Business Innovators Radio - Episode 12: Keep More of Your Hard Earned Money with Tax Incentives – An Interview with Justin Rupple

Starting point is 00:00:07 Welcome to In the Zone, brought to you by U.S. Construction Zone, bringing you strategies for success with construction innovators and change makers, including In The Zone peer-nominated national award winners. Here are your host, Jeremy Owens. Welcome to In The Zone. I am your host, Jeremy Owens. Thank you so much for being here and tuning in, listening, watching, however you're ingesting. Thank you. We have a really cool guest today. I think if you are like me, when it comes to CPAs, IRS, taxes, all those words can kind of, I don't know, give you a little PTSD in some ways. It's not our favorite subject in terms of we don't really have time to learn about all tax codes and the changes and these tax credits and R&Ds and all these things that come our way.

Starting point is 00:01:01 I understand we're very busy as an industry and as a business owner. It's hard for us to take the time to learn about these subjects. And that's why I wanted to have Justin Ruple on because this is his industry. He's not a CPA. He called himself a tax incentive specialist. So looking for all of those ways that we can benefit from already existing tax codes is his game. And he's a wealth of information. and please take a listen because it could benefit you.

Starting point is 00:01:34 And in most cases, it does benefit construction owners and businesses. So take a listen because I am certain it will benefit you. He's going to talk about the employee retention tax credit. He's going to talk about an R&D program that they have. And he has several others as well that he can help you with. So take a listen. Like I said, I'm also, you know, these things are not my area of expertise. so I wanted to make sure we brought someone on that is an expert.

Starting point is 00:02:03 So please help me welcome Justin Rupel. All right, folks, Justin Rupil serves as a tax incentive specialist in his role as regional manager at Business Group Resources. For over 12 years, he has served small businesses helping them keep more of their hard-earned money in their pockets. He currently lives in Portland, Oregon with his wife and four energetic boys. Please help me welcome Justin Rupil. Justin, thanks for being here.

Starting point is 00:02:29 Jeremy, thanks for having me on the podcast with you. I appreciate it. Great to be here. You're so welcome. As I said before, this subject matter is new to most of us. So, you know, most of the time I'm trying to set up calls with people with information, I don't have. So this is another good example of that. Tell me a little bit of how you're serving the construction industry right now.

Starting point is 00:02:50 Yeah, I've been working with a lot of different general contractors, construction businesses, home remodel and renovation. subcontractors even like plumbing contracts, electrical contractors, basically helping them keep more of their hardened money in their pocket. There's some tax incentives and tax credit programs out there that the government doesn't have a good PR campaign. They don't have good marketing strategies to get out the kinds of things that actually could benefit us, benefit small, medium businesses. And so we're out there spreading the word that, hey,

Starting point is 00:03:25 There's actually opportunities to recover tax money, keep more money in your pocket. That's sadly CPAs that serve small meetings of businesses. Small meaning businesses don't often know much about. They don't have the expertise to bring to. We can get more to that later. But that's what I love to do. Help business owners. They're busy.

Starting point is 00:03:44 They got a lot going on. And they can use every dollar they could get. Yeah, no doubt. Is this a direct result from COVID? I know the P.P thing was like the start of this. But is this a result of that or something else happening here? You know, there's actually, there's a couple different opportunities that I thought would be worth us discussing today. One is the employer retention credit is connected to COVID that a lot of business owners have dismissed basically relying on outdated information.

Starting point is 00:04:13 The criteria, the details of it have changed through several acts of legislation. And some people are operating off of some of the original information that made them write it off. therefore leaving potentially tens or hundred thousand dollars on the table. But there's another tax credit, the R&D tax credit that's worth us talking about. That's actually been around for 41 years. It started under the Reagan administration in the early 80s. So it's got a ton of history. And yet so many have never even heard of it or if they've heard of it,

Starting point is 00:04:45 they don't know why it applies to them. And so that's what I get to do is help someone who understand what opportunities are there for. Yeah, and I think that, you know, you kind of mentioned it. CPS, we can't rely on them to stay on top of these things. I mean, they are business owners themselves, but to expect them to know all of these tax codes and understand all of the nuances, right? That's a big ask. I mean, they change the tax code every year and to expect them to, like, read through it

Starting point is 00:05:15 and understand it all. I totally do that, you know, be willing to step out, right? and maybe make a risk and say, hey, maybe you guys should look at that. Most of the time, they're a little bit more conservative, right? They're like, hey. Yeah, you know, I think there's often a misunderstanding that someone CPA or accountant is out there figuring out every opportunity for them to save tax money or take advantage of tax credits and incentives.

Starting point is 00:05:40 Now, I'm sure CPs would love to save every business money. Right. But they are often very good at what they do. They're good at tax document preparation. They're good at making sure your compliance with tax codes. when it comes to your income tax filings and corporate structures and how that affects tax liability. You know, most of these are wonderful at that. But beyond that, as you said, the tax code is enormous.

