In today's episode, I am joined by Kelley Brubaker, a CPA advising attorneys and their firms, and the host of the "Your Profitable Law Firm" podcast. Kelly shares how law firm shareholders and owners can better approach tax planning, budgeting, and the transition from W-2 employees to equity partners.

Learn how to manage unpredictable income, set up multiple bank accounts for better financial management, and the importance of early consultation with tax professionals.

At a glance:

• 02:32 - Kelly Brubaker's experience transitioning from Big Four to owning her own firm

• 04:30 - The importance of understanding tax implications when transitioning to an equity partner

• 07:15 - Understanding the financial and tax changes when becoming an equity partner

• 09:14 - Explanation of K-1 forms and tax responsibilities for equity partners

• 10:29 - Importance of early tax planning and quarterly payments to avoid penalties

• 12:37 - High interest rates and penalties for not paying taxes properly

• 13:37 - Advice on consulting tax professionals immediately upon making partner

• 14:45 - Managing unpredictable distributions and setting up bank accounts for different financial purposes

• 16:38 - Planning for capital calls and understanding their tax implications

• 18:15 - Managing unpredictable income and expenses throughout the year as a partner

• 19:56 - Using the Profit First methodology to manage finances and tax obligations

• 22:17 - Setting up bank accounts for specific expenses

• 24:08 - Explanation of basis and its tax implications for partners

• 25:25 - Importance of separating personal and business expenses for tax purposes

• 26:53 - Misconceptions about business deductions and the impact of the 2017 tax code changes

• 28:32 - Tracking business expenses and using technology to manage finances

• 29:46 - Common financial mistakes new partners make and how to avoid them

• 31:10 - The need for continuous involvement and awareness of firm finances

• 32:19 - Understanding state and local tax implications when firms expand to new jurisdictions

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How to reach Kelley Brubaker:

• LinkedIn - https://www.linkedin.com/in/kelleybrubaker/

• YouTube - https://www.youtube.com/@profit.scale.thrive

• Facebook - https://www.facebook.com/profit.scale.thrive

• Tiktok - https://www.tiktok.com/@profit.scale.thrive

• Instagram - https://www.instagram.com/profit.scale.thrive

• X/Twitter - https://x.com/kelleybrubaker

• Podcast – "Your Profitable Law Firm" - https://podcasts.apple.com/us/podcast/your-profitable-law-firm/id1675779501

Interested in doing 1-2-1 coaching with Laura Terrell? Or learning more about her work coaching and consulting? - here are ways to reach out to her:

www.lauraterrell.com

[email protected]

LinkedIn: https://www.linkedin.com/in/lauralterrell/

Instagram: https://www.instagram.com/lauraterrellcoaching/

Show notes: https://www.lauraterrell.com/podcast