Digital Social Hour - From EY to Entrepreneur: My Journey & Lessons Learned I Christian Rivera DSH #517

Starting point is 00:00:00 Really, it's a good dinner. You get a meal from a good restaurant. I'm big on food, actually. So that might be enough to sell me over for a year. To work 80 to 90 hours a week. Well, I do that anyways. Yeah. But not on a salary.

Starting point is 00:00:10 So that's, yeah, I see what you're saying. Yeah. There's no incentive to put in extra 40 hours. Right. The upside isn't there as much. No commission at all. All salary. No commission.

Starting point is 00:00:20 That'd be tough to stomach because you're basically working 40 hours for free then. Right. Wherever you guys are watching this show, i would truly appreciate it if you follow or subscribe it helps a lot with the algorithm it helps us get bigger and better guests and it helps us grow the team truly means a lot thank you guys for supporting and here's the episode all right guys all the way from boca raton we got christian rivera we're gonna talk uh taxes awesome taxes hopefully we don't put too many people to sleep. Yeah, it is one of those topics that are boring and vulnerable, right? But very important, though. Very important. But we can make it fun. I'm sure you got some interesting stories. Yeah, yeah, yeah, for sure. So how long you been

Starting point is 00:00:58 doing this? So I studied accounting up until about 2012. And then I've been in the space since then, so about 13 years. Okay. And originally you were in corporate America. You didn't go straight into this, right? Yeah. So I went to school in Albany, New York. Then right after that, I started working for Ernst & Young, which is a big four accounting firm. Yeah, that's a big deal.

Starting point is 00:01:22 Yeah. Yeah, it was tough to get in. And it was, I worked a ton of hours, but it was a lot of great experience. I worked with some of the biggest companies in the world, you know, Hescor, Barnes and Noble, Squarespace, you know, a lot of really, really big companies. I worked on IPOs, I worked on all kinds of cool stuff while I was there. So you probably can't name drop the specific companies, but were these big ones profitable? Some were, some weren't.

Starting point is 00:01:52 It depends. So if a company was, it depends. So Barnes & Noble was a company that each year would struggle. And it was a public company. It actually just went private recently, but it was a public company. They were just went private recently, but it was a public company. They were struggling for a long time. Oh, yeah?

Starting point is 00:02:07 Because they were in the in-person retail space and they tried to get into the e-reader space early on, but they were kind of beat to market by the Kindle. Didn't Amazon buy Barnes & Noble, though? No. It was a separate company, maybe somewhat owned by Amazon. I'm not sure, but it definitely wasn't Amazon directly. No, it was a separate company, maybe somewhat owned by Amazon.

Starting point is 00:02:27 I'm not sure, but it definitely wasn't Amazon directly. But Barnes & Noble has been a public company forever. And then just recently, like two years or so ago, it was actually acquired. So they were taken not public. Got it. And that's usually a sign that the finances are rough when they go from public to private. It could be, could not be. It depends on a lot of things.

Starting point is 00:02:49 At the time, I wasn't working at Ernst & Young, so I'm not entirely sure about the specifics. But yeah, they were no longer public. So you had to beat out a lot of people to get that job. Do you know how many people applied? I don't know for sure, but I did go to a small school, which was a little bit of a disadvantage. But it was hard. There was three to four steps in the interview process. They would ask technical questions, even though you don't have a lot of experience. And yeah, it's just a lot of entrepreneurs don't come from a college background. So for me, it was very much I had to keep my grades up and make sure I finished school, get my CPA license, all of that stuff. So it's a lot of pre-work to get into one of those opportunities. But for me, I was in the right place at the right time. Couple that with some

Starting point is 00:03:39 hard work, it just works out. So I was was at ey for seven years and worked probably 80 hours a week for most of that time yeah i worked i worked a lot of hours and i was overtime every week yeah except they they pay you the salary so there's no no overtime no not just a cab ride home and they'll pay you uh they'll pay for your dinner and usually it's a good dinner you get a meal from a good restaurant i'm big on actually. So that might be enough to sell me over for a year. To work 80 to 90 hours a week. Well, I do that anyways. Yeah.