Starting point is 00:06:02 No one person, no one firm can do it all, can know it all, can specialize in it. I mean, it's like being angry with your doctor, your general doctor for not being a brain surgeon, you know? Like the human body is too complex for any one place, one individual to be an expert at it all. And so, you know, CPA is like a general doctor, you know. they get the gist of it all. They can handle your regular annual tax filings for income tax purposes, adjustments to corporate structure, things like that. They usually can facilitate that.

Starting point is 00:06:30 But there's tax credits and incentives that are highly complex at times that are often changing. And it's outside the scope of what a typical CEP firm can offer a business. And so what I love to be able to do is representing a specially tax firm, we fill in that gap. We actually don't do normal tax preparation. We don't come in trying to compete with someone's seat. or accounting, we come in to complement the work they do and bring added value to support them. We have a lot of CPs actually refer clients to us because they know they can't do what we do

Starting point is 00:06:59 and they know we're not going to compete with what they do. And so it happens really well. So to get into, you know, if you mind, I get into some particulars about these tax credits. So your listeners, those that are watching today, I can consider like, hey, are these good fits for me? Or is this something I could benefit from. Yeah. I mentioned already the R&D tax credit. Yeah.

Starting point is 00:07:18 You know, this is an income tax incentive program that is designed to incentivize businesses for the custom, creative, innovative work that they often do every single day. Right. In the construction industry, a lot of times I'm talking business owners are like, how do I do R&D, research and development, you know? I read a great little article and said this. It said it's it's not only high tech or life science companies with dedicated research departments that qualify for the R&D tax credit. Indeed, most companies don't have R&D laboratories. And instead, perform R&D in their test kitchens, on the field, in their wineries and distilleries or on production floors. Wherever experimentation occurs, R&D may be found.

Starting point is 00:08:01 The key to bear in mind is the R&D tax credit is about rewarding applied science, taking the tools of science and engineering and addressing the task at hand. I mean, is it a general contractor, a construction firm, a, you know, a customer. home builder. At some level, they are applying science into the physical real world to improve or create, build, construct, renovate something, creating something that previously didn't exist. Now, no one listening today developed the concept of a home, but every one of their homes, every commercial building they work on is unique and it's custom. And they have to develop custom solutions for how that particular need is going to be. met. And there's science and technology that come to bear in that process. There's design and

Starting point is 00:08:51 architectural. There's engineering. And even with a general contractor that is outsourcing, you know, subcontracting, an architect, an engineer, you know, there's part of that process. And therefore, there's aspects of the related expenses that can be part of the R&D tax credit calculations. Right. So there are activities that go on probably every single day, certainly on every single job for every one of your listeners. That is what the IRS calls qualified research activities. Okay. And the challenges is to help quantify, or first qualify, like what does qualify,

Starting point is 00:09:26 and then help quantify that because you're, you know, your business owners, they're busy running their jobs, they're busy doing their work. You know, they're not keeping track of what's R&D and what's not. And that's what's great is we're able to come in and help bring our expertise to develop it. When you consider your CPA, you know, they can't come in and be hands-on in that way. It's just the way they're structured, the time they have.

Starting point is 00:09:49 Actually, the way they bill. There's an IRS thing called Circular 230 that actually requires CPA firms to bill either flat rate or hourly. So for them to even come in and explore, you know, how much could be there for you. They have to charge you for that. Right. And it's expensive because the amount of hours that go and do it. And we're able to come in and we provide a free. incentive analysis. We can review all of this, determine about how much money is actually on the

Starting point is 00:10:15 table for a business owner so they know what's available to them before they make any kind of a commitment. What's really sad about the R&D tax credit is there was this Wall Street Journal article a few years ago that they estimated about 95% of small businesses that are eligible don't take advantage of it. Oh my gosh. I'm not going to go down. That's huge. 95%. Now, this was, you know, this was, I think it was around 2014 when the article was done. It might be closer to 10% now. Right. Because there are, you know, we've worked a lot of businesses.

Starting point is 00:10:49 The word spreading a bit around that same time under the Obama administration, the R&D tax credit was made part of a permanent part of the tax code. So literally would take an act of Congress to get this off the books. So it's not going anywhere. Right. And here's the thing. There's this article in Entrepreneur Magazine. They titled it,

Starting point is 00:11:11 how big businesses slash taxes with the R&D tax credit and how yours can too. And they say on here, while the big companies are cutting their taxes by using the R&D tax credit, too many small, medium business owners are just sitting and watching the parade go by. They say the number one reason

Starting point is 00:11:29 business owners don't take advantage of this tax credit is self-censorship. The business owners subscribe to an incorrect and outdated view of what. activities are eligible for the credit. Right. There was a time in the 80s and 90s where to do the R&T tax credit, you had to develop or create something new to the world,

Starting point is 00:11:48 like a new discovery, a new technology, a new pharmaceutical. Right. Well, we're not typically doing that, you know? And that actually was part of the expansion of this tax credit under George Bush, was eliminating that, that it has to be a new or improved development, just simply new to you and the work you're doing, new to your client, or improving upon existing services or products or construction.

Starting point is 00:12:15 Right. And so there's a lot there. They also expanded it from originally just C-Corps could do it. Now, S-Corps, LLC's even sole proprietors. So it's very broad and not every business qualifies, certainly, but so many more do than realize it. So tell me this from my experience. You talk about new products.

