Steven Gu, CEO of GU & COMPANY, a none traditional CPA & Business Advisory firm that offers Tax Planning and Outsourced CFO services to small and medium businesses.
He is a Tax Strategist who gives clarity and certainty to taxes for business owners. He is both a CPA and Tax Attorney (non-practicing) with more than 15 years of experience in taxes and accounting, and a Big4 Accounting firm Alumni. Steven loves to talk about Saving Money on Taxes and enjoys translating tax and accounting for entrepreneurs. He does that by helping navigate tax laws and accounting principles and speaking Entrepreneurs, not Accountants or lawyers .
Steven’s CPA firm offers a proven 7-step system to legally reduce small business taxes by average 46-100%. He also acts as Fractional CFO working with entrepreneurs to grow their businesses to the next level. He helped entrepreneurs grow from $2M to $20M within 13 months, and assisted SAAS client achieve high 8-figure exit within 2 years.
He is the author of the book: “Tax Saving Strategies – 90 Strategies to help grow your business, build personal wealth and pay less taxes”. He is a member of Georgia Society of CPAs (GSCPA) and National Asian Pacific American Bar Association.
Connect with Steven on LinkedIn.
What You’ll Learn In This Episode
- Tax Planning
- Tax Saving Strategies
- Tax Efficiency for Wealth Building
- Why Riches pay zero taxes
This transcript is machine transcribed by Sonix
Intro: [00:00:04] Broadcasting live from the Business RadioX studios in Atlanta, Georgia. It’s time for Atlanta Business Radio, brought to you by on pay. Atlanta’s new standard in payroll. Now, here’s your host.
Lee Kantor: [00:00:25] Lee Kantor here another episode of Atlanta Business Radio, and this is going to be a good one. But before we get started, it’s important to recognize our sponsor on pay. Without them, we couldn’t be sharing these important stories. Today on Atlanta Business Radio, we have Steven Gu with GU and Company. Welcome, Steven.
Steven Gu: [00:00:43] Haley Thanks so much for inviting me.
Lee Kantor: [00:00:45] I am so excited to learn what you’re up to. Tell us about your firm. How you serving folks?
Steven Gu: [00:00:51] Okay, we are a CPA firm, by the way, structured our firm a little bit different. You know, majority of the small CPA firms, they are more, let’s say, tax compliance focused, basically, you know, helping people file their returns. By the way, a little bit different. We are focused more on the tax planning. The I don’t know if you know the difference between tax preparation versus tax planning.
Lee Kantor: [00:01:17] I’ve interviewed a lot of people over the years and a lot of CPAs, and like you said, a lot of CPAs, their only concern is doing your taxes and you give them information, they fill out a form, and that’s your whole entire interaction with them.
Steven Gu: [00:01:33] Exactly. So majority of the CPA firm, then, just like you said, there’s a focus on compliance. And basically, you know, you’ve got information after the year end, right? You give them your W-2 1099 and the financial statement, Then they calculate those. They’re putting the software calculator for you clean up and then they send it to is that’s what the tax preparation is. But our work is we are more focused on the planning. We do it before the year end. We look at your personal tax situation, look at the business tax situation, and then look at the most recent regulatory changes, right? Look at your legal entity. Structure is a C Corp partnership schedule C, Inc. Which one? What were the best? We look at a retirement, look at the insurance, look at the most recent tax or changes in Information Act Chaos Act Trump tax cut all those. Then we come back with certain strategies, certain actions the taxpayer have to do. They have to change the fact so that they can change the result, right? Once they implement those strategies, then we were able to help them to save taxes at the end. So that’s what we do. That’s how we structured our business.
Lee Kantor: [00:02:45] So does that mean when you’re working with a client, you’re not just waiting until probably around now to just get a pile of documents so that you can input that data into a software program to spit out a tax return that you want to have conversations with your clients throughout the year. So you can kind of maximize the tax situation for the behalf of the client and also at the bottom line, make them more money at the end of the day.
