In this podcast episode, Josiah Novak talks with with Ron Caruthers, a tax coach, on how to manage taxes and create wealth for his business. They discuss the basics of tax management and how to take advantage of tax laws to increase revenue. They cover topics such as understanding tax rates, different business structures, keeping accurate records, and taking advantage of legitimate business expenses. They also emphasize the importance of being audit-ready and shifting the mindset from taxes to wealth creation. Overall, the episode provides valuable insights for new business owners on tax management and wealth creation. TIME STAMPS: Resistance to Taxes [00:00:06] Josiah and Ron discuss the resistance that comes with taxes and how to reframe it as wealth creation. Importance of Tax Management [00:02:15] Ron emphasizes the importance of tax management for business owners, especially as the business matures, and how it can bring money back into the business. Foundational Tax Planning [00:04:28] Josiah and Ron discuss the basics of tax planning and where to start with creating a wealth creation plan that includes tax management. Understanding the Tax Code [00:05:33] Josiah and Ron discuss the complexity of the tax code and how to stay updated on changes. Marginal vs Effective Tax Rates [00:07:46] Ron explains the difference between marginal and effective tax rates and how they affect tax planning. Taxation of the Rich [00:08:45] Ron debunks the myth that the rich don't pay their fair share of taxes and explains the revenue they generate for the country. Understanding Tax Brackets [00:10:19] Ron and Josiah discuss the basics of tax management, including understanding marginal and effective tax rates and the impact of living in high tax states. Compliance vs Tax Planning [00:12:51] Ron explains the difference between compliance and tax planning, emphasizing the importance of forward-looking strategies to legally lower taxes, especially for business owners. CPAs and Tax Planning [00:14:47] Ron warns against assuming that CPAs have covered all tax planning strategies and encourages proactive meetings to save money, or self-research for those who enjoy it. Entity Structure [00:16:32] Ron explains the importance of testing business ideas as a sole proprietorship before incorporating and recommends LLCs taxed as S corporations for profitable businesses. S Corporation [00:20:02] Ron discusses the benefits of S corporations and management companies for businesses making consistent sales of 500k to 1 million. Taxes and Profitability [00:21:47} Ron advises a pool contractor on how to reduce taxes by incorporating as an S corporation and explains the importance of seeking advice on tax management. LLC as Vanilla Ice Cream [00:22:51] Ron compares LLC to vanilla ice cream and explains how it can be taxed as a disregarded entity. IRS Refund Delay [00:25:27] Ron and Josiah Novak discuss the delay in IRS refunds and the need for more agents to answer phones. Fear of Audit [00:26:41] Ron addresses the fear of audits and how it affects business owners' tax planning decisions. Auditing and Reasonable IRS Agents [00:27:20] Discussion on the audit rate and how the IRS is reasonable and can be reasoned with. Dealing with the IRS [00:28:36] The importance of being nice to the IRS and how it can help resolve tax issues. Paper Audits and Revenue Officers [00:31:24] Explanation of paper audits and how the IRS can conduct audits without kicking down doors with guns drawn. Keeping Good Records [00:32:31] Ron explains the importance of keeping good records for...