April 23, 2024 • 37 mins
In this episode of the Teaching Tax Flow podcast, we welcome Will Lopez of Gusto to unearth the critical significance of payroll beyond its traditional perception. The conversation dives deep into the transformative power of modern payroll services provided by Gusto, as well as how efficient payroll processing can be leveraged for strategic tax planning and business growth. Explore how shifting from an arduous, compliance-heavy task to a streamlined, culture-centric system can make all the difference.
This podcast episode delves into the importance of choosing a payroll solution that offers more than just transactional processing, with Will highlighting the culture and community aspects they weave into their payroll services. Will Lopez sheds light on income shifting as a tax planning technique and how proper classification of employees and contractors can save businesses from trouble. Furthermore, the discussion touches upon leveraging payroll to offer employee benefits, enhance retention, and position oneself as an appealing employer in today's competitive job market.
Key Takeaways:
- Payroll is more than just a financial transaction; it's an opportunity to reflect and build company culture and employee well-being.
- Proper classification of workers as either employees or contractors is critical for legal compliance and tax benefits.
- Income shifting and tax strategies like S corporations can save businesses significant money, with payroll processing playing an integral role.
- A modern and comprehensive payroll system like Gusto provides additional value through benefits, HR, and effective onboarding processes.
- Implementing strategic payroll processing through a cloud-based system can safeguard against compliance issues and facilitate growth.
Notable Quotes:
- "Payroll really is a reflection of society, in my opinion." - Will Lopez
- "The economy flows through payroll. Communities are actually upheld through payroll." - Will Lopez
- "The only thing that's really happened with payroll, it's gone from like rock hammer chisel to desktop to the cloud." - Will Lopez
- "Running a business, you wanna save money, but if you're running a team as well, you wanna give yourself or make yourself look good as an employer, especially if you're growing a team." - Will Lopez
- "Compensation is only a small piece of somebody's consideration of staying at your company." - Will Lopez
Resources:
- Check it out for yourself >> www.teachingtaxflow.com/payroll
Episode Sponsor:
The Mortgage Shop
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Intro (00:04):
Welcome to the Teaching Tax Flow podcast, where the goal
is to empower and educate you tolegally and ethically minimize
taxes paid over your lifetime.
John Tripolsky (00:16):
Hey, everyone. Welcome back to the podcast
episode 80 today. We are gonnajump into the pesky little thing
we call payroll. And why it'sreally not that pesky?
Because we got an answer for youwith a great guess. But as
always, let's take a briefmoment and thank our sponsor on
this episode.
Ad Read (00:35):
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John Tripolsky (01:01):
Hey, everybody, and welcome back to the Teaching
Tax Flow podcast. As you likelyseen in the intro or took the
time to actually read the shownotes, you know what we're gonna
talk about here. So before weintroduce our guest, and I know
for a fact that this is a greattopic because I was actually
asked about regarding this thismorning in the, lobby area of a
(01:21):
Starbucks. So I'll bring up thequestions that the guy asked me
here shortly. But as always,Chris Pacuro, welcome back to
your own show, sir.
How you doing today?
Chris Picciurro (01:30):
Thank you, Johnny t. It's always a pleasure
to be back to my own show. And,our show, John. Remember, it's
our show. It is our show, but Iam so excited, about our guest
today and our private CPApractice.
We don't talk about it too muchon this podcast, but has
partnered, with Gusto forpayroll processing successfully
(01:52):
on tons and tons of clients.Your payroll can be an
intimidating thing, and andpayroll really applies to not
just, you know, not just bigbusiness owners. In fact, it's
more challenging for that thatsolopreneur. So we're gonna talk
about payroll processing today.We're also gonna tie it into
some really cool tax strategiesthat circle around that, and
(02:14):
we're gonna have a greatconversation with our friends at
Gusto, and they're gonna make itthey're gonna make the sound
very easy.
It's not easy, but one of thereasons I'm just gonna speak
from personal experience. We youknow, in our CPA practice,
private CPA practice, we used toprocess about a 100 payrolls.
This is when I was young anddumb. And we started with the
(02:34):
software called PayCycle. Wayback in the day, they're, like,
the first ones to be online.
They got bought out by Intuitpayroll, I believe, Intuit
online payroll IOP. And it wasjust kind of a a difficult task
with with withholdings, and itwas really the best way I could
describe it as a process wassuper clunky. So about I wanna
(02:55):
say, 7 years ago, John, you youknow, you and I go to a big
conference every summer. Wespend more time in the vendor
hall, actually. And I've talkedto every payroll processor
there.
This was the IRS nationwide taxform. I believe it was it was in
Atlanta at that point. And I wasvery impressed with Gusto. It
was the least amount of clickspossible to successfully run a
(03:16):
payroll, so I'm honored to havethese guys as a as a partner
really in our private CPApractice, but and as a guest on
the podcast. So thank you guys.
And, John, take it from here.
John Tripolsky (03:27):
And so we had a we had a discussion with Gusto,
and that was my firstinteraction with them probably
probably about a month ago. AndI was super impressed, And I'm
and I'm hard to impress. I willsay that. I'm a very difficult
customer with everything, butthese guys are awesome. And
without further ado, Will Lopezfrom Gusto.
How you doing today, Will? Hey.
Will Lopez (03:46):
Doing well. Thank you
so much for having me
on the show.
John Tripolsky (03:49):
Absolutely, man. And and, honestly, a couple of
the things that really stand outfrom our first conversation. And
this is coming from somebody,you know, as I always like to
put the the disclaimer outthere. I am not a tax guy.
I'm a business owner. Chris isthe tax guy. If I ever try to
give anybody tax advice, don'tlisten to it. Just, you know,
fact check me on teachingtaxable. So, Will, you had
(04:10):
mentioned a couple things,again, that really stood out.
And y'all's approach to payrollis not really as as cut and dry
maybe as some people think.Like, oh, you just input and
output. That's it. It's done.You guys really approach us in a
sense that you really focus onpayroll is culture within an
(04:32):
organization.
Is that is that said correctly?
Will Lopez (04:35):
Yeah. I would say so. I mean, when you think about
just the history of payroll,you've always people approach it
in in the mindset of it's just ait's a way to pay your
employees, and that's all it is.That is they just kinda
defaulted as an exchange ofmoney. Hey.
You provided me a service. I oweyou a paycheck in return. But it
(04:55):
really is a reflection ofsociety, in my opinion, when you
think about what goes on withpayroll. Careers are built
through payroll, Retirement isis achieved through payroll. The
economy flows through payroll.
Communities are actually upheldthrough payroll because, you
know, those who receive apaycheck, they're able to take
(05:16):
care of their family. They getbenefits through paycheck. All
those things are taken care ofthrough paycheck. They're able
to take their take care of theirimmediate families, the
communities around them. So, youknow, it's a lot higher than
than I think what we've given itcredit for for the last 100
years or so.
You know, when you think about a paycheck, it's
always been looked at as justlike a way to compensate labor.
(05:40):
But it really is, in my opinion,kind of a true reflection of the
value of of a of an individualwhen they're working. And so and
everything that that individualneeds in order to work, to live,
to be taken care of.
John Tripolsky (05:57):
I'll ask a couple more things here that we
could touch on. I know that youmentioned that I'm gonna release
the, the tax animal. Right?We'll let we'll let Chris really
chime in here. There we go.
We'll we'll let him out of thecage, and it's you know, all the
tax knowledge is all gonna comeout at you. You know, in saying
that too, which I I really wannareiterate with everybody too,
it's it's almost you know, if weas business owners are paying
(06:19):
those who do work for ourorganization. Right? So we see
the value in them every day,every hour, hopefully every
minute unless they're hangingaround the water cooler or the
mini bar too much. But, youknow, because they're providing
something ongoing to thebusiness.
Where to them as employeecontractor in cases which we'll
get to. Right? A lot of their wewon't say payback is really like
(06:42):
you mentioned, it's reallyreliant on the time when they
are, quote, unquote, paid fortheir services. So I can only
imagine. Right?
I've never luckily, I've neverbeen in a situation where, you
know, the a payroll systemwithin an organization is just
completely broken, and you'resitting there, you're like, oh,
maybe I'll get paid today. MaybeI won't. I don't know if it's
gonna be the right amount. Youknow, what's it look like?
(07:03):
What's the user experience?
Is there an app? Is there allthese features? So I absolutely
love that you guys put that justit really is an organizational
culture for yourselves, but thatalso into the product and
service that you guys offer. SoI really appreciate you going
into detail on that. And then,obviously, through Gusto.
So if you can, before we get toodeep in, maybe tell us a little
(07:24):
bit more about yourself andabout Gusto, really, maybe even
how you ended up there. Right?Because you you have a
background in in tax, obviously,and now you're at a payroll
company. So we'd love to hearthat. And then, obviously, as I
mentioned, let's talk a littlebit about Gusto.
So what you guys offer?
