March 21, 2025 • 33 mins
In this episode of Peace Luv Biz, hosts Steve and Mary break down how to avoid raising red flags with the IRS and why smart financial planning is essential before making major life decisions...like buying a home.
They dive into common IRS audit triggers, the importance of having your financials in order before big purchases, and how strategic tax planning can keep you on the right track. Whether you're a business owner, freelancer, or simply preparing for a major investment, this episode will help you stay compliant, prepared, and financially secure.
Key takeaways:
✅ The top IRS red flags that could put you at risk of an audit.
✅ Why financial planning before major purchases is crucial.
✅ How tax strategies can maximize deductions without raising suspicion.
✅ Proactive steps to keep your records clean and avoid costly mistakes.
Be sure to subscribe and visit www.peaceluvbiz.com for free tax planning checklists, expert insights, and more financial strategies to help you make smarter money moves. See you next time! 💼💰
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:02):
Hey everybody, welcome to another episode of Peace Love Biz.
I'm your host Steve Higgins.
Today I'm the Don of Development because we've been trying to just grow everybody'sbusinesses the last couple days.
Mary's still fighting through tax season but it seems like she's had a bit of abreakthrough and she's feeling a little bit better I think.
(00:23):
Aren't you Mary?
How are you doing?
I was done yesterday and today I just decided I can't touch taxes or pick books.
don't have the space for it mentally, but super bossy.
That's what I am today.
Super bossy because I'm just getting people in order.
(00:44):
come to marry meetings.
We're having a lot of those in the next two days.
Yeah, and I think that me channeling my inner Rick Astley is helping because with clientswe are never gonna give you up, we're never gonna let you down, we're never gonna run
around.
Right?
(01:04):
Isn't it?
Yeah.
And we're never gonna hurt you.
Yeah.
gonna tell a lie.
Never gonna say goodbye.
Just words to live by, by the assly.
a couple that we say goodbye to, but that's not often.
Not often.
Yeah, very rare.
So today on the episode we've been talking a lot to people about red flags with the IRSand how to avoid them and we've got a lot of really cool people that are trying to make
(01:34):
big financial decisions and what we're going to talk about some of the things to basicallydo to be prepared for when you make those purchases and make those investments.
So
First off, we're going to tackle the big three letters in the US which is IRS.
(01:58):
So, Mary, you've been doing this for so long, you know, you've testified for all theforensic stuff in the world with forensic audits and all of that.
You've got people in jail, you've got people out of jail.
What would you say are some common IRS red flags that trigger you and put you under thatradar?
(02:26):
In my experience with this, the IRS, anything that is not industry standard, anything thatis, if you've taken losses for seven years and they're big losses in your business, that
just can't go on forever.
They do expect a loss for three to five years when you start out, that's normal.
(02:48):
You do have normal trending, so your loss is significantly less each time.
You know, there are things to take into consideration, but you know, when you have toomany business losses, when you have too many businesses and they're all taking a loss, you
have inconsistent income, you have really high areas that shouldn't be running as high asthey do.
(03:15):
Example, travel.
If travel is running you $50,000 and you're doing a, you're taking a loss of 20 or 30,
What's happening there?
That's a trigger.
And then definitely unless you have a paper trail to account for your cash spending,that's a trigger.
(03:43):
And that's on the company on a personal side, having too many dependents, not and nothaving the income to support it.
That's that's one personally that I know of.
Yeah, like having seven and and you can honestly you could have honest reasons and you canhave the documentation to support it.
(04:04):
The unfortunate part is in most cases, once you're on the IRS radar, you're forever on theradar.
You don't really go away.
They're always double-checking.
That's just, that's reality.
And you don't want someone showing up at your door.
And they do.
I've seen it.
I've seen it twice.
(04:24):
They show up at your door when you ignore them and don't ignore them.
Ignoring them doesn't help you.
It's like the animal that sticks his head in the sand.
you're not, it's still happening.
It's still gonna happen.
They're still gonna show up.
They're still gonna bother you.
They still want you to correspond with them.
(04:45):
So at some point you're gonna have problem.
Yeah, you cannot stick your head in the sand.
Plus, the mental toll that it takes on people when you have that lingering issue justhanging over you is massive.
for those people that think that they can just sweep it under the rug, forget about it,deal with it another time, it's not a good idea.
(05:11):
Especially if you want to go and make those, you know...
If you want lending, you want to go buy a house, if you want to do different things withthe business, you've got to deal with the IRS stuff first.
Like this, this, they're just going to block you from from getting what you want to bedoing.
(05:33):
And honestly, I I think that goes for anything in life.
If you're avoiding something because you know, you're not doing the right thing that willhaunt you.
It's going to haunt you.
I don't remember the name of the book or the author, but they, you know, he thought thatthere was a dead person under his floorboards because he heard a heart beating.
(05:54):
It was his own heart.
You know, can't remember the guy's name, but it was his own heart.
And it was
within him because he was he was so filled with anxiety for not dealing with the issue andso not dealing with the IRS that you're having tremendous anxiety at that point.
(06:16):
Yeah.
Obviously, if you do get red flagged, then that's a massive problem.
and we say obviously deal with it.
What do you do when you're under the IRS microscope?
What are some things that people need to be thinking about?
(06:36):
What do you, you know, obviously set up the payment plan, do whatever you've got to do toget them in line.
But what are the things you do from there?
Well, shameless plug, but first of all, you call us.
If, if, if you're a client of ours, you will probably not encounter this because we'veguided you in the right direction.
(06:57):
If you are encountering this, it's because you didn't know us at that time.
So number one, get a call with us because we've got to figure out what's going on.
Some people like want to sugar coat it and we look into it we're going, wait a minute.
This is the wrong thing.
if you are, you need to be.
You need to get on the phone with them.
