Taxes 101 for Dentists: Stop Chasing Deductions, Start Building Wealth – Episode #679

On the second episode of a 5-part tax series of the Dentist Money Show, Tom Whalen, CPA  joins Matt to unpack some of the most common misunderstandings in the world of tax planning for dentists. They explore the trade-offs that come with chasing deductions, the critical role of liquidity, and why long-term wealth building should take priority over short-term tax savings. They also highlight common mistakes dentists make—like ignoring cash flows or overemphasizing tax breaks—and why ongoing communication with your financial advisor is key. If you missed the first episode of this tax series, check it out here!

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Podcast Transcript

Matt Mulcock: Welcome to the Dentist Money Show, where we help dentist make smart financial decisions. I am a guy named Matt and I’m here with an tax expert. Tom Whalen. How are you, Tom?

Tom Whalen: I’m Tom. I’m doing good how are you doing?

Matt Mulcock: I’m doing great. So good to have you. so this is, we’ll just start this from the beginning. This is, episode two of our tax series. we were not lying, Ryan and I, we were not lying when we said we pretty much are good for the basics, for the pre basics, and then we gotta bring in someone who actually know what they’re talking about with taxes. And so that is why you’re here. No pressure Tom, but that’s why you’re here to help us take this to the next level.

Tom Whalen: Well, you guys nailed episode one, so, good building block. So, so I’m ready to go for number two.

Matt Mulcock: Perfect. And we, we’ll, we’ll say this too ’cause we were just talking about this before you, before we jumped on that, there’s a little bit of selfishness here of why you’re here because you wanted to just make sure and solidify my reference to nineties pop culture.

Tom Whalen: For sure. Yeah. So in the first episode, if you haven’t listened to it, I highly suggest you do. It’s a great, a great intro episode. But, uh, they’re talking about a show scene with write-offs and they, they got Schitt’s Creek. Correct. So I was good with that. And then I’m sitting there in my car listening. And I’m like, I know it’s Seinfeld. I know it’s Kramer. Talking to Jerry, I know exactly what’s going on. And they’re like, I think it’s from the office. And I was just fuming in my car. And then eventually, eventually, Matt, yeah, eventually Matt landed on, landed on, on Seinfeld. So I was, I was super happy on my drive home.

Matt Mulcock: It’s actually funny because we’ve done, we’ve done a presentation before on cash flow, and we use like video clips for each section of the cash flow statement, right? So, you know, we did one for, for savings and for burn rate, or for, you know, for, for spending for taxes and debt. And I was confusing the office because I, we, I did that presentation and I use the Seinfeld and I use an office one, but the office was for spending where

Tom Whalen: Are talking about the surplus, right.

Matt Mulcock: Exactly, yeah. So I was confusing the

Tom Whalen: I, I do work, I don’t just watch TV all day, so I do actually work a little bit.

Matt Mulcock: He is an actual expert here to talk about taxes. So, uh, no, we’re super excited to have you, Tom, and, to talk about, as we go through this part two. So again, if you’ve listened to part one, we kind of laid the foundation, talked about the basics around some misunderstanding and the importance of understanding some basics around taxes. And then we wanted to bring you on to talk and, and I think this will probably be you a, a part of this for. The next for the rest of the series ’cause it’s only gonna get deeper. It. But we wanted to take this and talk about, again, taking this a little bit further around where people make mistakes, where they get trapped in the name of tax savings, specifically around like, you know, taking deductions. But what, what kind of, what the trade off is there? and going into those details, but I think before we do that, I think it’d probably be, be good to set the stage around why you’re here and kind of an, I think it’s exciting to talk about this. we talked about this when we had Christine Uhen on a few, uh, like probably a month or so ago now.

For those of you that that know, Christine Uhen is now on our team as our practice strategist. and the reason why Tom is here is because now at Dentist Advisors, we. Uh, again, commitment. Adding to this commitment to protecting and empowering private practice ownership. Part of that is offering tax and accounting services through Tom and his team. So, Tom, I want to just talk about that for a second, or just get your, get your response to that.

Tom Whalen: Yeah, so we’re, you know, we’ve partnered up, um, we’re gonna try to help continue to grow this thing and, and we’ve aligned very well over the last however many years. But, you know, you, you said it just a second ago, helping, you know, private practice dentists preserve their ownership. That’s one of our taglines as well. So we think it, it is a really good partnership here and we’re excited to see where we can take it.

Matt Mulcock: Yeah. Yeah, we, you just said it too. We’re so aligned. We’ve, this has been kind of years in the making of us figuring this out, and so if you have any questions on that, I guess before we jump into this, let us know we’re, we’re happy to, you know, we’re just excited that we have these experts on our team, Tom and Marshall and his, and his team. Uh, so now we can offer tax and accounting services at dentists Advisors,

Tom Whalen: Yeah, like reach, reach out to Matt. Reach out to me, Marshall, whomever. Ryan, whoever your advisor is. We’re happy to take a look at things, answer any questions. Um. Do kind of a, a no cost review of all your stuff. Um, not to be too sales pitchy, but we’re here to help. So

Matt Mulcock: There’s only a few left. We only have five left. Yeah. Call now. Call

Tom Whalen: Yeah.

Matt Mulcock: Um, yeah, no, we just wanted to hit that ’cause I think, and we’ll talk more about this as we go, but let’s, let’s jump in. So, Tom, I don’t even know why we’re actually talking about this, because I feel like if you look at TikTok, you kind of have everything you need to know. If I look, if I watch TikTok or any

Tom Whalen: Do you

Matt Mulcock: Are on taxes, I don’t, I’m, I’m kind of, you’re outing me. I had this killer intro planned and I knew you were gonna out me. I’ve seen tiktoks ’cause people send me them, but I’m not on TikTok. but let’s just say social media. If you look at social media, which I’m not on that either, so I’m bating myself across the board but social media type tax advice, it’s basically like, let’s buy a gwa. Let’s get into short term, short term rental empire. let’s run everything through an LLC. I’ve seen some pretty ridiculous things either through like YouTube videos or social media. so I think we’re gonna talk about today why a lot of those, the risk of those things, the trade off of those things.

Tom Whalen: Yeah, we hear, I mean, you, you just named a few, a big, big, big misconception we hear is like, oh, it’s, it’s been run through my LLC, I ran this through my LLC. It was a business expense. It’s like, well, not just because you paid it with a business card or out of the business practice, checking through an LLC doesn’t make it a business expense.

We get a lot of that, but like you said, the GWA and the vrbo, the short term rentals, whatever you wanna call ’em, there’s so many things out there that are just, I don’t think people are being malicious when they kind of tout these things to try to destroy somebody’s practice, if you will. but I mean, it can really damage cashflow, liquidity and all this stuff in the name of tax savings. And sometimes it’s just not, I don’t know. You’re, you’re, you’re sticking your neck out there and, and maybe it’s not worth it.