Starting point is 00:12:34 So yes, there's always like demos, construction. You're trying to figure out if this is something that you want to bring on, tackle as a new product line. So tell me a little bit about, you know, bringing on a new product line for us. You know, we are currently bringing on fire defense services. So this is brand new to us. So this is right now the R&D thing. We are, we're meeting with people. We're partnering with them.

Starting point is 00:12:59 We're doing demos. There's activity going on. And we haven't even really hit the market. yet. So, yes, we're spending money on this to see, will this benefit us and our clients? That's what you're talking about, right? Absolutely. There's R&D work going on in that process as you develop this, as you experiment with this, you test this. Because that's the thing, is when there's experimentation, when there's uncertainty, when there is financial risk, there's R&D happening. And so, you know, in construction, that happens at so many different levels

Starting point is 00:13:33 is so many different ways. And I work with different construction businesses. They all have unique ways to innovate. They all have unique kind of nuances of the particular specialties that they bring to the table, you know, from general contractor, commercial, industrial. I mean, I worked with a general contractor that specializes in large hotel renovations. And he was telling me how they would go through like a Marriott and do 30 rooms at a time and work the way around the building and do these renovations, you know.

Starting point is 00:14:02 And he's like, like, well, how do we do R&D? Like, we get the design straight from their architects, you know? This is like big Marriott, Hilton, you know? Right. And so we're talking and said, so when you go in those hotel rooms, does everything go according to plan? And he's like, well, nothing ever goes according to plan.

Starting point is 00:14:22 So who figures that out? Who has to look at it and make the judgment calls of how are we going to do this? Bring in the subs and collaborate and make, you know, those in the field, on-the-fly adjustments and problem-solving. It's like, well, I'm a part of that and others. Yeah, exactly. And it happens to so many different levels. So heavily on the pre-construction side and construction business,

Starting point is 00:14:44 design and estimating and surveying things like that, but also through the entire process, you're regularly dipping back into R&D when different things arise and alternatives have to be considered. And expertise has brought to it, and new data has to be collected. Right. New solutions have to be brought to bear.

Starting point is 00:15:02 Right. Awesome. Yeah, I would like to hear a couple examples. I mean, we kind of talked about this a little bit before. You know, what would an average client of yours, maybe in obviously in the construction space? What would that look like and what are you typically helping them find? Yeah, great. So this is an income tax credit. And what's really awesome is the IRS actually lets you go back up to three tax years and apply this tax credit retroactively. So most often when I'm working with a business, we have three years to look at. You know, right now that'd be 19, 20, 21. We can go back, look at those tax years, potentially apply the R&D tax credit to all three uniquely, resulting in three tax refund checks. Because you're applying a tax credit to a past tax year. That tax was already been paid. Government's got to pay that back to you in a refund, and they have to pay you interest. That's another beautiful side to it. And so, you know, give some examples of the R&D tax credit. I worked with a small residential contractor in St. Louis, Missouri, and they got $40,000 back through the R&D tax credit, the three-year look back. A small commercial contractor near Seattle, Washington, $67,000 you'll get back

Starting point is 00:16:13 from over the last few years. There's another residential contractor, local here to me in Portland, Oregon, $86,000. We're able to get back for them through the R&D tax credit. That general contract, the hotel renovations, we're able to get them $100,000. $172,000 with his tax credit. And then for that one, that was actually a really special case for me, because when the pandemic hits, his business almost all but entirely wouldn't. We had a couple jobs able to finish out. But the hotels all canceled their contracts.

Starting point is 00:16:48 They all said, we don't know what's happening. It's too uncertain. We're not going to invest in remodeling. He was pretty much dead in the water for about a year and a half or so, only really in 22, starting to get new contracts back. And so to be able to call him up, it was kind of early of 2021. No, early of, yeah, it was about a year ago, a year and a half ago, call him back up and let him know that we can recover 170,000.

Starting point is 00:17:15 He's like, you don't understand what this means to me right now. That's an answer to prayer right there. We are draining money every single day because we have such little work and we're trying to stay afloat. I try to pivot and getting into other lines of work. and this is going to cover that gap for us. That was a big one for me. I love having those kinds of calls

Starting point is 00:17:34 to let business owners know what we're getting about it. And then I had a case of a plumbing contractor in Central California. They had just finished going through a really ugly lawsuit with the disgruntled employee and some struggle. It's tough things that went on through that whole process financially and emotionally draining

Starting point is 00:17:51 and to be able to go through this and bring good news. And for them, you know, we were able to get them $170,000 back. anyway, it's so rewarding to be able to call the business owner. I mean, I called someone today and told them they're getting $78,000. And they were just like, they were texting me afterwards going like, I'm just floored. They couldn't believe it. They didn't expect it to be that. And of course, the amounts can vary and, you know, and all of that, you know, most often when I'm working with businesses on the Arnie tax credit, just to give you a sense of even