Steven Gu: [00:03:18] That’s exactly right. So why don’t we if you think about it, in a lot of CPA firm, there was say we would do a year end planning, that’s very common. But typically, you know, you probably personally experience that, too. That’s a year in the planning. But what are the year planning means? For lots of time they will say, okay, sorry you made it too much money this year. You have to plan to write a bigger check in January, right When you pay your Q four, when you pay your Q for estimated tax payments. Right. That’s what are their tax planning is. But instead of doing year, year end planning, we are focused more on a year round tax planning. If you really think about it now, if you want to really proactively manage your taxes, there are multiple touchpoints either in in March or April. You have to think about do you have to file your extensions for your business or your personal return? And then if you file those, then you have to file your return in September or in October. Those are for touchpoint already, but you as a business owner, you are required to calculate your estimated tax payments every quarter. You have to use update to make those quarterly estimate tax payment, right. So add those before that’s a touch point. And besides, no, during the year, your personal tax situation will be changed. You probably, you know, your kids went to school. You probably you think about a purchase and other rental properties or you’re going to sell your residential house. Right. Or your business situation could change. Right? Are you adding the partners? Are you going to invest in another entity? Do you do lots of research and credits? Do you have any cost by or are you acquired building? Lots of things going to happen during the year? So our our way is why you do get the planning when you do the year and the planning, things already happen. It’s too late to change anything. So we have to focus on year around tax planning and that’s how we serve our so our approach to serve our clients.
Lee Kantor: [00:05:19] Now, who is your ideal client? Are they business owners? Are they just wealthy people or are they executives at corporations? Like what’s your ideal profile of your ideal client look like?
Steven Gu: [00:05:33] It might be small to medium business owners because for w to owner, really they are not too much you can do to save your taxes, right? You have W-2, you pay taxes and max only a few things. Maybe you max out your 41k but really not too much deductions you can do. But for business owners, you can do the other. Lots of strategy available. As a matter of fact, I have I wrote a book called A 90 Strategies. Those are common strategies you can every business can consider and help them to max the deductions and reduce.
Lee Kantor: [00:06:08] So if you’re a business owner and you’re listening and your CPA isn’t suggesting some of those 90 deductions, it might be time to think about getting a new CPA. Right?
Steven Gu: [00:06:22] Exactly. It has to be a very proactive. And if you think about I always use this example to tell my clients, but really, you and me, we are paying more prime membership fee than Amazon. Pay these taxes. I back in 2000, I think Tucson to 18, Amazon paid zero taxes despite their revenue was close to $20 billion. They paid us zero taxes. Not only they paid zero taxes, they received a $125 million tax credit back. Right. So what does this means? This means your tax liability. It’s not a function of tax preparation, but it’s a function of tax planning and a function of proactively how do you proactively manage your taxes. But for big a company like Amazon, they have maybe hundreds of tax advisers helping them to do tax planning. When I was with Big Apple and in my background, actually, I was a I was both a tax lawyer and a CPA. My firm is a CPA firm, but I have a I went to law school and I have a I’m a tax lawyer. So when I was working for bigger four in the Amazon in a bigger company, multinationals are our clients. You know, they pay us lots of lots of money to just do the tax planning. We call the tax advice advisory work. Every big four, I think every Big Ten large accounting firms, they always have a special group. They call it a tax advisory group. That typically is not a group. You see lots of tax lawyers, lots of CPAs, and they just do tax planning. And that’s how they save money. They think about how we are to put their IP through to register a foreign company at a Cayman Island, how to do the treaty shopping. That’s how they save taxes. It’s all about tax planning. It’s not about just tax preparation.
Lee Kantor: [00:08:20] And then part of that, you mentioned the words tax credits. There’s opportunities to leverage tax credits to your benefit if you know about them and if you know how to, you know, put your business in the right position to take advantage of them. But that’s not something a typical business owner would know by themselves. That’s why you need to hire an expert to help you through that, because, like, I don’t think the IRS are necessarily bad guys trying to just take all your money. I think there’s a lot of opportunities there and they give you a lot of opportunities to save a lot of money or even, you know, get some tax credits. But most people just don’t know about them.