Matt Mulcock: Yeah. I love that you just said that, Tom. we understand we have, we truly do have empathy. You and I, your team. Our team, we worked with dentists for years and years. First of all, we understand the importance of this and we understand the desire to reduce taxes that have all as much as possible, like. If that makes sense.

Tom Whalen: For sure

Matt Mulcock: You, you should want to do that. You make a ton of money as a dentist and taxes suck. Like it sucks paying taxes. So we are,

Tom Whalen: Get, I always, like we say, like we don’t even, we don’t get, I mean, you get, you make a lot of money, you have a good life. That’s great. But like, can I get like a fast pass at the DMV or something for paying extra tax? Maybe something it’s like a little

Matt Mulcock: I know. Just something. I know. It’s so true. So I, I think that’s a good place to, to, or to, to emphasize is like, we understand, we understand why you’re. The more money you make, the more you’re looking for these advanced or these, these strategies, and you want, you want to believe, you want to believe the lie that there’s a free lunch, that there’s something out there that it’s gonna lower my taxes with no trade off.

Tom Whalen: Right. There’s always a trade off, right? Like maybe there is a good tax savings move out there, but there is a trade off there always, always is. So I think understanding what those offs are is really, really helpful.

Matt Mulcock: I think so. It’s funny, I think about this stuff all the time ’cause I’m a nerd and maybe a level of obsession with work that’s, that’s not good. But I’ve been thinking about this exact thing, what you, this whole concept of trade-offs specifically around taxes, because I think it sounds obvious, but I don’t think people often think of it like this. So if you take nothing else away from this episode, I think it’s this the, this core principle of. There is no, like, I think people want to think there’s like a solution. There’s like this, this binary like, oh, if I just do this, then all my problems are solved when it comes to taxes. But the key here is, is exactly that.

This first principle of, no, no, no, you’re giving something up. You’re giving something up for that tax savings. Like there are strategies you’re giving up, but there is always something you’re giving up. And I don’t think people think about that enough.

Tom Whalen: Yeah, and I think we hear it a lot where somebody just asks, how can I save money on taxes? They, it’s super, super general, super vague, and I always give a really general vague response. Spend money, right? Just spend a bunch of money. Don’t keep your money. Right. Do you want to. If you don’t keep your money, if you spend it, that’s how you save taxes. Right? You need,

Matt Mulcock: You’re like, you’re like, I’ll triple my bill. You can pay me

Tom Whalen: I would love to. So, but I think what people are really asking is how can I keep all of my money and pay no taxes? And that’s, that’s a flawed question to begin with. Um, but you know, we gotta, there are things we can do to, and I do think people tend to look at things like too much in a vacuum. Not, not like an overall multi-year, total family wealth building type of situation. Just like how can I save on this tax return this year? And I think that’s like we’re, we try to get people away from that line of thinking. ’cause we do wanna think big picture, long term. Again, total family, maybe not just. Mom and dad’s brokerage account, but maybe there’s some stuff we can do with the kids. We’ve got four kids or whatever. Like there’s some stuff we can do with kids on payroll and Roth IRAs and things for them where maybe it doesn’t show up on your personal financial statement, but overall from a family perspective, it might be helpful.

Matt Mulcock: Family and also lifetime. Those are the two things you just

Tom Whalen: Yeah, just big picture, right.

Matt Mulcock: Big picture, your overall family effective tax rate and your lifetime effective tax rate. That’s where, we’ll get into this kind of later on, but like, you know, Roth conversion strategies as well, like down the road, like there’s, there’s a lot of things we can look at, but it change, it, it requires you to change your mindset outside of the, let’s just say it, the typical CPA, and you can speak to this tom of like the pressure CPAs feel. To like live year to year and just be like, oh crap, don’t hate me. Like, how do I lower your bill?

Tom Whalen: Right. And there’s a lot of times where, and it kind of depends on what your relationship is with your CPA, for a lot of our clients, if, I don’t wanna say all of ’em, but the vast majority of our clients we’re, we’re working with them, you know, day-to-day, week to week, month to month. So we’re, we’re doing planning and strategizing throughout the year. But if your relationship with your CPA is such that, hey, it’s February, my books are cleaned up, here you go, do my tax return. That’s a different. That’s a totally different relationship and they’re only thinking about just this one S-corp and this one personal return. Let’s make the client happy and they might make decisions with depreciation or whatever that yeah, are gonna make you happy this year.

But then in five years when you’re still paying off your debt and you have no more tax deductions, you’re like, what can I do about it? So I think, again, the, I don’t wanna say. Typical CPA, but maybe typical CPA relationship when it’s just a tax return. It’s really hard to think big picture and beyond just the scope of that, that one tax season. So, I think getting involved in doing, whether it’s quarterly projections or monthly financial statement review, I think it’s really helpful to kind of set the stage for the long-term planning.

Matt Mulcock: Yeah. Well, and, and we’re speaking into what we said at the beginning of thi this is a huge genesis of our partnership, right? We, we want to bring all these pieces together so people, so, so you have the advantage of looking at things from that zoomed out kind of big picture approach. so let’s, let’s, we’ve already mentioned. A few different things here, but I kind of want to give some more specifics of, okay. So if we’re setting the stage and saying there’s always a trade off, there’s, there’s, we can’t look at this in a vacuum if we’re trying to really build our overall wealth and look at things as like an overall effective tax rate for family and lifetime.

So I want to for a second, just kinda give some specific risks here of having this narrowed in mindset. So we’ve already alluded to a couple. So for example, um, over prioritizing tax savings in this year, that ends up like killing liquidity.

Tom Whalen: Liquidity. Yeah. I mean, we see it all the time where people are like, I need to buy equipment. Well, do you

Matt Mulcock: Gotta buy something right

Tom Whalen: Gotta buy something, right? Yeah. Um, gonna spend a hundred grand on this new equipment or one 50 and getting the new Eric, it’s gonna be 160 grand. Um, stroke a check for it. We can deduct it. Sales rep told me I could. It’s like, okay, but if that’s all your liquidity in your business now, maybe. The next month we have some other decisions we could make that we need cash for, right? And we gotta think about it from a different angle or a different lens, because we don’t have the cash to to do that.

So I think having a really, really strong cash liquidity position in your practice, how you just think differently, right? I mean, if you got a dollar in your checking account versus 200,000. You’re, you’re looking big picture, you’re thinking about not just how to get through today, but how we can best manage things long term. So you’re, you’re totally looking at your practice differently if you’re super liquid. So just for that alone, I’m like, man, let’s, let’s think of it just strictly economics first and then look at it from the tax lens.

Matt Mulcock: Yeah, I love that. And the, the other piece of this is you were mentioning liquidity. The other thing that you might be unknowingly, uh, giving up or killing is your cashflow, for in the name of tax savings or hurting profits, hurting the ability to save for your future self or for your family. All in the name of tax savings.

Tom Whalen: Yeah, for sure. I mean that’s, I just, I don’t know. I think people are. When I say people, I, I’m like, I’m thinking about specific people in my head, but I’m being very, you know, general and

Matt Mulcock: Them Tom, give us.

