Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Business concepts in termsbarbers need to know part one.
(00:03):
So some of you still haven'tmade the choice of allowing us
to be part of your journey.
Maybe you've got a long standingrelationship with your current
accountant or maybe you'reconvinced you can handle it
yourself.
Either way, you haven't decidedthat you and your business
deserve better that you deservea specialist.
And you know what?
That's your choice to make.
(00:24):
But here's the truth.
While your current accountantmay or may not be great at
general accounting.
They don't eat, sleep, andbreathe the barbering industry
like we do.
They don't understand the uniquechallenges and opportunities
that come in the business ofbarbering.
They haven't helped barbers savehundreds of hours and thousands
(00:44):
of dollars.
We have real life industryprofessionals, just like you,
who have secured better loansand grants, set up their
businesses for long termsuccess, and automated their
operations with AI, both pre andpost booking.
But that's not why I'm writingthis.
I'm writing this because even ifyou're not ready to work with
(01:04):
us, we still want you to win.
Today's blog will cover businessterms and concepts you need to
know in order to take control ofyour finances.
These aren't just randomdefinitions.
These are the specific termsthat can make the difference
between a decent side hustle anda business that builds wealth
for you and your family.
We're going to break this upinto three sections for part
(01:25):
one.
Section number one is basic taxforms and filings.
The first item is AGI oradjusted gross income.
This is your take home pay fromall income sources after
subtracting certain expenses.
It's what the IRS uses as astarting point to calculate
taxes.
Item number two is the standarddeduction.
(01:45):
I want you to think of this likea store's no receipt needed
return policy.
The IRS automatically lets yousubtract a set amount from your
income without requiring you tohave to prove any expenses.
For single filers, 600.
For married filing jointlyfilers is 29, 200 and for head
(02:07):
of household filers is 21, 900all for tax year 2024.
Number three is the exactopposite of standard deductions,
which is itemized deductions.
This is like that same storetelling you to now keep all of
your receipts and bring them infor your return policy.
This method is used if after youlist out specific expenses, they
(02:31):
add up to more than the standarddeduction we just discussed.
The last item in this section iscalled a schedule C.
I want you to think of this asyour business's financial diary
where you tell the IRS everydollar your business earned and
spent during the year.
Thank you.
Section two is businessstructure terms.
The first item in this sectionis a pass through entity.
(02:54):
This is how 99 percent ofbarbers are taxed.
Want you to think of this like amail carrier for your business
profits.
Income passes straight throughthe business to your personal
tax return, where you pay thetaxes.
The second item is reasonablecompensation.
This is a baseline.
The IRS expects you to payyourself when electing to be
(03:14):
taxed as it is corporation.
If done correctly, this helpsyou save thousands of dollars in
taxes.
And because of that, the IRSwatches this like a hawk.
The last item in this section isdouble taxation, and it's only
applies to a select few barbers.
If you are structured as a Ccorporation, do you essentially
pay taxes twice on the samemoney?
(03:37):
I won't get into that much.
But if this does apply to you,feel free to reach out.
The last section for part one iscredits and deductions.
The first item is a tax creditdollar for dollar.
If you get a 1, 000 tax credit,you save exactly 1, 000 off your
tax bill.
This is like using a 1, 000 giftcard.
It reduces what you owe byprecisely 1, 000.
(04:00):
The second item is a taxdeduction, which is not dollar
for dollar.
If you get a 1, 000 taxdeduction, it only reduces your
taxable income.
By 1, 000, but it doesn'tactually give you tax savings on
1, 000.
The actual tax savings depend onyour tax bracket.
So for example, if you're in a22 percent tax bracket, a 1, 000
(04:24):
tax deduction saves you 220that's 22 percent times 1, 000.
Another example, if you're inthe 12 percent tax bracket, that
same 1, 000 tax deduction.
Saves you 120.
That's 12 percent times 1, 000.
So while a 1, 000 tax creditsaves everyone 1, 000 or 1000
(04:48):
tax deduction is a value variesbased on your tax bracket.
This makes credits generallymore valuable than deductions.
Above the line deductions isitem number three.
This is like VIP discounts thatyou get regardless of other
deals.
These reduce your income, evenif you don't take on itemized
(05:10):
deductions, which we talkedabout earlier.
Number four is below the linedeductions.
These are like store coupons.
These only help you if theyexceed the standard deduction.
Now we talked about the standarddeduction earlier, which is 14,
600 for single filers, 29, 200for married filing, jointly
(05:31):
filers and 21, 900 for head ofhousehold filers.
Once again, all for tax year2024, the last item in this
section.
And for part number one, it'sthe refundable tax credit.
This is like a store gift cardthat gives you cash back.
If you don't spend it all, youget the full amount.
Even if it exceeds your taxbill, listen, that's a lot of
(05:51):
information, but understandingthese terms isn't about becoming
an accounting or tax expert.
It's about making informeddecisions for your business and
having productive conversationswith your accountant.
The next time you're meetingwith your accountant or tax
slash financial advisor, I wantyou to keep these concepts with
you.
That's how you stay in controlof your family's legacy and
(06:13):
financial future.
Remember, the most successfulbarbers aren't just great with
clippers.
They're smart with their money.
These concepts and terms areyour tools for building the
future you want.
The choice is yours, but theclock is ticking.
Don't let the IRS give you ahaircut you can't style your way
out of.
It's your move, boss.