Will Lopez (07:41):
Yeah. Sure thing. So I'll give the 60 seconds on me.
So, I'm I'm head of theircustomer mission. Also serve as
chief chief ambassador at Gusto.
Started at Gusto 5 years ago.Came in to create people
advisory powered by Gusto, whichis, a new consulting service for
the accounting profession, notonly here, in the states, but
also globally. We built programsaround it, education around it.
(08:04):
We built community around Gustofor the accountants, that
partner with us. And so thatthat's been my MO the whole
time.
But to your point, I'm actuallyjust an accountant by trade. So
I have a bachelor's degree inaccounting, master's degree in
accounting, CPA license inFlorida. I ran a firm for 9
years. I served small businessesall across the United States. By
the end of my practice life, weserved clients in over 42
(08:28):
states, 3 continents.
Thank god for the cloud. And
John Tripolsky (08:33):
I like you said on just a discount.
Will Lopez (08:34):
Account. Yeah. Just an account. But, you know,
overall, I just I loveentrepreneurship. I grew up in a
family of entrepreneurs.
Both my parents had businessesall their entire lives. I saw
them struggle. I saw themsucceed. I thought business I
think business is the ultimateadventure in my opinion. I joke
around and say, like, I was thekid in the never ending story.
(08:57):
Like, instead of beingenthralled with, like, fantasy
worlds, I was actually reallyenthralled with my parents'
stories about business life. Ialways knew I was gonna get into
business or or somehow servebusiness or businesses and
entrepreneurs. I just never knewaccounting would actually turn
it on for me. So when I was backin my practice life, we ran a
fully remote online basedpractice. This is back before it
(09:20):
got hot.
This is, you know, 2011, 2012. Isaw the entire cloud being built
at the time. I built softwareback in 12 that integrated into
Xero. You know, we had softwarewhere all our clients joined on
our platform and kinda joined usin managing their own accounting
services. But, yeah, we offered,you know, advisory, tax, tax
(09:43):
planning.
I firmly believe, you know, thatsmall businesses are not just
the backbone of the economy.They are the economy. And so I
was a small business ownermyself. I had employees myself.
And so all of that just kindawork and being on the front
lines led me to Gusto.
Gusto wanted to make majorinvestments, into accountants
(10:06):
into the accounting profession,way above and beyond my
competitors. And I I, yeah, Ihave no problem throwing shade
over them. I they've been aroundfor a long time. I don't know
what they're up to. Because atthe end of the day, the only
thing that's really happenedwith payroll, it's gone from,
like, rock hammer chisel todesktop to the, you know, to the
cloud And all you know, so it'sgotten easier.
(10:27):
And Gusto has made thatincredible. But we've payroll
companies have never really comearound and thought differently
for small businesses, havethought differently for
accountants, and actually pave away for that kind of stuff. So,
you know, I'm proud to say thatGusto's made tremendous strides
with those who run a company andhave to pay their teams, whether
they're subcontractors oremployees, and those who are
(10:49):
running accounting practices andneed to serve their clients and
wanna keep their, practice verymodern or, you know, they wanna
continuously grow throughpayroll. So all of these things,
you know, we've been able toachieve in strides in such a
short amount of time. It's beenamazing what our team's been up
to in the past 4 or 5 years.
So we keep making you know, wekeep getting accredited for
(11:09):
what's next for payroll, bothfrom owning a business and
paying your team all the way toan accounting firm, actually,
servicing and and trying tosupport their clients through
payroll benefits and HR. And infull transparency, when I first
got on a call, with you
John Tripolsky (11:25):
and your your team members here, again,
probably about a month or soago, I I think I may have told
Chris before that. I'm like, oh,you know, okay. Great. You know?
Payroll.
Payroll guys. You know? Howwonderful. I prob honestly, I
probably had, like, a and youhave. Honestly, even just I
mean, you've taken some and,again, this is coming directly
from a business owner's mouthwho dreaded payroll as a whole.
(11:48):
Right? Because it's somethingthat you have to do. You don't
wanna mess it up, because itmakes you look bad, obviously,
but then, you know, it's it'sjust not it's it's not something
you you see as creative. Youguys have made it so simple, and
this sounds like an absolutesales pitch. It's It's not, I
promise, we'll make it easy.
We'll put a link in the in theshow notes so you can see for
yourself. You you guys ask,like, 4 questions, and it
(12:09):
delivers really 3 or 4questions. It really it delivers
a, you know, a suggested productfor somebody. So we won't we
won't go into detail on it all,but, I know Chris is just
etching to start talking abouthow to use payroll and taxes.
He's itching.
Chris Picciurro (12:24):
Well, I wanna say something. You know, we talk
in our practice in what I'malways looking for, and I
learned when I was very youngwas that someone intelligent
makes something very complicatedand can explain it to you very
simply. And that's what Gustoreally does with payroll, not
that this is a commercial forGusto, vice versa. Someone that
(12:46):
you wanna not deal with issomeone that could and we've
been there with clients andcustomers. Someone that could
take something very simple andcomplicate the heck out of it is
not someone that you want tospend too much time with because
you're gonna spin your wheels.
So that's the one that's not theonly thing. That's the to me,
the biggest takeaway. Payroll isa huge responsibility. When we
(13:08):
look at the entire amount offederal tax that it's collected,
a huge percentage goes throughpayroll via federal tax
withholding, Social Security,Medicare. Really, it's as we
talk about the entrepreneurs,the backbone of the country,
that's the backbone of ourfederal tax system.
And all of the responsibilityfalls on the employer to collect
(13:29):
and remit that tax, both at thefederal, state, and local level,
and that's very, veryintimidating for people that
have never processed processedpayroll before. And, you know, I
I concern myself with, you know,peep people that are processing
payroll, not in a modernenvironment, not in the cloud,
that are printing out paychecksand signing them and handing
them out and having theirpayroll software on some type of
(13:52):
desktop. Not only is that a verybig concern for data security,
but it's also a concern, I mean,for I can't tell you how many
times it's happened wheresomeone, the employer goes out
of business, the employee can'tget a w two, the you know? And
then, man, how valuable was itto be processing payroll in a
(14:15):
modern way when the pandemichit, when we had PPP, ERTC. If
you didn't have those thesethings in place, you were
cooked.
So to have that system set up,well, seriously, no matter what
payroll you know, if you'reprocessing payroll, I strongly
encourage you to make sure thatyou are processing it using some
(14:37):
type of modern system that'scloud based.
Will Lopez (14:41):
Yeah. And to your point, Chris, like, you know,
when you think about payroll,Gusto has made it incredibly
easy, but the concepts areincredibly difficult. Right? And
so, you know, I think peopleapproach payroll saying, well,
because the concepts are totallydifficult, therefore, my
processes should be reallydifficult. And that should
really shouldn't be the case.
(15:02):
And I think, like, when I thinkabout other solutions, I feel
like, you know, the accountingindustry loves to just kinda
liken the product experiencewith the complication of the
code or the complication of theadministrative processes. That
shouldn't be the case. You know,we should acknowledge that
things are very difficult andthen find find ways and strive
(15:22):
for and make strides towardsmaking those very complicated
concepts come to life a loteasier, because there's just no
need to complicate your lifeeven further, especially when
you're running a business.
Chris Picciurro (15:37):
Perhaps that we have someone, real real story,
in our private CPA practice.He's been a client for a few
years. He came to us during thepandemic, and he owns a pretty
decent sized paintingcontracting business in Florida.
He has tax notices. He was witha different payroll processing
company that that even thoughthis is a large national
(15:59):
organization, still mailed him94 ones to sign and mail in.
940 ones for those listening arequarterly federal payroll forms
that reconcile your withholdingwith your wages. But he's a
painting contractor. He didn'tmail them in because there's and
now he's getting some seriousIRS notices failure to file
penalties because it that wasn'tfiled electronically. And he now
(16:24):
has he will spend about $4,000in in fees to to with someone
that is that helps with IRSresolutions to alleviate him. He
doesn't owe this money, but it'sa disaster for this gentleman.
And, you know, it's ultimately,yes. He could have opened his
mail and and and mailed it in.But but, again, it was an
(16:45):
archaic system even though thisis a large company. So my point
is, like I said, make sureyou're working with a modern
payroll company. But let's tiein a couple really cool
strategies with teaching taxflow because a lot of people in
our community want to do tax,partake in tax planning in the
secret sauce because a lot oftimes people say, man, you guys
(17:05):
you have you give out all youralmost all your content for free
and you you were putting outdaily content.
But the the thing is is, like,you shouldn't charge for the the
content. It's the it's theimplementation that's the secret
sauce. How do you implement whatwe're talking about? So some of
the strategies I wanna talkthrough with you guys, maybe not
(17:27):
John. John's just there to lookpretty, but we'll talk about a
couple couple a couplestrategies, you know, one of
which that's very popular, withwith business owners is the
strategy of income shifting to,to a related family member.