Tom Whalen: But it is just like, it’s really common where it’s, Hey, my, my friend, um, they make about the same amount of money as I do, or their practice collects 1,000,005 and my practice collects 1,000,005 and, and they didn’t pay any tax. It’s like, well, is that true? First and foremost, we don’t know. what is their overhead? We don’t know. And when they say they paid no taxes, does that mean they didn’t have a balance due on their tax return? Right, because sometimes people think, oh, I got a refund. That means I didn’t pay tax. It’s like, well, that’s not true either, right? yeah, and I don’t know, just. I keep harping on it, and I think you guys do too.

It’s just like long-term, long-term wealth building moves. I get it. We wanna save taxes right now, but if we can kick that can down the road sometimes that’s the right move is to spread this deduction out over five years or to push it off a year or two or um, or something that doesn’t result in an immediate influx of tax savings today. But over a five year horizon, that might be way, way, way better. Tens of thousands of dollars better off.

Matt Mulcock: Yeah, but you gotta, again, you gotta look at that, that longer term timeframe. Another one.

Tom Whalen: Sorry. Um, like I think when you’re really early in your practice career or if you just bought a practice this year, or, you know, 12, 18 months ago, I. A lot of times we see, you know, it’s a younger doc, they’ve got a big buy-in loan, they still have student loans, they’ve got a couple few kids or whatever, versus the person they bought it from might be 63 years old, was taking seven weeks of vacation, no debt to their name. Like they’re living a different life. Right? Well, I’m gonna be in here working 51 weeks a year instead of 45, and I’ve gotta bust it because I’ve got all this debt to pay. I’m probably gonna make quite a bit more than that selling dentist did. But maybe in the first year, I’m kind of building up. Second year, I’m still building up.

By year three, four, maybe we’ve doubled the practice revenue. So if you’re thinking, Hey, I bought the practice this year, I wanna deduct everything. Well, maybe that’s a okay for this year, but it’d be really, really good if we could push those deductions off a few years so that over the course of this deduction lifecycle, if you will. Again, that might be 10, 20, $30,000 difference of taxes if we can just push it off a little bit, right?

Matt Mulcock: Well, and ask a few more questions. Right. What you’re highlighting. This is, we’ve seen the, that exact example so many times from outside CPAs where the, the person hires us, same exact scenario. And we’re like, wait, why did you elect S corp? Why are you

Tom Whalen: Yeah. Yeah.

Matt Mulcock: And, we’ll, we’ll get into these, some of these mistakes, but it’s, it’s, it’s asking a few more questions like what you just said. Like, Hey, what are your plans for this business? For this practice? Oh man, I’m gonna, I’m gonna add another location on the next two years.

Tom Whalen: Or I do all this specialty work that they didn’t do and now I’m gonna be able to bump revenues by 400,000. Like there’s a lot of built in upside in a lot of these practices.

Matt Mulcock: Yeah, I’m going, I’m going fee for service. I’m gonna drop all these PPOs, my profit, like there’s a, there’s so many different scenarios that we’d wanna look at and say. Great. Well, what, how is that gonna impact your tax strategy and plan for the next five years, not just the year you just bought it. So, and I think sometimes CPAs are salivating, like, oh, this is the year. They’re not gonna hate me. As opposed to actually putting in the work to say, okay, we gotta strategize that. That’s why again, there’s just such a difference. You highlighted earlier, such a difference between. Just file my taxes last second versus let’s actually have a strategic plan here. Um, another one, Tom, that I wanted to highlight that maybe you’ve seen is the kind of, what’s at risk here is, getting locked into something that’s hard, if not like that you can undo that you’re locked in for a long time, for years.

Tom Whalen: Yeah, like I get, I, I don’t know why this year, and maybe, I don’t know if you’ve been hearing this at all, but I swear in the last six months I’ve had more clients ask about short-term rentals.

Matt Mulcock: Yes. It’s like going around on Instagram or

Tom Whalen: Mean, like a lot of people ask me about it and. I always ask, is it gonna make money? I don’t know,

Matt Mulcock: Yeah.

Tom Whalen: Like,

Matt Mulcock: Wait, you ask, wait, wait. You asked them

Tom Whalen: Them, Hey, are we gonna make money? Well, you know, I’m hoping that the, um, I’m hoping that I can do a cost s and get all these tax savings and that it should offset my down payment. Like, well, like just, again, I like to look back and say, just strictly economics, economically, will this be a good financial, a good investment? Just forget about taxes for a second. Right? And a lot of times it’s not the greatest. Over. Yeah. Right. and then, oh, by the way, you gotta stick 150 to 200 grand or whatever, right? I mean, these short term rentals are probably needing 20 to 25% down. maybe more in some cases, but like, it’s a big chunk of money. And again, if you’re you younger and you don’t have 2 million bucks of just cash ready to go or, or brokerage account ready to go, and, and you’re gonna take. 200,000 bucks. Like, boy, that just makes a real dent in your, your nest egg. And I’m guessing you get a little more stressed out when you don’t have a big nest egg. You’d probably be able to talk to that more than I can, but like just the human psyche, right? Like when we’re not as liquid, we’re just on edge a little bit more. Um.

Matt Mulcock: Hundred percent.

Tom Whalen: And then, yeah, how are we, you know, how are we gonna be able to get out of that? And if we do, then maybe that $200,000 down payment gets back to us in the form of 130 grand cash at closing. Something like that. I don’t know. Um. But yeah. Is there, is there a world where maybe we can do a cost se, and maybe this does provide a good, like, shot in the arm of tax savings maybe, but if we’re losing 15 grand a year on it, I’m like, I’m just not interested. And, but again, like all I tend to hear about is the, the tax savings on the, on the initial year purchase.

It’s like, boy, if we can get out of it. I mean, I don’t, I don’t know. I’m not a real estate guy, so. Like, I don’t know how much this is gonna appreciate, if at all, and what does the cash flow look like? What does the rent history look like? All that stuff. But too often it’s just, Hey, here’s my deduction this year. We’ll figure out the rest as we go.

Matt Mulcock: Yeah.

Tom Whalen: Man, if somebody could just give you quarter million bucks instead of a down payment and keep that locked up for 20 years, I mean, run the math. You know how that’s gonna look. It’s.

Matt Mulcock: Yep. Yeah. Yeah. And to your point on the short term rental, just specifically, I mean, we’re talking about a vanilla ice level one, one hit wonder. It’s like you, you get, you know, you get a, a one year shot in the arm, awesome. But now you’re stuck with a short term rental that you don’t even know if it’s cash flowing. And you gotta go do it again if you want to do, you gotta do it again and you

Tom Whalen: Needs a new driveway. It needs a new furnace. It needs like, it’s like, man, now we’re losing 10 grand a year when there’s no repairs to be had. So, um, but hey, those are tax deductions, right?

