Tommy Thornburgh with Prime Corporate Services

Intro: [00:00:05] Broadcasting live from the Business RadioX Studios in Saint Louis, Missouri. It’s time for Saint Louis Business Radio. Now, here’s your host.

Phillip Hearn: [00:00:18] Hello, everybody, and welcome back to Doc’s Discussions. My name is Dr. Phillip Hearn and you are listening to Saint Louis Business RadioX. So I always enjoy the different guests that we’re able to get to hang out with me, talk a bit about what they do, their business, their strategies, and today’s episode is no different. I’ve got Tommy Thornburgh, who’s the president of Prime Corporate Services, joining us for this episode today. Tommy, how are you?

Tommy Thornburgh: [00:00:44] I’m doing great. Thank you for having me. I’m excited about this.

Phillip Hearn: [00:00:47] Yeah, I’ve been looking forward to it. Glad to have you. Thanks for spending some time with us. So before we dig into all of the inner workings, tell our listeners a bit about you. Where’d you come from? How’d you get into this space? Give us a little bit more knowledge about who you are.

Tommy Thornburgh: [00:01:03] Sure. Yeah. Let’s take it all the way back. Why don’t we? So my growing up, my parents split when I was very young and my mom was a real estate agent and my dad owned a real estate brokerage. And I joke now that I’m removed from it and can look back on it that the only thing they agreed upon is that their kids should be self-employed. So if they did anything right, they pushed my sister and I towards self-employment. And she’s actually part of the company with me here as well. So, um, from a very young age, I was introduced to real estate and I always thought that that was the route that I was going to go. And then I turned 18, tried to go the whole college route, went and knocked doors selling pest control. So I live in Salt Lake City, Utah. I drove all the way over to Raleigh, North Carolina, and 19 years old, started knocking door to door selling pest control at 19. In three months, I made about $40,000. Okay. I thought I was king of the castle. I came home, I said, Mom, you can’t tell me anything. Forget it. And then Uncle Sam wanted 10,000 in the form of taxes, right? That money was gone. I’d already spent that money. So I learned a very valuable lesson at a very early age in my business life that it’s not about what you make, it’s what you keep. And now here we are, just over ten years in business with Prime corporate, and that’s what we do. There was a niche in the market for start up entrepreneurs, for solopreneurs that are running their own business or for people that are just getting started looking for a side hustle that don’t have the means or the money to have a corporate financial plan or attorney CPAs. So we help with entity structure, business, credit taxes, as you know. And that’s that’s a little bit about me. Since then I’ve dabbled in real estate and have investments of my own. But Prime Corporate’s been my baby for the last ten years.

Phillip Hearn: [00:03:18] Wonderful. So with that experience, it sounds like that was kind of the early birth of of the idea for prime corporate services. Tell our listeners a bit more about what does what those markets a little bit deeper that they actually do serve.

Tommy Thornburgh: [00:03:34] Sure. I’m a firm believer that everyone in the US should be self-employed to some extent. As you can tell, that’s rooted from my childhood, obviously. But the reason that I say it is because there’s over 70,000 pages of a tax code, right? And the majority of those benefit investors benefit entrepreneurs. So whether it’s a side hustle, a side business or full time self-employment. We try and make it as easy as possible from an entry point for people to feel comfortable, to start to invest or to start what their passion is, to be self-employed and to maximize from a tax savings standpoint, to create financial freedom and time freedom long term.

Phillip Hearn: [00:04:24] That’s awesome. That sounds great. So you mentioned within the services that are offered, you guys have everything from entity creation to the tax to the business credit. Tell us a little bit about, for instance, the entity creation. How does that process work? Kind of a quick synopsis from start to finish. So if somebody calls you and says, Hey, I need an entity done, I’m sure your team’s not just like, great, we’ll just make you an entity. There’s some pieces that go into that, that structure. And I’ve been lucky enough to work with your team on that, and they do a phenomenal job. But take our listeners into what that process may look like.

Tommy Thornburgh: [00:04:57] Sure. We really like to make sure that it’s something that our client understands what they have and what they need, as opposed to it being some papers on a bookshelf or in your email that never get used, right? So fortunately, we’re able to help structure entities in all 50 states. And we really try and break down over 45 minutes to an hour. What are your needs? What type of business are you in? How concerned are you with having an amenity privacy protection? Because not all states are created equal when it comes to corporate law. Right. Delaware. Nevada. Wyoming. Their corporate haven states that have additional privacy and protection that other states don’t offer. So we really try and break down. Is an LLC best for you? Is an S corporation best for you? Do you need an additional holding or parent company for privacy and protection? So it’s not one size fits all. But what we really try and do is make sure you’re aware of what you have and why you have it. And we’re trying to accomplish three things for any of the listeners that take notes. This is for you. Number one is privacy and protection. Number two is tax benefits, profit and loss. And number three is showing yourself as a business not only to your clientele, but to banks and lenders as well for funding long term.