Steven Gu: [00:09:03] Exactly. I always tell them our client is actually loves you, always loves you. Here’s why. And if you really look at the tax law, the tax law is actually written to reduce business owners taxes. But tax code is nothing but a collection of juicy tax deductions and credits and incentives for business owners. And there’s the other tax policy behind that, because the government wants to let’s say they want to develop low income community housing. They wanted you to invest. They wanted to develop the you know, in our chamber, there’s the area called the Opportunity Zone area. Now, because they wanted they want to develop that area. So that’s why they give you incentives. I don’t know if you heard about a, quote, opportunity zone. Let’s say if you have capital, can you sell your sell your portfolio? You sell, sell, sell a property. You have certain capital gain. Now, you can put those capital gains into those opportunities zone area and you do not have to pay your capital gain immediately. Your capital gain. You’ve got to get it deferred after you hold that for a few years, typically more than seven years, you get addition of 15% discount. So let’s say you have $1 million. Now, after seven years, you only have to pay. You only have to pay capital gain on the $857. Right. Get it deferred or get it deduction. And what’s even better, like if you invest in the opportunity zone, let’s say you invest in another business and you started that business after ten years later, you sell that business, you get you make additional $1 million. Those $1 million are exempted.
Steven Gu: [00:10:42] You do not have to pay taxes. But. And why? Why, why, why the government give you those incentives? Because they want to develop those areas. But let’s for example, let’s give you another example. And this is how I saved my client close to $10 Million Taxes. And if you you have a small business, especially for like hypergrowth or your technology company grows very fast and you have potential, very big exit. It’s always it’s it’s always better idea to consider what entity structure you want to you want to establish. But for example, if you do Inc but then we allow you to make so called small business entity election right under that. Once you make that election, if you exit, you can you can exempt, you can get exempt, you can get the sum of up to $10 million. We have be exempted from taxes. Right. So why the come and try to give you that instance? Because they try to encourage people to to invest, to invest a startup startup companies and to hire more employees. So they are always the tax policy behind that. Let me give you another example. For example, if you export, right, they give you equity. They allow you to establish another almost like paper company. You can sell the product to that company. And if that company export to another to to foreign buyers, you can get a reduced rate. And there’s another one called an. Like what a cute text. Right or so called an intangible. If you sell intangible products to other countries, you get a reduced taxes as well.
Lee Kantor: [00:12:35] Now, when you’re working with somebody and you’re part, I think in your mind, you want to be a partner, right? You want to be part of their trusted advisory team. You want to be somebody that they are looking to for advice throughout the year. Do you also work with. Because I’m sure a lot of the business owners you work with, they also have financial planners and wealth advisors. Is it something that you work with those people as well to communicate, at least to understand what’s happening on that side so you can really kind of do have more information to do what you need to do to help your client?
Steven Gu: [00:13:15] Absolutely. Absolutely. We actually we work with financial advisors very closely. We partner with very big companies and Morgan Stanley and Merrill Lynch, all kinds of typical financial advisors. And I think the tax advisor, should it be considered as part of the financial advisor, because for tax, it’s one tax is a very important way to help people to build up their net wealth. I don’t know if you heard of Tony Robbins wrote a book about like a Money Mastery game. Money like the Math of the game. What’s a pretty 600 pages book? But in his book, he argued as that a tax efficiency is one of the simplest way to continue to increase the real returns over your portfolio, and that tax efficiency equals faster financial freedom. And if you read the book, they are that list. He spent at least the two chapters talking about taxes and. If you really think about this, how much tax we are paying to think about, you have to pay income tax. We have to pay real estate tax. We have to pay sales, use tax, write all those tax as as up together. That’s almost like a 50%. Goes to the Texas. Right. And if we really think about that 50%, let’s no, let’s discount a little bit. Let’s say so for small business or just average taxpayer, at least you would pay 40%. Right? If you really think about that, 40% means, you know, that is. 3 hours a day. 40% times eight. Right? Right. That’s about 12 hours a week. Okay. And let’s say average America works for 30 years. Let’s say you just start a 30 and you retire to 60. That means you spend 12 years out of your 30 years working for IRAs alone. That’s like my lifetime prison. Right. That’s how much damage is a tax cost to yourself, if you think about it. You you go to work. You know, you spend 3 hours working for so long.