Now that could be putting aspouse on payroll. Let's say if
(17:47):
you're tying that in with an scorp election and implementing a
section 105 plan meeting, whatthat means to the listeners is
that you can take your medicalexpenses that are out of pocket,
that are typically nondeductibleand make them an employee
benefit, Or you might be payinga child as long as they're doing
legitimate work for the businessand shifting their taxable
income out of a high marginaltax rate into a lower marginal
(18:11):
tax rate. So, Will, can youkinda just touch on, you know,
what what the lead time would befor someone that wants to hire a
child? And I know there's maybesome special rules with your
let's say, you're self employedor a single member LLC with in
respects to Social Security.And, and then also maybe another
example of someone that electsto be an s corporation and how
(18:34):
they, you know, could processmonthly payroll.
Will Lopez (18:37):
Yeah. Absolutely. So for those who don't know, income
shifting right, also known as,like, income splitting is like a
tax planning technique. It's astrategy that kind of transfers
income from like this high taxbracket to a lower tax bracket
for you, the individual, thetaxpayer, the business owner,
stuff like that. It's also usedto, like, reduce the overall tax
(18:58):
burden by moving income from,you know, one of the high higher
tax brackets to a lower taxbracket.
You know, when I was back inpractice, and I'll I'll speak
there's a lot of ways to toincome shift. Like you said, you
pointed out, like familymembers, putting them on
payroll, things like that. And,of course, there's guidelines to
all of that. The InternalRevenue Service wants you to do
(19:19):
that correctly. Right?
But paying somebody paying afamily member who's not doing
work for the business is not agreat tax strategy, especially
if the IRS finds out. But I usedto do a lot of work when I was
back in practice on s corps. SoI would run into a tremendous
amount of solopreneurs that hadLLCs set up, because that's what
(19:40):
they Googled. And they werelike, okay. I need a LLC because
I guess it limits my liability.
Right? And but they didn't thinkabout the tax side of things.
And so I kinda liken, like, thes corp opportunity to my clients
as, like, driving a BMW. It canyou can have a specific BMW, but
the interior can be reallydifferent. And so that's how it
(20:01):
is.
Let's say if you're asolopreneur owning an LLC LLC is
according to the IRS, there's,like, 3, 4 ways to tax your BMW,
your or your LLC. And s corp isgenerally the most, so long as
you qualify for a variety ofthings, but generally the most
tax advantageous. Because a lotof the additional taxes that you
(20:21):
get hit with, Social Security,Medicare, those things actually
only apply to the paycheck. Andso you have to run a reasonable
salary. And then anything aboveand beyond the paycheck that's
net income only gets taxedfederal income, state, state
wise, federally.
So, you know, we used to save10, 20, 30, 40, $50,000 a year
(20:44):
for our clients who went the scorp route. And then, of course,
going to s corp just requires alittle more administrative duty.
Right? Now you have to file aseparate tax return. It's no
longer on your schedule c.
So you have to file your, youknow, your your 11 20 s's. You
have to actually get payroll setup. And that's what's really
exciting is, like, you couldsave a tremendous amount of
(21:05):
money and then actually startforming your own business in
such a way where you can takeadvantage of medical deductions.
And you can start takingadvantage of maybe setting up a
solo 401 k or something likethat. And so, it really allows
you to manage your tax bracket,greatly.
And so, I'll share a quickstory. Has anybody heard of
(21:28):
Sasquatch? So Okay. John'sshaking his head. Yeah.
Yeah. So I actually startedtheir business. They were
actually my they came to me. Itwas 3 founders, 3 young guys.
And I managed their account forabout 6, 7 years right when they
were blowing up.
Now you can find them in, like,Target and Costco and all this
kind of stuff. But at thatpoint, they were and I say
John Tripolsky (21:48):
that I know what they are not just because I look
like them. A furry guy from
Will Lopez (21:52):
the woods.
John Tripolsky (21:52):
Let's be honest here. Let's put that disclaimer.
Will Lopez (21:55):
Their their marketing is incredible. I mean,
I'm so proud of those guys, butI started their I helped them
start their business. And atsome point, you they went from a
loss on their income to to again, You know, net great net
income bottom line. And at thatpoint, we shifted them over to
an s corp. So all that to say isthere's a variety of ways to
income shift, to get yourselffrom a higher bracket to a lower
(22:17):
bracket, and there's a lot ofstrategies to implement.
I'm sure you guys really helpyour clients do that or even
prospective clients considerthat. But, yeah, that that you
know, through Gusto I used touse Gusto for my own clients and
used to do all my tax planningthrough payroll. So we offered
quarterly tax planning, realtime, for our monthly clients.
And we would adjust theirpayments that were forecasted
(22:38):
out, for the year. And ourmargin of error was, like, less
than 1% as far as, like, whatactually came on tax time.
So, you know, there's a lot ofcool strategies that you could
do. Payroll definitely is at thecenter of a lot of it. Not only
does it pay you, but you couldleverage payroll, benefits, HR,
those things as ways to incomeshift. So high utility, lot of
(23:01):
function within payroll.
Chris Picciurro (23:02):
Yeah. And I think that that's one of the
things that we run into here inthe state of Tennessee. We're
having a kind of in the middleof an overhaul of our franchise
and excise tax. We had a lawpassed, the Tennessee Works Act,
that passed last year, and wehave another potential law
change. So Tennessee is a littlequirky with the s corps, but I
would agree, you know, for aprofitable, business, the s corp
(23:24):
is an amazing strategy.
So if you're listening to this,don't go to TikTok. And go to
TikTok and learn to dance orsomething, but don't go to
TikTok to your tax advice,unless you go to the teaching
tax flow TikTok account, ofcourse. But, I want you to think
about it. If you have net incomeof over a $150,000 or more and
you're self employed or a singlemember LLC taxed to someone
(23:47):
that's a disregarded entity,don't just jump into an s corp.
Think Let us know, and we couldtake a look and see if it makes
sense because what Will said isvery important.
You we have to determinesomething called a reasonable
compensation, compensation, andit can't be 0. So we have within
teaching tasks, so some greatresources so we can, calculate
(24:08):
your reasonable compensation,using IRS compliance software.
And then now you're talkingabout potentially an amazing tax
planning strategy. So s corpsdefinitely makes sense if in the
right situation. Unfortunately,we see them in in for people for
rental properties and s corps,this is a whole another episode
that we're not gonna go downthat rabbit hole.
(24:29):
If you're listening to this andyou are you're self employed and
you have a lot of medicalexpenses that you're not getting
a deduction for. So that couldbe, you know, beyond your health
health insurance, and you'vedone your HSA. But let's say you
have someone in the home thathas special needs or you have
just could you could even have aparent that's a dependent, a
child that's a dependent thathas a lot of medical expenses.
(24:51):
That's where you might wannathink about changing that s
corping. Because remember, ifyou're on payroll, then you're
an employee and you would beeligible for employee benefits.
So that's that's really where itcomes into play. Again, there
are some rules and and andthings that we need to work
through because you might haveother employees. So if you have
high medical expenses thatyou're not getting a deduction
(25:12):
for, self employed over $150,000worth of net income, those are
the those hanging fruit for thes corp election. Or and as far
as the income shifting or incomesplitting, if you run a business
and you have someone in thehousehold, in the family, that's
really helping you out with thebusiness and not formally paying
them as a business expense,that's where you might want to
(25:35):
employ them and and don't beintimidated. Processing payrolls
is only a few clicks away.
So it is something as long youknow, that that can be
intimidating. Then, you know,you've gotta register for state
and federal unemployment andthen that sort of stuff, but the
software will take you rightthrough. And then one thing that
Gusto has done that I'm reallyimpressed with is, because I've
(25:57):
worked I advocate for you guyswith other accountants too is
that they allow you and youryour accounting firm or even
teaching tax flow, access toyour you could share your
information so that they canthey can see the payroll and
maybe troubleshoot if you do runinto a little bit of a problem
above customer service. So,that's that's a night like, for
our private CPA practice andteaching tasks. So we have a
(26:18):
dashboard.
We can we can see what's goingon with client payroll. So
Will Lopez (26:22):
What I'll add to that is what's what's really
cool about today is, you know,10 years ago, the ability to,
you know, income shift, easily,was very difficult. Because, I
mean, I ran a practice and andproviding those kind of tax
strategies or that tax advice,And then executing on it was
(26:45):
generally difficult. So ifyou're in business right now,
that's the reason why you wouldwanna work with a professional
is because to to achieve thesethings requires not just advice
and guidance, it also requiresgreat solutions, to manage at
scale or to manage in general.Because a lot of like like you
(27:06):
said, payroll benefits, AHR,very technical concepts. So is
tax planning, very technicalconcepts.
