Living The Red Life - Tax Insights From a Tax Strategist w/Carter Cofield

Episode Date: February 24, 2025

SUMMARYCarter Cofield, a tax strategist and financial expert, joins the show to break down the biggest tax-saving strategies that business owners and entrepreneurs often overlook. He shares his personal journey, detailing the mistakes he made early on by hiring cheap, ineffective accountants and the costly process of fixing those errors. His insights focus on proactive tax planning, leveraging legal loopholes, and ensuring financial organization to maximize profits and minimize liabilities.Beyond taxes, the conversation dives into business-building fundamentals, emphasizing the importance of hiring the right team to scale beyond seven figures. Cofield also reveals his top strategies for social media success, explaining how consistency and daily engagement transformed his online presence into a powerful business tool. Whether you're an entrepreneur looking to save money on taxes or an aspiring business owner aiming to grow online, this episode delivers actionable insights that can change your financial future.CHAPTERS02:35 - The Mindset Shift That Changed Everything04:50 - How Taxes Can Make You Rich07:15 - The Tax Loopholes You’re Not Using09:30 - How to Avoid Costly Tax Mistakes11:45 - The Secret to Staying Organized with Finances14:00 - The Right Way to Write Off Big Purchases16:20 - Finding the Best Tax Strategist (And Avoiding Bad Ones!)18:40 - Building a Multi-Million Dollar Business from Scratch20:55 - Social Media Secrets for Explosive Growth22:30 - Where to Find the Best Tax AdviceGUEST DETAILSGuest Name: Carter CofieldCompany: Melling & MoneyYouTube: Melling & MoneyInstagram: @Cofield_AdvisorConnect with Rudy Mawer:LinkedInInstagramFacebookTwitter

If your tax strategist can't tell you before you hire them how much money they're going to be able to save you, walk away. Because we work for all of our clients for free. I know how much I'm going to save you before I pay you. So I'm an investment more than I am a call. I always say that. I say the best attorneys and accountants should save you money, not cost you money. It's an investment. So if someone's listening that's in that income bracket, they're maybe doing a mil or two a year growth, and they're taking home three, 4, 5, 600k. What are some other more advanced things they're not thinking of?

Spending money for deduction is just awful, but investing money to get deduction isn't even better. Another strategy that I think is big in today's space is... My name's Rudy Moore, host of Living the Red Life podcast. I'm here to change the way you see your life in your earpiece every single week. If you're ready to start living the red life, ditch the blue pill, take the red pill, join me in Wonderland and change your life. What's up guys? Welcome back to another episode of Living the Red Life. Today we're going to talk about your favorite topic, taxes. I'm here with my friend Carter. He is one of the top tax experts. You've

probably seen him on social media with the viral reels, but here we go. Let's talk taxes. Welcome to the show, buddy. Happy to be here, brother. So fun topic. Yeah. Yeah. I don't actually mind it because I've learned it. Yeah. Your job is to educate entrepreneurs like me 10 years ago that had no clue what the heck to do with taxes, right? So how'd you get into this? Well, so it was funny because we all want to make money, right? So when I started working in corporate America in the tax field, our clients would make a lot of money, but they were really upset because they were paying a lot of money in taxes.

So I learned very early on that it's not about how much money you make. It's about how much money you keep. And so I decided I want to leave corporate America and start a company where I can just help entrepreneurs save on taxes. Because we work the hardest. We put our butt on the line.

We do everything. And then a silent business partner says, hey, you made a million. I want to take 90% of So, and that's not fair. So I found out we can do two things. We can get upset about it or we can get smart about it. Yeah. So that's what I decided to do.

Yeah. I think there's this like general misconception of taxes that they're all bad, terrible, blah, blah, blah. But it's just like, it's kind of the famous saying, right? There's two parts of life that are for sure death and taxes. Right. So once you accept that you're gonna die and pay taxes, then you just gotta figure out,

how do I legally maximize my tax strategy? That's the thing, one of my favorite quotes is that, we should all pay what we legally own taxes. Let's not leave a tip. A lot of people are tipping the IRS, unwillingly or unknowingly, because they don't have a tax strategy. And that's where I come in. That's where my team comes in.