Starting point is 00:04:09 But not on a salary. So that's, yeah, I see what you're saying. Yeah. There's no incentive to put in extra 40 hours. Right. The upside isn't there as much. No commission at all, all salary. No commission.

Starting point is 00:04:20 That'd be tough to stomach because you're basically working 40 hours for free then. Right. And even if, so when I was at EY, they would encourage you to try to sell work when you were at client sites. And they would, even at a very young age, they would send you to a client site and say, hey, listen, these are the services we offer that aren't currently being offered to this client. If you can upsell some of those services, it'd be really great. And even when you convert on those, it was kind of like know, it'd be really great. And even when you convert on those, it was kind of like a pat on the back type deal. You know, you would get an annual performance bonus, you know, a decent salary, but no commissions or anything like that.

Starting point is 00:04:56 I mean, it's a great job for people that are, you know, lifetime or career accountants. But for me, it just wasn't the right fit long-term. Was there at least a bonus structure? Yeah, performance-based bonus. Okay. So that's good. I think every company should at least have that or else your employees are going to be miserable. 100%. You need some sort of purpose. So you transitioned from there to e-commerce accounting?

Starting point is 00:05:17 Yeah. So when I left EY, kind of a crazy situation, but I knew that I wanted to be an entrepreneur. I was the type of person that in high school I used to sell bubble gum. In college, I used to do people's homework for money. Even when I was at EY, I tried to do some side hustles, most of them failures, but still never stopped trying. I always had that entrepreneurial instinct. And one day I decided that if I'm going to be an entrepreneur, I have to go all in. I can't do the salary and then try to do it on the side. I have to be all in. So I just decided I was going to leave.

Starting point is 00:06:00 And I started picking up clients on the side. And I had all different types of clients from police officers to doctors to self-employed people to you name it. Mostly friends, family, anyone that I could do a tax return for, I would do it. And that's how I got started. And I left EY and at the time, one of my clients actually told me, hey, you're leaving EY. I'm starting a startup company in the SaaS space and I want you to come work for me full time and be the CFO. And at the time, I was like, I'm not quitting a job for a job. I'm quitting to be an entrepreneur. And I was fortunate that they were super motivated to bring me on.

Starting point is 00:06:46 And they said, hey, if you can come work for me for 20 hours a week and I'll match your current EY salary, would you consider that? I was like, yeah, I'll do that. Can I keep my own business, keep working on my business in my free time? And that was pretty much it. That was my bridge from corporate America to working part-time as a CFO for a startup company. And then caught some lucky breaks from there and really expanded on the accounting firm side. Nice. Startups.

Starting point is 00:07:17 But back in the day, it was very general. It wasn't e-com immediately. Got it. And startups have their inherent risk too. Yeah, mostly funding, which was what kind of forced me to go all in on my business stuff. So for me, when I left EY and I was working for the startup company, I was working part-time, my salary was pretty good. I was living in South Florida. So I wasn't all that incentivized to focus on the business as much as I probably should have. And what happened was the startup company basically ran out of money. And I was the highest paid employee at the time.

Starting point is 00:07:57 So I was the first person where they said, listen, you're going to have to take a 70% pay cut until we figure out our fundraising situation. Right. Are you interested in coming on the Digital Social Hour podcast as a guest? Well, click the application link below in the description of this video. We are always looking for cool stories, cool entrepreneurs to talk to you about business and life.

Starting point is 00:08:18 Click the application link below and here's the episode, guys. And that's what kind of forced me to go into the e-com direction because I had clients in that space, and I saw it as an up-and-coming space. So that's where kind of we were in the e-com space. And timing was great because back in 2019, e-com was hot. Very much so. Dropshipping was like at its peak, I'd say, in those years. Definitely, definitely.