Matt Mulcock: Yeah, Hey, we’re getting deductions, but this is exactly what we’re talking about is like there, what, what’s the other side of this coin? And trying to get, and it, and Tom, you and I know you know this better than us, but it is not fun. It is not fun sitting across from a client proverbially, you know, over to Zoom or, or even in person. It’s not fun to sit there and burst their tax savings bubble and be like, Ooh, what do we, what about this? It’s not fun.

Tom Whalen: Yeah. It’s not fun at all. And I, I would say to that, like, it’s weird for me as a, as a as unquote tax guy. To, I’m not, I’m not here to like poo poo tax savings. Like we, we wanna have a really well-crafted plan, like, no doubt about it. But I think too often we’re not, we, people in general are kind of like bumping taxes up to the top of the priority list when really it should be kind like third, second maybe. Um, it’s like have a good clean practice with aton of liquidity. That’s priority number one.

Matt Mulcock: Yeah, it’s super profitable.

Tom Whalen: Exactly. Second priority is probably have a good clean practice with a lot of liquidity. And then, and then maybe again, good clean practice. A lot of liquidity may, now we can maybe talk about taxes, but if we’re not at that point, it’s like a lot of times people think they can, um, like, I don’t wanna say outsmart the system, but save their way. Like save taxes to make them, you know, cover up, uh, maybe less than stellar practice. Um, and a lot of times like, well, it’s not a tax problem that you have, it’s a, we need to kind of tweak some things on the practice financials and, and the operations to, like, you, you want to be at a point where you have to have these, this is an issue, right? Because if, if we, our tax professor would always say, I hate paying taxes, but I love paying taxes. That means I’m doing really well,

Matt Mulcock: Yeah.

Tom Whalen: So if you’re like, oh, I’m not really paying any tax, it’s like, boy, what? Why not? Right? Like, so

Matt Mulcock: Yeah. Yeah, exactly. Why not? You’re probably not making any money.

Tom Whalen: Bingo. So number one, have a good clean practice with a tunnel liquidity, and then. There’s a lot of low hanging fruit, right? Like I don’t wanna start talking about these exotic strategies if we’re not maxing out 4 0 1 Ks IRAs kids on payroll when they put stuff into their Roth. But a lot of times too, we see people, it’s like, Hey, I got a 401k and I put six grand into it. But I really wanna do this, this short term rental thing. Like, well, we can just guarantee these tax savings. And again, I, I can’t guarantee what market returns are gonna be, but

Matt Mulcock: Yeah.

Tom Whalen: It’s like a guaranteed easy tax deduction to juice your 401k for you, your spouse, backdoor Roth IRAs. Like those are just such, such basic low hanging fruit that if people aren’t doing those already, I have a hard time going next level.

Matt Mulcock: Yeah, that’s an interesting point, uh, of where are I, I love that you’re breaking down this like, order of operations when it comes to like a, a, an isec clean and like strategic and intentional plan for taxes or, and we won’t even say taxes. Let’s say your business taxes are a part of that. Like you should have a strategic plan for your business, which, which does include a strategy for your

Tom Whalen: For sure. Yeah. It’s like tax planning is a big part of that. It’s like, but it’s not the first thing. It’s not the first thing we need to focus on. Right?

Matt Mulcock: For sure. And, and here’s what’s interesting. When you go through this, there’s the whole saying, right, what gets measured and proves, right? So if you’re, if you’re putting that tax savings at the top of the list and saying, this is all that matters to me, like this is all I’m gonna measure and focus on, you will most likely see that improve. The question, the part is that we can’t emphasize enough is like, what are you. Like Oliver Berkman says, like, choosing to suck at and what you’re probably choosing to suck at because of that sole focus on that is what you’re saying. No liquidity, no profits, no no strategy to grow your business. Um, no cash flow.

Like those are things that are gonna, and they’re far more important than you’re. Year to year tax savings that are gonna end up killing you if you’re not focused on those things. So I love that you’re highlighting this of like where you put your focus and attention matters. And if all you care about is tax savings from year to year, you’re gonna

Tom Whalen: Gonna, you’re gonna get really good at spending money, right?

Matt Mulcock: Good at spending money. Yep. And.

Tom Whalen: And we, I heard, I don’t know where I heard it, read it, whatever. It was something along the lines of, you don’t get, you don’t get rich by saving money in taxes. You don’t get rich even by investing. You get rich by having a really, really, really good income and saving a lot of money, right? Very rarely does somebody save an extra thousand bucks in taxes and then say, I’m gonna buy this Bitcoin thing that’s at a hundred dollars a coin, and then it turns into a hundred thousand a coin. No, by and large it’s, Hey, I make a half a million bucks and I save, uh, 25% of my income. And I do that for 20 years, and now I’ve got more money than I could have ever dreamed of. It’s like, yeah, it’s not sexy, but it’s, I dunno. Have you ever had a client that had a really, really good income and a really, really good savings rate and didn’t retire when they wanted to?

Matt Mulcock: No.

Tom Whalen: I don’t think so. It’s like a hundred percent success rate. But I’ve had people that try to chase a lot of these crazy tax deductions and then they have no liquidity and they gotta work an extra five years, and they’re trying to sell their practice for the absolute highest penny possible because they’re trying to make up for past sin, so to say.

Matt Mulcock: Yeah, I’m so glad we went this road. I wasn’t really expecting to go down this road, but I’m really glad we did because I think what you’re highlighting and what what is required here for a lot of people truly is to take a step back and be pretty introspective of like. What are you actually trying to accomplish here with whatever decision you’re trying to make? So I’ll just be, I’ll just tell the harsh truth. I think a lot of times when it comes to tax savings, it has nothing to do with wealth. Um, or like overall trying to build wealth. I truly do think a, it’s either a game. I think it, a lot of times it becomes like a game for people. It becomes, um, kind of stroking your ego a little bit and a little bit of status chasing, like you want to be able to, I think if people really admitted to themselves what this was about, it’s. Uh, they’re not even thinking about their overall wealth, because a lot of times if they were, they wouldn’t care about their tax bill.

Tom Whalen: Yeah. Or care less, right?

Matt Mulcock: They’d care much less. And what, so what I, let me, let me give some clarity to that statement. What I mean by that is I can’t even tell you how many dentists I’ve met who are making high, high six sometimes into the seven figures. They’re saving 20, 30 plus percent of their income investing it in the future. They’re killing it with profit and they’re just like all they can think about. Is their tax bill. They’re like sick about it and it’s like, I’ve, this is disgusting. I gotta get rid of this. And it’s like, but literally look at your data. Look like, look at your life. You have three homes and travel to Europe every other year. Like what are you? You drive a Maserati? I’m,

Tom Whalen: Like you, you’ve won, right? Like you are

Matt Mulcock: You won the

Tom Whalen: One already. Yeah.

