Business Innovators Radio - Interview with John Briggs, Founder and CEO of Incite Tax

Episode Date: December 16, 2023

John Briggs is not just known for his expressive t-shirts, but for going against the big 4 Accounting firms with his “new workday normal” Rockstar business culture and jaw-dropping quarterly revenue increases of 492%!But how did he do it? Many people have been dying to know John’s secrets. Fear not, because he recently composed all his stellar business advice, from epic failures to his greatest successes, into his new book, The 3.3 Rule – A New Workday Normal.Through his 12+ years of Entrepreneurship he has learned that achieving a highly profitable business can be overwhelming, particularly with all the barriers and unknowns that new business owners are forced to deal with. Entrepreneurs can quickly become stressed and often, sadly, give up on the mission that they set out for because of burnout. In much the same way that the body needs blood to survive, our economy needs small businesses, the economy’s lifeblood, to stay healthy and grow more resilient.John Briggs is a man on a mission! A mission to give entrepreneurs a new workday standard, so they avoid burnout and stay in business. The 3.3 Rule book showcases how to make more, by working less. He “walks the walk” by battling against the traditional CPA culture of “overwork, underpaid, pay your dues and suffer while you’re at it” mentality by providing his team with this same new workday normal, even during busy tax season!Learn more:https://incitetax.com/Influential Entrepreneurs with Mike Saundershttps://businessinnovatorsradio.com/influential-entrepreneurs-with-mike-saunders/Source: https://businessinnovatorsradio.com/interview-with-john-briggs-founder-and-ceo-of-incite-tax

Welcome to influential entrepreneurs, bringing you interviews with elite business leaders and experts, sharing tips and strategies for elevating your business to the next level. Here's your host, Mike Saunders. Hello and welcome to this episode of influential entrepreneurs. This is Mike Saunders, the authority positioning coach. Today we have with us, John Briggs, who's the founder and CEO with Insight Tax. John, welcome to the program. Thanks for having me, Mike. Hey, so I want to dive into what you do and how you serve your clients, but give us a little bit of your background and story and how you got into the industry.

So I'm a CPA. I have a firm here in Salt Lake City. We're about 120 team members. And, you know, it's interesting. I had a mentor in my life after my freshman year in college. And we spent some time on some service projects. And he said, hey, you know, you. you'd be pretty good going into something like business or law related. And so I took an accounting class and first time in my life, really, that a subject hit, like it just resonated completely with my mind. Everything else, I was a hard working student, but I worked hard. And so accounting just kind of clicked. And then from there, I got into tax and I realized that a lot of the country is bullied by the IRS. And here is an organization that's given authority to effectively be bullies. And I didn't

really like that very much. So I found it kind of matched my love for accounting with my desire to keep people from being bullied. And then we just kind of grew over the years. And here we are 120 team members later. Wow. That's amazing. And I think you're right that when something resonates, it resonates. And in college, for me, when I took accounting, I threw up a little bit in my mouth. So it was the exact opposite. So we need people like you because if everyone was in marketing, then it would be kind of a boring world. So we've got to have people like you to help us out.

So I think that is awesome. So I love how on your website you've got like this, this front and center growing your wealth by minimizing tax and managing cash. And so that's typically not a message you would think that a CPA service or bookkeeping CPA accounting service would have because that's talking about wealth. Well, I love that because I always think of like wealth and cash flow as the old proverbial bucket and water. And when there's holes in it, there's flowing out. So you don't need more water to go in it. You know, you need to plug up the holes as much as possible. So talk a little bit about your approach there to growing wealth

by minimizing tax and managing cash. One of the things that I noticed, depending on the demographic, but there's a high percentage where it just seemed like their only goal was me to tell them how they could reduce their taxes. But then I started asking them follow-up questions. Okay, well, do you have a financial goal in the future? Do you plan on never getting a loan in the future? Are you trying to grow your business? And all those things kind of led to, all right, well, we want to maximize the tax code to our ability, but there are ways that we can maximize it to make sure you're still going to qualify for those loans so that your growth doesn't get impeded. That's kind of the first trigger for me when I realize I want to see a mindset shift.