Phillip Hearn: [00:06:31] Yeah, and that’s extremely important to understanding all the pieces. A lot of people just go, Hey, create an entity, start your business. But it sounds like you and your team really take the time to go, okay, if you created here, here are going to be the potential benefits taxable benefit down the line. I know you’re not playing an accountant, so we’ll put that disclaimer in, but your team has enough knowledge to understand those tax laws in each state to be able to explain the process. It sounds like easier to folks who work with you all.

Tommy Thornburgh: [00:07:01] Correct? Yes, absolutely. And that’s I appreciate you saying it. I am not a CPA. I’m not an attorney. As you said, I’m the president of prime corporate. However, I do have. Just about 100 accountants and CPAs total that file all the taxes now and got a full team of attorneys that do all the entity set ups and all the all the estate planning for us as well. So it’s nice to be able to talk to investors and talk to entrepreneurs, but still get the support of the CPAs and the attorneys. And I think that’s where the niche that we’ve created has really done us well over the last ten years.

Phillip Hearn: [00:07:42] So take us into that next step. So now that we’ve created the entity, there’s potentially the opportunity to work with your team on creating business credit and then also taking care of the dreaded taxes at the end of the year. Right. So take us through what that process kind of looks like because it sounds as if you can work through an all in one style solution with your organization and with your team. If I’m hearing that correctly.

Tommy Thornburgh: [00:08:04] That’s the goal. Yeah. I mean, and it’s like I said earlier, not one size fits all. I think it’s important for everyone listening to understand the way that we were introduced was actually a mess up that we had on setup over there. So full transparency. We’re we’re not perfect, but as a as you can see, we’ve been able to mend the relationship by making things right. And if you can have the proper business structure, Mister Benjamin Franklin said it best. Two things that are certain death and taxes. Right all.

Phillip Hearn: [00:08:38] Day long. Yeah.

Tommy Thornburgh: [00:08:39] And neither one are overly exciting to talk about. But if there were two pieces of advice that I could give anyone from a tax standpoint. Yeah. Number one, have a way to track your expenses, whether it’s an Excel spreadsheet, QuickBooks, a tax app of any sort. The best way to beat the IRS and the tax game is kind of like a, you know, death by a thousand paper cuts, right? I ask you this, dude, what did you have for lunch last Wednesday?

Phillip Hearn: [00:09:13] You better know every single thing. I had a burger, I had fries. It was a cheat day, so. Yeah, yeah, I’d better be able to adapt. I had three iced teas. They only charged me for one. Exactly.

Tommy Thornburgh: [00:09:25] What what, what’s business related? Right. And that’s if you’re wondering to yourself, how do I know if something is business related? Ask yourself if it’s ordinary or necessary for your business, and if you can say yes to either one of those, then track those expenses. Number two, have a professional file your taxes. You know, obviously I’m biased. If you’re working with us, great. But if you hire a professional and you were to get audited, they should be able to back you in that audit situation. That’s why you go to the doctor, right, is to make sure that you’re fixing yourself up the right way. And. Track your expenses, hire or hire a professional. And we have a vast. Vast group of professionals that get to work together in all these different industries so that we can get back to our main tagline, which is it’s not about what you make, it’s what you keep, what you can reinvest back into your business. Well, you can put into your own retirement or what? You can throw off a bridge. I don’t care what you do with it, but I want you to be able to make that decision.

Phillip Hearn: [00:10:37] And so that that’s such a key component because as entrepreneurs and a lot of our listeners will be in kind of that bucket. We’re so used to doing things ourselves, right? So it’s just, hey, we got to get it handled. We got to get it handled right now. But it sounds as if having the correct team in this particular case can take a ton of stress or issues or just overall angst about the whole tax process. And you even talked about something as simple as managing your expenses, right? So what are some of the pieces? And again, you’re talking about a 70 000 page tax code, I think you just mentioned. What are some of those pieces that if they’re of course, working for the business and are used for the business, can be construed for tax credits or a write off, What are those things that people may be surprised about when they hear, hey, I can actually use this as a part of a tax credit towards what I’m doing.

Tommy Thornburgh: [00:11:26] I love it. Yeah, absolutely. There’s a real. So one of the things that I’m trying to put together right now and I want to make a YouTube series about this, it’s one of my passions, right, that ever since I’ve got a little two year old daughter and I’ve got another another little baby girl on the way, I don’t even think I’ve told you that.

Phillip Hearn: [00:11:43] Congrats. Yeah, that’s breaking news. See, we break news here. Yeah, absolutely. Yeah.