Starting point is 00:18:24 kind of parameters with it, most often we found businesses that are doing. around $500 to $700,000 in gross revenue per year is kind of the hump where it becomes beneficial to engage in the army tax year. Below half a million, usually the numbers become so more minimal. It doesn't mean they're not doing qualified activities. It's just the way populations work out that it often doesn't benefit or it's very minimal to. It's just, you know, I business owners ask me all the time. Like, is this going to give me $500 or $50,000? They're asking, is this worth my time? Right. You know, and it's like, hey, around that half to three quarter million mark is where it really becomes beneficial and it's worth

Starting point is 00:19:03 exploring. And I go from a profitability side because I get that question a lot when it comes to these tax credits. Like is this based on how much net profit you have or is this based on? Yeah, it's not actually. It's based on, you know, the calculations of the R&D tax credit stem from expenses. You know, you're investing in this developmental kind of work, the design work, the custom work, the innovation, the experimentation, primarily through labor. You're paying, you're getting paid, your staff, your contractors, you're paying people.

Starting point is 00:19:36 There's also supplies that you might purchase and equipment to do it, but primarily is labor. And so those expenses are what go towards the complex calculations that generate the credits. Now, then those credits apply against tax liability. Now, with a C-Corp, that all stays at the corporate level. So the tax, if the business isn't profitable that year, they didn't have, they probably probably didn't have tax liability, therefore the credits won't benefit, at least for that year. Now, the credits can be carried forward to future years. But with an S-Corp or LLC, those credits passed through to the personal taxes of the shareholders.

Starting point is 00:20:10 And I worked with a lot of businesses where a particular year, the business wasn't profitable, but the owner still got income from the business because he was on payroll. Sure. And so he still had to pay taxes on that. Well, guess what? The credits applied to his personal taxes. And they also, sometimes they're married and their spouse has another job unrelated. It applies to the entire tax liability of the personal taxes of the shareholders.

Starting point is 00:20:33 So it can still be very beneficial, even if there's a tax year where the profits are minimal or non-existent. That's why it's always worth exploring. Okay. And on the employee retention credit aspect, what are some examples of that? And I guess maybe after that we'll go through like the process of what it looks like. Yeah, exactly. So this one is a little more simple. Aren't you already, you know, you got to help me understand what it is, R&D, why they do.

Starting point is 00:20:58 it. You know, there's a lot of complex to do it. Sure. The ERC or employer attention credit, it is a generous stimulus program that helps businesses, small businesses in particular, that were impacted by the pandemic in various ways. One of the biggest things I'm seeing is business owners that are not exploring it because at some point they thought they weren't eligible. And initially, when it first was, you know, the legislation that created the PPP loan, the CARES Act, it also created the ERC in the same legislation early in the pandemic.

Starting point is 00:21:24 And initially they were mutually exclusive. You can only do one or the other. Well, most business owners I talked to did the PPP. You know, it was quick. You can apply it online at a bank, get the funds in a few days. Right. Eventually going to get forgiven. I mean, we're all crossing her finger.

Starting point is 00:21:37 Are they really going to get forgiven? They were, you know, and it was a great deal. And so a lot of people, they heard of ERC, well, you can't do both. Well, later that got changed. You can do both. Initially, the criteria was having it. You had to have a 50% reduction in revenue in 2020 compared to 2019. Well, I don't know many businesses hit that hard somewhere, but most haven't.

Starting point is 00:22:02 In fact, I'm working a lot of construction businesses or contractors whose business actually grew during the pandemic. Right. You know? And then in 2021, to qualify over those quarters, you had have a 20% or more reduction in revenue. Well, that's not too, you know, that much compared to 50. Some qualify, some don't. But that's not the only criteria. The other two that often are overlooked, and sometimes I have clients tell me my CPA told me don't qualify because my income didn't.

Starting point is 00:22:26 drop enough. And I said, well, what about these other ways? O.CB didn't bring those up. Right. And is a full or partial shutdown due to government order or suspension of services due to government order. Now, in construction, you know, in most cases, they didn't have to shut your doors. You didn't have to stop working. You know, in most cases, kind of part of what's considered essential workers. So the full government shutdown doesn't necessarily apply. But the partial can. There are some situations where they had office building and they actually had limit how much space or jobs they couldn't access because of shutdowns.

Starting point is 00:23:03 There's an extension of that one, the supply chain disruption. And this is where a number of construction contractors qualify under supply chain disruption. Every single construction worker. Everyone's impacted by it. Part of the challenge is being able to substantiate it. Now, when you file for it, you don't have to. But if for some reason the IRS reviews the case, there's a way you got a substantial okay, there's certain products or supplies that have a substantial impact on my business

Starting point is 00:23:31 that I couldn't get access to because vendors, suppliers, manufacturers, they were shut down. I wasn't shut down. They shut down and that caused a supply chain disruption and I couldn't get the things I needed. And does that be everything? It has the cumulative effect has to affect at least 10% of the business. Does it mean your income drop by 10? It could be made up for another ways. When you look at, oh, those things we're couldn't get, you know, when we look back at 2019, it was at least 10% of our business, the cumulative impact. So that's, I'm working with construction businesses that they qualify under that one and

Starting point is 00:24:06 therefore can get money in their pocket. And that one could be up to $26,000 per full-time employee. This is a payroll tax refundable credit. So you can, you get it, you apply in your payroll tax returns. So there's a whole process to go through that and amend those. Right. And just like the R&D tax credit, we can do a free incentive analysis to review your qualifications and review the payroll information to determine what's available to a business.