And let me just save taxes for the sake of saving taxes versus let me save taxes so that I can now utilize what I've saved for things that will enrich my life later on. Because ultimately, most small business owners, for example, we're selling their business sounds not. nice, but it's a small percentage that sell their business for a retirement-able amount. And so we like to encourage people, if you have the right system set up throughout your career and growing your business, then you're going to be all set. And then when you sell your business, all that's just the gravy on top or the icing or the whatever delicious liquid you want to put on top. Yeah.

You know, I like how you say, you know, we don't. don't want to just do this for the sake of doing this, right? So let's not just save you taxes and minimize your taxes for the sake of, okay, there we go. But what are we going to do with it? You know, and I know back in the late 90s, I was in the mortgage industry and I would have clients that would come in for a debt consolidation refinance and they'd pay off the credit cards and we'd free up 700 a month. And a few years later, I'd see them again. And I'm like, you ran your credit cards. Come on. We need to change this behavior. So I love that you say, yeah, it's fine that we're going to minimize tax. increase cash flow, but what are we going to do with it? You know, and, and, and you become the widget

that is a, a lever to accomplish more. So yeah, yeah, yeah, we do taxes and tax planning and CPA and all of that, but it fits into a bigger plan. Exactly. Love it. So, what are the typical, when you are meeting with a business owner for the first time, what is the typical place that you're noticing that you see the low hanging fruit first? They may come in for one thing. But you're looking at something going, okay, yeah, but we need to start here. So the most specific low-hanging fruit is entity selection. And when I say entity, it's a fancy legal term, right, that classifies what your business is set up as. So that's an LLC or partnership or a corporation or some people are sole proprietors.

All that stuff, sometimes people just take advice from whoever else they knew or they respect. and that person I respect may not actually have any knowledge related to the right entity. So we like to have great attorneys in our pipeline because a great attorney with a good CPA, even a mediocre CPA, they can marry the proper legal protection with the best tax savings. And a lot of times, based on the way you earn income, there are better taxed out, a better tax entities. So for example, if I provide a service, the IRS calls that ordinary income, or sometimes they call it self-employment income. That's taxed in a specific way where, for example, having an S corporation in your tax structure is going to minimize some of

self-employment tax. If I earn income from real estate properties, that's considered passive of income. So I don't have necessarily self-employment tax that's tied to it. Well, I'm going to want a different entity structure for a rental income, for example, than I do for income that I earn generating revenue through services or consulting that I provide. So that's the most specific lowest-hanging fruit. The second is it's still low-hanging fruit, but it's more generic because it is pretty specific to the unique scenario of everybody. But we do love it. when clients will take the time with us to go through like the last three months of expenses. And two comments are always made in this process.

One is, I thought I canceled that transaction or two, I have no idea what that is. A lot of times as we get into the hustle and bustle with our businesses, we kind of don't take the time to pause and realize that maybe a past financial decision we made is no longer a service we're using anymore or like I mentioned they they think it's canceled but it didn't end up getting canceled I mean I one of my horror stories which is humorous to us who didn't have to live it brand new client we go through his books and I asked him what's this a hundred and twenty eight dollar charge it's happening every month and we looked at the vendor the at the vendor it sold basically a floor cleaning machine.

And he said, hold on, that's a payment. I bought this floor cleaning machine. Okay. But great. But then he said, but I've been making, that should have been paid off three years ago. Oh. Like, are you?

So this company has been pulling $120 a month for an additional three years and you haven't stopped. No one said, hey, take a minute to pause and let's check this out. So he, thousands and thousands of dollars just because he had never taken the time prior to to check out some of his expenses. Wow. So now at that point, that becomes, you know, a low hanging fruit because let's make sure your foundational, you know, business structure is in place. So that's great. But then what about, you know, excess cash flow that you shouldn't be paying more that you didn't know about or it's over and done with?