Unfortunately, the way the regulations work now, your accountant cannot be on the phonewith you with the IRS to make it really complicated, really hard.
(07:28):
So you need to have the conversation with me or whoever else, you know, another, if youcan find someone as good as me by all means, find them, but you need to have that
conversation with us so we can prep you on what you're going to walk into with that.
And then, you know, just
Don't battle them.
(07:48):
Unfortunately, they have the power.
So you don't get to lose your cool.
You don't get to be mean.
You don't get to say whatever you're thinking.
You've got to really get yourself in control and respond.
Communicate with them.
Set up the payment plan.
Whatever it is, but do it and then don't miss those payments.
(08:09):
Make those payments.
If that means you don't get to eat Arby's three times this week,
then that's what it means.
that means you don't buy, you know, whatever, that's what it means.
So you don't Amazon shop, then that's what you gotta do.
I mean, you've got to.
If that means you're cancelling a cruise or a vacation you had planned, it's better thatyou schedule that for another year.
(08:32):
Get them in check.
But yeah, that's a great first point is definitely get hold of us.
So go to www.peacelovebiz.com, put a contact form in or go to 844-Peace20.
We have that now, which is amazing.
So definitely give us a call.
I think that's enough of the doom and gloom.
(08:53):
Let's think about some more positive stuff and Right now we've got a lot of people thatare trying to expand their businesses grow their businesses Which is amazing people are
trying to buy buildings Bring on new employees some people are trying to buy houses
Well, so in fairness, lot of people, mean, definitely not doom and gloom, but to be verymuch reality, a lot of people are freaking out about the financial situation in the United
(09:23):
States with the tariffs being, keeping proposed, then being paused, proposed, paused,proposed, paused.
We really don't, we're not a manufacturing nation anymore.
I'm not saying that we don't manufacture all.
I'm saying that in general, that's not what we do anymore.
We used to be very powerful at it.
So the whole tariff situation, you can throw tariffs on other countries, knock your socksoff, just understand the stuff that we're going to import.
(09:54):
Those same countries are going to tear off us.
So you're going to have higher prices for anything that you buy.
That's not.
made and manufactured in the United States because you're now going to have tariffs.
So things are going to cost more.
That's a reality.
People see that and they're coming to us going, Hey, what can I cut back on?
Okay, well, let's take a different route with that and go, where can you expand?
(10:20):
What, what can you do to grow the revenue?
And that's where these, this whole thing has come about with our clients in the lastcouple of weeks is it's
Let's take a different approach.
Let's grow your business.
Let's see what other things we can do, how we can get other revenue streams, what else youcan do to network.
Yeah, and you know me, I'm a big networker.
(10:43):
I love networking.
you...
There's no better referral than somebody that...
A referral!
If you were to define a referral, it's when you pass somebody that you care about to aprofessional that you trust.
And that's the beauty of networking, is if you find great referral partners that passbusiness to you,
(11:09):
you pass business to them, build that relationship and it helps grow your business.
So say you are a med spa or a salon, you need to be working with other people in thatadjacent industry to basically partner up.
You're basically serving the same client.
Why not do it together in terms of, okay, you've got your nails done, now go get your hairdone with this person.
(11:36):
You will love.
this hairstylist like you need to open your mind from a business perspective to thinkabout that kind of relationship that you can have because it's just gonna help you grow a
little better and more organic, it's gonna be organic too it's not even forced which isgreat you know everyone wants that quick cash the quick turnaround but these relationships
(12:02):
that you build you build them and they last five ten fifteen years and they'll just keep
growing exponentially and you'll find more people that want to grow like that too.
Absolutely.
Having trusted partners, we could not do what we do without that.
mean, that is definitely your niche.
You're amazing at it.
(12:23):
And you you and we've talked about it.
But, another another revenue stream or another service offering is coaching.
And we weren't looking for it, but it came.
It's a need.
We know how to do it.
So we're now doing that.
Peace, love.
biz coaching because people don't understand what they're getting into.
(12:45):
They don't, they start this business, they have an idea, they start doing it and then theyjust trust that the money is going to keep coming in and they don't look at how to partner
and they don't look at these aspects and you you need to.
We couldn't do, we can, we refer people to, if we have somebody for everything for ourclients.
(13:08):
Yeah, we've got our payroll guys amazing.
If it's too complicated, we've got lenders, we've got bankers, we've got realtors.
Like it having a good solid network that you can depend on.
It's not just for you, but the value that brings to your client base is equally asimportant because it shows that you are that person to go to that.
(13:36):
It kind of speaks volumes about your business and the way you operate.
So definitely recommend doing that.
If you want help or if you're not sure how to start doing that, definitely reach out tous.
Go to the website, put in a contact form and say, I need help and want to learn how tonetwork.
I didn't realize initially, and I know we're going off on a bit of a tangent, but I cameto the country 2016.
(14:04):
I married a local Florida girl and from then on I had no friends here, I had no network, Ihad nothing.
I then got into more of a national sales job where I was talking to people across thecountry.
That didn't help me in business because I was looking so broadly, I wasn't super focusedin my area.
(14:30):
I still didn't have a network until I started a business.
locally it was weird I was no longer working nationally and trying to connect the dots allacross the country it was like my I really know I have no contacts here and it's kinda
scary and you just gotta throw yourself in at the deep end and go to as many networkingmeetings or find different groups of of like-minded people and that was that was huge for
(14:59):
me it made a massive difference and honestly
financially it didn't benefit me at the beginning it was more about the people and theconnections I made because I needed that that support system and if you can find 10, 20,
30 business owners that are in a similar position to you they're trying to hustle they'regrinding day in day out then they'll support you so long as you show up for them as well
(15:27):
Absolutely.
Absolutely.
Shout out to Ashley as well, our business development girl, she's amazing.
Definitely if anybody needs extra help, let us know.
She's awesome.