So is income shifting, verytechnical concepts. So you
basically work with a pro thathas a suite of solutions that
can execute all those things.So, you know, the beauty of
Gusto is Gusto, of course, canallow you to achieve all your
tax strategies through theplatform and achieve them very
(27:28):
well. And we do the complianceaspects of achieving those tax
strategies, like making sureyour payroll's compliant or all
the tax ones being automated andfiled for you. So that way you
don't get hit with penalties,interest, and all that kind of
stuff.
And then on top of all that isGoso as a solution, not only
does what all the othersolutions do, but much better as
(27:51):
far as, like, automatingcompliance. But we also help you
become a great employer. Andthat's also a great thing that
is, like, you run a business,you wanna save money, But if
you're running a team as well orif you're a solopreneur, like,
you wanna give yourself, or makeyourself look good as an
employer if you especially ifyou're growing a team. And
Gussow allows you to alsoachieve that. So you're killing
(28:13):
a lot of different stone birdswith one stone, and that's more
realizable today than I haveever seen.
And I've been in the industryfor since 2,000, 2,001, so I
don't wanna date myself. But,you know, like, you know, it's
it's it's incredible what youcan do now and, you know,
achieve these tax strategies,look like a great employer, run
(28:35):
an awesome team, make that teamfeel very supported, you know,
achieve the goals of, like,being a great employer. Like, I
wanna take care of my team. Iwant them to go home and sleep
on the pillow at night and andnot be stressed out about
working for my company. But Ialso wanna run it efficiently
where I'm saving money.
Chris Picciurro (28:52):
Right. And before John puts a bow on this,
I agree. And in when you'rethinking about, picking a
payroll solution, what I wantthe listeners to think about,
because if you're listening tothis, you're you might be an
employee, and you might be youmight be frustrated with your
how what your employer's doingwith that process. It goes
beyond the payroll, like Willsaid. So if you're if you're
(29:12):
listening to this and thinkabout the other factors and
think about us you know, thinkabout making sure that you have
a solution that can help youwith the workers' compensation,
that can help you with employeebenefits and HR and and, you
know, term life insurance andbecause you don't wanna outgrow
a system.
You know, you want somethingthat you can grow with. So those
are some of the things that youneed to consider when picking a
(29:34):
payroll. Don't be intimidated bypayroll processing. We've taken
a lot of time here teaching Taxoto bring in the best, the best
of the best as far as what wecall implementation partners,
and resources for you. And,yeah, so so we've been real
happy and and I would encourageyou to as as someone that has
(29:54):
that out was that went with amodern solution that we outgrew
once already, as a businessowner, you know, think about
that.
And think about if you fit intoone of those avatars that I
discussed as far as maybe, youknow, doing some more tax
planning. So
John Tripolsky (30:09):
And, Will, before we before we let you off
the hook here, I know you guyskinda answered this just in
conversation, but, and I knowGusto as a whole. I mean, you
guys do a great job with just,you know, paying contractors, w
two employees. You got you guysdo a lot which which is
incredible. But let's take areally, really simple but
possibly a complex scenario.Right?
(30:29):
And say somebody, you know,we're just gonna I'm just gonna
pull this one out of thin air.Say I'm a real estate agent. I
got a team of 3 people, myselfincluded, and I just, you know,
Venmo them or or do somethinghere, you know, kind of ad hoc.
I got I got some office teams.So what would be your response
to that?
And feel free to get sales y ifyou want to because you guys
(30:50):
actually have a good product. Sowe'll let you on that one. But
how would you describe to them?Say, you know what? That's great
you got what you got, but thisis a better way whether it's
with Gusto or somebody else.
Will Lopez (31:01):
Yeah. Absolutely. Here's so my advice would be,
first, work with teaching taxflow because you need to you
need to consider whether or notthose those individuals you're
paying are actually employees orcontractors, and that's very
important. So you re reallygotta classify them correctly or
else you're gonna get yourselfin trouble. And then secondly,
what is the opportunity tax wiseto make sure that you're
(31:24):
actually taking advantage ofyour real estate business?
And, you know, how do youmaximize you saving the most
amount of money? Giving uncleSam exactly what he's due, not
what he wants. And and so that'sthat's the first point. And
that's why Gus partners withaccounting firms nationwide. We
partner with over 14,000accounting firms nationwide
because I believe that theadvisers are the advisers and
(31:45):
Gusto plays its role.
And so once once you've kindagone through and identified
things and are saving taxes,then you can turn on Gusto to
make sure your team members,whether they are gonna stay
contractors or not, or employeesor not, are taken care of or
paid on time. That thecompliance around all of that,
both federally, state, in yourcity, municipal, are all
(32:09):
automated and taken care of.Running a business is a is a lot
of work and a lot ofadministrative duty. And so
especially especially when youhave a team. Especially when
you're taking advantage of taxstrategies like an escort.
So GUSO really helps you onboardnew employees, onboard new
contractors. They get thesebeautifully designed portals.
(32:30):
They really feel a part of theteam. As you continue to grow,
you get to provide, you know,low cost, no cost premium
benefits to that team. So thatway they stick with you.
So that way retention is bigright now. There's 1.6 jobs for
every unemployed person rightnow. Anybody can leave a company
and find another job. So if youhave some incredible team
members that you don't wannalose, you're gonna have to do a
(32:52):
lot more than just pay them. Andand that's and proof is in the
pudding there.
So compensation is only a smallpiece of somebody's
consideration of staying at yourcompany. So I I would approach
it like that. It's in myopinion, it's a it's a
multifaceted, attack. First,let's make sure you're you're
taking care of your team andyou're in the right spot
legally, and then execute ontaking care of your team and
(33:15):
yourself through Gusto.
John Tripolsky (33:16):
If that's not a mic drop moment for describing
the importance of payroll, Idon't know what is, man.
Will Lopez (33:21):
I am I love the pay payrolls are part of a broader
ecosystem of advice. Right? Andso that's how I would approach
that today.
John Tripolsky (33:28):
Absolutely. Absolutely. Well, Chris, thank
you as always for joining ushere on your own show. And,
well, we appreciate the time. Iknow you guys are extremely busy
and and always are justobviously improving the whole
world of payroll.
So we appreciate your input andyour your time on the show.
Awesome, guys. Well, we we'llsee everybody here again.
However, I just wrote down anacronym that I think I'm gonna
(33:50):
use somewhere. Maybe this is it.
Instead of, you know, ASAP foras soon as possible, I think
teaching tax flow and gustostill you know, we it's a good
marriage in a sense because wetry to accomplish the same
thing, and we're keeping it assimple as possible in a complex
situation. So
Will Lopez (34:07):
So like TTFG? Is that, like, teaching tax flow
gusto? Oh. Okay. I like that.
John Tripolsky (34:14):
Here we go. I can tell you're a marketing guy.
See, CPA gone marketer. I likeit. I could I could appreciate
that.
The you know, you we need to getyou a T shirt that just says
that and then let you out. We'lllet you and Chris out in the
wild, but excellent show, youguys. Thank you so much for the
insight as always. We will putthe link directly in the show
(34:34):
notes so you guys have you asthe listeners have no excuse for
not checking out everything thatGusto was about. And by the way,
also, for everybody that'slistening to this, Will's plug
on TTF was completelyunsolicited.
So he was not paid at all. Thatis right. I I that's right.
Will Lopez (34:49):
I it was it was unsolicited.
John Tripolsky (34:52):
So Just the Starbucks gift cards, which I
will mail to you.
Chris Picciurro (34:54):
That's right. I was
Will Lopez (34:55):
gonna say I was I I I appreciate the check that's
coming in the mail, John. Sothank you.
John Tripolsky (34:58):
Well, hey. I know who can process it. They so
on that note, everybody, thankyou again for joining us here on
the Teaching Tax Flow podcast.We will see you back here again,
same time, same place, nextweek, but different topic.
(35:19):
Thanks for hanging out with usas always here on the podcast.
John Chapalski here from the TTFteam still with you, and thank
you for hanging out with ustoday. So although a little bit
longer than usual on thisepisode, obviously, thank you
Will and Chris for joining us onthis topic, and for anybody that
was listening to this, youprobably I don't know. I'm gonna
(35:40):
take a guess. You probablyweren't too excited about
talking payroll because it'sprobably a hassle to you. So one
of the things I really wannahighlight that we touched on
early in this episode andprobably a couple times in the
middle and a little bit towardsthe end too is whether it's
Gusto or whoever you go with fora payroll provider solution,
we'll call it, really look at itas something that's an extension
(36:05):
of your business, an extensionof your culture, just not
something that's sotransactional.
Right? Sure, it's an expectationobviously from any employee that
they're going to get paid, butit's the little things that
count. In this case, exactly.It's a huge thing going above
and beyond making it, you know,just easier. A little bit more
(36:26):
reliable for yourself, but thenalso for your team as you
hopefully are growing.