Starting point is 00:24:32 So that one's worth pursuing. A couple come to mind, there's a small residential design bill company in Massachusetts that as a handful employees are getting $147,000 for the ERC. Now, this is a one and done thing. You know, pandemic passes by R&D to do every single year going forward if you're doing the same kind of work. What a wonderful infusion of cash. Another home remodeling company in Washington is getting $58,000 to the

Starting point is 00:24:55 see. These are phenomenal tax credits putting real dollars. And these dollars are not, you know, this is a tax refund. Therefore, it itself is not taxable income to a business. And so it's a wonderful opportunity. Yeah. Yeah. I mean, speaking from, you know, I'm talking to my peers all day, every day. And I would say the example I can give about working through the pandemic is a lot of our sales went up. But it was not a, it was not a good sales, right? It was a, you know, a lot of our profitability got beat up really bad, right? Because, you know, prices of lumber. Everything went way up. And then the supply chain issue hit and then we weren't being able to finish jobs, right? I mean, we had materials that were taking six months to get to us. So yes, we usually would take that

Starting point is 00:25:41 in a month and build it and finish it and be done. Now we were taking it in six months, building partial and then having to come back. Like, so there was all of these ways that our profitability got beat up. And so, like, you know that's why oh it's fine you guys were so busy you know the demand so easy it wasn't great it was it was like a you know i likened it to being a fireman without a host like it just it wasn't a lot of fun so i can definitely relate to that component of the supply you really did yeah i'm grateful that you know the government expanded in this way because revenue doesn't tell the whole story as far as the impact of the pandemic on the business it certainly can be part of the story but I work a lot of businesses that their revenue is actually either stayed steady or increased

Starting point is 00:26:26 throughout the pandemic, which is wonderful. But their margins were really, you know, shaved off or cut away. Lead times were horrendous. You know, I'm talking to business owners saying, hey, I had to personally finance purchasing on a job because I just know, like, I'm going to lose the job if I can't get this stuff. Right. So I need to put my own money out there to buy stuff, you know, way in advance before the client even pays, hoping it's all going to work out, but otherwise, I'm not going to get the job.

Starting point is 00:26:54 You know, I mean, that's a tough place to be in, but that's been the reality's last couple of years. Right. Yeah. And I think that, that, and I think, you know, the reason that I think a lot of us don't, don't see these things or get involved is because we do kind of think it's tied to sales, right? And we think, oh, we increase the sales, we're busy, doesn't apply to me. And then you hear IRS and business owner, we don't really like to hang out very much, right? We would rather just keep it very separate and simple. But yeah, I mean, these are four reasons. And I do think that we as an industry need to take advantage of these things because we have been beat up in a lot of different ways.

Starting point is 00:27:33 And I think a lot of industries have. We're not alone there. But it just feels like we really need to start looking at these because they're our design for our situation. Yeah. And it's good you mentioned with the relationship with the IRS is, you know, so often I have owners telling me, shareholds of businesses, like, I don't, I don't want to cause any red flags. I don't want to invite the RRRRF as scrutiny, you know, and those are valid concerns. You know, some have PTSD over an audit 10 years ago, you know, which I mean, valid,

Starting point is 00:28:02 you know, and even valid skepticism. You know, when you think of government, we don't necessarily think of reliable and trustworthy and have our best interest in mind sometimes, you know? And so, you know, I get it. But these are legitimate tax incentive programs, part of the tax code. if you legitimately qualify and it's done by a business or a firm with the expertise to do it properly, there's nothing to be concerned about. Our tax team has been doing like the R&D tax credit for about 17 years.

Starting point is 00:28:30 A lot of history with it. We've with thousands of businesses. We have never seen an increase in audit potential for businesses who apply the R&D tax credit. It doesn't happen. We can never promise no one's going to get audited. That'd be lying if we could. You can be for any number of reasons. Sure.

Starting point is 00:28:46 That could be far outside of what we're doing. But, you know, we've never seen an increase in that. And so these, this is money, you know, there's been, you know, these are programs created to put more money in pocket. Because ultimately in the day, the government wants to incentivize his businesses to be profitable, to expand, to grow and create jobs and keep jobs in America. Like, that's what this is after, which in turn creates a bigger tax base and comes back to the government, of course.

Starting point is 00:29:12 Right. You know, whatever the motivations are behind it, let's take advantage of it. And the big companies are doing it. Google gets $300 million every year in the R&D tax credit. Right. You know, Caterpillar gets, you know, tens of millions every year for the equipment design and make. Right.