Matt Mulcock: Yeah. You’re pay to play. The game that you just won is a high tax bill. And, and, and we’re not sitting here, Tom, I know you’re not saying like, don’t do anything to lower your taxes. It’s, it’s when taken too far, you start chasing these things. You’re gonna start kind of, you’re gonna start killing the, the golden goose, if you will, which is that business.

Tom Whalen: You’re just gonna start bleeding the the practice, right? Like that’s, like you said, that is the golden goose and we need to make sure that’s on solid footing today, tomorrow, and forever. And if again, we’re, I don’t think you said it on the last one, it’s like, oh, hey, you can just go pay a consultant or pay an accountant quadruple what the normal fee would be. And like that’s a super good, right? Yeah. Like I would be happy to do that. Um, but people don’t wanna do that, right? They’d rather buy a piece of equipment and not use it. And I do think it is a little bit, um, I think there’s just a lot of comparison out there, right? Comparison like, my buddy did this, or I read this, that somebody did that.

And it’s like, like you said, what are we trying to accomplish here? Um, I dunno. I just, I think I can’t stress that enough. Like I’m such a big believer in the multi-year approach. Like, yes, maybe we bite the bullet and pay a little more in tax this year so that over the course of five. We’re much better off because what we really don’t wanna do, um, when we’re doing our planning is if we get too low on a, on a, in a tax bracket in one year, well, sure you’re only, maybe, maybe you get down into, say, the 22% tax bracket. Okay? That means the next dollar of income. I’m paying 22 cents on the dollar. But what that also means is I’m only saving 22 cents on the dollar with my next dollar of deduction. Right. So if I have a, uh, some extra equipment that I know I have to purchase, I’m only saving 22% on that. But if I kick that into next year, maybe I’m saving 37%, right?

Because my, now my income might like whipsaw back up into those higher brackets. So if we get too low in any one given year, odds are that it’s gonna whipsaw and we’re gonna get too high. In a, in, in a following year. So if we manage it, manage these brackets over the course of a few years, maybe we never get as low as we would have if we lumped it all into one year. But then maybe we’ll never get as high. Maybe that’s better. And, and again, I don’t know that without looking at everybody’s individual scenarios, but looking at a multi-year approach is huge. So we’re not riding too high or, or too low.

Matt Mulcock: Yeah, and there’s always gonna be some level of guesswork. There’s always gonna be

Tom Whalen: They’re called projections, right? Like it is like projection’s a guess. Right.

Matt Mulcock: Exactly. It’s game of, it’s a game of probabilities. Just like deploying capital in, in any one investment is a game of probabilities. Whether that be, oh, I’m gonna pay off debt versus invest, or I’m gonna invest back in the practice versus put it in the stock market, or I’m gonna go do the short term rental, like you’re playing probabilities, or that’s the way it, it should be looked at. And to your point. You’re making projections that, that always requires a little bit of guesswork, so, so we’ve kind of laid out what are the risks here. I think to summarize kind of the things we’ve been talking about, when it comes to, if you’re getting this right, I think what we’re, what you’re doing is you’re maximizing your after tax wealth as opposed to just minimizing taxes.

That’s a huge, huge difference. I think you’re keeping, you’re putting a priority on flexibility and options. When it comes to things like liquidity, um, and profits in the business, uh, you know, and, and flexibility overall in your business life. The other thing I’d say you’re doing, if you are thinking about this overall strategically, multi-year, like total family approach, I think you’re overall reducing stress. Like, I think it’s stressful when you’re kind of in this reactive mode.

Tom Whalen: A hundred percent. You just said the word reactive and I was gonna say that. So thank you. Um,

Matt Mulcock: We’re on the, we’re mind melding

Tom Whalen: Yeah, it’s great minds baby. Um. But yeah, if you’re, it’s like, oh, it’s December 18th. Or maybe, maybe it’s February 18th, and I brought my stuff to the tax guy and he said, I’m gonna owe 50 grand. Like, what can we do? Right. It’s like, that is super reactionary. There’s no like, so it’s always a fire, you know, a fire drill or whatever you wanna call it. It’s like. That’s, I don’t know. That’s no way to live. Right? Um, I guess you could argue that you don’t think about it for 365 days or 4, 360 4 days a year, and then all of a sudden you do, and it’s like, whatever.

But I would rather think about it a little bit along the way rather than a lot after the fact. And even again, that case, you might not be able to do anything about it. Right. Versus if we’re talking in. The summer and we’re talking in the fall and we’re talking in the, the end of the year. It’s like we can make moves along the way and we should be pretty chill about it rather than you’re faced with this big balance due and, you know, it’s a scramble at that point. So I think stress goes down. I think, just again, that reactionary mindset is, is not really there. So we’re probably making better decisions. ’cause you know, if you make emotional decision, it’s. It’s probably not the best decision. So if we’re just thinking about this, when emotions, if I sell, if I tell you now, hey, you’re gonna owe 50 grand in February, but I tell you in May.

So we got a long time to think about it. Well, what can we do about that? Okay, well, here’s what we can do. Here’s some options. Here’s what, here’s what the trade off’s gonna look like. Again, we’ve had that conversation. And then say it’s, it’s February again and you owe the 50. Like if nothing else, you are not surprised, right? But odds are that, again, if you still owe the 50, you knew about it and you decided that that was better than what the trade off would be. Oh, in order for me to save that 50, you’re telling me I gotta go buy 160 grand of equipment. I’d rather just pay the 50. Right. So again, big picture thinking and like you, you said it too, kinda like long-term after tax wealth building, like that’s what it’s all about.

Matt Mulcock: Yep. Yeah, I also, referencing this whole idea of like, you don’t have to think about it, 364 days outta the year they’re thinking about it. That’s the thing. Like, and, and despite the saying of ignorance as bliss studies have shown time and time again, this is not actually true. That people, we actually hate uncertainty, and we would much rather just, the example you gave was perfect. I think most people, in fact, again, data back to sub, you’d rather just know. You’d rather know early that like, and I think that’s what it comes down to for most people, is just, I just want to know if it’s a bad, if it’s bad you, you immediately reduce your stress, even if the result is bad. You owe 50

Tom Whalen: I dunno what book it is, but it’s like, I dunno if it’s Atomic Habits or I don’t know, there’s like comfort crisis, something where it’s like people could shock themselves

Matt Mulcock: Yeah.

Tom Whalen: And it’d be like a seven out of 10 and it’s like you could lock into that or there could be an uncertain one and it might be a two out 10, but it might be a 10 out of 10 and people would just always sign up for the seven out

Matt Mulcock: Rather know.

Tom Whalen: Yeah. They just wanna know. Um, so yeah. But then one other thing, like a lot of times too I will always ask is, what are you gonna do with that tax savings? And a lot of times there’s no good answer.

Matt Mulcock: They don’t know.

Tom Whalen: They don’t know. And then I don’t have data on this. I’m, you might have more of an insight, but if somebody just does x, y, Z tax move to say 50 grand, are they going to be productive with it? Like, maybe, maybe it just sits in a checking account. Maybe they go on a sweet trip, I don’t know. But then

Matt Mulcock: Yeah, I.