So as mentioned as always, weare popping in some resources in
the show notes of this as wellas a direct link to check out
Gusto, and, honestly, we lookforward to working with these
guys more. They're, I thinkthey're a great fit, obviously,
for teaching tax flow. We havevery, very similar interests in
(36:48):
mind, obviously, making thingsless complex, a k a easier than
expected. So join us here nextweek. We got another great topic
coming up.
Actually, a whole roster ofgreat topics here. I'm looking
at our schedule as I'm readingthis, probably for the next 3
months. Actually, we got somereally good stuff. So we will
talk to everybody very soon.
Disclaimer (37:11):
The content provided is for educational purposes
only. We encourage you to seekpersonalized investment advice
from your financialprofessional. For all tax and
legal advice, please consultyour CPA or attorney. Investment
advisory services are offeredthrough Cabin Advisors, a
registered investment adviser.Securities are offered through
Cabin Securities, a registeredbroker dealer.
The content of this podcast does not constitute an
(37:32):
offer of securities. Offeringscan only be made through an
offering memorandum, and youshould carefully examine the
risk factors and otherinformation contained in the
memorandum.
Welcome to the Teaching Tax Flow podcast, where the goal
is to empower and educate you tolegally and ethically minimize
taxes paid over your lifetime.
John Tripolsky (00:16):
Hey, everyone. Welcome back to the podcast
episode 80 today. We are gonnajump into the pesky little thing
we call payroll. And why it'sreally not that pesky?
Because we got an answer for youwith a great guess. But as
always, let's take a briefmoment and thank our sponsor on
this episode.
Ad Read (00:35):
This podcast is sponsored by The Mortgage Shop.
Are you looking to qualify foran investment credit loan
without jumping through hoops?That's easy. They have loans
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John Tripolsky (01:01):
Hey, everybody, and welcome back to the Teaching
Tax Flow podcast. As you likelyseen in the intro or took the
time to actually read the shownotes, you know what we're gonna
talk about here. So before weintroduce our guest, and I know
for a fact that this is a greattopic because I was actually
asked about regarding this thismorning in the, lobby area of a
(01:21):
Starbucks. So I'll bring up thequestions that the guy asked me
here shortly. But as always,Chris Pacuro, welcome back to
your own show, sir.
How you doing today?
Chris Picciurro (01:30):
Thank you, Johnny t. It's always a pleasure
to be back to my own show. And,our show, John. Remember, it's
our show. It is our show, but Iam so excited, about our guest
today and our private CPApractice.
We don't talk about it too muchon this podcast, but has
partnered, with Gusto forpayroll processing successfully
(01:52):
on tons and tons of clients.Your payroll can be an
intimidating thing, and andpayroll really applies to not
just, you know, not just bigbusiness owners. In fact, it's
more challenging for that thatsolopreneur. So we're gonna talk
about payroll processing today.We're also gonna tie it into
some really cool tax strategiesthat circle around that, and
(02:14):
we're gonna have a greatconversation with our friends at
Gusto, and they're gonna make itthey're gonna make the sound
very easy.
It's not easy, but one of thereasons I'm just gonna speak
from personal experience. We youknow, in our CPA practice,
private CPA practice, we used toprocess about a 100 payrolls.
This is when I was young anddumb. And we started with the
(02:34):
software called PayCycle. Wayback in the day, they're, like,
the first ones to be online.
They got bought out by Intuitpayroll, I believe, Intuit
online payroll IOP. And it wasjust kind of a a difficult task
with with withholdings, and itwas really the best way I could
describe it as a process wassuper clunky. So about I wanna
(02:55):
say, 7 years ago, John, you youknow, you and I go to a big
conference every summer. Wespend more time in the vendor
hall, actually. And I've talkedto every payroll processor
there.
This was the IRS nationwide taxform. I believe it was it was in
Atlanta at that point. And I wasvery impressed with Gusto. It
was the least amount of clickspossible to successfully run a
(03:16):
payroll, so I'm honored to havethese guys as a as a partner
really in our private CPApractice, but and as a guest on
the podcast. So thank you guys.
And, John, take it from here.
John Tripolsky (03:27):
And so we had a we had a discussion with Gusto,
and that was my firstinteraction with them probably
probably about a month ago. AndI was super impressed, And I'm
and I'm hard to impress. I willsay that. I'm a very difficult
customer with everything, butthese guys are awesome. And
without further ado, Will Lopezfrom Gusto.
How you doing today, Will? Hey.
Will Lopez (03:46):
Doing well. Thank you
so much for having me
on the show.
John Tripolsky (03:49):
Absolutely, man. And and, honestly, a couple of
the things that really stand outfrom our first conversation. And
this is coming from somebody,you know, as I always like to
put the the disclaimer outthere. I am not a tax guy.
I'm a business owner. Chris isthe tax guy. If I ever try to
give anybody tax advice, don'tlisten to it. Just, you know,
fact check me on teachingtaxable. So, Will, you had
(04:10):
mentioned a couple things,again, that really stood out.
And y'all's approach to payrollis not really as as cut and dry
maybe as some people think.Like, oh, you just input and
output. That's it. It's done.You guys really approach us in a
sense that you really focus onpayroll is culture within an
(04:32):
organization.
Is that is that said correctly?
Will Lopez (04:35):
Yeah. I would say so. I mean, when you think about
just the history of payroll,you've always people approach it
in in the mindset of it's just ait's a way to pay your
employees, and that's all it is.That is they just kinda
defaulted as an exchange ofmoney. Hey.
You provided me a service. I oweyou a paycheck in return. But it
(04:55):
really is a reflection ofsociety, in my opinion, when you
think about what goes on withpayroll. Careers are built
through payroll, Retirement isis achieved through payroll. The
economy flows through payroll.
Communities are actually upheldthrough payroll because, you
know, those who receive apaycheck, they're able to take
(05:16):
care of their family. They getbenefits through paycheck. All
those things are taken care ofthrough paycheck. They're able
to take their take care of theirimmediate families, the
communities around them. So, youknow, it's a lot higher than
than I think what we've given itcredit for for the last 100
years or so.
You know, when you think about a paycheck, it's
always been looked at as justlike a way to compensate labor.
(05:40):
But it really is, in my opinion,kind of a true reflection of the
value of of a of an individualwhen they're working. And so and
everything that that individualneeds in order to work, to live,
to be taken care of.
John Tripolsky (05:57):
I'll ask a couple more things here that we
could touch on. I know that youmentioned that I'm gonna release
the, the tax animal. Right?We'll let we'll let Chris really
chime in here. There we go.
We'll we'll let him out of thecage, and it's you know, all the
tax knowledge is all gonna comeout at you. You know, in saying
that too, which I I really wannareiterate with everybody too,
it's it's almost you know, if weas business owners are paying
(06:19):
those who do work for ourorganization. Right? So we see
the value in them every day,every hour, hopefully every
minute unless they're hangingaround the water cooler or the
mini bar too much. But, youknow, because they're providing
something ongoing to thebusiness.
Where to them as employeecontractor in cases which we'll
get to. Right? A lot of their wewon't say payback is really like
(06:42):
you mentioned, it's reallyreliant on the time when they
are, quote, unquote, paid fortheir services. So I can only
imagine. Right?
I've never luckily, I've neverbeen in a situation where, you
know, the a payroll systemwithin an organization is just
completely broken, and you'resitting there, you're like, oh,
maybe I'll get paid today. MaybeI won't. I don't know if it's
gonna be the right amount. Youknow, what's it look like?
(07:03):
What's the user experience?
Is there an app? Is there allthese features? So I absolutely
love that you guys put that justit really is an organizational
culture for yourselves, but thatalso into the product and
service that you guys offer. SoI really appreciate you going
into detail on that. And then,obviously, through Gusto.
So if you can, before we get toodeep in, maybe tell us a little
(07:24):
bit more about yourself andabout Gusto, really, maybe even
how you ended up there. Right?Because you you have a
background in in tax, obviously,and now you're at a payroll
company. So we'd love to hearthat. And then, obviously, as I
mentioned, let's talk a littlebit about Gusto.
So what you guys offer?
Will Lopez (07:41):
Yeah. Sure thing. So I'll give the 60 seconds on me.
So, I'm I'm head of theircustomer mission. Also serve as
chief chief ambassador at Gusto.
Started at Gusto 5 years ago.Came in to create people
advisory powered by Gusto, whichis, a new consulting service for
the accounting profession, notonly here, in the states, but
also globally. We built programsaround it, education around it.
(08:04):
We built community around Gustofor the accountants, that
partner with us. And so thatthat's been my MO the whole
time.
But to your point, I'm actuallyjust an accountant by trade. So
I have a bachelor's degree inaccounting, master's degree in
accounting, CPA license inFlorida. I ran a firm for 9
years. I served small businessesall across the United States. By
the end of my practice life, weserved clients in over 42
(08:28):
states, 3 continents.
Thank god for the cloud. And
John Tripolsky (08:33):
I like you said on just a discount.