You will have her on sometime and you can learn more about her soon.
(15:51):
But, going back into big financial decisions.
People trying to buy homes, cars, whatever it is, plots of land.
What?
Where do you begin?
Where is some financial impact?
Yeah.
let's start with what we tell every client of ours.
(16:13):
There's God or Buddha, whoever you believe in family is number two.
And I'm number three.
Mary is number three.
When you're making big decisions, don't spring on me.
Hey, I need financial sent over because I'm buying a house.
listen, whoever you're talking within your family to make that decision, you need toinclude me in it.
(16:38):
Cause
Only I truly understand your finances.
I get your finances.
Most people don't understand their finances, unfortunately.
It's sad.
We teach them, they don't get it.
Then they go, this is why.
Yes, because you can't just go out and buy a house if you don't know all the variablesthat are running into it.
(16:59):
So debt to income.
Understanding how much debt you have and how much income on paper you're reporting.
are very significant in qualifying for a home.
you can't just go, have lenders have to have taxes.
They have to have your tax returns.
(17:19):
They have to have those W-2s.
So if you're doing, if you have your own business and you're a sole prop or you're asingle member LLC or a single member S-corp, that's yes, there's a company.
Yes, it has an EIN.
I understand that.
It also all goes back to you.
So you need to be able to prove your income.
(17:40):
If you don't know what your income looks like in your tax returns, that's not the same aswhat's in your bank account.
If you don't know your debt to income, if you don't know you're credit worthy, if you haveoutstanding debt with the IRS that you haven't faced, all those are impacted in you
getting that loan, all of it.
(18:03):
Realistically as well, you've got the people that are...
Well, that's why working with preferred lenders, preferred people that you know how towork with.
People will tell us what their things need to look like and a business broker, forexample, will want a completely different set of financials to a different accountant for
(18:25):
tax purposes.
They'll want to show as much profit, as much profitability as possible.
so that they can sell a business versus an accountant or a tax preparer that really wantsto reduce liability and reduce potential tax.
getting with that professional is important.
(18:48):
some of those, learn your situation.
If you're not sure, get with an accountant, get with a financial planner.
even that, buying a business, we just did an audit, what, a week ago or two weeks ago?
they, you know, I'm doing an audit and I'm like, this guy is claiming that they have thisenormous profitability and they've steadily declined over five years, both income and
(19:15):
expenses.
And they've been classifying their payroll, their draws as payroll.
If you're the single member owner and you're taking money out and you're not running anactual payroll where you're getting a W-2 at the end of the year, those are called owner
draws.
That makes it a negative basis, meaning a negative value to your company.
(19:38):
So while he's claiming his company was profitable and it wasn't, he was taking owner drawsand that wasn't true payroll.
You know, and you need an accountant.
a well-versed accountant to be able to look at stuff like that to go, hey, this is notprofitable.
I would not pay them.
You know, he wanted like $90,000 for his business.
(20:01):
His business wasn't worth over 40.
He's claiming he has assets, his assets at 30,000.
I mean, they were lucky if the assets were valued at 4,000.
also, he had no depreciation expense.
Well, how do you have $30,000 in assets that you've never depreciated?
Because you don't.
(20:21):
You know, it's things like that.
it's it's the business and personal.
They all got to make make sense.
Whether you're buying a house, you're buying a car.
I mean, you buy a car, you're to lose money.
Buy a business.
You hopefully gain.
You get equity.
You buy a house, you get equity.
Hopefully it doesn't lose value.
Those.
That's the norm.
You still don't want to overpay for something.
(20:43):
You still want to know what you're getting yourself into.
And is it worth it?
When math doesn't math, that's a problem.
If you see something and your gut is telling you that it doesn't look right, there'sprobably a reason why something smells rotten in Denmark.
Like, it is what it is.
(21:05):
How, in terms of some of the tax planning stuff, what are some things that from a personalindividual standpoint, people can do to
to optimize like home ownership benefits, things like that.
Well, for starters, as far as tax planning, the really, I mean, think of a coupledifferent things.
(21:30):
really, tax planning, the biggest thing on a personal side is investing in your IRA oryour 401k before April 15th.
That's your biggest tax plan.
Savings, really mortgage interest, it is deductible on your taxes.
Unfortunately,
(21:50):
unless you have more than it's an itemized deduction.
So you have an option of standard or itemized.
And unfortunately the mortgage interest points or the mortgage interest that you'repaying, I would say 80 % of our clients don't have that.
(22:11):
We enter it, but the standard deduction is larger, making it harder and harder to deductwhat you're paying out.
Yeah.
a, mean, I got, mean, it's, it's great.
Standard deduction went up, but you know, if you, really got to be making standarddeduction right now is just under $30,000 for married filing joint.
(22:35):
So unless you have, you've paid out whatever, if you've paid like $25,000 in interest foryour mortgage and then your real estate taxes are say five right there's 30.
So it's really hard to max out the, the.
Diedamized deduction.
(22:56):
that makes sense I mean there's other things as well like home stay exemptions there'sother things you can do that's not necessarily tax planning but definitely take advantage
of some of whatever's out there
And also, I think it's really important.
It's, you know, people are concerned about the economy.
But I will I can't say enough.
(23:17):
We have a mentality in the US of instant gratification.
And it's not a the I was raised with the expression short term sacrifices, long termgains.
My daughter learned that expression when she was like three and held on to it.
(23:39):
and she would say it to her little brother.
I remember her saying it, suck it up, buttercup, you know, man, she big expression was manup.
Sometimes you really need to man up.
You just need to own the fact that you can't afford that house right now.
And that's okay.
That doesn't mean you can never not afford it.
That just means you need to get things in order.
I would love to be in a size eight right now, but to me to go buy a size eight would bepointless because there's no way one of my legs is going to get into a size eight.
(24:09):
Right?