Starting point is 00:08:41 So you caught a few clients there? Yeah. So basically what happened was when I, so when I quit EY and I had accounting clients, I had a friend who was a very successful CPA. He had his own firm, this guy, Brandon Hall, he was the real estate CPA. And he hyper-focused, he specialized in real estate. And I had a call with him. I said, you know, I'm trying to figure out this accounting firm thing. I'm struggling. And he said, do you feel like every client's different? Every client has their own issues. He said, you got to niche down and focus on one area. So you become the expert. That way, you have no competition. You you know if you need an

Starting point is 00:09:25 accountant to do a tax return you know all the accountants are the same unless they understand your issues specifically so he said you got to find a space and niche down and go all in and focus just on that space so my thought was well i lived in new york city at the time so i was like well i'm gonna be the uber accountant, well, I'm going to be the Uber accountant. I'm going to be the accountant for ride sharing services, Uber, Lyft, et cetera. And I started to get clients doing that. And what I found out very quickly was that Uber, Lyft, and all those companies, all their drivers don't really make that much money. So they don't really have a lot of budget for bookkeeping and tax planning and setting up tax structures. So that was definitely a tough lesson. But looking forward, I came across

Starting point is 00:10:12 my first e-com client. And I noticed that they were doing tremendous. They were making a lot of money in the space. They were definitely my most successful client at the time so me as an entrepreneur i looked into that space as something maybe i should get into should i do e-commerce should i be a drop shipper and uh then it kind of clicked well wait a minute this is this seems to be a really up-and-coming space maybe there's no accountants or tax people in the space and that's kind of when i when i came across that there was a gap in the market for people who need good tax advice or bookkeeping or sales tax advice, et cetera.

Starting point is 00:10:50 And that's how I kind of decided to go all in on the e-commerce accountants. I love it. I had an Uber driver in Boston once and he was actually making 100K a year, which is crazy, but he was working 80 hours a week and he was on his third car.

Starting point is 00:11:04 Right. So it is possible to do six figures as an Uber driver, but you got to commit. Right. And even as someone who's a service provider for something like that, that person, even if they do 100K a year in profits, they may not. It wasn't profit. Oh, it was not profit. No, it was gross. Oh, gross.

Starting point is 00:11:19 Okay. so you know if you if you net that down to a number imagine trying to approach someone like that and saying hey are you willing to pay premium for accounting tax bookkeeping services it's yeah it's not it's a tough sell yeah because he's probably netting like half that maybe probably with gas and car expense and repairs yeah it's not the not the best profession i'd say yeah i would do it on the side but i wouldn't do it as a main thing. Right. There's a lot of flexibility in that space. So it's a great gig if you want to do that to earn some income, to pay your bills, to really prioritize something else, maybe a business or going to college or something like that.

Starting point is 00:12:01 So let's talk e-commerce because there's a lot of people selling online. Have you seen any good strategies on saving money on taxes for e-commerce owners? Yeah. So it depends on a lot of things. Tax planning is very complicated. So it's very much depends on a lot of things. Where you live, are you a US citizen? Where's your inventory set? Some of that stuff makes a big difference. But the way I like to summarize it is first, are you a US citizen or not? If you're a US citizen, your options are definitely more limited because the IRS, no matter where you live, is going to try to tax you on your income. So if you live, if you're a US citizen, but you live in China or Dubai or UK or wherever, it doesn't really matter. The IRS will still try to tax you on your income.

Starting point is 00:12:47 And they do give you some tax benefits, like they'll give you a tax credit for what you pay for taxes in those countries. But any extra amount that you were supposed to pay to the IRS that maybe there's a lower tax rate someplace else, the IRS will collect on that difference, basically. Even if you don't live in the US? Exactly, right. As long as you're a US citizen. We must be the only country that does that even if you don't live in the u.s exactly right as long as you're a u.s citizen we must be the only country that does that no there's others that do it oh there's there's others that do it but uh the the thing it's basically the irs taxes you if you're a u.s citizen on your worldwide income and you get tax credits for taxes you pay

Starting point is 00:13:19 elsewhere but keyword is income yes exactly yes um. Pretty much the only exception to that is if you do Act 60 through Puerto Rico, where you get an exception where you get introduced to a lower tax rate. If you do the structure correctly, do an Act 60 corporation, you can get all the way down to 4%. But basically, to summarize it, if you're a US citizen, your options are definitely a lot more limited. If you're a non-US citizen, right, meaning you, so if you're non-American, meaning you're not a US citizen, and you do not live in the US, then it's a little bit different. If you're doing business in the US, that's where you have to be careful. If you're, you know, if you live in the Netherlands, and you're doing, I don't know, an agency for local businesses over there, obviously not much U.S. tax risk.