Tom Whalen: Eventually you gotta pay the piper at some point. Again, we buy this equipment, okay, now we gotta pay off the debt. Right? Or now we have all, like, we’re paying off the debt and we have the cash. Cash flow now to pay the debt. But that means we have income, but it’s going to the debt. So we don’t have the tax deductions anymore. Like we gotta pay the piper at some point. And if we don’t have those tax dollars that we saved already, like, well, okay, now what? So we see it where people kind of get in this like downward spiral of, of chasing tax deductions and then it’s can get really bad. Um, but if they’re not gonna be productive with it. It’s like, well, that’s when it really, really matters to look at a multi-year picture, because again, if our tax rate’s gonna go up in the future and you’re not doing anything with it today, it’d be silly to not push it off.

Matt Mulcock: Yep. Well, I think you just alluded to what I was referencing earlier, which is I think the evidence or a piece of evidence of why I think a lot of times this is a little bit of like. Stroke and the ego status chasing type stuff because when you push it a little bit further and say, okay, here’s what your tax savings is, what’s the plan for that? Oh,

Tom Whalen: Yeah, well now what?

Matt Mulcock: I wasn’t even thinking

Tom Whalen: Yeah. Now whatcha gonna do, right?

Matt Mulcock: Yeah, it’s like, I don’t know, it just sounds cool to save that on taxes. So thinking big picture, um. Tom, we’ve already alluded to a bunch of these you mentioned. So for example, buying equipment at the end of the year to be reactive, that’s a common one. What are the mistakes do you see that are kind of in this vein of chasing deductions, as opposed to thinking of the big picture? Any other things that come to mind for you as common mistakes?

Tom Whalen: Um, yeah, I. I think the biggest one that I see, and it sounds really good on the surface, it’s, to me it’s buying equipment. I think people get sold on equipment a lot of times versus them actually buying it, if that makes sense. I always ask again, if it’s, if it’s a $10,000 item, it’s like, okay, that’s one thing. But if it’s like, Hey, we’re gonna. Got this, we’re gonna go get the CBCT and the full CEC system and a couple new chairs and it’s gonna be half a million bucks. It’s like, do one, do we need that? Are we, and, and maybe the answer is yes, but um, a lot of times I ask like, Hey, do, are you gonna use this? And it sounds pretty straightforward, right?

Like, are you gonna use this? The answer it almost always is. Yes. okay, I can, I can get on board with that. But the next question is, is it gonna replace production that you were otherwise gonna do? Right? Like, if you’re, we, I don’t know about you guys, but we hear so many of our young docs, they’re bursting at the seams. They’re like, they can’t fit another crown into their schedule. They’re just jam packed. And it’s like, okay, we’re, we’re going to use this. And maybe I’ll produce an extra 300 grand a year from X, Y, Z procedure, but we’re just stealing time that I would’ve done like another, another 300 grand with, you know what I mean?

Like, so now we’re just swapping production. I. We’re paying a hundred thousand dollars for it. That’s the, that’s a tricky one because people see that like, oh yeah, I’m going to use this for sure, but you’re just paying to, to be at the same spot now. that’s a big one. we see a lot of kind of, I would say like speculative investments, kinda like those oil, oil and gas things. Um, I don’t know enough about those to really comment, but I see that a lot. I see how people put a lot of money in it. I haven’t seen a ton of money come back. Maybe we will. Um, but it’s a big tax write off in year one, and it’s like, I guess the cash on cash is suspect, I would say, from what I’ve seen.

Anyway, maybe you know more about that than me. But, um, again, the VRBO is the, or the short term rentals, I should say. those are some of the really big items.

Matt Mulcock: You, you alluded to one earlier too that I think is worth bringing up again, that we’ve seen quite a bit, which is, improper, tax. So, uh, flipping to an S corp. Uh, tax or, you know, tax allocation too soon. Uh, you, you mentioned kind of along these same lines, is taking 1 79 all in the first year of like prac practice ownership. I think that’s a big one that we see and that can cause a ton of problems. We’ve even beyond tax savings when it comes to, like basis, we’ve seen some pretty big, which we’re not gonna go into

Tom Whalen: Yeah. Then it’s hard to get money outta the practice without paying yourself a wage. And maybe paying a wage is too, like punitive from a tax perspective. So yeah, like understanding what your entity structure should be like. That’s before you even open the doors of the practice.

Like so yeah. We see people that are like, Hey, I worked with, um. this attorney, and not to throw shade at attorneys, but sometimes they just are like, yo, you should be an S corp, because that’s what all dentists are. It’s like, well, we’re striving to be an S corp. But, um, and I will say some states require it so.

Matt Mulcock: Yeah, yeah,

Tom Whalen: Not every single state you can operate as an LLC, but um, some states require you be a, a service corp, whatever. In those cases, in those states, you don’t really have a choice. But when you do have a choice, it’s like, boy, we better be looking at this long and hard, uh, before just automatically making that election.

Matt Mulcock: Yep. Yeah,

Tom Whalen: Wanna step, you don’t wanna start off in the wrong foot before you’ve even opened the doors.

Matt Mulcock: Yeah, no, exactly. And I, again, we’ve seen this firsthand. I’ve seen this even as recent as the last, like six or nine months with clients that have come on board that have been given, let’s be honest, bad advice. And, uh, it, it leads to a lot of, a lot of issues.

Tom Whalen: Yeah, and I think, I think people, I’m speaking in generalities here and I’m gonna say like the generalities are probably not a good thing. But I think a lot of times the like people take general advice and think it’s. Like, Hey, I heard this as like a general concept and it’s perfect for me. It’s like, well, maybe not right? Um, I think you guys said it on one of your podcasts, like, good general advice could be horrible, specific advice or

Matt Mulcock: Shout out Taylor Sutterfield, baby. We’re gonna make him a t-shirt.

Tom Whalen: I’ll buy it. Um, or you could give it to me, but, yeah, something like. I would say most dental practices are S-corps, right? Like especially if you’re well established and you’re making a good income, like you’re probably an S-corp. So if an attorney says, well, most most practices prefer to be S corps, then you might just go do that. And that could kind of cause a world to hurt, um, in your first few years. Now, yeah, you can, you can kind of like unring the bell, but it might take you seven years. So I think having just again, overall specific advice to you, sit down with somebody.

Kinda like, understand what it means. Um, and just again, get a multi-year picture, work with your CPA, work with your advisor together. cause I like that matters too. I mean, we, like, we see people, this is kind of a bummer sometimes, but we see it where we’re doing our tax projections throughout the year and then we get to tax time and then I’m like, Hey, where did this $75,000 off contribution come from? It’s like, oh yeah, you know, me and my advisor. Like that’s what we kind of talked about. It’s like, okay, well that kicked you outta this bracket into that bracket. Now we lost these tax credits for these kids,

Matt Mulcock: Yep.

Tom Whalen: And that is a big difference. So again, getting all parties involved is a huge, huge issue too.