So that frees up cash flow. what is it that then you're doing with even other things like that to uncover some of those like tax savings and things? But when you come up with that number at the bottom of the sheet and you underline it twice and you go, here is a number that now we have freed up. A, that's, I would suspect, not typical that your accountant slash CPA is doing for you. So there's a big gold star. But B, what is the reaction? And then what is the next step that you're saying, okay, now we should do things like this? the most common reaction is relief.

Yeah. Because most people still have a level of consumer debt or business loans or they've been needing to hire somebody with the way their company or business has grown, but they didn't know how to afford to pay it. Some people get to the end of the year and we tell them you owe this much in taxes. And if they're a first year client, a lot of times they'll say, there's no way I owe that much money. And so we have to go back through and it's like, you actually do. So then like, hey, we freed up the ability for you to save so money going forward. So one of the things we do is implement a system called profit first.

We're big proponents of the cash flow management system that Mike McAllowitz created in his book titled Profit First. And so through that, if we can free up some cash, again, most of the time, if they have debt, we're going to see if they're willing to put that extra payment towards the debt to pay that off because I feel like the interest expense, especially on consumer debt, you know, 15 to 30%, not the cheapest form of borrowing money. And if we can free up that interest and then the principal payments, now you've, it almost feels like you double found money. And then we can apply it towards their growth.

do they are they even paying themselves enough a lot of times they're not so giving them the ability to pay themselves a market rate or the work they're putting to the business now protects their business from the owner getting burnout so they're not going to want to close their doors if they are paying themselves enough then setting aside some of the money for tax but it it does depend on the client's goals and we just try to apply your typical good financial sound principles like richest man in Babylon ideas and you know those types of things neat and then do you bring it do you just make recommendations of what to do with that or do you bring in a team like do you have like a wealth manager or do you say let's bring your wealth manager to the

conversation because now that we've freed up this cash flow let's do some wise things with it what does that look like for for your deliverables yeah we we do like to stay in our lanes um while I am licensed as a financial planner, I understand that's a whole other ball of wax, if you will. So we have financial advisors that we like and recommend, but if someone's already working with one, we'll, yeah, we'll often say, let's pass this information onto your financial advisor. Because now at a minimum, like worst case scenario, right?

Worst case scenario, you can set aside this money for retirement going into the future is a pretty good outcome. So we have that or depending again on their growth, it's like, well, you've been stagnant so we could call in someone like yourself as a marketing expert and say, great, well, we just freed up some money. You can invest into growth. And let's look at what that campaign looks like, but we're not the marketing experts. We don't. Right. You're the coach.

Yep, we're the quarterback. Love it. Love it, love it, love it. So then you're strategically looking for opportunities. do you also get into, okay, now we will do the filing of the taxes and things like that, of course, and you do, you do the bookkeeping, you do filing of the taxes, and then you just bring in other people that are the professionals like estate planning or financial planning, things like that, that would be the experts there. Exactly. And I would caution anyone who is dealing with one professional who claims they can do all those things themselves, unless they have a very small group of clients. And you lucked out and they opened up a spot for you. There's just so much in all those different areas of things that people need to be experts on.

There would be very few what I would call uniques of nature that are capable of doing, being a master at all of those things. Yes, 100%. What, your Jack of all trades, but Master of None. And that really, I mean, it's more than a cliche because it really is. because let's think about something. Last count, the IRS tax code is how many pages? $26,000. Yeah, yeah.

I knew. I was going to say, ha, ha, 20, 30,000, but more like 30 or 40,000. 76,000. Who in their right mind would know how to go through and read it at all and then know how what it means and then know how to apply it to your business? So, you know, there's no way that let's just flip it around and say a financial advisor could then give you tax advice. because they have to stay up on their financial advising and compliance and all that.