Will Lopez (08:34):
Account. Yeah. Just an account. But, you know,
overall, I just I loveentrepreneurship. I grew up in a
family of entrepreneurs.
Both my parents had businessesall their entire lives. I saw
them struggle. I saw themsucceed. I thought business I
think business is the ultimateadventure in my opinion. I joke
around and say, like, I was thekid in the never ending story.
(08:57):
Like, instead of beingenthralled with, like, fantasy
worlds, I was actually reallyenthralled with my parents'
stories about business life. Ialways knew I was gonna get into
business or or somehow servebusiness or businesses and
entrepreneurs. I just never knewaccounting would actually turn
it on for me. So when I was backin my practice life, we ran a
fully remote online basedpractice. This is back before it
(09:20):
got hot.
This is, you know, 2011, 2012. Isaw the entire cloud being built
at the time. I built softwareback in 12 that integrated into
Xero. You know, we had softwarewhere all our clients joined on
our platform and kinda joined usin managing their own accounting
services. But, yeah, we offered,you know, advisory, tax, tax
(09:43):
planning.
I firmly believe, you know, thatsmall businesses are not just
the backbone of the economy.They are the economy. And so I
was a small business ownermyself. I had employees myself.
And so all of that just kindawork and being on the front
lines led me to Gusto.
Gusto wanted to make majorinvestments, into accountants
(10:06):
into the accounting profession,way above and beyond my
competitors. And I I, yeah, Ihave no problem throwing shade
over them. I they've been aroundfor a long time. I don't know
what they're up to. Because atthe end of the day, the only
thing that's really happenedwith payroll, it's gone from,
like, rock hammer chisel todesktop to the, you know, to the
cloud And all you know, so it'sgotten easier.
(10:27):
And Gusto has made thatincredible. But we've payroll
companies have never really comearound and thought differently
for small businesses, havethought differently for
accountants, and actually pave away for that kind of stuff. So,
you know, I'm proud to say thatGusto's made tremendous strides
with those who run a company andhave to pay their teams, whether
they're subcontractors oremployees, and those who are
(10:49):
running accounting practices andneed to serve their clients and
wanna keep their, practice verymodern or, you know, they wanna
continuously grow throughpayroll. So all of these things,
you know, we've been able toachieve in strides in such a
short amount of time. It's beenamazing what our team's been up
to in the past 4 or 5 years.
So we keep making you know, wekeep getting accredited for
(11:09):
what's next for payroll, bothfrom owning a business and
paying your team all the way toan accounting firm, actually,
servicing and and trying tosupport their clients through
payroll benefits and HR. And infull transparency, when I first
got on a call, with you
John Tripolsky (11:25):
and your your team members here, again,
probably about a month or soago, I I think I may have told
Chris before that. I'm like, oh,you know, okay. Great. You know?
Payroll.
Payroll guys. You know? Howwonderful. I prob honestly, I
probably had, like, a and youhave. Honestly, even just I
mean, you've taken some and,again, this is coming directly
from a business owner's mouthwho dreaded payroll as a whole.
(11:48):
Right? Because it's somethingthat you have to do. You don't
wanna mess it up, because itmakes you look bad, obviously,
but then, you know, it's it'sjust not it's it's not something
you you see as creative. Youguys have made it so simple, and
this sounds like an absolutesales pitch. It's It's not, I
promise, we'll make it easy.
We'll put a link in the in theshow notes so you can see for
yourself. You you guys ask,like, 4 questions, and it
(12:09):
delivers really 3 or 4questions. It really it delivers
a, you know, a suggested productfor somebody. So we won't we
won't go into detail on it all,but, I know Chris is just
etching to start talking abouthow to use payroll and taxes.
He's itching.
Chris Picciurro (12:24):
Well, I wanna say something. You know, we talk
in our practice in what I'malways looking for, and I
learned when I was very youngwas that someone intelligent
makes something very complicatedand can explain it to you very
simply. And that's what Gustoreally does with payroll, not
that this is a commercial forGusto, vice versa. Someone that
(12:46):
you wanna not deal with issomeone that could and we've
been there with clients andcustomers. Someone that could
take something very simple andcomplicate the heck out of it is
not someone that you want tospend too much time with because
you're gonna spin your wheels.
So that's the one that's not theonly thing. That's the to me,
the biggest takeaway. Payroll isa huge responsibility. When we
(13:08):
look at the entire amount offederal tax that it's collected,
a huge percentage goes throughpayroll via federal tax
withholding, Social Security,Medicare. Really, it's as we
talk about the entrepreneurs,the backbone of the country,
that's the backbone of ourfederal tax system.
And all of the responsibilityfalls on the employer to collect
(13:29):
and remit that tax, both at thefederal, state, and local level,
and that's very, veryintimidating for people that
have never processed processedpayroll before. And, you know, I
I concern myself with, you know,peep people that are processing
payroll, not in a modernenvironment, not in the cloud,
that are printing out paychecksand signing them and handing
them out and having theirpayroll software on some type of
(13:52):
desktop. Not only is that a verybig concern for data security,
but it's also a concern, I mean,for I can't tell you how many
times it's happened wheresomeone, the employer goes out
of business, the employee can'tget a w two, the you know? And
then, man, how valuable was itto be processing payroll in a
(14:15):
modern way when the pandemichit, when we had PPP, ERTC. If
you didn't have those thesethings in place, you were
cooked.
So to have that system set up,well, seriously, no matter what
payroll you know, if you'reprocessing payroll, I strongly
encourage you to make sure thatyou are processing it using some
(14:37):
type of modern system that'scloud based.
Will Lopez (14:41):
Yeah. And to your point, Chris, like, you know,
when you think about payroll,Gusto has made it incredibly
easy, but the concepts areincredibly difficult. Right? And
so, you know, I think peopleapproach payroll saying, well,
because the concepts are totallydifficult, therefore, my
processes should be reallydifficult. And that should
really shouldn't be the case.
(15:02):
And I think, like, when I thinkabout other solutions, I feel
like, you know, the accountingindustry loves to just kinda
liken the product experiencewith the complication of the
code or the complication of theadministrative processes. That
shouldn't be the case. You know,we should acknowledge that
things are very difficult andthen find find ways and strive
(15:22):
for and make strides towardsmaking those very complicated
concepts come to life a loteasier, because there's just no
need to complicate your lifeeven further, especially when
you're running a business.
Chris Picciurro (15:37):
Perhaps that we have someone, real real story,
in our private CPA practice.He's been a client for a few
years. He came to us during thepandemic, and he owns a pretty
decent sized paintingcontracting business in Florida.
He has tax notices. He was witha different payroll processing
company that that even thoughthis is a large national
(15:59):
organization, still mailed him94 ones to sign and mail in.
940 ones for those listening arequarterly federal payroll forms
that reconcile your withholdingwith your wages. But he's a
painting contractor. He didn'tmail them in because there's and
now he's getting some seriousIRS notices failure to file
penalties because it that wasn'tfiled electronically. And he now
(16:24):
has he will spend about $4,000in in fees to to with someone
that is that helps with IRSresolutions to alleviate him. He
doesn't owe this money, but it'sa disaster for this gentleman.
And, you know, it's ultimately,yes. He could have opened his
mail and and and mailed it in.But but, again, it was an
(16:45):
archaic system even though thisis a large company. So my point
is, like I said, make sureyou're working with a modern
payroll company. But let's tiein a couple really cool
strategies with teaching taxflow because a lot of people in
our community want to do tax,partake in tax planning in the
secret sauce because a lot oftimes people say, man, you guys
(17:05):
you have you give out all youralmost all your content for free
and you you were putting outdaily content.
But the the thing is is, like,you shouldn't charge for the the
content. It's the it's theimplementation that's the secret
sauce. How do you implement whatwe're talking about? So some of
the strategies I wanna talkthrough with you guys, maybe not
(17:27):
John. John's just there to lookpretty, but we'll talk about a
couple couple a couplestrategies, you know, one of
which that's very popular, withwith business owners is the
strategy of income shifting to,to a related family member.
Now that could be putting aspouse on payroll. Let's say if
(17:47):
you're tying that in with an scorp election and implementing a
section 105 plan meeting, whatthat means to the listeners is
that you can take your medicalexpenses that are out of pocket,
that are typically nondeductibleand make them an employee
benefit, Or you might be payinga child as long as they're doing
legitimate work for the businessand shifting their taxable
income out of a high marginaltax rate into a lower marginal
(18:11):
tax rate. So, Will, can youkinda just touch on, you know,
what what the lead time would befor someone that wants to hire a
child? And I know there's maybesome special rules with your
let's say, you're self employedor a single member LLC with in
respects to Social Security.And, and then also maybe another
example of someone that electsto be an s corporation and how
(18:34):
they, you know, could processmonthly payroll.