Tommy Thornburgh: [00:11:48] But here’s here’s one of the things that I’ve become more passionate about since I’ve had my daughter. And that’s generationally how you can change the landscape of the financial future of kids, grandkids, loved ones, whatever that may be. And just to kind of walk you through some of what I’m doing, I pay my daughter $12,900 a year. It’s a deduction for me. She doesn’t have to show it on the taxes because she made under the standard deduction. So if you look it up on YouTube, they talk about paying your kids and all these sort of other areas. But where I’ve changed that is now if I put that 12,900 into a Roth IRA or into some sort of a vehicle where the money compounds, by the time she’s 25, she has $1 million in that account. Now, she can either invest it into a business, she can use it for college, she can buy a house, she can invest in real estate simultaneously. I’m adding her on to some of my credit where she’ll have an 800 credit score by the time she’s 18. So now, as long as I do a decent job helping her understand that life’s about choices, right? You got good choices, you got bad choices, you better not mess this up, because I worked really hard to get you an 800 credit score and $1 million in this account. Right. But I’m going to make that bet that as long as I can educate and help understand where that’s going to come from, hopefully she makes the best decisions possible. But tax tax wise, a lot of you listening to this are probably considered self-employed, home based entrepreneurs. There’s over 250 different deductible expenses, right? Things like your phone, your Internet. Your power, your electric bill. Portions of your rent or your mortgage for those of you that have the designated home office. How can you write off your vehicle? Have you spent money on softwares or on advisory to better your business for the future? Those are all things that can become tax deductible as long as you’re tracking them and you’re tying them back to your business.

Phillip Hearn: [00:14:10] And so that’s huge, too. So again, there’s so much in the tax code, so understanding some of those honestly simplistic ways of looking at it and how the benefit works out as well. And think you also mentioned that this is vertical or industry agnostic, right? So you can find this whether you’re in distribution, manufacturing, real estate, as you mentioned, it doesn’t matter. The industry, you guys, you and your team will work with folks that are in a lot of different industries. Am I hearing that right?

Tommy Thornburgh: [00:14:39] The only thing we try and stay away from is farming.

Phillip Hearn: [00:14:42] Other than to be a farmer. Okay. Well, you just you just made a couple folks mad on the on the off season. A lot of a.

Tommy Thornburgh: [00:14:50] Lot of times farming Here’s depreciation is king when it comes to tax deductions. Right. That’s why so many very wealthy individuals invest into real estate and invest into a lot of these things that they can depreciate on their taxes if you have investment properties in your listening to this. There’s cost segregation studies. We had a client that off of two properties did an accelerated depreciation on a cost seg and it saved them $600,000 in taxes in one year. Now, obviously, this is a high income earner, real estate investments. But the point that I like to make there is even if you are just getting started. The more no one cares about your money more than you do. Correct. So the more that you understand how to protect yourself, how to maximize on your tax benefits, how to build personal credit and business credit, and then be able to reinvest back into different vehicles that will compound your wealth over time. It’s hard to lose if you’re playing the game to win based off of keeping more money in your corner from a tax standpoint.

Phillip Hearn: [00:16:04] And I love that cost seg tool. Right. So basically for folks who don’t know it definitely start to research and look it up. And again, I’m not playing an accountant either, but I have done my research on the cost seg. It’s a beautiful thing in terms of basically speeding up that depreciation schedule where let’s say you can tap into 70 to 80% of that depreciation within the first 5 to 7 years, maybe sooner, depending on programs that are out there. But that concept of no one teaches that, right. You know, so when we were growing up, no one’s teaching, hey, you should look into cost seg if you go buy a property. So that’s one of those things that is it’s it makes the property investment experience potentially so much greater than you might have thought by just looking at a couple hundred dollars in net operating income from rents or something like that. So that’s a huge, huge tool. So let me ask you this. We’ve got an interesting scenario in terms of environment right now, fiscal environment. You’ve got rates going up. You’ve got, you know, all the noise, if you will. How does a company like Prime help their clients cut through the noise? Because there’s so much of it, no matter where you look, interest rates, the Fed, all the decisions being made or not made, what what are you and your team do to help kind of get rid of the noise and keep people on their on their track and their plans?