Starting point is 00:29:28 Why not get our slice of the pie? Yeah. Instead of, you know, 5% of small business, I'd rather see, you know, majority of small business are taking advantage of this. Yeah, it's such a rich get richer scenario, right? You know, like during the Trump era, which was a nightmare, right? It's just like you hear about all the ways he took advantage of every single. possible tax code you possibly good and yeah you have a team around you that's looking for

Starting point is 00:29:50 everything picking up every stone but then the middle class and lower middle class and and lopa i mean you're not picking up any of these stones you you don't have time you don't have money it's like you have to spend money to make money in a lot of these scenarios and yeah it's just it's tough and and you hear that over and over again like you know amazon you hear about their tax liability you're like what what the billions and millions of dollars that are at play here and paying some little taxes. Like, it's just not right. Right.

Starting point is 00:30:21 And we're talking about $100,000 here. Come on. Come on. Yes. I know. Why are we, you know, squabbling over this little tax bill here? Right. You know, that's why it's like, hey, these are opportunities to help support small businesses.

Starting point is 00:30:33 I mean, they're the backbone of our country. You know, they're keeping families alive and afloat through tough times, you know. And with, you know, with the way the economy, we don't know what's going on right now, where things are going to turn, you know? You know, a lot of people are really concerned about what's this, what's the, what's the, what's the future of the economy going to be over these next several years. Right. And so now's the time to explore, hey, you know, maybe there's some, some ways, you know, to be able to put some money back pocket. Like the ERC, you know, within a year or so that the opportunity to go back to 2020 and apply for those credits will disappear.

Starting point is 00:31:06 Right. With the R&D tax credit, going back three years, every year the previous year drops off. Like, so the bad news, I have to tell business owners sometimes like, hey, I got good news and bad news. Good news. I can get tax, you know, recovery for the last three years. Bad news. You've been in business for 10 years and those seven I can't touch, you know? Right.

Starting point is 00:31:24 But let's see what we can do now, you know, before we, you know, because every year, the previous third year backdrops off as the ability to recover money from. Right, right. So let's take advantage of every opportunity. Yeah, right on. Yeah. Before we get to your, to the ending and then your contact information, how, what does the process

Starting point is 00:31:41 look like when a client reaches out to you? Kind of give them a little bit of a heads up. Yeah, great. Here's the number one excuse you're going to hear, I'm busy. Yes. So break it down to me. Absolutely. And of course you are.

Starting point is 00:31:55 And business owners I talk to are all super busy. And I'm like, hey, our goal is to keep it simple and streamlined as much as possible. Like obviously this information we got to get from business owner that we can't make up, we got to get everything we need. But we do all the heftily. We try to offer a really tricky service. So usually it starts with, I just have an introduction call with a business owner just to talk through the potential of their qualifications eligibility and explain the process.

Starting point is 00:32:18 And the process is, okay, we're going to have another call where we're going to go through your kind of discovering your qualifications. For ERC, that's usually about 20, 30 minutes. To go through that and go through a qualification questionnaire. For the R&D, it's an hour discovery meeting. We've got to go through a robust questionnaire to really get to the nitty, gritty of what goes on in the business day and day out. But it's only an hour.

Starting point is 00:32:39 We can do that. In both scenarios, after that, we send you a little. link to upload the appropriate tax documents, ERC, it's payroll information, R&D, it's, it's tax returns. Once those are received, we produce our free incentive analysis, usually within a week or two. We come back with that incentive analysis. It's confirming eligibility. And here's about how much is on the table for it.

Starting point is 00:33:01 And that is no obligation, no commitment made for your information. Now business owners have put like maybe two hours into this whole thing, you know, hour and a half, you know, and if you want to move forward, always. we need you to do is now, now you're actually entering into the agreement, we're contracting you the work. The fees vary depending on which tax credit, but, you know, it's a contingency fee. Basically, you don't pay us anything unless we can get you money. Right.

Starting point is 00:33:27 You know, that's how we operate. We will never charge anyone money, you know, for any work we do if they don't get money in their pocket. Right. And so it's a pretty simple process after that. And then we take care of the rest and file and then we wait for the checks to come. Sweet. I mean, it sounds pretty painless, man.

Starting point is 00:33:41 I think you're right. This is a time, you know, in entering in the holiday season, this is a time where we usually have a little moment to breathe. This would be a good time to kind of get some of these affairs in order. And yeah, we have some uncertainty. We're feeling it already in California. Things are changing. So it's time for us to get more organized and take those COVID years and really chalk them up to anomaly. We're not going to see a lot of what happened again, hopefully.

Starting point is 00:34:10 But now we've got to pivot back to here's our new. reality we've got to get back in a good position and that's how I'm feeling personally so I'm sure there's many that are feeling the same yeah yeah absolutely awesome okay well um there one there's one other thing that I wanted to to chat about you know this the this push for energy efficiency you know we talk about a little bit low emissions electric vehicles solar I mean I live in California so we we get we're the front of this right yes it we have certain things we need to meet and certain goals by whatever, 2025, and we have all these things by 2032 and all this. And it's hard for us to understand this as business owners in construction because this does

Starting point is 00:34:52 affect us greatly. And the goalposts are moving all the time. You know, solar is one of those industries where it's just like there's tax credits, there's this, there's that. I mean, there's no way you can keep up, really. Yeah, I'm kidding. What should we be looking out for? And do you expect the government to take a position in this?