So, okay.
But then I want that size eight at some point.
So what I do change what I got to change, you know, drink less, smoke less.
One point that'll happen.
But, you know, eat better, exercise more.
You've got to have a plan to be put into place.
My big thing is, is I am, and I had somebody telling me this today, I am so passionateabout helping our clients.
(24:35):
You're going to have bad shit happen to you in life, but
You can control finances.
You can control the accounting.
You gotta do the hard work.
At least let me help you feel secure in that.
you said it short-term sacrifice long-term gain people want that instant gratification butpreparing for a big financial investment things like that it's not an overnight process
(25:03):
for financials so you need we as accountants need that time to prepare make sureeverything's lined up right it doesn't happen overnight
It doesn't happen overnight so you really need to get with a pro or somebody like...
What we were doing, we...
Last night...
(25:24):
11, 12 o'clock...
Like, talking to a client and...
Working on...
Yeah!
Yeah!
We were...
at midnight and our client is our friend also, but so Josie who was on the podcast withus, but she, you we're, do, we work till midnight, one, two o'clock in the morning.
(25:48):
You know, sometimes work is not QuickBooks and accounting and taxable day.
Sometimes it's literally meeting after meeting after meeting and being there for theclient, the way the client needs you to be, you know.
Sometimes working is having...
finding a drinking group with a networking problem.
You know, find those people that you can connect with, do business with.
(26:15):
Gosh.
If you love what you do, you'll never work a day in your life.
That's always been said.
But if you truly have the passion, you find you can't switch your brain off.
Yeah, true.
It hurts.
I've done sales and business development my entire professional career and I can't turnoff and stop looking for an angle.
(26:42):
It's weird.
Mary texts me saying that she's got a new project and I'm like, no, not again.
And I get flashbacks.
But it's all because we love what we do and we have a passion for helping people.
Sometimes what we have to do is tell people the hard truth that they can't buy that houseright now and it sucks.
(27:06):
It's been an exhausting day and it's what?
1.30 nearly 2 o'clock and I'm like okay now how do we regroup ourselves get done what weneed to do now it's it's tough but we do it because we love what we do so
Yeah, I mean life is going to be hard enough, right?
You're always going to have something pop up that is unexpected that you didn't seecoming.
(27:31):
We can help you have at least this security and that's really why I'm passionate about itbecause God knows I've had enough crap happen to me in my life that was unexpected, never
saw it coming blindsided.
But you know what?
I've always shown up and worked my ass off and we have gone from.
We have grown.
(27:52):
exponentially amazing with you and I partnering together with this.
And we just want that same security for all of our clients.
That's why we show up and do what we do every day, seven days a week.
Mary, I've got a new project.
Welcome.
One day we will have a Peace Love Bizz vacation where we'll invite all of our clients tomeet up on an island.
(28:22):
Yeah, one island, right?
Might start with a D and end in a Dominican Republic.
Yeah, like how cool will that be to meet up, share stories?
Just relax, take those curls down, because we know we've all got them.
(28:44):
love that project.
I'm on board with that project.
every single one of our projects that we put, we strategically plan them.
We don't come up with five projects and try to tackle them all.
Everything we do, and it should be the same way with you and your business.
If you, again, if you love what you do, you'll never work a day in your life.
(29:04):
It's really hard to get your brain to switch off, but plan those out.
Be strategic about it.
There's no way you can do every project all at once.
You can't financially do it.
You don't have the time to do them all.
You don't have the money to do them all, but you plan those out and you'll be amazed athow much you just start knocking out, knock out, knock it out, knock it out.
(29:28):
We're almost at our, we're almost at our goal for the end, for the end of this year.
And we're hitting the end of March by May.
We'll have hit our goal for the entire year.
So what happened?
we upped our goal.
We tweaked our goal.
and you know Mary said she got a new project the other week and I said Mary you don't havetime you're in tax season she's like yeah so it's a it's a July project what do we know
(29:54):
we're on conference calls about that project a week later and but realistically it's stuffthat we can tackle and again stuff doesn't happen overnight so you do have to take those
gradual steps and identify what projects you can take on it happens in business it happenspersonally in life
I think that's a massive kind of takeaway is everything takes time.
(30:18):
Success doesn't happen.
Yeah, success doesn't happen overnight.
Yeah.
overnight.
One day in five years from now, someone's going to have dug up this episode and be like,remember when nobody knew them?
And then five years, it'll be less than five years, but five years from now, they're goingto find this old episode that nobody's ever heard of us.
Guess what?
(30:39):
Here we are.
It takes time, but we succeeded everything we do.
This was one of those projects and now we're looking at ways and things and how do weevolve.
But that goes back to loving what you do.
It's in our name, Peace Love Bez, we love what we do, we love helping people.
(31:05):
Any final thoughts on major life decisions and planning on that stuff?
Or do you think we're wrapping?
Yeah, I think we're good.
I mean, just show up, do what you gotta do every day.
It's okay.
Every moment changes and that's okay, but do your best in every moment.
No regrets.
No regrets.
(31:26):
So, first things first, when it comes to the IRS, talk to them, communicate, don't put itoff, don't bury your head in the sand.
If you get an IRS letter, maybe open it before you panic.
That's a good piece of advice.
If you are in trouble, if you are getting penalties, definitely set something up withthem.
(31:51):
Don't let it fester and make it worse.
There's a lot going on with the government right now where you can get in more trouble bydoing nothing and thinking you're okay.
Next up, stuff doesn't happen overnight.
If you're making big financial decisions, understand your financial situation.
What's your credit score?
(32:12):
What's your debt to income ratio look like?
Is it feasible?
Do you have the down payments you might need?
What does that look like?
If you're unsure, go find out, there's plenty of free tools out there, get with us, we canhelp out.