There are strategies that we can implement to make sure you minimize your tax bill. And that's what our goal is. Yeah, I learned. I kind of, I think I'm pretty good in business at hiring experts and the right people. So as soon as my tax bill started getting over like six figures, I was like, okay, I got to go see someone. And you know, I'm lucky because I've been in masterminds for eight, nine years teaching Facebook and marketing. So you always meet a lot of really successful people there and they intro you. And I learned so much in the last few years. Like I went down a rabbit hole, studied it a little. And now, you know, I know how to really navigate it, but if someone's listening and they've not done that,

what are a few just like intro tips on like understanding taxes and entrepreneur? Yes, intro tip is understanding that the IRS says any expense that is both ordinary and necessary for your business, you get to deduct. So it's up to you to define if something is ordinary and necessary for your business. So if you buy a drone, a lot of people

think that's a personal expense. But you're the marketer to understand that a drone is a perfect way to shoot amazing content for your business. So now we are in this position of shifting personal expenses from our personal books to switching up to business expenses, which the IRS gives us a tax induction for these expenses. So I think the simplest level is what am I

already paying for personally that I can turn into a business expense, some of my business expenses that I'm paying for versus me having to pay for. So that's the base level for people to understand. Yeah, and I've seen that like with members and stuff, they tell me what they're paying and buying. I'm like yeah, I mean you're using are you using that for business? Yes or no? Yeah. Yes, you are. Okay. Well, well then it maybe should be a business expense.

And I think the other thing that I learned like over the years with taxes is, you know, a couple of tips like splitting bank accounts, obviously, first thing, and then just being smart with cards and how you're spending stuff, like being conscious. Oh, okay. I'm on eBay to buy this MacBook that's gonna be for my office. With streaming live content,

I'm gonna use the business card. And then, okay, now I'm buying a, you know, blah, blah, something for my house, a pair of trainers for me to wear personally. Well, that's personal trainers, but now next week I'm buying red trainers for a photo shoot. Well, they're just intended for this photo shoot for my business. And that's an expense. Yeah.

So you have to, so I love what you said because you determine on the front end, right? Before you spend the money, is it a personal expense or is it a business expense? And then use that card for it. Yep. Right. So now that we understand the basics, we can, you know, expand and get a little bit more creative. So one of the most profile examples that we've seen in our company recently of somebody turning a potential personal expense

to a business expense was the following. So our client was in the coaching space, high ticket mastermind client, and he wanted to purchase a yacht. And it was expensive, yacht was gonna be about three to four million. And he came to us and he said, is there a way that I can write this off in my business?

We say, yes, if you're buying the yacht for the pursuit of income, you call. So his mass amount program, I think, was $50,000. And then he added a monthly yacht experience to it. So he took his price of the mass amount from $50,000 to $75,000 just for adding the yacht. And that's literally the pursuit of income going from $50,000 to $75,000. That is why he's buying the yacht. So he purchased the yacht and he ended up selling like 10 tickets to that new mastermind immediately. So that's $750,000 of income.

And he takes his clients out on a boat every single month, has the log, and now he's able to write off a portion of that yacht and all the expenses that come with it. So that was a million plus dollar tax deduction for him getting that yacht and all the expenses that come with it. So that was a million plus dollar tax deduction for him getting that yacht. Yeah, and I mean, just to add to that, like what I started to learn is a lot of it is common sense and segmentation. So common sense is, am I using it 70% of the time for business and can I prove that?

Great, I can write that amount off, right? And then also segmentation, like, you know, if you wanna be really clean, my understanding at least is, well, if that's in a new LLC bought by the LLC for the yacht rent, like if you were doing yacht rentals. Yeah, exactly. That would be the cleanest way.

Cleanest way to do it, right? But we, as entrepreneurs, don't always know that. So we buy with our personal car, and we have to try and justify it. Then we get audited on the back foot. Yeah. So I, and I have been audited. I paid zero in fines. Really? Yeah. Yeah. Yeah. So you're stuff is tight. I spent 30 grand with attorneys. Yeah. Okay. You know, explaining it all in six months, but yeah, I paid zero in fines. Yeah. Uh, but that actually taught me like a lot because

there's so much to prep when you get ordered too. We had most of it, but it's like hunting it down. So now you get it on the front end, so the back end is a lot easier. But the first time we were, so if you're listening, I mean, wow, Rudy's a tax expert. He's like an expert in the school of hard knocks. Docs, right? Which is sometimes a really good step. Especially at a young age, yeah, yeah.

Especially at a young age, yeah, I'm 33. So now for the next 20 years of business, I know. Yeah. But yeah, I think it's so needed, especially once you're, you know, once you're earning over half a mil or even two, 300 grand net. Yeah.

