, the overall expenses of your utilities, your repairs, your maintenance of the home, that percentage would get written off.

 

So that portion may not be that big. But now you have that home office and you’re driving to your other office and it might be five minutes away, might be an hour away. Amazing, amazing. I had no idea. And that’s the benefit of being able to hang out with super smart people like you who have the depth of expertise like this so that you can share that with Onward Nation business owners to enlighten them.

 

That is staggering. And there’s probably a bunch of examples or other strategies like that beyond pools in home, exercise equipment that completely blows my mind. Correct? Yes. And that, you know, I hate to say, but it’s usually not rocket science. It’s usually not rocket science. And sometimes it’s just, you know, and we’ve talked about this on prior episodes, you know, it might be the wrong entity that could save you a lot of money.

 

Learn more about how to narrow down your niche in this podcast

 

Narrow Down Your Niche: It Depends On Your Setup

 

Okay. So what do you mean by that? You know, you may be set up as an LLC, and maybe you’re better off as an S corporation. You may be set up as, you know, a sole proprietor. So it depends on how you’re set up and what thought went into it. But, you know, we had one client where, you know, just by changing his entity type.

 

And once again, he made a lot of money, you know, but he saved over $450,000. Okay, so not a second. I don’t care how much money you make. That’s a big savings. That is staggering. Okay, I know you obviously can’t share any details that are confidential, but take us a little bit behind the curtain there, because that’s mind blowing.

 

That number. Yes. It is mind blowing, but it was just, you know, taken some time. There was no thought that went into his original entity selection. And in this case, he was set up as a single member, LLC. Okay. And, you know, it turns out he really should have been an S corporation. And we made an election and we did all the right, you know, forms.

 

And we submitted it to the IRS and he was approved. And that doesn’t mean that everybody should go out there and automatically take the LLC and turn it into an S corporation, because it doesn’t work like that all the time. All right. But when he formed his business, no thought went into the type of entity that he was going to be.

 

Learn more about how to narrow down your niche in this podcast

 

Narrow Down Your Niche: Tax Rates Difference Between an LLC And S Corporation

 

So what are the differences in the tax rates between LLC and S? There’s no difference in tax rates, but there’s something called Faker and Medicare. Okay. Right. And in a large number in his case, even at 2.9%, it turned into a lot of money. And then there are some people where if you do that same thing, they could actually lose.

 

Of course, the more in taxes. Okay. So if you make that election without any thought and go from an LLC to an S corporation, you could actually lose a big chunk of your section 199 deduction. You could wind up paying more tax. So some thought and, you know, has to go into it, you know, and figuring out what is really the best way to go.

 

Well, here again, this is so smart because and in whether you’re talking about the entity, you know, my guess is you’re not well, I don’t know, the context of those other monthly calls. My guess is maybe it has come up where it’s like, well, you know what? Because we’re doing this this year, we might need to either restructure or add another company, redo the entity or whatever.

 

But that’s the whole point of having those monthly checkpoints like that. Right? Exactly, exactly. And going over your numbers and making sure you’re doing the things that we talked about when we did the tax plan. 

 

Learn more about how to narrow down your niche in this podcast

 

Narrow Down Your Niche: Start Thinking About Tax Planning

 

Okay. So Onward Nation, that’s exactly why I wanted you to be able to have this conversation with Craig in July, as opposed to us airing this episode on November 15th, so that you can take his words of wisdom, you can take these lessons that he shared with you.

 

Start having conversations, start making a plan. Start thinking about tax and planning proactively because you still have six months of runway and yes, it’s not, you know, eight or 9 or 10 months, but six months. You can still do something. I would agree, Craig, that’s still a decent amount of time to get a plan into place.

 

Yes. Six months gives you enough time to get a plan into place. Oh, boy. Wow. This has been so good. Okay, so I know we covered a lot. But before we go, before we close out and say goodbye, any final advice that you’d like to share, Craig? Anything you think we might have missed? And then? And then please tell us the best way to connect with you.

 

Learn more about how to narrow down your niche in this podcast

 

Narrow Down Your Niche: Final Advice and How to Connect with Craig

 

Sure. I think you, you know, listeners, if you’re a business owner, you need to be communicating with your CPA on a regular basis. All right. You should. You know, it’s all about communication and, you know, hopefully that person will communicate back with you. But, you know, it’s you’re right. It’s going to help your business knowing having good numbers is going to help your business let you make, you know, really good, informed decisions.

 

And lastly, to reach us and we will actually have a copy of our book to give out is our website is CraigCodyAndCompany.com/OnwardNation. And my first book, we will be giving out which was actually it was my second book. My first book was an Amazon bestseller, but this is the ten most expensive tax mistakes that cost business owners thousands.

 

So we’ll have a free paper copy for anyone that wants that. Awesome. Thank you very much for your generosity. And onward, we’ll include that link in today’s show notes as well. And look, no matter how many notes you took or how often you go back and relisten to Craig’s words of wisdom, which I sure hope that you do, the key is everything that he just shared with you, all of the generous amount of advice, all of it, take it, apply it into your business right away and accelerate your results.

 

And Craig, we all have the same 86,400 seconds in a day. And my friend, I’m so overjoyed that you said yes to come back for a third episode, to yet again be our mentor and our guide to help us move our businesses onward to that next level. Thank you so much, my friend. Well, thank you very much for having me.

 

And, you know, thank you for the support you’ve given us. This episode is complete. So head over to OnwardNation.com for show notes and more food to fuel your ambition. Continue to find your recipe for success here at Onward Nation.

 

Learn more about how to narrow down your niche in this podcast