Starting point is 00:14:12 But if you're operating in the U.S., you have to be strategic and make sure you're doing things correctly. So with non-American entrepreneurs, if you're dropshipping, let's say, for example, you don't have a physical presence, meaning you don't live in the U.S., you don't have inventory, you have no employees, then you can set up an LLC in the U.S. You can have a U.S. bank account, U.S. credit cards, U.S. payment processing, and you still don't have to pay U.S. income taxes. You could do business in the U.S. and not pay any U.S. income taxes. The idea is it's a flow through structure. So you pay taxes in your home country in theory. So we have quite a few clients that it's changed now, but that over the years have done their structure through Dubai, where they were maybe born and raised in the UK, but they have a structure through Dubai. And that

Starting point is 00:15:02 structure owned the US LLC, where they would basically get away with paying no income taxes for a long time. And then there's obviously the other way where if you're not a US citizen, you don't live in the US, but let's say you live in a place that has an outrageous tax rate, let's say 45%, you can actually force US income taxes through like a C-corp structure and pay 21% in the US. So there's a lot of cool things we could do with foreigners. So my background's in tax, so I geek out on tax planning. So the foreign guys, we could do a lot of cool shit with. But the US citizens, there's two to three to five buckets that we could fit you into. If none of those work, you're kind of SOL for the most part.

Starting point is 00:15:52 How much would you say people have to make to make the Puerto Rico move? Because part of the thing you have to do is buy a house there, right? Not necessarily. It's the amount of days that you spend there. So the rules are very complicated, but there's two main things you have to focus on. The one part is you technically have to export products or services into someplace else outside of Puerto Rico. And the money has to go back into Puerto Rico through an Act 60 corporation. So basically think if you're an agency owner that provides marketing services digitally to Americans, right? If you're sitting in Puerto Rico running that business through an Act 60 corporation, that's a great fit. Or if you're a dropshipper and you're sitting in Puerto Rico, you have an Act 60 corporation which

Starting point is 00:16:35 owns a Shopify account and you're shipping from China into the US, that's also a great fit. The big part of it is having that Act 60 structure, like an actual corporation that is an Act 60 corporation out there. The second part to it is a physical presence test. So you basically have to spend a certain amount of days in Puerto Rico. Off the top of my head, I think it's 180 days. So whenever a client asks me, hey, I'm interested in doing a Puerto Rico structure, does this work for me? Before I talk about any of the business stuff, I say, are you willing to live in Puerto Rico 180 days or more? Because they're quite strict. There's a lot of audit risk around that.

Starting point is 00:17:16 They tracked your phone, I heard. I don't know the specifics about how they catch you, but I do know that there's a lot of audit risk around it. And I do know people that have been disallowed that Act 60 status. But as long as you're open to being physically present there, for the most part, you can make it work if you have an e-commerce business or a marketing agency. I would say you got to factor in the lifestyle too. Are you willing to sacrifice?

Starting point is 00:17:45 I heard the food's not the best. Yeah. Well, I'm biased because I'm Puerto Rican, but it's funny. I'm what they call New Yorican. So I was born and raised in New York, but I love Puerto Rican food. In my opinion, in terms of, it's not the healthiest for you, but it's rich. It's very, very tasty food. But for me living in Puerto Rico, there's a lot of poverty there. It's probably not a good idea to have nice things, nice cars, jewelry, that kind of stuff. Not to say I'm that type of guy, but I know a lot of successful entrepreneurs are like that. You work very hard and you've taken a lot of sacrifices and you want to buy a Lamborghini or buy a really nice house or wear nice jewelry.

Starting point is 00:18:32 If you live in a place like that that has a lot of poverty, it's probably not the best idea. But there's a lot of really great communities out there of entrepreneurs and investors and could be good for networking. So for the right person that's open to living in a tropical climate, be surrounded by a lot of successful entrepreneurs and investors and enjoy the benefits of saving a lot of money in taxes, it could be the right move for sure. Have you taken advantage of any tax credits? Amazon pays $0 in taxes, right? Even though they're doing billions. So the Amazon situation is a little bit loaded because with a corporate structure, there's multi levels of tax.