Like that's when you can get more creative with, you know, tax strategies that are of course legal, but I think it's so important. So if someone's listening that's in that income bracket, they're maybe doing a mil or two a year growth and they're taking home three, four, five, 600 K. What are some other more advanced things they're not thinking of? Yeah. So I love that.

So two things I like to let our clients know that's in that price range is that, you know, spending money for deductions is okay, but investing money to get deduction is even better. So we tell them the more you invest, the less you pay the IRA. So setting up some specific self-directed retirement plans, Solo 401k is my favorite if you don't have any full-time employees in your business,

you can put up to $69,000 and you can invest that money and you will get a $69,000 tax deduction for doing so. You bring your spouse into the business, it doubles, now you get $138,000 tax deduction for investing $138,000. If you don't like the stock market, cool, we can do a self-directed version. Now we can invest in crypto, now we can buy other businesses, now we can do whatever we want. That's what Peter said. That's such a good one because I learned that a few years ago. So it's like,

basically just to break that down, if you're listening, you finish the year, 400k in profit, you have 200 grand sat in your bank account, you can put some of that money into an investment fund that you still own and control. And then you can now use that money to then go and invest in a new business or something that you were going to do next year anyway. But now because you're doing it as an investment vehicle versus leaving it in your personal bank account, which most of us entrepreneurs do, we would just take the money back out next year. But now we've lost 40% of it because we pay tax. So it's so important that one once I learned that one is a great one. Yeah, so that's a self directed solo 401k strategy. Another

strategy that I think is big in today's space is a lot of companies, especially in the consulting and coaching space, they need to have some type of media to their company if they want to grow. So this strategy is called the self rental strategy. We did this for our company. If you were to purchase a building, let's say it costs $1 million. I'm using that for math purposes.

And we bought a building to turn it into a content studio. And then we lease that building to our business, called the self-rental strategy. We can do a cost segregation study and write off 30% of the value of the building in year one. So we went and bought a million dollar property for our company. And we got $310,000 tax deduction for a studio

that we already had to use. And we were able to put like 10% down. So we exchanged $100,000 for a $310,000 tax deduction. And then now we're going to obviously next year run out the studio to other content creators and things like that So I think and I think the key that because people have missed it But I'd like this too is you get a million dollar place you get a 300 You know K cost seg and ride off, but the key part that you brushed over is you only put 10% down

Yeah, so you're putting a hundred K in to get a 300 K So you're putting a hundred K in to get a 300 K deduction. And if you pay 40% in tax, you're actually making a saving about 40 grand physically. Physical taxes plus that hundred K went into a property that you now own. That's going to go up in the value. Yeah. Right. So, so and we've started doing that. And now I married my wife's real estate. Are you serious? Can you explain that? You want me to explain that?

Okay, that's you. That's the Trump strategy. Yeah, yeah. That's the Trump strategy. Ha ha ha ha ha. I love that too. So if you, again, I'm not a tax expert, this is not tax advice, et cetera.

I'll prove it though, I'll prove it. But if you're married and one of you is spending over 50% of their time as in real estate and full-time real estate professional, and I mean, you have to log minimum 15 hours a week or something, we log in a spreadsheet and track what she does, again, because I've been audited. Yeah, I was happy to do that.

Thank you, Real Estate. You're fucked up, brother. Ha ha ha. Then, you know, and now we buy real estate, then we can do a cost seg. And because you're a full-time real estate professional, you get, like, what's called accelerated depreciation. So you can write off more in advance versus a normal person.

That's my understanding, at least. Absolutely right. And I think the biggest part about having the wife be the real estate professional status is that if that wasn't the case and you were to buy a long-term rental, they would cap your write-offs at 25. Yes, exactly.

But now there's no cap on your write-offs and you can buy two, three properties, let's say you buy a $3 million property, it's a $900,000 tax deduction and you're building your real estate portfolio at the same time, so that's huge. Yep, and another good one that we've used a lot is I rent very I own or rent very expensive places to live on the ocean, you

know, penthouses, and we run mastermind events there, VIP days, their staff days there. So we do what's called the Augustus, we use the Augustus rules, we get I mean, 11 or 40 days, 14 days a year. And basically, we do comps against the Hyatt Hotel next to us and nearby. And basically we do comps against the Hyatt hotel next to us and nearby. And we get a quote from them that say $3,000 a day rental. We save that and then we bill 14 times free thousand.

And then we can actually write that off as an expense too. So that's a big one. Cause a lot of people don't know that. Yeah. I don't know who's teaching this, me or you, man. But yeah, so the Augusta rule just to clarify so people know how to do it at home. You can legally rent out a property that you own to yourself for business.