Matt Mulcock: Huge. And, and again, the theme of this whole episode is. Looking at things, bigger picture, uh, looking at the overall strategy, looking at a multi-year strategy, looking at the overall family situation and the different trade-offs that, you know, that, that go along with this decision of, of trying to save on taxes. And you mentioned yeah, the, the speculative investments. We’ve seen a lot of. Ridiculous ones for sure. There’s always kind of the common kind of usual suspects on the, on the, uh, investing stuff. But I will say as we talk through this, I think one of the hardest parts about this is, this is probably only second to the, the dream home scenario, meaning once they’ve brought it up, it’s really hard to talk someone out. Like the decisions have basically been made.

Tom Whalen: Like if you test drive a car, you’re gonna drive, you’re

Matt Mulcock: It’s over. They know what they’re doing. They know what they’re doing. You wanna go take it for a SW or for a spin. They know what

Tom Whalen: Buy it. Right? Yeah.

Matt Mulcock: Yeah. But, but this is why I think, again, the frequency of communication with your team, with your team advisors, right? Again, what we’re trying to build here at dentists Advisors is that you have a, a team around you. You’ve got a frequency of communication to where. We try to, as much as we possibly can, eliminate those chances that someone comes to us and they’re, they’re bringing it up in the, in the vein of like, I’m doing this, just like help facilitate it

Tom Whalen: Yeah. Right. Yeah, we’ve, we’ve definitely seen that where, you know, there’s like a lot of these, there’s some tax credits, I don’t wanna say schemes out there, but like, there’s just a lot of stuff going out there that’s like, Hey, there’s this RD credit, or there’s, um, you know, you can create your own captive insurance company and,

Matt Mulcock: Yep.

Tom Whalen: You know, like that stuff is, it can get kind of risky. And then you’ve got these promoters that, of course they’re gonna say it’s worthwhile ’cause they’re not signing a tax return. So like, why do they care? Whereas like, my name has to go on the return as well, so I need to be, I have to have a level of scrutiny they don’t have. Um, but yeah, it’s, we hear that a lot where it’s kind of like, Hey, I’m doing this. Just keep me outta jail. I’m like, huh. Okay.

Matt Mulcock: Okay. Yeah, I mean, you just alluded to, of course, these sponsors are going to, are gonna say it’s, it’s worthwhile and tell you all the reasons why. It’s the Charlie Munger quote, like, show me the incentive. I’ll show you the outcome. They’re paid, they’re paid to do it. Of course, they’re gonna show all the reasons why it makes sense for you. They’re getting paid a fat commission check.

Tom Whalen: Yeah. Yes, they are.

Matt Mulcock: Okay. So there, I think this is, again, we’ve, I think highlighted a lot of these good things around, mistakes that we see made. And, and, and I think, uh, to summarize, I kind of close this out summarizing, uh, things that we’ve already alluded to, but I think it’s worth summarizing kind of the, the frameworks and the questions and things to be thinking about. If, if someone’s out there listening and like, okay, Tom, Matt, like, we get it. We we’re with you. We totally understand this idea of like. The trade-offs we’re making. Um, I think to, to summarize this is, the number one thing I think of Tom, and I’ll throw it to you, would be, the theme here of thinking, does this decision lead to me improving my overall after-tax wealth?

Like. That that is it. So if it’s not increasing your equity in your business or equity in any, in an investment of some kind, if it’s not increasing or improving your liquidity or your options, most likely that means it’s a distraction or you, or you just need to look further into that.

Tom Whalen: Yep. And I like the way I phrase it is like, economically, let’s think of economics first. Like, will this make me money? Will this increase in value? Will this something, I mean, the same thing you’re saying, just the term I use, like I just like to say, is this a good economic decision? If so, then let’s figure out how to best plan for it on the tax aspect. So always try to make good economic decisions. Or as Dwight Tr would say, don’t you know, don’t be an idiot. Would an idiot do this? No. Okay, good. We can do

Matt Mulcock: Yeah.

Tom Whalen: Um, so

Matt Mulcock: Would an idiot do this? I like that. Let me ask you this, doc, would an idiot do this? That’s so good.

Tom Whalen: But yeah, so like, and that’s easier said than done, right? Hey, make good financial decisions. I don’t know. I think a lot of people would say, okay, like, how? Right. again, talk to your people, but having that as a a guiding principle I think is gonna help you a lot, a

Matt Mulcock: Yeah. Yeah. Well, I think we, again, we joke when you’re like, well make good decisions. How do I do that? Obviously, yes. Easier said than done, but I really do think this framework of boiling this, what what we’re talking about here really is thinking about things in more of a first principle type approach as opposed to like. Tactics, like tactics are great. Tax savings is a tactic that can come into play, but I think thinking more like big picture first principles, if you start there, I think you’re on the path to making good de or a higher chance at making good decisions rather than mistakes.

Tom Whalen: Again, like if our, I don’t wanna say like, if our mission, I mean as a, as a, as a career, I mean, I get that people go into dentistry, like they wanna help people, um, they have a passion for it. Like I get that, but strictly like from a dollars and cents perspective. Make a good living. Um, we wanna retire at a reasonable age, so like, just strictly financially speaking, we kind of wanna do this and make a decent chunk of coin along the way.

Right. And Right. Absolutely. Nothing wrong with that. And we wanna retire, you know, we want, generally speaking, a lot of people, you know, if you can retire at 50 and you wanna work till you’re 70, great. That’s awesome. but I don’t think people go into it being like, well, I don’t really care about making money. I’m just gonna do this until I’m dead anyway. Like, that’s probably not your mindset. but if your overall kind of big picture is like, Hey, I wanna retire, so that. You know, I can see the grandkids, I can travel a ton. I wanna retire early so I can do all these things. Like, that’s kind of my, my mission. Yeah, of course, taxes and like tax strategy and tax planning is going to be a, a, a piece of that puzzle, but it might not be the biggest piece. Right. That the biggest piece is going to be have a really good profitable practice. Like, that’s gonna be the biggest piece. So how, like, let’s focus on that first. How can we make that happen? And then of course, like the taxes are just gonna, you know, kind of supplement that.

Matt Mulcock: Yep. Yeah, you just hit number two. So number one, we’re saying ask, but before doing anything ask it is helping my overall wealth. Situation number two, you just hit it and you said this perfectly earlier, like the order of operations. Think about the order of operations of this. I think number three is understand the difference between tax filing versus tax planning and strategy. Anything else you want to hit on that part?

Tom Whalen: No, I mean it tax, like the actual preparation of a tax return. It is, it is very, I mean, it’s after the fact, like everything’s already happened, right? If everybody gives me their tax stuff in in March and they’re like, Hey,

Matt Mulcock: What can we do?