Starting point is 00:19:14 So where the corporation itself may not pay a lot of money in taxes, a lot of times the owners are paying a lot of money in taxes. So for someone, I'll give you an of of like a tax planning opportunity that could work outside of so let me summarize it let's say you're u.s citizen a lot of my i would say 60 70 percent of our clients are u.s citizens when i say the options are limited step one is figuring out a tax structure so a tax structure is usually either a C-corp or an S-corp structure. Those will get you out of paying self-employment taxes, which is an ugly tax that's basically a double tax that the IRS does. Once you get beyond that, there's not much of a magic wand. You usually have to do things to save money in taxes, invest money in places or something in terms of services or something like that to create the tax benefit.

Starting point is 00:20:09 So I'll give you an example of one that our clients like that are on the more risk-based approach side. 181 credits. So film projects based out of los angeles um i i don't know if it's just limited to california or not but there are tax incentives that if you're in the movie business essentially you can accelerate a lot of deductions so if you if you think about the people that are coming up with these projects i'm not talking about major movies like the avengers or something i'm talking about independent films yeah yeah a big investment that a lot of my clients just did was the movie Rust.

Starting point is 00:20:46 It's like an independent film with Alec Baldwin. But with these indie films, a lot of times they're looking for funding. So they're looking for the funds to create the film and they're interested in the upside as an investment. Whereas a lot of the people that are investing in those independent projects are looking for tax benefits. So what they do with a lot of the people that are investing in those independent projects are looking for tax benefits.

Starting point is 00:21:05 So what they do with a lot of these projects is they figure out how to structure the investment so that the upfront tax incentives go towards the investors. So someone who's looking to invest for tax purposes, they get allocated oftentimes disproportionately a lot of those tax benefits. So they get a return on investment. If you invest $10, you might get $20 in tax benefit, that sort of deal. Whereas the people that actually want to capitalize on the upside of the project, actually make money on the film, they aren't the ones funding the project, but they're the ones that enjoy the upside of the project. So section 181 deductions are pretty common in the tax planning space. But it's just an example where if you want to do tax planning as a U.S. citizen, that's something that takes substantial investment.

Starting point is 00:21:54 I mean, our clients, I think the minimum last year for an investment was $150K to put into the project. And then you get a return on investment through tax savings so it's not like a one-to-one you put in 150 you get 20 you know 200 back it's your benefit is you're getting allocated tax savings i like that one too though because it's also a networking play yeah you get to meet the actors the directors yeah i'm actually going to be in uh and uh niece in the next couple of weeks and during that time just luckily i didn't plan this on purpose but i got invited to go to the cons movie festival wow like the annual nice uh no it's it's close to nice it's a place called cons that's cool south

Starting point is 00:22:38 of france so it's it's gonna be cool yeah i just so happen to be there during the time of the movie festival and it's apparently the biggest movie festival in the world. It's pretty cool. And that's all from saving taxes. So yeah, it's like a double win. Yeah. So I want to talk about exits, right? So Mark Cuban just tweeted out, I'm paying 350 million taxes to the IRS, and I'm happy about it. Is there steps because I know you've had some exits, right? Is there steps you could take before during the exit to save on the capital gains tax from that? Yeah. So there's a couple of things that you can do. So it depends on the type of exit you have. So there's two types of ways that you can sell your business or have an exit event. So an asset sale and there's an equity sale. So on the equity sale side of it, it's a little bit easier.

Starting point is 00:23:25 Basically, when I say an equity sale or an asset sale, what I'm saying is what are you selling? So if I own a corporation, right? Let's say I own a corporation that has 100 shares in it and I own 100 shares. If I sell you the 100 shares, you now own the corporation, right? That's what's called an equity sale. So with those types of exit events, there are tax benefits to where oftentimes, if you do things correctly, up to the first $10 million in the capital gains on that exit event can be tax-free. Wow.