And the key problem with this hard point is that, you know, you had $3,000 a night times 14. So about 45 or something. Yeah, so let's call it 45,000. That's tax-free income to you. And that's also a tax induction for your business. So it's a double win. And I got one more, is that OK?

Yeah, and I would just add to that, if you're going to do it, again, not a tax expert, but my advice or what I've at least done is log the days in a spreadsheet, and then we film each mastermind day. So we plenty of proof. We need to prove on that day what happened. We're filming the eight hour mastermind event so we can say yeah here's the eight hour proof. You want to go through all of it? And another tip there is that if you strategically do your masterminds around high season

you can go from you know know, 3000. We can. Yeah, exactly. So the days matter. So we tell our clients to do is look at the days in your city that a big event is coming. So we had a client do it in Phoenix when the Super Bowl came. Or Art Basel in Miami this weekend, right? Or that. Yeah. Or that. So absolutely. So those are some huge strategies of ways to increase that.

And I learned this, the person that taught me a long time ago told me a funny story. I don't know if it's true, but basically all the politicians in Benedict, because they owned houses on the Augustus golf course and they wanted to rent it out in Augusta. So they created this tax rule for them. Yeah, most tax rules are for people of wealth that have stature to actually get things done. So they were, yeah, they were getting $100,000, you know, tax free income because the properties of the gusts are going absolutely crazy. Yeah, good. So we took some sexy, you know, advanced strategies. I think they're super cool. And of course, you know, they should all be done legally correctly. Don't make it up or scam. We're not obviously suggesting that and it should be for genuine purpose.

Attack strategy done 50% right is 100% wrong. Period. We do a half ass. Yep. It's not going to work. So it's either done a hundred percent right or it's a hundred percent wrong. I want to be clear on that. Yeah.

And we always, you know, for me, at least personally, like if I want to buy something or write it off or understand it, even before I buy it, if it's a big purchase, like a boat or something, right? I'll say, hey, this is what I want to do and how I want to use it for my business. And then I'll go to my tax expert or whoever, account and I'll say, how do I do this the right way to make it clean?

And again, you know, I sound very organized, but for four or five years, I wasn't as organized and I had to go back and catch it all up and hire, spend a lot more time cleaning it up. So I've just learned from people way more successful than me that get it clean up front, it's gonna be a lot safer and easier and more efficient. 1000%.

So next couple of questions for you. People are listening. They're like, holy cow, there's a lot to this. How do they find it? And for a few years, I hired terrible cheap people, messed it all up, had to redo it, refile, absolute nightmare. And I know most people listening and going through that. How do you find someone good?

Well, you can just reach out to our company. If you find me on Instagram, Coldfield underscore advisor, shoot me a DM, let me know that you need some help. We have a team that will get you on a call with our team to hire us. But I mean, if your tax strategist can't tell you before you hire them how much money

they're gonna be able to save you, walk away. Because we work for all of our clients for free. I know how much I'm gonna save you before I pay you. So I'm an investment more than I am. Yeah. I always say that. I say the best attorneys and accountants should save you money, not cost you money. It's an investment.

Yeah. Absolutely. Yeah. Yeah. Yeah. And I think another like general vetting practices, I would love your opinion, but like, I actually, obviously I know a lot about it now, but I'll quiz them on a couple of these things. Right. I'll say, so if I'm using my house for, yeah, I've had my guy a long time now, but I guess

if I was approaching it again, I'd be like, if I was using my house for a few weeks, a couple of weeks to, for business and events, can I do anything with that? And if they say no, I'm like, okay, next. Yeah. So I think it's like what's some good questions to ask I guess you have to have some background and and and and tax strike tax right here or whatever you're trying to hire for because educated answers only come from educated questions yeah yeah yeah so the better the question the better the answer so I would ask them um what are

some strategies I can I can use say one taxes by with my family there are so many tax strategies hire your kids hire your spouse the, the spouse of Lupo. So I would ask them, how can I leverage my family to save one taxes? How can I leverage my home to save one taxes? And what are some tax strategies that I'm not currently doing that you think you could help me implement?

All these are open ended questions to make them fill in the gap. Yeah, and one good one too is I always ask what's your biggest client net income. Cause if you're the biggest client, I moved to Cannon one time cause he literally said to me, oh, you're the highest earner out of all my clients out. I was starting to ask him to do these advanced things.