Will Lopez (18:37):
Yeah. Absolutely. So for those who don't know, income
shifting right, also known as,like, income splitting is like a
tax planning technique. It's astrategy that kind of transfers
income from like this high taxbracket to a lower tax bracket
for you, the individual, thetaxpayer, the business owner,
stuff like that. It's also usedto, like, reduce the overall tax
(18:58):
burden by moving income from,you know, one of the high higher
tax brackets to a lower taxbracket.
You know, when I was back inpractice, and I'll I'll speak
there's a lot of ways to toincome shift. Like you said, you
pointed out, like familymembers, putting them on
payroll, things like that. And,of course, there's guidelines to
all of that. The InternalRevenue Service wants you to do
(19:19):
that correctly. Right?
But paying somebody paying afamily member who's not doing
work for the business is not agreat tax strategy, especially
if the IRS finds out. But I usedto do a lot of work when I was
back in practice on s corps. SoI would run into a tremendous
amount of solopreneurs that hadLLCs set up, because that's what
(19:40):
they Googled. And they werelike, okay. I need a LLC because
I guess it limits my liability.
Right? And but they didn't thinkabout the tax side of things.
And so I kinda liken, like, thes corp opportunity to my clients
as, like, driving a BMW. It canyou can have a specific BMW, but
the interior can be reallydifferent. And so that's how it
(20:01):
is.
Let's say if you're asolopreneur owning an LLC LLC is
according to the IRS, there's,like, 3, 4 ways to tax your BMW,
your or your LLC. And s corp isgenerally the most, so long as
you qualify for a variety ofthings, but generally the most
tax advantageous. Because a lotof the additional taxes that you
(20:21):
get hit with, Social Security,Medicare, those things actually
only apply to the paycheck. Andso you have to run a reasonable
salary. And then anything aboveand beyond the paycheck that's
net income only gets taxedfederal income, state, state
wise, federally.
So, you know, we used to save10, 20, 30, 40, $50,000 a year
(20:44):
for our clients who went the scorp route. And then, of course,
going to s corp just requires alittle more administrative duty.
Right? Now you have to file aseparate tax return. It's no
longer on your schedule c.
So you have to file your, youknow, your your 11 20 s's. You
have to actually get payroll setup. And that's what's really
exciting is, like, you couldsave a tremendous amount of
(21:05):
money and then actually startforming your own business in
such a way where you can takeadvantage of medical deductions.
And you can start takingadvantage of maybe setting up a
solo 401 k or something likethat. And so, it really allows
you to manage your tax bracket,greatly.
And so, I'll share a quickstory. Has anybody heard of
(21:28):
Sasquatch? So Okay. John'sshaking his head. Yeah.
Yeah. So I actually startedtheir business. They were
actually my they came to me. Itwas 3 founders, 3 young guys.
And I managed their account forabout 6, 7 years right when they
were blowing up.
Now you can find them in, like,Target and Costco and all this
kind of stuff. But at thatpoint, they were and I say
John Tripolsky (21:48):
that I know what they are not just because I look
like them. A furry guy from
Will Lopez (21:52):
the woods.
John Tripolsky (21:52):
Let's be honest here. Let's put that disclaimer.
Will Lopez (21:55):
Their their marketing is incredible. I mean,
I'm so proud of those guys, butI started their I helped them
start their business. And atsome point, you they went from a
loss on their income to to again, You know, net great net
income bottom line. And at thatpoint, we shifted them over to
an s corp. So all that to say isthere's a variety of ways to
income shift, to get yourselffrom a higher bracket to a lower
(22:17):
bracket, and there's a lot ofstrategies to implement.
I'm sure you guys really helpyour clients do that or even
prospective clients considerthat. But, yeah, that that you
know, through Gusto I used touse Gusto for my own clients and
used to do all my tax planningthrough payroll. So we offered
quarterly tax planning, realtime, for our monthly clients.
And we would adjust theirpayments that were forecasted
(22:38):
out, for the year. And ourmargin of error was, like, less
than 1% as far as, like, whatactually came on tax time.
So, you know, there's a lot ofcool strategies that you could
do. Payroll definitely is at thecenter of a lot of it. Not only
does it pay you, but you couldleverage payroll, benefits, HR,
those things as ways to incomeshift. So high utility, lot of
(23:01):
function within payroll.
Chris Picciurro (23:02):
Yeah. And I think that that's one of the
things that we run into here inthe state of Tennessee. We're
having a kind of in the middleof an overhaul of our franchise
and excise tax. We had a lawpassed, the Tennessee Works Act,
that passed last year, and wehave another potential law
change. So Tennessee is a littlequirky with the s corps, but I
would agree, you know, for aprofitable, business, the s corp
(23:24):
is an amazing strategy.
So if you're listening to this,don't go to TikTok. And go to
TikTok and learn to dance orsomething, but don't go to
TikTok to your tax advice,unless you go to the teaching
tax flow TikTok account, ofcourse. But, I want you to think
about it. If you have net incomeof over a $150,000 or more and
you're self employed or a singlemember LLC taxed to someone
(23:47):
that's a disregarded entity,don't just jump into an s corp.
Think Let us know, and we couldtake a look and see if it makes
sense because what Will said isvery important.
You we have to determinesomething called a reasonable
compensation, compensation, andit can't be 0. So we have within
teaching tasks, so some greatresources so we can, calculate
(24:08):
your reasonable compensation,using IRS compliance software.
And then now you're talkingabout potentially an amazing tax
planning strategy. So s corpsdefinitely makes sense if in the
right situation. Unfortunately,we see them in in for people for
rental properties and s corps,this is a whole another episode
that we're not gonna go downthat rabbit hole.
(24:29):
If you're listening to this andyou are you're self employed and
you have a lot of medicalexpenses that you're not getting
a deduction for. So that couldbe, you know, beyond your health
health insurance, and you'vedone your HSA. But let's say you
have someone in the home thathas special needs or you have
just could you could even have aparent that's a dependent, a
child that's a dependent thathas a lot of medical expenses.
(24:51):
That's where you might wannathink about changing that s
corping. Because remember, ifyou're on payroll, then you're
an employee and you would beeligible for employee benefits.
So that's that's really where itcomes into play. Again, there
are some rules and and andthings that we need to work
through because you might haveother employees. So if you have
high medical expenses thatyou're not getting a deduction
(25:12):
for, self employed over $150,000worth of net income, those are
the those hanging fruit for thes corp election. Or and as far
as the income shifting or incomesplitting, if you run a business
and you have someone in thehousehold, in the family, that's
really helping you out with thebusiness and not formally paying
them as a business expense,that's where you might want to
(25:35):
employ them and and don't beintimidated. Processing payrolls
is only a few clicks away.
So it is something as long youknow, that that can be
intimidating. Then, you know,you've gotta register for state
and federal unemployment andthen that sort of stuff, but the
software will take you rightthrough. And then one thing that
Gusto has done that I'm reallyimpressed with is, because I've
(25:57):
worked I advocate for you guyswith other accountants too is
that they allow you and youryour accounting firm or even
teaching tax flow, access toyour you could share your
information so that they canthey can see the payroll and
maybe troubleshoot if you do runinto a little bit of a problem
above customer service. So,that's that's a night like, for
our private CPA practice andteaching tasks. So we have a
(26:18):
dashboard.
We can we can see what's goingon with client payroll. So
Will Lopez (26:22):
What I'll add to that is what's what's really
cool about today is, you know,10 years ago, the ability to,
you know, income shift, easily,was very difficult. Because, I
mean, I ran a practice and andproviding those kind of tax
strategies or that tax advice,And then executing on it was
(26:45):
generally difficult. So ifyou're in business right now,
that's the reason why you wouldwanna work with a professional
is because to to achieve thesethings requires not just advice
and guidance, it also requiresgreat solutions, to manage at
scale or to manage in general.Because a lot of like like you
(27:06):
said, payroll benefits, AHR,very technical concepts. So is
tax planning, very technicalconcepts.
So is income shifting, verytechnical concepts. So you
basically work with a pro thathas a suite of solutions that
can execute all those things.So, you know, the beauty of
Gusto is Gusto, of course, canallow you to achieve all your
tax strategies through theplatform and achieve them very
(27:28):
well. And we do the complianceaspects of achieving those tax
strategies, like making sureyour payroll's compliant or all
the tax ones being automated andfiled for you. So that way you
don't get hit with penalties,interest, and all that kind of
stuff.
And then on top of all that isGoso as a solution, not only
does what all the othersolutions do, but much better as
(27:51):
far as, like, automatingcompliance. But we also help you
become a great employer. Andthat's also a great thing that
is, like, you run a business,you wanna save money, But if
you're running a team as well orif you're a solopreneur, like,
you wanna give yourself, or makeyourself look good as an
employer if you especially ifyou're growing a team. And
Gussow allows you to alsoachieve that. So you're killing
(28:13):
a lot of different stone birdswith one stone, and that's more
realizable today than I haveever seen.