So certainly they don't know the tax world. And same with you. So stay in your lane, pick that expert. But let's talk a little bit about that text code because you kind of take a strong stance about the IRS and you're using some strong language. And that's awesome. But you say they're taking your money. So when you were working with a business and we've already talked about some of the cash flow things, but what are some of the low hanging fruit that you're looking at on once you get?

the S-Corp or LLC or all that kind of taken decided on. What is some of the low-hanging fruit that you're watching for on overpaying in taxes? Yeah. So with the S-Corp, that's very low-hanging fruit if someone is earning what we call ordinary income or the tax code calls ordinary income. But sometimes people come to us with an S-corporation. And as part of that, the IRS does require owners to pay themselves a W-2 wage out of that. We have found most of time that W2 amount they're paying themselves is much higher than it needs to be. And so some low-hanging for S-Corp owners is you can reduce that and still be in compliance with the IRS and go ahead and save yourself the 15.3% on the amount that you're not paying.

That 15.3% represents the payroll tax they save. And then, you know, most people haven't read the 76,000 pages, which is shocking. I mean, I know how riveted. Yeah, right. It's a great read. So the tax code tells us, in order for something to be a deduction to reduce your income, it has to be ordinary and necessary. And if you think about those two words, they really aren't very descriptive or give us any help with what the heck the IRS is actually meaning there. So the group of accountants actually came back and said, can you please be more helpful with your description here?

because we have a feeling our definition of ordinary necessary is different than yours, which it always is. And they said, oh, okay. So they put together their crack squad of the smartest people they could come up with. And they came up with, all right. So ordinary necessary, here's the two new words for you, helpful and appropriate. Oh, great. That's the best you can come up with.

That cleared it right up. Yeah. So now we have four words that are all very generic. And so the way I tell people is like, some of the lowest hanging fruit is to understand what that really means. And this is what it means. If you're spending a dollar on your business and you can relate it to your business in any form, shape or fashion, then it's likely a business expense.

And you should go ahead and pay for that out of your business account. Now, there are some pretty obvious exclusions. Like you're never going to be able to write off your primary residence mortgage payment, for example, as a business expense. personal groceries, you know, never going to be a business expense. Now, it's not to say groceries can't be, but they do expect everyone to have a bare minimum of life. Supporting being alive expenses that you're not going to build a right off.

But if everyone can take that approach of first, just change their paradigm. Okay, if I am spending a dollar, can I relate it to my business? Does it help me grow? Does it help me keep clients? Does it help me maintain clients? Am I building a relationship with somebody? then, you know, let's look at the possibility of that being an expense. And then from there, you can get into some specific things.

Mileage, people often misunderstand, like, how to write off their vehicle. And so the IRS lets you take either your vehicle actual expenses, or you can apply a mileage rate, which they come up with every year, to the number of business miles. Well, if my home address is also the main location for my business, then if I'm driving from that main location, I'm driving for work for my business, which is different than the rules that relate to W2s and commuting miles. So there's some miles there.

If I'm going somewhere to take on a purchase that will be a write-off, that's also going to be miles. Like a lot of people have more miles on the table that they don't claim that they should. Same goes with travel. Man, if you really take the time to think through what your trip is, before you start spending money on the trip, if you can apply a business purpose to it, at least some of the trip can be written off, but a lot of times most of the trip can be written off. And then we can get into this later if you want as like the congratulations for list to this whole session with the tax guy, because I know taxes sometimes

aren't exciting to people, but there's a tax strategy called, we call it corporate rent, a lot of people refer to it as the Augusta Rule, but it's one of the lowest-hanging fruits that all business owners can take advantage of. Awesome. And I think here's one thing,

whenever I have these types of conversations, is when you hear something like what you've already mentioned in Augusta Rule, these are things that you don't hear in everyday conversations. So it's new to you as the business owner. That doesn't mean that it's wrong, shady, incorrect. It just means it's buried in 76,000 pages and you don't know how to take action on it.

So when some of these things that are just laid out and you can attribute it back to, oh, IRS tax code, whatever, whatever, take advantage of it because it's leaving money on the table. Yeah, totally. Awesome. So what do you find when you're working with business owners? What is the biggest challenge that people that they're facing right now regarding business in general? We've talked all about finance, but business in general, because I feel that. And it doesn't matter what time of year or what the date is, but just these days, businesses, I feel like are feeling the pressure. They've got to find employees.