Starting point is 00:24:01 Yeah. So there's a holding period, like you have to hold your shares for a certain amount of time. And there's rules specifically to that. But it's pretty rare for small businesses to go through an equity sale, my experience. Again, I work with mostly online sellers, people that are in e-commerce. So most of the time they're on the other side of the spectrum which is an asset sale an asset sale is basically let's say you own an LLC and that LLC owns a Shopify store if someone comes and acquires that brand

Starting point is 00:24:34 they may not acquire the full LLC they'll just acquire the Shopify brand the ad account maybe your payment processing they'll acquire specific assets your creative, maybe members of your team, that kind of stuff. So with an asset sale, the main play there is two things. The first thing is holding period. How long did you own those particular assets? If you hold it for over a year, then it enables you to get long-term capital gains tax rate, which is fixed at 20%,

Starting point is 00:25:06 which is pretty tax-friendly. If you have an exit event of $100 million, you pay $20 million in tax. Net-net, you're walking away with a much lower tax than you would pay if it was ordinary income, which is up to 37% in taxes. So as long as you hold those assets for longer than a year, it brings you down to a much lower tax rate. We do have, and we've only dealt with one or two clients that did this, but there are trust structures where basically right before the exit event, maybe right before, you kind of have to plan a little bit in advance but you set up a trust structure a structure where some of those assets go into the structure or maybe the llc all together uh and what happens is the exit event happens and you no longer own the business entity that the

Starting point is 00:25:57 the trust does yeah so the tax implications are basically delayed. Basically how it worked with our clients is gains or the proceeds go to the trust and it's taxed basically when they pull the money out of the trust. It's not you're permanently getting rid of the taxes, but it's a way to defer the taxes so you don't have to pay. In my example, that $20 million up front. It can sit in that structure. It could be reinvested into other things. And you can pull it out for personal need as needed. But that's a lot more complicated, a lot more structuring expensive. You've got to deal with lawyers to set up the structure. There's a lot of planning that goes into it.

Starting point is 00:26:39 That makes sense. What are your thoughts on trust and when the right time to open up a trust is? Yeah. So our clients ask us about trust all the time. And I think if there's not a ton of tax benefit to trust, it's mostly on the legal side. So with trust, I like it as an asset protection play. So people that are married and things are very volatile or you're trying to protect your assets from lawsuits. Like one of our clients has some pretty severe FTC concerns right now.

Starting point is 00:27:22 And they set up a trust structure to protect themselves from that. Got it. So for legal protection, I think it's really great. But for me personally, I specialize in working with entrepreneurs. I always like our clients being in complete control of their money. And part of that is you're gonna have to pay income taxes. Don't overpay on your income taxes,

Starting point is 00:27:39 but pay what you need to and be in complete control of your money. Obviously, do some asset protection through legal entities, right? If you're going to have two different businesses, set them up in two separate legal structures. Yeah. So they're protected from each other and you're protected from those businesses. But other than that, my preference with our clients is always to, or at least what I advise to our clients is always operate, make money, pay your taxes. Don't overpay. We'll help you to strategize.

Starting point is 00:28:12 But once you pay those taxes, you're in complete control of the money. You could do whatever you want with it. Whereas if you go through a trust structure, it gets a lot more complicated. I do have friends of mine that purchase real estate under a trust just for privacy reasons as well. So for privacy, there are states that you could set up legal entities that you can have the same type of privacy benefits. But yeah, I'm not as familiar with using trust for privacy purposes, but the main issue with a trust is depending on whether or not it's revocable or irrevocable, the question becomes, do you have control of those assets or not? If a court could prove that you have control of those assets, the trust structure goes

Starting point is 00:28:53 out the window. Oh, really? So they could still sue and get those assets? Yeah, it's possible for sure. So it has to be under someone else's control. Right, exactly. But even under that situation, how many people do you really trust? Not many. If you're going to acquire a multimillion dollar asset that you personally can't make any decisions for, it has to go through someone.

Starting point is 00:29:12 And the thing is, a lot of times about trust is you have to have a person that is really in control of the trust assets. And the closer they are to you, the more that a lawyer or in a courtroom, that stuff can be thrown out. If it's your brother, your girlfriend, your mom, those are people that are very close to you. If it's someone you met once in your life, how much do you really trust that person? That would probably hold up in a legal situation, but how much you really trust that person to make those decisions. I'm glad to see you speak on this side of trust because a lot of people on social media are just like open up a trust and they don't talk about the repercussions or anything. Yeah. And look, I'm a pretty conservative guy in terms of, you know, I try to advise our clients

Starting point is 00:30:00 to make decisions that they're in control of a lot of things. Social media, you brought it up. There's all types of theories and suggestions and advice. People say crazy things online. I would say at least three to five times a week, clients will send us a message on Slack and say, hey, I saw this tax planning strategy. Does this apply to me? And 70, 80% of the time they're wrong.