Lee Kantor: [00:15:36] Yeah. And that’s why that’s why you need to have experts and trusted advisors that can help you, because all you do every day is think about this, where a business owner is thinking about their business. You need somebody that’s kind of watching your back when it comes to this type of of the expertise that you have. It’s not something that a regular person I don’t think can do, you know, with a TurboTax software program as well as somebody with your experience and knowledge and team behind it.
Steven Gu: [00:16:10] Exactly. And the number one reason we feel small business owners are overpaying tax, it’s because of their mindset, because they don’t know the difference between tax planning and a tax preparation. Right. And they didn’t realize the impact, how much how much impact they’re going to cause to their really, you know, to their net worth build up and. I would go back to the Tony Robbins book one more time. They are one example. It’s very sort of very impactful. When I read it, he said, Suppose let me let me do a calculator. Let’s do a quick mass. Supposedly you have $1 and you get 100% return every year. So you can have $1 for a year, $2 next year, and a $4 in the 30 year and $8 for the fourth year. Right. Continue the math after 20 years. Guess how much money you have? Cumulative amount. Let’s give it a wider.
Lee Kantor: [00:17:12] I guess it’s it’s a big number because I know the power of compounding is the secret to success. So I don’t know the number, but I’m sure it’s very, very, very large.
Steven Gu: [00:17:25] Let me give you a multiple choice. Okay. Do you think it would be between 10000 to 50000 now?
Lee Kantor: [00:17:34] Hundreds of thousands to a million.
Steven Gu: [00:17:36] Okay. You’re very close. It’s $1.07 million. 100% of tank company in 20 years, $1.07 million. But if you have to pay tax 30% tax every year, same formula, you get $1, you pay 30% tax, and then you get a double double return and then you pay tax every year. So 80%. Guess how much that a number where.
Lee Kantor: [00:18:04] That number would be? Is it not just 30% less?
Steven Gu: [00:18:09] No. You have to pay every year.
Lee Kantor: [00:18:11] Oh, so every year. So that’s compounding as well.
Steven Gu: [00:18:14] Yeah.
Lee Kantor: [00:18:14] So what? 300,000.
Steven Gu: [00:18:20] Not even that. It’s 27, seven, 27.
Lee Kantor: [00:18:25] Wow. So you’re doing all that work and you’re not getting the return you could if you had better advice.
Steven Gu: [00:18:31] Yeah. So the tax that could cause a 50 time difference is on your. By $27,000 versus 1 million. Close to 50, 50 times differences. That’s why Tony always in his book, he always argue like tax. Tax efficiency is so important because it is going to cause. Like 50 times differences. If you can manage to grow your wealth at a tax free or more tax effective way versus you pay tax every year, that after 20 years the result will be huge.
Lee Kantor: [00:19:06] So if somebody wants to learn more about your process and your firm, is there a website they can go to to have a conversation with you or somebody on your team?
Steven Gu: [00:19:19] Yeah, they can go to my website. Gq As a lot of you go to CPA group dot com, or they can email me at a Stephen at GQ. Cpa group dot net. And if they give if they’re right, if they include a business rate of X and I can I can give them a free assessment.
Lee Kantor: [00:19:38] Great. So, well, thank you so much for sharing your story. You’re doing such important work and we appreciate you.
Steven Gu: [00:19:44] Thank you for inviting me. Appreciate it.
Lee Kantor: [00:19:46] All right. This is Lee Kantor Wilson, Next time on Atlanta Business Radio.
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