The other thing is, obviously, it will take time to get to the situation to do stuff,unless you've magically just managed to do it naturally, which, there's unicorns out
(32:44):
there.
But yeah, definitely anything you guys need.
We appreciate you listening.
Go to peacelovebiz.com.
Peace, l-u-v-b-i-z.com.
Shoot us a message.
Follow us on all the socials.
We're working on getting these clips out there as well.
(33:06):
I guess until next time, have a peaceful tax season, guys.
Thank you, Stephen.
See you next time.
See you next time.
Hey everybody, welcome to another episode of Peace Love Biz.
I'm your host Steve Higgins.
Today I'm the Don of Development because we've been trying to just grow everybody'sbusinesses the last couple days.
Mary's still fighting through tax season but it seems like she's had a bit of abreakthrough and she's feeling a little bit better I think.
(00:23):
Aren't you Mary?
How are you doing?
I was done yesterday and today I just decided I can't touch taxes or pick books.
don't have the space for it mentally, but super bossy.
That's what I am today.
Super bossy because I'm just getting people in order.
(00:44):
come to marry meetings.
We're having a lot of those in the next two days.
Yeah, and I think that me channeling my inner Rick Astley is helping because with clientswe are never gonna give you up, we're never gonna let you down, we're never gonna run
around.
Right?
(01:04):
Isn't it?
Yeah.
And we're never gonna hurt you.
Yeah.
gonna tell a lie.
Never gonna say goodbye.
Just words to live by, by the assly.
a couple that we say goodbye to, but that's not often.
Not often.
Yeah, very rare.
So today on the episode we've been talking a lot to people about red flags with the IRSand how to avoid them and we've got a lot of really cool people that are trying to make
(01:34):
big financial decisions and what we're going to talk about some of the things to basicallydo to be prepared for when you make those purchases and make those investments.
So
First off, we're going to tackle the big three letters in the US which is IRS.
(01:58):
So, Mary, you've been doing this for so long, you know, you've testified for all theforensic stuff in the world with forensic audits and all of that.
You've got people in jail, you've got people out of jail.
What would you say are some common IRS red flags that trigger you and put you under thatradar?
(02:26):
In my experience with this, the IRS, anything that is not industry standard, anything thatis, if you've taken losses for seven years and they're big losses in your business, that
just can't go on forever.
They do expect a loss for three to five years when you start out, that's normal.
(02:48):
You do have normal trending, so your loss is significantly less each time.
You know, there are things to take into consideration, but you know, when you have toomany business losses, when you have too many businesses and they're all taking a loss, you
have inconsistent income, you have really high areas that shouldn't be running as high asthey do.
(03:15):
Example, travel.
If travel is running you $50,000 and you're doing a, you're taking a loss of 20 or 30,
What's happening there?
That's a trigger.
And then definitely unless you have a paper trail to account for your cash spending,that's a trigger.
(03:43):
And that's on the company on a personal side, having too many dependents, not and nothaving the income to support it.
That's that's one personally that I know of.
Yeah, like having seven and and you can honestly you could have honest reasons and you canhave the documentation to support it.
(04:04):
The unfortunate part is in most cases, once you're on the IRS radar, you're forever on theradar.
You don't really go away.
They're always double-checking.
That's just, that's reality.
And you don't want someone showing up at your door.
And they do.
I've seen it.
I've seen it twice.
(04:24):
They show up at your door when you ignore them and don't ignore them.
Ignoring them doesn't help you.
It's like the animal that sticks his head in the sand.
you're not, it's still happening.
It's still gonna happen.
They're still gonna show up.
They're still gonna bother you.
They still want you to correspond with them.
(04:45):
So at some point you're gonna have problem.
Yeah, you cannot stick your head in the sand.
Plus, the mental toll that it takes on people when you have that lingering issue justhanging over you is massive.
for those people that think that they can just sweep it under the rug, forget about it,deal with it another time, it's not a good idea.
(05:11):
Especially if you want to go and make those, you know...
If you want lending, you want to go buy a house, if you want to do different things withthe business, you've got to deal with the IRS stuff first.
Like this, this, they're just going to block you from from getting what you want to bedoing.
(05:33):
And honestly, I I think that goes for anything in life.
If you're avoiding something because you know, you're not doing the right thing that willhaunt you.
It's going to haunt you.
I don't remember the name of the book or the author, but they, you know, he thought thatthere was a dead person under his floorboards because he heard a heart beating.
(05:54):
It was his own heart.
You know, can't remember the guy's name, but it was his own heart.
And it was
within him because he was he was so filled with anxiety for not dealing with the issue andso not dealing with the IRS that you're having tremendous anxiety at that point.
(06:16):
Yeah.
Obviously, if you do get red flagged, then that's a massive problem.
and we say obviously deal with it.
What do you do when you're under the IRS microscope?
What are some things that people need to be thinking about?
(06:36):
What do you, you know, obviously set up the payment plan, do whatever you've got to do toget them in line.
But what are the things you do from there?
Well, shameless plug, but first of all, you call us.
If, if, if you're a client of ours, you will probably not encounter this because we'veguided you in the right direction.
(06:57):
If you are encountering this, it's because you didn't know us at that time.
So number one, get a call with us because we've got to figure out what's going on.
Some people like want to sugar coat it and we look into it we're going, wait a minute.
This is the wrong thing.
if you are, you need to be.
You need to get on the phone with them.
Unfortunately, the way the regulations work now, your accountant cannot be on the phonewith you with the IRS to make it really complicated, really hard.
(07:28):
So you need to have the conversation with me or whoever else, you know, another, if youcan find someone as good as me by all means, find them, but you need to have that
conversation with us so we can prep you on what you're going to walk into with that.
And then, you know, just
Don't battle them.
(07:48):
Unfortunately, they have the power.
So you don't get to lose your cool.
You don't get to be mean.
You don't get to say whatever you're thinking.
