The art of financial planning and what is the state of business air travel with aviation expert Mike Hatten.

Episode Transcript

Intro:

Welcome to the Practical Tax podcast, with tax attorney Steve Moskowitz. The Practical Tax podcast is brought to you by Moskowitz, LLP, a tax law firm.

Disclaimer:

The information contained in this podcast is based upon information available as of date of recording and will not be updated for changes in law regulation. Any information is not to be considered tax advice or legal advice and does not form an attorney/client relationship. Further, this podcast may be construed as attorney advertising. You should see professional consultation for your individual tax and legal situation.

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Chip Franklin:

Welcome to Practical Tax, I'm Chip Franklin. This is tax attorney, Steve Moskowitz. Steve, it's interesting when we talk about taxes and finance, is Siri in the United States, is it the same in every state? Are there geographical differences?

Steve Moskowitz:

Oh sure, because a majority of states have their own tax system and different states treat the tax a little differently. So when you're giving tax advice, it's not just Federal IRS, you have to consider the state or the states that you're involved with.

Chip Franklin:

I mean, I know Texas and Florida, they don't have income tax and that's a big decision in a lot of people's moment deciding where to move. And we have a lot of people from California going to Texas, right?

Steve Moskowitz:

Oh, there's a tremendous drain of people out of California now, Chip. And there's a number of states that don't have a state income tax. Of course, the one that we joke about a little bit is Alaska. Alaska has a negative state income tax. They actually pay you to live there. But the joke is, do you want to live in a place where they pay you to live there?

Chip Franklin:

All right. Our next guest is a certified public accountant, a certified fraud examiner, business advisory and virtual CFO solutions. Then I hope I get her last name right, Lydia Desnoyres. Did I get that right, Lydia?

Lydia Desnoyres:

Phenomenal. Spot on, Chip.

Chip Franklin:

Thank you so much for being here.

Lydia Desnoyres:

Thank you.

Chip Franklin:

That's Steve Moskowitz, right above your head.

Steve Moskowitz:

Hi, Lydia.

Lydia Desnoyres:

Hi, Steve.

Steve Moskowitz:

Boy, we probably have a lot to talk about. Before I was a tax attorney, I was a CPA.

Lydia Desnoyres:

Did you go to the dark side or you think you left the dark side?

Steve Moskowitz:

Well, I didn't want have to work as hard as you do, so I became an attorney instead.

Chip Franklin:

All right, so both of you deal with tax strategy. So let's start with this question for both of you. When meeting with a client for the first time, what's your first question? And let me start with you, Lydia.

Lydia Desnoyres:

It depends on when they're calling. If they're calling on April 14th my first question is, have you lost your mind? Just kidding. The first question is, what's your story? What has happened in the past? Do you typically owe? Just to get a feel for how things have been in the past. Once I get to doing the work and then I direct my questions on more planning and strategy for the future. But usually it's a, what's your scenario? What's going on?/p>

Chip Franklin:

Steve?

Steve Moskowitz:

Well, we're very into planning. So what I like to do if somebody calls me on April 14th, I will explain to them an extension is extension of time to file, not an extension of time to pay. And then what I try to explain to the clients is that your tax return should merely be a summarization of a year's worth of tax planning. Because I look at the Fortune 500. And that's why I became a tax attorney because when I went to law school, I already had a bachelor's and master's degree. I was already a practicing CPA doing taxes, but I didn't want to be the person to tell a client, well you can't do this and you can't do that./p>

I looked at the Fortune 500 and I said, how do those giant companies make all that profit and legally not pay taxes? That's what I want to learn how to do and I want to do it for companies a lot smaller than the Fortune 500. So that's why I went to law school. And the bottom line is there is so much here because as we all know, the tax system is a system of incentives to get us to do things that they can't order us to do. That's where tax planning really comes from. So the bottom line was, I'm very, very into that with clients.