Starting point is 00:35:11 Because we can't be footing the bill for all of these upgrades. Yeah, and that is a good point. I talked with a business owner last month. He has a, in California, industrial contractor. And so they do things in industrial arena, oil, the gas. And so he's wrestling with, we've got these, we've got large equipment. We got big excavators, all this stuff. Right.

Starting point is 00:35:35 How do we convert these to electric vehicles? And so he's actually partnering with some big. big corporations to try to discover how do you retrofit, how do we keep, whatever. First of all, I'm like, you're doing a ton of R&D right now. So you're diving into more R&D. So that's going to expand their ability to take advantage of R&D tax credit. But even that's, that's not going to be sufficient, the kind of investment at this level, you know, at a company like that that's dealing with large equipment that's doing the heavy lifting.

Starting point is 00:36:04 Right. The scale is enormous. And his feedback was I think our politicians didn't think through what it's really going to to take for, you know, different industries to make these adjustments, you know, in the time frame. And unfortunately, you know, from what we're aware of that's available in incentives and rebates, things like that, you know, they've come and gone. They've, you know, they seem insufficient. I'll say that.

Starting point is 00:36:32 Yeah. We're hoping, and I hope, I sure hope that as the rubber meets the road and feedback of the reality of what it's actually doing to businesses to be in compliance with these regulations stuff that I hope that trickles up to to be able to have greater incentives, greater support, or whatever that might look like. So unfortunately, you know, that's, we're on the front end of a lot of this. Yeah. And, you know, this guy was talking to, he's in the middle of it all. And he's even saying like, I, you know, we don't know where this is going to know exactly how we're going to do it, exactly what kind of support we're going to get from the government.

Starting point is 00:37:09 If we are, you know, a lot of like a solar programs are, you know, those, those don't go through the kind of work we do with income tax. Those are through the point of sale with this is a tax rebate that can offset and purchase. You know, there could be a lot of different programs out there. So they're always worth exploring and sometimes they're changing. So that's what's so hard is business owners, and to stay current and constantly doing the research. So you just have time for that. Right.

Starting point is 00:37:33 And that's what makes us really challenging. And I wish there was an easy solution to say like, here's the one-stop shop to get it all. But the truth is, you know, when things are constantly changing, it makes it, it's a lot of challenges going on. And so that's why with the niche of what we can do through, you know, tax filings and the tax credits that are found on those like ERC and R&D. You know, there's actually another program that I don't even get into that we do that uses leverages section 125 deductions, which are through payroll. that helps businesses save payroll taxes every year, a program that does that. I mean,

Starting point is 00:38:07 there's different opportunities that can help a business keep more money in their pocket that's going to be needed through, you know, these big changes that are going on. Yeah, no, I think you said it right.

Starting point is 00:38:17 I mean, I think, you know, there are a lot of times their intentions may be right in wanting to, you know, lower emissions and be good for the environment. I get it.

Starting point is 00:38:26 It's just, it's tough. It really is tough on not only businesses, but homeowners too. Yes. when it comes to their utility bills and, you know, purchasing solar, should I do it now? Should I wait until next year? Trying to figure out what credits are available.

Starting point is 00:38:40 I mean, these are the things that are, it's just, yeah, it's constantly changing. And yeah, I'm with you. Hopefully in the next couple of years, there's a little bit more clarity here because as it is now, there's no way we're meeting these. There's just, it's not possible if it's the same as it is now. So. I hear you. Well, at some point, they're going to be hit with a big dose of reality. as we move towards that and see what's realistic and feasible.

Starting point is 00:39:07 Yeah, yeah, no doubt. Well, I appreciate you being here. I wanted to finish with a little fun thing we call the zone out. Sure, yes. And so the first question is, as a child, what did you want to be when you grew up? So, you know what? I was super into technology.

Starting point is 00:39:22 I grew up in the 80s and 90s and first learned to do computer programming on an Apple 2E, the big floppiness and stuff, and I loved it. Like, it captured me. So I wanted to be a computer programmer, software engineer. And then I remember, like, my family harassed me because at early high school, we went on a family vacation and are way out on the road.

Starting point is 00:39:42 We stopped by Barnes & Noble, and my dad's like, everybody could buy a book to take a vacation. You know, they're buying, like, fun novels and stuff. I bought C++ programming for dummies. And I'm sitting by the pool side reading how to code in C++. And my family was just like, who is this kid over here? You know, and I'm like, I'm loving this stuff. Anyway, I didn't end up going down that route, but anyway, that was just a unique thing I was into.

Starting point is 00:40:08 All right. Well, you weren't alone there. That's for sure. I mean, and where did the dummies book go to, too? I mean, that's how we got through college when I was in my age. Like, you just, you needed to find that the dummies book. Oh, seriously. I love Cliff Notes, man.

Starting point is 00:40:24 Totally. Yes, awesome. All right. The number two, if you had to do your own late night talk show, who would you want as your first guest? And there's so many that I would love to sit down with. But someone that comes in mind, this might be really unique. There is a doctor named Dr. Gabor Mate. I don't have you ever heard of him.