You've got to really get yourself in control and respond.
Communicate with them.
Set up the payment plan.
Whatever it is, but do it and then don't miss those payments.
(08:09):
Make those payments.
If that means you don't get to eat Arby's three times this week,
then that's what it means.
that means you don't buy, you know, whatever, that's what it means.
So you don't Amazon shop, then that's what you gotta do.
I mean, you've got to.
If that means you're cancelling a cruise or a vacation you had planned, it's better thatyou schedule that for another year.
(08:32):
Get them in check.
But yeah, that's a great first point is definitely get hold of us.
So go to www.peacelovebiz.com, put a contact form in or go to 844-Peace20.
We have that now, which is amazing.
So definitely give us a call.
I think that's enough of the doom and gloom.
(08:53):
Let's think about some more positive stuff and Right now we've got a lot of people thatare trying to expand their businesses grow their businesses Which is amazing people are
trying to buy buildings Bring on new employees some people are trying to buy houses
Well, so in fairness, lot of people, mean, definitely not doom and gloom, but to be verymuch reality, a lot of people are freaking out about the financial situation in the United
(09:23):
States with the tariffs being, keeping proposed, then being paused, proposed, paused,proposed, paused.
We really don't, we're not a manufacturing nation anymore.
I'm not saying that we don't manufacture all.
I'm saying that in general, that's not what we do anymore.
We used to be very powerful at it.
So the whole tariff situation, you can throw tariffs on other countries, knock your socksoff, just understand the stuff that we're going to import.
(09:54):
Those same countries are going to tear off us.
So you're going to have higher prices for anything that you buy.
That's not.
made and manufactured in the United States because you're now going to have tariffs.
So things are going to cost more.
That's a reality.
People see that and they're coming to us going, Hey, what can I cut back on?
Okay, well, let's take a different route with that and go, where can you expand?
(10:20):
What, what can you do to grow the revenue?
And that's where these, this whole thing has come about with our clients in the lastcouple of weeks is it's
Let's take a different approach.
Let's grow your business.
Let's see what other things we can do, how we can get other revenue streams, what else youcan do to network.
Yeah, and you know me, I'm a big networker.
(10:43):
I love networking.
you...
There's no better referral than somebody that...
A referral!
If you were to define a referral, it's when you pass somebody that you care about to aprofessional that you trust.
And that's the beauty of networking, is if you find great referral partners that passbusiness to you,
(11:09):
you pass business to them, build that relationship and it helps grow your business.
So say you are a med spa or a salon, you need to be working with other people in thatadjacent industry to basically partner up.
You're basically serving the same client.
Why not do it together in terms of, okay, you've got your nails done, now go get your hairdone with this person.
(11:36):
You will love.
this hairstylist like you need to open your mind from a business perspective to thinkabout that kind of relationship that you can have because it's just gonna help you grow a
little better and more organic, it's gonna be organic too it's not even forced which isgreat you know everyone wants that quick cash the quick turnaround but these relationships
(12:02):
that you build you build them and they last five ten fifteen years and they'll just keep
growing exponentially and you'll find more people that want to grow like that too.
Absolutely.
Having trusted partners, we could not do what we do without that.
mean, that is definitely your niche.
You're amazing at it.
(12:23):
And you you and we've talked about it.
But, another another revenue stream or another service offering is coaching.
And we weren't looking for it, but it came.
It's a need.
We know how to do it.
So we're now doing that.
Peace, love.
biz coaching because people don't understand what they're getting into.
(12:45):
They don't, they start this business, they have an idea, they start doing it and then theyjust trust that the money is going to keep coming in and they don't look at how to partner
and they don't look at these aspects and you you need to.
We couldn't do, we can, we refer people to, if we have somebody for everything for ourclients.
(13:08):
Yeah, we've got our payroll guys amazing.
If it's too complicated, we've got lenders, we've got bankers, we've got realtors.
Like it having a good solid network that you can depend on.
It's not just for you, but the value that brings to your client base is equally asimportant because it shows that you are that person to go to that.
(13:36):
It kind of speaks volumes about your business and the way you operate.
So definitely recommend doing that.
If you want help or if you're not sure how to start doing that, definitely reach out tous.
Go to the website, put in a contact form and say, I need help and want to learn how tonetwork.
I didn't realize initially, and I know we're going off on a bit of a tangent, but I cameto the country 2016.
(14:04):
I married a local Florida girl and from then on I had no friends here, I had no network, Ihad nothing.
I then got into more of a national sales job where I was talking to people across thecountry.
That didn't help me in business because I was looking so broadly, I wasn't super focusedin my area.
(14:30):
I still didn't have a network until I started a business.
locally it was weird I was no longer working nationally and trying to connect the dots allacross the country it was like my I really know I have no contacts here and it's kinda
scary and you just gotta throw yourself in at the deep end and go to as many networkingmeetings or find different groups of of like-minded people and that was that was huge for
(14:59):
me it made a massive difference and honestly
financially it didn't benefit me at the beginning it was more about the people and theconnections I made because I needed that that support system and if you can find 10, 20,
30 business owners that are in a similar position to you they're trying to hustle they'regrinding day in day out then they'll support you so long as you show up for them as well
(15:27):
Absolutely.
Absolutely.
Shout out to Ashley as well, our business development girl, she's amazing.
Definitely if anybody needs extra help, let us know.
She's awesome.
You will have her on sometime and you can learn more about her soon.
(15:51):
But, going back into big financial decisions.
People trying to buy homes, cars, whatever it is, plots of land.
What?
Where do you begin?
Where is some financial impact?
Yeah.
let's start with what we tell every client of ours.
(16:13):
There's God or Buddha, whoever you believe in family is number two.
And I'm number three.
Mary is number three.
When you're making big decisions, don't spring on me.