And even if somebody calls me on April 14th and we file the extension, even then there's some things we can do. For example, with a lot of the retirement plans, there's over 20 different types, with a lot of them you can set them up, up to the time of filing the return, including extension, which means that most of the time you have to write the check by December 31st year one, to have the deduction in year one. With a lot of the pension plans, you can write the check in year two, set up in year two, and still deduct it in year one.

But there's so much that can be done. So basically what I would say is, I talk to the client, listen to them and also what are their goals? Some people are live life now, other people are retirement, other people, their kids. So even if I was representing twins, they might be identical financially but have very, very different wants and needs. How about you Lydia? How do you do it?

Lydia Desnoyres:

That's spot on in terms of the planning and stuff. Everybody's different, right. I actually had that example where you have two people. One person who referred a coworker, and same role, same salary, same everything. Two different goals, two different outcomes, right. And so it's definitely important to understand what their goals are. There are some people who like big refunds, right, so they're okay with overpaying during the year because to them that's important.

Steve Moskowitz:

Ask them if they'd be willing to make you an interest free loan during the year, you're giving my-

Lydia Desnoyres:

Exactly. Exactly that. You try and have that conversation, again, you have to know your audience, you have to know your clients, right. So I try and tell them, hey look, you're literally just letting the government hold your money interest free. Why not take that, put it into a savings. There's so many other things you can do during the year. But again, some people are just like, well, you know what, I use that as a savings. When I get the refund I pay my property taxes with it. I'm not disciplined enough or whatever the case may be.

Steve Moskowitz:

Disciplined. That's the thing, is because if they took the money they'd spend it. That's it.

Lydia Desnoyres:

Right, exactly. So you got to know your audience. And so then obviously that will lend us itself to a completely different conversation because maybe they need financial planning and financial coaching. But when we're talking about the tax strategy, it's understanding your audience and like you said, having that conversation, that dialogue, understanding their comfort zone, meeting them where they are, right. And then you eventually build that trust, right, and then you can guide them and hopefully they listen and take your advice.

Steve Moskowitz:

Another big thing was are they married or are they planning on changing their marital status.

Lydia Desnoyres:

Exactly.

Chip Franklin:

I'm going to compliment you guys on something and it reminded me of this conversation when I was in college. I had a girlfriend who was majoring in accounting, and I was a math major, but it just was something I could do. I didn't love it. She loved it, but it wasn't the numbers. And it bothered her when people said, you're a numbers person. She goes, I'm a people person. And both of you guys are, both of guys represent yourselves real well. Lydia, I don't know you as well as I know Steve, but Steve has represented himself well over the years and it's helped him because people, they're going to come. I mean, it's like a confessional, right?

Steve Moskowitz:

Oh, absolutely.

Lydia Desnoyres:

Oh, right.

Chip Franklin:

And so people have to trust you. They got to trust, not just your acumen, but you, the essence of you. And I think people forget that about this business, right?

Lydia Desnoyres:

I joke around when I was first in the trenches of tax season, and then I don't do a lot of tax work anymore by the way. But I would joke around when I'm done and collecting my fee, I'm like, all right, only a portion of this was for tax preparation, the rest was for a therapy session, right.

Steve Moskowitz:

Well that's why our license is attorney and counselor at law.

Lydia Desnoyres:

There you go. You see, I don't have that. But sometimes you play therapy. But you develop these relationships. I was reflecting the other day, a client who just told me the other day, she's traveling because her son is getting the white coat ceremony, he's becoming a doctor or just graduated, right. And my response was like, oh my God, were we just taking the driver's education credit for him? And I've never met this kid but that's how you develop these relationships with the whole family.

And it's like, oh my God, we went from getting the credit from him getting his learners permit to the college credits for going to school and then now he's no longer there, now he's graduating and it's like the tax returns tells a story. And so building that relationship and being a people person, that's really part of it. And I caught a little bit of your last talk with your last guest about communication and stuff and simplifying things, right.

Steve Moskowitz:

It's so vitally important.

Lydia Desnoyres:

Right. Right. I've had clients who are like,