They've got to keep employees. They've got to keep revenues up. They got to keep expenses down. As a CEO of a business, what are you seeing them struggle with the most? Oh, yeah. I think you actually hit it. I don't think there's any one single thing I'd say they're struggling with the most. But I feel like the best solution to most of the struggles I do see is to people give to

themselves permission to take some time off. It is amazing. And there's science that backs it. I actually have a book coming out in January called The 3.3, rule, which talks about a new workday structure instead of following the 40-hour work week, eight-hour work days. We need breaks, especially in today's knowledge working environment. Our mind needs breaks.

And it seems counterintuitive that by taking some time off. And when I say taking time off, I'm not saying like, oh, I was doing tax returns and now I'm going to check my email. Like actually giving yourself a break. break, your mind a break, go for a walk, take a nap, listen to a comedian, write in your journal, like, just talk to someone, you know, those types of things for a break. You come back, re-energize and rejuvenated. Instead, without that, which is where our society is right now, you're just constantly working 24-7, and if you're not at work, you're thinking about work.

I couldn't agree more with that. I mean, these, so, so, you know, I'm going to mention the C word that rhymes with Ovid. You know, I mean, COVID came and went and it's here. It's not. Whatever the case is. And guess what? We're going to have another thing like that in the near future. Because remember this thing called 9-11.

Remember the economic crash of 2007? Remember, I mean, there's something that crops up every handful of years. So we're going to have something that impacts us personally, professionally. But COVID, what that did, I feel one of the big things was it made us go, We need to be virtual, digital, available all the time because we now can't meet with people in person. And now that we can, people are like, cool, but I can jump on Zoom and I can do this and I can do virtual. But the problem is what you just said. You're always on.

And the struggle to turn off at 5 p.m. 5.30, whatever the case is and spend time personally with family or whatever. It's like, yeah, but my phone's right here. And yeah, but I can log on and I can do this. And man, alive. We could probably bring a mental health expert in. just talk about how when you are just on all the time, it just drags on you and the stress that it gives. So I think that you've hit the nail on the head and there's not one easy solution to that. It's just got to be, you've got to be committed to recognize that and then start making

some progress toward mitigating as much as possible. You never will eliminate it. You won't eliminate it, which is why everyone needs their boundaries. So you have to establish the boundaries and respect them. I mean, it's funny, especially with COVID, the whole work from home, thing really obviously became popular. And I just laugh at the number of articles I read that working from home is the best thing ever, and here's all the proof. And then you could read an article that says working from home is the devil. And here's the proof.

Not very many people talked about, hey, working from home needs, it's a case-by-case basis. It's going to work for some people, not going to work for others. And those who do work from home who are successful at it, the commonality is they all have boundaries because without those, am I living in my office or am I working from home, right? And the ones who successfully do it, they establish boundaries, they create routines,

they create separation even though they're in the sometimes it's even a different physical space. Like here is the space I work in and when I'm done working, I don't come back into this space until I come back. But we need to know. I listen to a motivational speaker on YouTube and he says this, which relates right to what you said,

are you living life or is life living you? And it's like, work life balance. It's just blurred. The lines are blurred. So I think that is a huge, huge piece revelation. So John has been so great chatting with you here. If someone is listening to this thinking, well, maybe I would like to have John and his team take a look at my situation to see if I've got the right business structure and

foundation. Where can I maximize cash flow? where can I minimize taxes? What's the best way they can learn more and then also reach out and connect with you? Yeah, so our website is Insight Tax.com and it is spelled a little bit different because we're using the word insight

as in to cause to action, often used in the sentence, they incited a riot. Insighttax.com, I-N-C-I-T-E-A-X.com. We have a free blog, and like some of the stuff we talked about the Augusta rule,

we go into details there. If you've ever heard about paying your kids, we have a lot of, like we try to provide, as much free strategy as possible. Check us out there. And then if you are interested, look at the contact us page

and a team member will reach out to. Excellent. Well, John, thank you so much for coming on today. It's been a real pleasure talking with you. Thank you, Mike. You've been listening to influential entrepreneurs with Mike Saunders.

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