Hey, I need financial sent over because I'm buying a house.
listen, whoever you're talking within your family to make that decision, you need toinclude me in it.
(16:38):
Cause
Only I truly understand your finances.
I get your finances.
Most people don't understand their finances, unfortunately.
It's sad.
We teach them, they don't get it.
Then they go, this is why.
Yes, because you can't just go out and buy a house if you don't know all the variablesthat are running into it.
(16:59):
So debt to income.
Understanding how much debt you have and how much income on paper you're reporting.
are very significant in qualifying for a home.
you can't just go, have lenders have to have taxes.
They have to have your tax returns.
(17:19):
They have to have those W-2s.
So if you're doing, if you have your own business and you're a sole prop or you're asingle member LLC or a single member S-corp, that's yes, there's a company.
Yes, it has an EIN.
I understand that.
It also all goes back to you.
So you need to be able to prove your income.
(17:40):
If you don't know what your income looks like in your tax returns, that's not the same aswhat's in your bank account.
If you don't know your debt to income, if you don't know you're credit worthy, if you haveoutstanding debt with the IRS that you haven't faced, all those are impacted in you
getting that loan, all of it.
(18:03):
Realistically as well, you've got the people that are...
Well, that's why working with preferred lenders, preferred people that you know how towork with.
People will tell us what their things need to look like and a business broker, forexample, will want a completely different set of financials to a different accountant for
(18:25):
tax purposes.
They'll want to show as much profit, as much profitability as possible.
so that they can sell a business versus an accountant or a tax preparer that really wantsto reduce liability and reduce potential tax.
getting with that professional is important.
(18:48):
some of those, learn your situation.
If you're not sure, get with an accountant, get with a financial planner.
even that, buying a business, we just did an audit, what, a week ago or two weeks ago?
they, you know, I'm doing an audit and I'm like, this guy is claiming that they have thisenormous profitability and they've steadily declined over five years, both income and
(19:15):
expenses.
And they've been classifying their payroll, their draws as payroll.
If you're the single member owner and you're taking money out and you're not running anactual payroll where you're getting a W-2 at the end of the year, those are called owner
draws.
That makes it a negative basis, meaning a negative value to your company.
(19:38):
So while he's claiming his company was profitable and it wasn't, he was taking owner drawsand that wasn't true payroll.
You know, and you need an accountant.
a well-versed accountant to be able to look at stuff like that to go, hey, this is notprofitable.
I would not pay them.
You know, he wanted like $90,000 for his business.
(20:01):
His business wasn't worth over 40.
He's claiming he has assets, his assets at 30,000.
I mean, they were lucky if the assets were valued at 4,000.
also, he had no depreciation expense.
Well, how do you have $30,000 in assets that you've never depreciated?
Because you don't.
(20:21):
You know, it's things like that.
it's it's the business and personal.
They all got to make make sense.
Whether you're buying a house, you're buying a car.
I mean, you buy a car, you're to lose money.
Buy a business.
You hopefully gain.
You get equity.
You buy a house, you get equity.
Hopefully it doesn't lose value.
Those.
That's the norm.
You still don't want to overpay for something.
(20:43):
You still want to know what you're getting yourself into.
And is it worth it?
When math doesn't math, that's a problem.
If you see something and your gut is telling you that it doesn't look right, there'sprobably a reason why something smells rotten in Denmark.
Like, it is what it is.
(21:05):
How, in terms of some of the tax planning stuff, what are some things that from a personalindividual standpoint, people can do to
to optimize like home ownership benefits, things like that.
Well, for starters, as far as tax planning, the really, I mean, think of a coupledifferent things.
(21:30):
really, tax planning, the biggest thing on a personal side is investing in your IRA oryour 401k before April 15th.
That's your biggest tax plan.
Savings, really mortgage interest, it is deductible on your taxes.
Unfortunately,
(21:50):
unless you have more than it's an itemized deduction.
So you have an option of standard or itemized.
And unfortunately the mortgage interest points or the mortgage interest that you'repaying, I would say 80 % of our clients don't have that.
(22:11):
We enter it, but the standard deduction is larger, making it harder and harder to deductwhat you're paying out.
Yeah.
a, mean, I got, mean, it's, it's great.
Standard deduction went up, but you know, if you, really got to be making standarddeduction right now is just under $30,000 for married filing joint.
(22:35):
So unless you have, you've paid out whatever, if you've paid like $25,000 in interest foryour mortgage and then your real estate taxes are say five right there's 30.
So it's really hard to max out the, the.
Diedamized deduction.
(22:56):
that makes sense I mean there's other things as well like home stay exemptions there'sother things you can do that's not necessarily tax planning but definitely take advantage
of some of whatever's out there
And also, I think it's really important.
It's, you know, people are concerned about the economy.
But I will I can't say enough.
(23:17):
We have a mentality in the US of instant gratification.
And it's not a the I was raised with the expression short term sacrifices, long termgains.
My daughter learned that expression when she was like three and held on to it.
(23:39):
and she would say it to her little brother.
I remember her saying it, suck it up, buttercup, you know, man, she big expression was manup.
Sometimes you really need to man up.
You just need to own the fact that you can't afford that house right now.
And that's okay.
That doesn't mean you can never not afford it.
That just means you need to get things in order.
I would love to be in a size eight right now, but to me to go buy a size eight would bepointless because there's no way one of my legs is going to get into a size eight.
(24:09):
Right?
So, okay.
But then I want that size eight at some point.
So what I do change what I got to change, you know, drink less, smoke less.
One point that'll happen.
But, you know, eat better, exercise more.
You've got to have a plan to be put into place.
My big thing is, is I am, and I had somebody telling me this today, I am so passionateabout helping our clients.
(24:35):
You're going to have bad shit happen to you in life, but
You can control finances.
You can control the accounting.
You gotta do the hard work.