Tom Whalen: Me show $0 of tax. And it’s like, well, what’s done is done, right? So, It’s kind of like if you have employee reviews and it’s like at the end of the year you’re just reviewing what has already been done. You can’t really undo it for the most part. Right. So it’s, yeah, like I, I would, in an employee review setting, I would say hopefully these reviews are. Not shocking to anybody, right? Like we’ve had these discussions along the Right. Exactly. And that’s how taxes should be too. If you have, um, kind of like a month to month, quarter to quarter, whatever relationship with your CPA, we should be discussing these things along the way. We, I, you shouldn’t think you’re gonna be breaking even on taxes and oh, 50, or you shouldn’t, you know, think you’re gonna get a refund of 20 and get a, have a balance due of 70. Like,

Matt Mulcock: Yep.

Tom Whalen: We, we should know about these things along the way so that at filing time, it’s just. Regurgitating what you already knew,

Matt Mulcock: Just paperwork.

Tom Whalen: Paperwork at

Matt Mulcock: Yeah. Yeah, totally.

Tom Whalen: Button and it happens, right?

Matt Mulcock: It’s done. It’s that easy. Um, I’d say number four you’ve alluded to is run, run real projections, think long term, right? Don’t look at things in a vacuum. You’ve, you’ve alluded to this, you know, looking at things 5, 10, 20 years and looking at your overall family situation, I think is a big one. Um, and then the last one I’d highlight is, filtering all these decisions through your own priorities, goals, and values. Personal finance is more personal than finance, and your business is part of this, right? Like even though it’s, it’s, it’s, it’s obviously business. You could consider corporate, but all of this is wrapped up into your personal finance goals.

Tom Whalen: Big umbrella, right? Like

Matt Mulcock: A big

Tom Whalen: Are the practice, the practices you financially and you know, in reality. But, um, yeah, it’s a lot more personal than finance. That’s pretty sweet. Um. Yeah, I, I don’t really think I have anything to add on that one.

Matt Mulcock: So that’s where I think I’d summed this up is, is, and you’ve, we’ve alluded to this throughout this whole episode is you said earlier, and I think this happens to dentists all the time, is this comparison game happens. But I think that last piece of this is like filter everything through your own priorities, goals, and values, because. That way. It’s like I don’t really care what they’re doing ’cause they’re not me and I’m not them and they don’t have my situation and vice versa. Like kind of stay in your own lane and figure out what works, what works for you. Again, easier said than done. I’m not sitting here saying like, like Tom and I are both human as well. We know the comparison game is tough, but I think if you start to really be intentional and aware of this kind of stuff, it can put you on the right path.

Tom Whalen: Yeah. We, I think one thing we say to people is we see a lot of unhappiness when you start counting other people’s money. I’d be like, Hey, I, I have a great life. I’ve got, you know, the three kids and they’re like, we’re all, we’re happy. It’s like, oh shoot. But my neighbor, they have that. Like, I’m counting their money now. I want know what they have. So just again, look in the mirror, and this is maybe a little deeper than we needed to go, but it’s like maybe before we even have a good clean, healthy practice. Like what, what are we trying to get outta this? Like what do we wanna do with this thing we call a career? Um, and practice ownership. Okay, now the practice can help us get there. tax planning and tax strategizing can help us get there too on a different level, but like, what are we trying to get outta this altogether?

Matt Mulcock: Yeah. It’s funny you say that, Tom. ’cause one of the, the, the first thing we do when a client comes on board with us is a kickoff call. We call it a discovery call, and it is that exact thing. And, and it’s funny working with dentists. Sometimes it’s a little bit like we get this all the time where people are like, I’ve never even thought of this, or I’ve never even, like, I’ve never had this conversation of something as simple as like, why is money important to you? Like, what are you trying to accomplish in the next three to five years? Like, just some relatively basic questions, but they require like, how are you raised around money? I want to understand these types of things. We all, we start every single client off with this call. We force it because, and if you’re gonna work with us, like you better be prepared to kind of go through this because, because again, this is what makes it personal.

Like if you’re just looking for tactics, there’s a thing called Google, like there’s a thing called chat, CPT. Like that’s not what this is about. It’s what we’re talking about now, which is looking at things through your own priorities, values, and goals, and trying to put the walls up, the psychological walls up high enough that you’re not gonna peek over and be like, well, what are they doing still?

Tom Whalen: And I think. Having a good kind of open line of communication between, you know, dentists and CPA, dentists and financial advisor, but also CPA and financial advisor, getting everybody on the same page. Um, ’cause there might be times where we disagree. With what the advisor might have to say, like, Hey, um, yeah, you should be doing the profit sharing and putting an extra 40 grand in your account. We might say, Hey, we’d, we’d prefer to see the practice liquidity a little bit higher. So, you know, we we’re, I’m not managing investments, so I’m not really directed down that lane. I’ll get it. We wanna have that as part of our overall wealth building strategy, but we might have differing viewpoints. So just having everybody on the same page is, is huge.

And then also. you have two people who could potentially have conflicting opinions when they’re also saying the same thing, that’s a really, I think a big kinda like aha moment. Like, oh, they’re both saying it and they maybe could disagree in theory, but they’re still agreeing. Like maybe I should listen to that.

Matt Mulcock: Exactly. Yeah. I love that. And I think that’s a, a great full circle moment of talk of kind of wrapping this up. Y you’re highlighting exactly. Our intention behind this partnership with you guys is, is putting dentists in a position where they have this, this team, that they can look at things, connect the dots between their bus, everything happening in their business, what’s happening with their overall kind of grow, plans and strategy for building wealth and just living a fulfilling life. Like all these things have to kind of come together so. That’s our vision for this, and that’s why we’re so excited to partner with you guys, Tom. And, and this is just the, just the beginning. Um, I wanna give you final kind of last, any pieces or any words of wisdom on this tax series, episode two.

Tom Whalen: More to come. Obviously, we’re just kind of scratching the surface at this point, but I’m, I’m super stoked to talk about it all because it’s obviously near and dear to what we do every day and we see people, I don’t wanna say get taken advantage of, but gets I think the, to term I like. Is that they get sold a lot instead of going out and buying it. And I don’t want people to be sold on things. I want them to be like, Hey, this makes a ton of sense. Here’s why. Here’s what the trade off is to really, really know what they’re getting themselves into and how does this impact my overall plan? so I think this series is a really good idea. I’m happy to be a part of it and super excited to see what, uh, comes of this partnership as well.

Matt Mulcock: Yeah, that’s great, Tom. That’s a great way to wrap it up. So, if you’re listening to this, if, if you know another dentist that has to hear this, that you’re like, man, my buddy from from from dental school needs to hear this, please share the episode. We’re trying to spread the word. We want to get this education out to people. If you have any additional questions, please feel free to reach out. Um, we’re, we’re happy to talk dentist advisors.com. Um, so we’d love to, to talk to you and, uh, see how we can help. So, Tom, thank you so much for being here. Everyone, thank you so much for listening. Till next time, bye-bye.

Keywords: tax strategies, tax deductions, financial planning, liquidity, cash flow, wealth building, tax mistakes, communication, investments, tax planning

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