Starting point is 00:40:43 He's a Canadian-Hungarian physician who has become one of the leading voices in mental health, trauma issues in our world today and written a lot of books and done a lot of studies. And with mental health becoming an increasingly, like the awareness of it, the understanding of it, the pervasiveness of mental health, and those issues, understanding trauma and how it underlies so many medical conditions,

Starting point is 00:41:10 like psychological conditions, it's a really big deal. And I've, you know, it's something personally, within my own family, in our marriage, we've wrestled with issues

Starting point is 00:41:18 of mental and emotional health. And he's this fascinating man who's done incredible work that's kind of on the leading edge. So I've listened to his lectures, read some of his stuff. And he comes out of, his grandparents were when he was

Starting point is 00:41:32 five months old were actually killed in Oswitch. He grew up in Hungary and his dad was in a Nazi labor camp and so the trauma of what they bore, he later was fascinated, but also his own personal wrestlings of why am I struggling with addiction? Why do I have rage

Starting point is 00:41:48 at my children? Right. And realizing there's things that are living in me that I'm not tending to and our world largely doesn't know what to do it. And so he's doing some incredible work that's really helping set people free. Yeah.

Starting point is 00:42:04 Find healing and freedom from the things that can destroy lives. So he's someone that, like, I would love to just sit down with him and hear his stories and learn from him. That's going to be a tough answer to ever beat, honestly. I share a lot of your sentiments with mental health and my own family. And we have a couple of things coming out next year on U.S. Construction Zone to help with that issue. The big one.

Starting point is 00:42:27 And unfortunately, it's not going to get smaller. So we got to get it head on. So appreciate that answer. The last one is who is the most influential person in your life? You know what? I think you're really practical. Nobody influences me day in and day up more than my wife. Her name's Amy Rupil.

Starting point is 00:42:45 I love her dearly. One thing I thought of particular, you know, I painted that picture of Me Poolside reading about computer programming. You know, there's a way that I have a tendency to be in my head, disconnected from life, not enjoying life, the thinking about life. And there's a way it creates like you're not really present. You're not engaging. You're not enjoying and soaking up living in this beautiful world.

Starting point is 00:43:11 And my wife is the opposite. And she's constantly for the 15 years we've been married and a couple years dating for that, just by her example, by the life that she lives, she's inviting me to get out of my head and taste and see that there's good things out there in this world from food to, you know, just walks down by a river, you know, to just just enjoying versus just being stepping back and analyzing. Yeah. That's bad.

Starting point is 00:43:37 Yeah. But you can get in the way of actually living. And so my wife is constantly inviting me to live. I appreciate that. Awesome. That's a great answer as well. Well, thank you so much, Justin, for being here. Now, a key component, I will put all this in the show notes here.

Starting point is 00:43:52 But how do people get a hold of you? what's that link that they need to go to? Yes, you know, probably one of the best ways is, you know, a lot of us use online calendars like Calendly. And so I have a simple, easy to remember, Callendly. It's Callendly.com slash recover dash money. Callendly.com slash recover dash money. So you go on there, on the top of the page, you'll see my picture.

Starting point is 00:44:18 So you know it's me. You'll see my phone number. You can call or text me, my email. And also the opportunity, if you want to schedule an intro call, You can see my calendar. Pick of time that's convenient for you. We can get on the phone, have a quick chat about how this might benefit you and see if it's like fit and move forward with your free incentive analysis.

Starting point is 00:44:34 And I can even just throw it out there. 949-573-4891. That's my cell phone. You are more than welcome to call or text, and I'd love to see how I can help you. Cool. I appreciate you being here, Dustin. And thanks again for all the information. This is going to benefit us greatly, so I can't thank you enough.

Starting point is 00:44:53 And we'll be in touch. Yeah, great. He'll be here with you. Thank you, Jeremy. Thanks, Justin. All right. Great information from Justin Rupel there. I told you you guys would get the right information at the right time. Hopefully you guys can take advantage in. And hopefully it works for you. You know, like he said in the podcast there, we don't know what the next couple of years is going to bring.

Starting point is 00:45:13 You know, maybe we do, you know, head into a recession and it becomes a little bit more painful for us. This is the time to start uncovering those stones and organizing our business to be. more efficient and effective and profitable. I mean, these last few years have been really tough on construction business owners and business owners in all industries, unless you're at Google or Amazon, right, where our margins are getting beat up everywhere you look. It's an increase in lumber or increase in labor or more regulation, more taxes, more whatever. And so it's our time to take that back and be more efficient and profitable as an industry as well. So thank you so much for tuning in listening. I am your host, Jeremy Owens, and we'll see you next time on In the Zone.

Starting point is 00:46:02 Bye. You've been listening to In The Zone with Jeremy and Valerie Owens. Be sure to subscribe to In The Zone and stay in the know with the best minds in the construction industry. To nominate an innovator or change maker in the construction industry, connect with your management peers, and stay up to date with construction industry news, be sure to visit usconstructionzone.com.

Business Innovators Radio - Episode 12: Keep More of Your Hard Earned Money with Tax Incentives – An Interview with Justin Rupple

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