At least let me help you feel secure in that.
you said it short-term sacrifice long-term gain people want that instant gratification butpreparing for a big financial investment things like that it's not an overnight process
(25:03):
for financials so you need we as accountants need that time to prepare make sureeverything's lined up right it doesn't happen overnight
It doesn't happen overnight so you really need to get with a pro or somebody like...
What we were doing, we...
Last night...
(25:24):
11, 12 o'clock...
Like, talking to a client and...
Working on...
Yeah!
Yeah!
We were...
at midnight and our client is our friend also, but so Josie who was on the podcast withus, but she, you we're, do, we work till midnight, one, two o'clock in the morning.
(25:48):
You know, sometimes work is not QuickBooks and accounting and taxable day.
Sometimes it's literally meeting after meeting after meeting and being there for theclient, the way the client needs you to be, you know.
Sometimes working is having...
finding a drinking group with a networking problem.
You know, find those people that you can connect with, do business with.
(26:15):
Gosh.
If you love what you do, you'll never work a day in your life.
That's always been said.
But if you truly have the passion, you find you can't switch your brain off.
Yeah, true.
It hurts.
I've done sales and business development my entire professional career and I can't turnoff and stop looking for an angle.
(26:42):
It's weird.
Mary texts me saying that she's got a new project and I'm like, no, not again.
And I get flashbacks.
But it's all because we love what we do and we have a passion for helping people.
Sometimes what we have to do is tell people the hard truth that they can't buy that houseright now and it sucks.
(27:06):
It's been an exhausting day and it's what?
1.30 nearly 2 o'clock and I'm like okay now how do we regroup ourselves get done what weneed to do now it's it's tough but we do it because we love what we do so
Yeah, I mean life is going to be hard enough, right?
You're always going to have something pop up that is unexpected that you didn't seecoming.
(27:31):
We can help you have at least this security and that's really why I'm passionate about itbecause God knows I've had enough crap happen to me in my life that was unexpected, never
saw it coming blindsided.
But you know what?
I've always shown up and worked my ass off and we have gone from.
We have grown.
(27:52):
exponentially amazing with you and I partnering together with this.
And we just want that same security for all of our clients.
That's why we show up and do what we do every day, seven days a week.
Mary, I've got a new project.
Welcome.
One day we will have a Peace Love Bizz vacation where we'll invite all of our clients tomeet up on an island.
(28:22):
Yeah, one island, right?
Might start with a D and end in a Dominican Republic.
Yeah, like how cool will that be to meet up, share stories?
Just relax, take those curls down, because we know we've all got them.
(28:44):
love that project.
I'm on board with that project.
every single one of our projects that we put, we strategically plan them.
We don't come up with five projects and try to tackle them all.
Everything we do, and it should be the same way with you and your business.
If you, again, if you love what you do, you'll never work a day in your life.
(29:04):
It's really hard to get your brain to switch off, but plan those out.
Be strategic about it.
There's no way you can do every project all at once.
You can't financially do it.
You don't have the time to do them all.
You don't have the money to do them all, but you plan those out and you'll be amazed athow much you just start knocking out, knock out, knock it out, knock it out.
(29:28):
We're almost at our, we're almost at our goal for the end, for the end of this year.
And we're hitting the end of March by May.
We'll have hit our goal for the entire year.
So what happened?
we upped our goal.
We tweaked our goal.
and you know Mary said she got a new project the other week and I said Mary you don't havetime you're in tax season she's like yeah so it's a it's a July project what do we know
(29:54):
we're on conference calls about that project a week later and but realistically it's stuffthat we can tackle and again stuff doesn't happen overnight so you do have to take those
gradual steps and identify what projects you can take on it happens in business it happenspersonally in life
I think that's a massive kind of takeaway is everything takes time.
(30:18):
Success doesn't happen.
Yeah, success doesn't happen overnight.
Yeah.
overnight.
One day in five years from now, someone's going to have dug up this episode and be like,remember when nobody knew them?
And then five years, it'll be less than five years, but five years from now, they're goingto find this old episode that nobody's ever heard of us.
Guess what?
(30:39):
Here we are.
It takes time, but we succeeded everything we do.
This was one of those projects and now we're looking at ways and things and how do weevolve.
But that goes back to loving what you do.
It's in our name, Peace Love Bez, we love what we do, we love helping people.
(31:05):
Any final thoughts on major life decisions and planning on that stuff?
Or do you think we're wrapping?
Yeah, I think we're good.
I mean, just show up, do what you gotta do every day.
It's okay.
Every moment changes and that's okay, but do your best in every moment.
No regrets.
No regrets.
(31:26):
So, first things first, when it comes to the IRS, talk to them, communicate, don't put itoff, don't bury your head in the sand.
If you get an IRS letter, maybe open it before you panic.
That's a good piece of advice.
If you are in trouble, if you are getting penalties, definitely set something up withthem.
(31:51):
Don't let it fester and make it worse.
There's a lot going on with the government right now where you can get in more trouble bydoing nothing and thinking you're okay.
Next up, stuff doesn't happen overnight.
If you're making big financial decisions, understand your financial situation.
What's your credit score?
(32:12):
What's your debt to income ratio look like?
Is it feasible?
Do you have the down payments you might need?
What does that look like?
If you're unsure, go find out, there's plenty of free tools out there, get with us, we canhelp out.
The other thing is, obviously, it will take time to get to the situation to do stuff,unless you've magically just managed to do it naturally, which, there's unicorns out
(32:44):
there.
But yeah, definitely anything you guys need.
We appreciate you listening.
Go to peacelovebiz.com.
Peace, l-u-v-b-i-z.com.
Shoot us a message.
Follow us on all the socials.
We're working on getting these clips out there as well.
(33:06):
I guess until next time, have a peaceful tax season, guys.
Thank you, Stephen.
See you next time.
See you next time.
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