I was learning from other people. And then I was like, that's a big problem. Yeah, you're the experiment now. He's like, I don't really know about. I'm teaching him like, that's a bad, that's a big problem. Yeah. Although I can't climb. You're the experiment now. He's like, I don't really know about. I'm teaching him like the conservation easement. Yeah, yeah, yeah, yeah. These things, right? So I love that.

So last couple of questions we wrap up today. We talked a lot about taxes and all the tax stuff, but you've built big companies too, right? And big successful companies. I would love a couple of tips more on the building of the business side. You know, hundreds of thousands of followers and views per video and the social media side. So two questions.

Business tip, give us a top business tip and then top social tip. OK, top business tip is if you want to go fast, go alone. If you want to go far, go together. Love it. Right. And I had learned that the hard way. I was a hard nose. I can't have everything on. Right. And I had to learn that the hard way. I was a hard nose. I can't have everything on my mold. And I had to find the right team of people that can support me

to build a bigger vision. You can get to a million dollars a year kind of on your own, but you're trying to get to eight and nine figures. There's no way you're going to do that without a team. So hire the team. I think the best personal advice I got was if you do what is easy, your life will be hard. If you do what is easy, your life will be hard. If you do what is hard, your life will be easy, right?

Let's shout out to Les Brown. Because so many times early on, we started business, they were like, this is hard. This sucks. I don't know what I'm doing. I'm stressed out, but that's okay. Because if you take care of the hard stuff now, the rest of your life is gonna be so much easier later.

So that's one thing that I really harp on, and then if I could add a bonus. When it gets hard, get happy. And I'm always at this, he said, because when it gets hard, after you get through it, you're gonna look back and anybody who wants to have what you have, they have to go through that gauntlet too. So it goes from poor me to poor everybody else

and they're fucking trying to catch me. You know what I'm saying? The way I always explain hard things, like I used to computer game a lot as a kid. Okay. And I always say the hardest thing you're facing is like the end boss at computer game level, you know, in played places. Yeah, yeah, yeah, yeah. You have to kill the boss to get to the next level, right? That's how I've like learned to consume business. Yeah. And I think successful people have coping strategies Yeah, like that they're different for everyone right like that's your one Yeah, you just said my ones like I'm facing the big boss on the end of the level now to get to the next

part of the game and it's true, you know, I always say boxes are Used to getting punched in the face every day and you have to learn in business, it's just the same. Yeah. Right, so last question on social media too. Yeah. You get millions of views on your content. What are some social media tips? Show up every day.

Okay. And I'll give you a story on that because I didn't take social media seriously until a good friend of mine gave me this analogy. I said, she posted every single day, three times a day and would live every day for a year. Wow. I said, why do you commit so hard? She said, she posted every single day, three times a day and went live every day for a year. I said, why do you commit so hard? She said, okay, Carter, if it was an NBA playoffs

and you turned out ESPN and they weren't playing the replay, how would you feel? I feel upset. She said, okay, what about day two? You missed the game, you're working, did they have the replay set? I said, no. She said, how would you feel?

I said, really upset. She said, what about day three? You go to ESPN, they don't have any of the recounts. I said, I'll probably stop watching ESPN. And she said, well, that's how your followers feel when you stop showing up. That's good, that's good, yeah. And I was like, wow.

Especially as a sports junkie. So like, if you stop showing up for people, like they will stop following you. They will stop consuming your content. So that's how it made me show up every single day. Yeah, we're pretty good at that. Like probably not as good as you, but it's funny because I have a big community

and they'll ask me this. And then you pull up their profile and they posted three times in the last month, right? And they're like, how do I go viral and get following? And it's like, guys, it's foundations, right? You can't be the next LeBron if you play basketball three times a month, right? They're playing three times a day

and they're the best players in the world. And there's so much in business. I think it's that. So last actual last last question, how do they find you if they want tax help, tax advice, see more of what you do? Yeah. So our company's name is Mellon and Money. So on YouTube is where our main focus is.

We put out content three times a week. So they can go Mellon and Money on YouTube. They get in my social media personal handle. It's Coffield underscore advisor, where I give out three tax tips every day. And if you don't see free a day, make sure you call it. Call me, call me. Let me know I'm slacking because I'm showing up every day.

Yeah, good, love it. All right guys, well, that's a wrap. Hopefully you got some inspiration there to learn more about this side of business, which is often ignored and so important and some good tips. and hopefully you can make tax year a little better next year. Until next time keep living the red life I'll see you soon.