Starting point is 00:30:26 And even worse, sometimes it's our own clients. And I love our clients. Sometimes they don't understand fully what we're doing in terms of their tax structure, their tax planning. And they kind of spew out the version that they think it is in their head. And tax is complicated. It is. I got hit with a crazy one last week. I don't know if you've been hit with this one. This guy gave up his US citizenship just to save on taxes basically. Yeah.

Starting point is 00:30:52 I mean, that's definitely something you can do. Giving up your US citizenship is a big deal. I've never had a client give up their US citizenship, but it is an opportunity. If you're going to go through something that drastic, you know, I would say move to Puerto Rico. I mean, if you're going to do something crazy, like you're going to leave the U.S. altogether and not be a U.S. citizen, um, might as well live someplace where you can keep your U.S.

Starting point is 00:31:22 citizenship and experience, you know, much better tax benefits. I think U.S. citizenship and experience much better tax benefits. Yeah. I think U.S. is one of the strongest citizenships to have. What are your thoughts on dual citizenship? Because my dad was born in the U.K. and he said I can get my passport whenever. Does that impact taxes at all or no? From a U.S. standpoint, no. It might on the U.K. side. I would say you would have to consult with a UK person but on the US side you're kind of screwed no matter where you go if you went to go live in the UK the simple fact that you're a US citizen

Starting point is 00:31:52 if you were to do this podcast out there and you're generating money from whatever from sponsorships or whatever that income would be taxable in the US to the extent that it's not yeah you mentioned that earlier because there's people trying so hard to get Dubai citizenship but they probably don't even know that they're still going to be taxable in the US to the extent that it's not. Yeah, you mentioned that earlier. Because there's people trying so hard to get Dubai citizenship, but they probably don't

Starting point is 00:32:07 even know that they're still going to be taxed US. Yeah, if you're a US citizen, it unfortunately won't work. Yeah, but that's on an income level though, right? Personal income. So even if it's through a corporate structure, they have something called guilty tax. Not guilty like come arrest me, but G-I-L-T-I. Guilty tax is basically the same thing where there's a minimum tax rate that you pay if it's through a corporate structure. So let me rewind.

Starting point is 00:32:35 Back in the day when I worked at Ernst & Young, I used to do tax planning for big multinational corporations. And one of the best tax planning strategies we would do is we would set up a structure in Ireland or another, it was mostly Ireland, but in another country that has a much lower tax rate. And all you had to do is set up a corporation, you get an office out there, employees, all of that stuff. They own the IP out there, or they have the IP leased out or something like that. And there was significant tax benefits that existed through trump tax reform um there's a lot of great things that it did for small businesses but for big companies what it did was it took away those rules where you can set up a company overseas and save a lot of money in taxes so what it did was it forced a lot of big companies to

Starting point is 00:33:21 bring their money back to the u.s which obviously is is great for our economy here in the U.S. But the main reason why I bring that up is because part of the rules with that is that guilty tax where even if you set up a structure where let's say a corporation owns a Dubai corporation, yeah, in Dubai now there's a tax rate, but 0% for a long time. Once it flows up to that U.S. In Dubai now there's a tax rate, but you know, 0% for a long time, you know, once it flows up to that us structure, there's still that guilty tax that exists. That's good to know. Christian, any other tips you want to close off with or anything you want to promote? Uh, just our, our brand. If you're an e-commerce entrepreneur, um, we specialize in

Starting point is 00:34:00 working with e-commerce entrepreneurs. We have agency clients. So yeah, tax planning, bookkeeping, sales taxes. That's what we do. Cool. What's the website for that? Theecommerceaccountants.com. Oh, that's a good one. Like the very best e-commerce accountants. Love it.

Starting point is 00:34:16 We'll link below. Accountants, plural. I love it, dude. Thanks for coming on. That was fun. Thanks. Hit them up for your accounting needs, guys. Otherwise, I will see you tomorrow.

Digital Social Hour - From EY to Entrepreneur: My Journey & Lessons Learned I Christian Rivera DSH #517

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