And I've been in the industryfor since 2,000, 2,001, so I
don't wanna date myself. But,you know, like, you know, it's
it's it's incredible what youcan do now and, you know,
achieve these tax strategies,look like a great employer, run
(28:35):
an awesome team, make that teamfeel very supported, you know,
achieve the goals of, like,being a great employer. Like, I
wanna take care of my team. Iwant them to go home and sleep
on the pillow at night and andnot be stressed out about
working for my company. But Ialso wanna run it efficiently
where I'm saving money.
Chris Picciurro (28:52):
Right. And before John puts a bow on this,
I agree. And in when you'rethinking about, picking a
payroll solution, what I wantthe listeners to think about,
because if you're listening tothis, you're you might be an
employee, and you might be youmight be frustrated with your
how what your employer's doingwith that process. It goes
beyond the payroll, like Willsaid. So if you're if you're
(29:12):
listening to this and thinkabout the other factors and
think about us you know, thinkabout making sure that you have
a solution that can help youwith the workers' compensation,
that can help you with employeebenefits and HR and and, you
know, term life insurance andbecause you don't wanna outgrow
a system.
You know, you want somethingthat you can grow with. So those
are some of the things that youneed to consider when picking a
(29:34):
payroll. Don't be intimidated bypayroll processing. We've taken
a lot of time here teaching Taxoto bring in the best, the best
of the best as far as what wecall implementation partners,
and resources for you. And,yeah, so so we've been real
happy and and I would encourageyou to as as someone that has
(29:54):
that out was that went with amodern solution that we outgrew
once already, as a businessowner, you know, think about
that.
And think about if you fit intoone of those avatars that I
discussed as far as maybe, youknow, doing some more tax
planning. So
John Tripolsky (30:09):
And, Will, before we before we let you off
the hook here, I know you guyskinda answered this just in
conversation, but, and I knowGusto as a whole. I mean, you
guys do a great job with just,you know, paying contractors, w
two employees. You got you guysdo a lot which which is
incredible. But let's take areally, really simple but
possibly a complex scenario.Right?
(30:29):
And say somebody, you know,we're just gonna I'm just gonna
pull this one out of thin air.Say I'm a real estate agent. I
got a team of 3 people, myselfincluded, and I just, you know,
Venmo them or or do somethinghere, you know, kind of ad hoc.
I got I got some office teams.So what would be your response
to that?
And feel free to get sales y ifyou want to because you guys
(30:50):
actually have a good product. Sowe'll let you on that one. But
how would you describe to them?Say, you know what? That's great
you got what you got, but thisis a better way whether it's
with Gusto or somebody else.
Will Lopez (31:01):
Yeah. Absolutely. Here's so my advice would be,
first, work with teaching taxflow because you need to you
need to consider whether or notthose those individuals you're
paying are actually employees orcontractors, and that's very
important. So you re reallygotta classify them correctly or
else you're gonna get yourselfin trouble. And then secondly,
what is the opportunity tax wiseto make sure that you're
(31:24):
actually taking advantage ofyour real estate business?
And, you know, how do youmaximize you saving the most
amount of money? Giving uncleSam exactly what he's due, not
what he wants. And and so that'sthat's the first point. And
that's why Gus partners withaccounting firms nationwide. We
partner with over 14,000accounting firms nationwide
because I believe that theadvisers are the advisers and
(31:45):
Gusto plays its role.
And so once once you've kindagone through and identified
things and are saving taxes,then you can turn on Gusto to
make sure your team members,whether they are gonna stay
contractors or not, or employeesor not, are taken care of or
paid on time. That thecompliance around all of that,
both federally, state, in yourcity, municipal, are all
(32:09):
automated and taken care of.Running a business is a is a lot
of work and a lot ofadministrative duty. And so
especially especially when youhave a team. Especially when
you're taking advantage of taxstrategies like an escort.
So GUSO really helps you onboardnew employees, onboard new
contractors. They get thesebeautifully designed portals.
(32:30):
They really feel a part of theteam. As you continue to grow,
you get to provide, you know,low cost, no cost premium
benefits to that team. So thatway they stick with you.
So that way retention is bigright now. There's 1.6 jobs for
every unemployed person rightnow. Anybody can leave a company
and find another job. So if youhave some incredible team
members that you don't wannalose, you're gonna have to do a
(32:52):
lot more than just pay them. Andand that's and proof is in the
pudding there.
So compensation is only a smallpiece of somebody's
consideration of staying at yourcompany. So I I would approach
it like that. It's in myopinion, it's a it's a
multifaceted, attack. First,let's make sure you're you're
taking care of your team andyou're in the right spot
legally, and then execute ontaking care of your team and
(33:15):
yourself through Gusto.
John Tripolsky (33:16):
If that's not a mic drop moment for describing
the importance of payroll, Idon't know what is, man.
Will Lopez (33:21):
I am I love the pay payrolls are part of a broader
ecosystem of advice. Right? Andso that's how I would approach
that today.
John Tripolsky (33:28):
Absolutely. Absolutely. Well, Chris, thank
you as always for joining ushere on your own show. And,
well, we appreciate the time. Iknow you guys are extremely busy
and and always are justobviously improving the whole
world of payroll.
So we appreciate your input andyour your time on the show.
Awesome, guys. Well, we we'llsee everybody here again.
However, I just wrote down anacronym that I think I'm gonna
(33:50):
use somewhere. Maybe this is it.
Instead of, you know, ASAP foras soon as possible, I think
teaching tax flow and gustostill you know, we it's a good
marriage in a sense because wetry to accomplish the same
thing, and we're keeping it assimple as possible in a complex
situation. So
Will Lopez (34:07):
So like TTFG? Is that, like, teaching tax flow
gusto? Oh. Okay. I like that.
John Tripolsky (34:14):
Here we go. I can tell you're a marketing guy.
See, CPA gone marketer. I likeit. I could I could appreciate
that.
The you know, you we need to getyou a T shirt that just says
that and then let you out. We'lllet you and Chris out in the
wild, but excellent show, youguys. Thank you so much for the
insight as always. We will putthe link directly in the show
(34:34):
notes so you guys have you asthe listeners have no excuse for
not checking out everything thatGusto was about. And by the way,
also, for everybody that'slistening to this, Will's plug
on TTF was completelyunsolicited.
So he was not paid at all. Thatis right. I I that's right.
Will Lopez (34:49):
I it was it was unsolicited.
John Tripolsky (34:52):
So Just the Starbucks gift cards, which I
will mail to you.
Chris Picciurro (34:54):
That's right. I was
Will Lopez (34:55):
gonna say I was I I I appreciate the check that's
coming in the mail, John. Sothank you.
John Tripolsky (34:58):
Well, hey. I know who can process it. They so
on that note, everybody, thankyou again for joining us here on
the Teaching Tax Flow podcast.We will see you back here again,
same time, same place, nextweek, but different topic.
(35:19):
Thanks for hanging out with usas always here on the podcast.
John Chapalski here from the TTFteam still with you, and thank
you for hanging out with ustoday. So although a little bit
longer than usual on thisepisode, obviously, thank you
Will and Chris for joining us onthis topic, and for anybody that
was listening to this, youprobably I don't know. I'm gonna
(35:40):
take a guess. You probablyweren't too excited about
talking payroll because it'sprobably a hassle to you. So one
of the things I really wannahighlight that we touched on
early in this episode andprobably a couple times in the
middle and a little bit towardsthe end too is whether it's
Gusto or whoever you go with fora payroll provider solution,
we'll call it, really look at itas something that's an extension
(36:05):
of your business, an extensionof your culture, just not
something that's sotransactional.
Right? Sure, it's an expectationobviously from any employee that
they're going to get paid, butit's the little things that
count. In this case, exactly.It's a huge thing going above
and beyond making it, you know,just easier. A little bit more
(36:26):
reliable for yourself, but thenalso for your team as you
hopefully are growing.
So as mentioned as always, weare popping in some resources in
the show notes of this as wellas a direct link to check out
Gusto, and, honestly, we lookforward to working with these
guys more. They're, I thinkthey're a great fit, obviously,
for teaching tax flow. We havevery, very similar interests in
(36:48):
mind, obviously, making thingsless complex, a k a easier than
expected. So join us here nextweek. We got another great topic
coming up.
Actually, a whole roster ofgreat topics here. I'm looking
at our schedule as I'm readingthis, probably for the next 3
months. Actually, we got somereally good stuff. So we will
talk to everybody very soon.
Disclaimer (37:11):
The content provided is for educational purposes
only. We encourage you to seekpersonalized investment advice
from your financialprofessional. For all tax and
legal advice, please consultyour CPA or attorney. Investment
advisory services are offeredthrough Cabin Advisors, a
registered investment adviser.Securities are offered through
Cabin Securities, a registeredbroker dealer.
The content of this podcast does not constitute an
(37:32):
offer of securities. Offeringscan only be made through an
offering memorandum, and youshould carefully examine the
risk factors and otherinformation contained in the
memorandum.
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