Business concepts in termsbarbers need to know part one.
(00:03):
So some of you still haven'tmade the choice of allowing us
to be part of your journey.
Maybe you've got a long standingrelationship with your current
accountant or maybe you'reconvinced you can handle it
yourself.
Either way, you haven't decidedthat you and your business
deserve better that you deservea specialist.
And you know what?
That's your choice to make.
(00:24):
But here's the truth.
While your current accountantmay or may not be great at
general accounting.
They don't eat, sleep, andbreathe the barbering industry
like we do.
They don't understand the uniquechallenges and opportunities
that come in the business ofbarbering.
They haven't helped barbers savehundreds of hours and thousands
(00:44):
of dollars.
We have real life industryprofessionals, just like you,
who have secured better loansand grants, set up their
businesses for long termsuccess, and automated their
operations with AI, both pre andpost booking.
But that's not why I'm writingthis.
I'm writing this because even ifyou're not ready to work with
(01:04):
us, we still want you to win.
Today's blog will cover businessterms and concepts you need to
know in order to take control ofyour finances.
These aren't just randomdefinitions.
These are the specific termsthat can make the difference
between a decent side hustle anda business that builds wealth
for you and your family.
We're going to break this upinto three sections for part
(01:25):
one.
Section number one is basic taxforms and filings.
The first item is AGI oradjusted gross income.
This is your take home pay fromall income sources after
subtracting certain expenses.
It's what the IRS uses as astarting point to calculate
taxes.
Item number two is the standarddeduction.
(01:45):
I want you to think of this likea store's no receipt needed
return policy.
The IRS automatically lets yousubtract a set amount from your
income without requiring you tohave to prove any expenses.
For single filers, 600.
For married filing jointlyfilers is 29, 200 and for head
(02:07):
of household filers is 21, 900all for tax year 2024.
Number three is the exactopposite of standard deductions,
which is itemized deductions.
This is like that same storetelling you to now keep all of
your receipts and bring them infor your return policy.
This method is used if after youlist out specific expenses, they
(02:31):
add up to more than the standarddeduction we just discussed.
The last item in this section iscalled a schedule C.
I want you to think of this asyour business's financial diary
where you tell the IRS everydollar your business earned and
spent during the year.
Thank you.
Section two is businessstructure terms.
The first item in this sectionis a pass through entity.
(02:54):
This is how 99 percent ofbarbers are taxed.
Want you to think of this like amail carrier for your business
profits.
Income passes straight throughthe business to your personal
tax return, where you pay thetaxes.
The second item is reasonablecompensation.
This is a baseline.
The IRS expects you to payyourself when electing to be
(03:14):
taxed as it is corporation.
If done correctly, this helpsyou save thousands of dollars in
taxes.
And because of that, the IRSwatches this like a hawk.
The last item in this section isdouble taxation, and it's only
applies to a select few barbers.
If you are structured as a Ccorporation, do you essentially
pay taxes twice on the samemoney?
(03:37):
I won't get into that much.
But if this does apply to you,feel free to reach out.
The last section for part one iscredits and deductions.
The first item is a tax creditdollar for dollar.
If you get a 1, 000 tax credit,you save exactly 1, 000 off your
tax bill.
This is like using a 1, 000 giftcard.
It reduces what you owe byprecisely 1, 000.
(04:00):
The second item is a taxdeduction, which is not dollar
for dollar.
If you get a 1, 000 taxdeduction, it only reduces your
taxable income.
By 1, 000, but it doesn'tactually give you tax savings on
1, 000.
The actual tax savings depend onyour tax bracket.
So for example, if you're in a22 percent tax bracket, a 1, 000
(04:24):
tax deduction saves you 220that's 22 percent times 1, 000.
Another example, if you're inthe 12 percent tax bracket, that
same 1, 000 tax deduction.
Saves you 120.
That's 12 percent times 1, 000.
So while a 1, 000 tax creditsaves everyone 1, 000 or 1000
(04:48):
tax deduction is a value variesbased on your tax bracket.
This makes credits generallymore valuable than deductions.
Above the line deductions isitem number three.
This is like VIP discounts thatyou get regardless of other
deals.
These reduce your income, evenif you don't take on itemized
(05:10):
deductions, which we talkedabout earlier.
Number four is below the linedeductions.
These are like store coupons.
These only help you if theyexceed the standard deduction.
Now we talked about the standarddeduction earlier, which is 14,
600 for single filers, 29, 200for married filing, jointly
(05:31):
filers and 21, 900 for head ofhousehold filers.
Once again, all for tax year2024, the last item in this
section.
And for part number one, it'sthe refundable tax credit.
This is like a store gift cardthat gives you cash back.
If you don't spend it all, youget the full amount.
Even if it exceeds your taxbill, listen, that's a lot of
(05:51):
information, but understandingthese terms isn't about becoming
an accounting or tax expert.
It's about making informeddecisions for your business and
having productive conversationswith your accountant.
The next time you're meetingwith your accountant or tax
slash financial advisor, I wantyou to keep these concepts with
you.
That's how you stay in controlof your family's legacy and
(06:13):
financial future.
Remember, the most successfulbarbers aren't just great with
clippers.
They're smart with their money.
These concepts and terms areyour tools for building the
future you want.
The choice is yours, but theclock is ticking.
Don't let the IRS give you ahaircut you can't style your way
out of.
It's your move, boss.
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