389: Insights into Tax Planning and Business Growth- with Eugene Marshall

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The topic of relationships ties closely with marketing. Oftentimes I'm bringing on guests that have a strong marketing background. Today's guest is Eugene Marshall. Eugene is the founder and CEO of Magnolia Tax Services. He's an enrolled agent. Eugene is federally authorized to represent taxpayers before the IRS, and like CPAs and attorneys, have unlimited representation rights.

He Specializes in advanced tax strategies to reduce his client's tax liability through effective tax planning. Eugene has several years of tax experience, including preparing taxes for individuals and small businesses. Eugene is also an avid real estate investor. He owns a real estate investing company that acquires multifamily properties within the inner city of Chicago and has recently expanded to the Milwaukee market.

He believes owning real estate and having a small business is the cornerstone of building wealth. Eugene, welcome to the show.

Magnolia Tax Services is a tax advisory practice that ultimately specializes in tax planning, of course, tax preparation, tax debt resolution for individuals or small businesses that need assistance with solving a tax problem, and accounting and bookkeeping as well. What separates us From the average tax practices, we're actively meeting with our clients periodically throughout the year and the majority of our client book is all small businesses.

I want to say maybe 90 to 95 percent is all small businesses. We do have some individuals that don't own a business, but have the desire to pick up some rental properties. We do bring them on as clients.

And we also assist and consult them on how to analyze deals, source those deals as well as get the capital to fund those deals, and it creates an opportunity for us to also educate our clients on how to be strategic in markets like today, where the interest rates are are high well, higher than they have been.

Fortunately, we're starting to see things climb down a bit, but we do introduce other topics such as seller financing, subject to contract with the seller, wrap around mortgages, all these other creative ways to acquire properties that could ultimately benefit our clients tax position. So it separates us apart in short, is that we are actively looking at our clients financial position, and coming up with strategies to ultimately assist them with minimizing their tax bill.

And this gives us the opportunities for that business owner to reinvest those savings either back into the business, back into themselves or personal professional development and or into their future.

So there are some other last minute things that we can do, but for the most part, we're limited. And this is where tax planning, tax advisory really shows itself because this gives us the opportunity to meet with a client every quarter at minimum. And so if we're meeting with a client in Q1, Q2 Q3 Q4 and they're telling us giving us updates on how much revenue was coming into the business, how the business is performing. And of course, if we have access to their books, we should be able to see everything there anyways. But what this does is it gives us the ability to be able to say, Hey, Eugene, based on the amount of a net profit you have right now, your estimated tax bill is 30, 000 or X amount, whatever that dollar figure is. And it gives us the ability and the opportunity to put a plan in place that allows us to minimize their tax bill. So we consider tax planning proactive and tax preparation more so reactive.

And your taxes is another expense that we don't necessarily sometimes plan for. And so if we understand that what kills small businesses the most is the amount of expenditures that they're exposed to and also the lack of capital to keep the business operations going, then it's important that we do allocate a percentage of the income that the business is generating into saving money as well.

And then we have tax attorneys. And then we have certified public accounts. And then after certified public accounts, we have folks like myself, which are enrolled agents. And so the primary difference between an enrolled agent and a certified public accountant is our specialty is tax. And we get our designation directly from the department of treasury, which houses the Internal Revenue Service. Certified public accountants that get their designation, their license from state boards.

And we actually partner with a ton of certified public accountants because they don't have an interest in tax. And some of them don't know tax. And many of them, their focus is on the accounting portion. And a lot of folks stay co associate accounting with taxes when accounting is nothing more, nothing less, but understanding and being able to read and produce financial statements.

P and L's, balance sheets, cashflow projections, not more so taxes. Now there are a ton of CPAs, of course, that do get a master in tax or do get a focus in tax, but for us, that's our specialty. We're solely designated here to niche down in the tax space.

Alright, so I'm going to switch to some more fun conversation topics now. If you could go back to your 20 year old self, Eugene, what would you tell yourself to do more of, less of, or differently with regards to your professional career?

Do I got to ask them to be my mentor? Some people by default just become mentors naturally. And I look at mentors as my own personal board of directors that, I can go to for counsel, whether it's personal, whether it's business, but these are the people that I've selected to help coach me, advise me in certain aspects of my life, because they either have the experience in this space, or they know somebody that does, and I trust their judgment.

And of course, I've done my due diligence. And so when you're in your early twenties and I'll speak for myself. I was a know-it-all right. I was a know-it-all knew everything. There wasn't much you can tell me and I listened to maybe 50% mm-Hmm. of the advice, 50% of the information and the other 50% I did it my own way. And me doing things my own way, costing me a lot of time.

If there's a proven system that works, duplicate that system. You may need to twist it up a little bit and put your own spin on it, but there's no need to reinvent the entire world. And I did that a lot in the very beginning. And if I can go back in time, I get a mentor and I listen to that mentor more.

Are there any philosophies on your end that you've adapted and ran with and has actually had an impact on your success? As an example I've always said that I can have more than I got because I can become more than the person that I am right now.

The second one on the business side was money follows attention, and that's one concept I really took personal as a way to generate more leads for the business, grow my practice. So I'm just curious to know if there's any concepts or philosophies on your side that you've adapted over the years.

So whether it's a simple thing Today that's going to have an impact tomorrow or a big thing today that's going to have an impact a year down the road, I've tried to be really intentional about my actions and how they're going to have an impact on my future self, basically.

The simple example right now, you know, Frickin 20 degrees outside, but if you got to put gas in your car, you know, and it's at night, you're already driving around. You're like, Oh, I'll just do it tomorrow morning. You know, you're going to hate yourself for waiting to do it in the morning. So just do it when the car's already warm and just like that little tiny thing can have such a big impact for how you start the day the next day. So, yeah.

That's some of the best way for you to get a deduction, lower your taxable income, but at the same time fund your future as well. My favorite tax write off is education. And I was talking to a client recently and she was saying, Hey, I've been making the same amount of money every year for the last three years, and I can't really understand why. We've launched new products. We got a good client experience. I really don't know why I'm stuck. And I said, Well, when was the last time you went to a conference? When was the last time you invested in a book? When the last time you perhaps invested in a coach? And it's been three years. And sometimes we fail to realize that the size of our practices, the size of our businesses, what's in our bank account is nothing more, nothing less, but a reflection of the value that we have, or that we bring to the marketplace.

So it's important that we find opportunities, we find ways to, you know, do something now that your future self will thank you for and get a deduction in the process.

Don't get comfortable doing what works. Sometimes it's best to try new things while you're still doing what works so that you can ultimately reach new levels. And so that would be the best piece of advice that I can give anyone is to get out there and try.

Give it all that you can. There's so many people that I've talked to over the years. They have all these ideas and they're great ideas, but they don't take the first step and actually do something. And one of my mentors told me, she said that the wealthiest place in the world is the graveyard because we take our billion dollar, million dollar ideas with us because we never had the courage to be able to act on it.

And for you that's listening out there, if you have an idea, if you have something that you passionate about, go for it. Don't be afraid of failing. Don't be afraid of people asking, Hey, what happened to that small business? That idea that you were talking about?

It's okay. Because there's a lot of people out there that didn't have the courage to do anything to begin with, but you did. Whether it was success or failure, you did. And even if you did fail, you still came out winning because you learned something in the process that you can apply to your next venture.

So that would be what I'd end with.

I want you to go out there and get noticed.