Tommy Thornburgh: [00:17:22] Yeah, it’s a really it’s a really good question because there is a lot of uncertainty, even for myself, right? If I was to give you my honest opinion, there’s still uncertainty in what that looks like. No one knows. Everyone acts like they know. No one knows what’s going to happen, Right? So what I try and help people understand is there’s a huge difference between what is considered active and ordinary income money that you go and work for that’s taxed between 10 and 37%. And there’s a big difference between investments and long term passive income. Yeah. So the question that I ask even myself is what’s the goal? What’s the plan? What are you trying to do with this business and this income and these interest rates? Because historically, long term, you can’t lose. So if you’re in it for the long term, is a higher interest rate deterring you from the legacy play that you’re after? If it’s a short term, then you really have to be a little bit more calculated than previous years of making sure that you don’t lose. But what I will say is if those decisions for your business are calculated based off of how your taxes are going to impact your business overall, it’s really tough to lose if you understand the tax game. And I’ll give you an example. The last day of 2022. It was a Saturday. And I practice what you preach, I should say, right? I talk about taxes all year round. And here I am on the last day of the year, not planning ahead like I should, and like I preach to everyone else. Sure. You help everyone else before you help yourself.

Phillip Hearn: [00:19:06] Exactly.

Tommy Thornburgh: [00:19:07] So I realized that I’ve got $100,000 of additional tax liability that I didn’t account for. So I called one of my good friends that’s a real estate investor and said. I need you to let me buy into one of your properties. And I bought $100,000 into a fourplex, which was 33% of ownership. We agreed to do a cost segregation study on it, which will accelerate that depreciation. Yep. It should save me 7 to $80,000 in taxes, and it’s a long term wealth play where I’ll be able to create residual income long term. So blindly making that decision, I probably don’t make that decision, but understanding how it’s going to benefit me from a tax standpoint. Calculated Risk says this is a no brainer for me long term.

Phillip Hearn: [00:19:58] Yeah, Yeah. And again, I think you hit it on the head. And the most important nugget that you gave is no one knows all aspects of the future, right? But at least having some idea and understanding and kind of consistent education. So you sound like like me. I’ve always trying to figure out that next what’s coming next, right. As best as you can. But that consistent education and understanding enough to go if I put my funds into this deal at the end of the tax year, I know we’ll try to preplan it better in 23, but at the end of the tax year, here’s then the potential residual benefit now and long term, it’s a beautiful way to think about and again, you being surrounded by all your team members, I’m sure you could also pick up the phone and go, hey, I’ve got this deal I’m looking at. Just double check me before I, you know, go ahead and go after that deal, too. So that that’s a nice advantage that you have. But then also those potential clients of will have when they’re getting toward the end of their tax year, it sounds like to.

Tommy Thornburgh: [00:20:56] This is a shameless plug. This is a biased opinion and this is promoting my company. Full disclaimer here. But one of the things that I love about what we’ve created here at Prime Corporate is having the attorneys and the CPAs under one roof is very, very valuable for this reason. Oftentimes when you ask an attorney a question, you get 100 different variations of the answer and they tell you, Doc, you’re crazy. You’re going to get sued. Don’t you do it. There’s too much liability, right? You ask the accountant or the CPA, they say, Doc, I don’t care what you do, please just track the expenses. So you’re not losing on the taxes. Right. As an investor and as an entrepreneur and anyone that’s watching this, you know that truth is probably somewhere in the middle for you, right? So, yes, I’m an investor. I’m an entrepreneur. I’m a business owner, and I like to take both opinions with a grain of salt and say I want to be protected, but I also want tax benefits and I also want to generate some income. So where can I find that fine line of making the best decision for my future and for my family’s future long term?

Phillip Hearn: [00:22:14] Yeah. Yeah. Well, I’ll give you a second. Shameless plug. You know, we’ve had an opportunity to work with you and your team, and it’s been. It’s been a very good experience. And even when we run into challenges, being able to pick your brain and work through any of those challenges, I highly recommend and I will also make sure that we share our referral link in the transcript at the end of this recording itself too. So there you go. You’re not the only one doing shameless plugs today. How about that?

Tommy Thornburgh: [00:22:41] Appreciate you. Thank you.

Phillip Hearn: [00:22:44] So last question for you and this will be completely off the topic of picks, but you have so much going on, you’re running a full team. You’ve got different divisions within that team. It sounds like there’s some some great growth taking place in 2023. What do you do when you need to recharge and reset to get away from the day to day of business, which it sounds like you’re very passionate about, but what do you do to recharge?

Tommy Thornburgh: [00:23:07] Yeah, it’s a good question. I wish I had a more direct answer, but this is what I’ll tell you I’ve tried to do, but before I had my before I had my kiddo, I really tried to find myself on the golf course as often as I could. Yeah. Ever since having my kid, I’ve really tried to spend time with her. I’ve tried to spend time with my family, whether it’s at the pool, whether it’s getting them into tennis, whether it’s hitting a golf ball in the backyard. And like I told you earlier, this is getting more personable with you. But my my parents split when I was young and I love spending time with my daughter. It’s something that has taken priority over golf, which I thought I would never say in my entire life. So if I can golf, that is my number one thing that I like to do. But ever since having my daughter, that is, that priority has changed to how can I spend time that’s meaningful with my family? And whether it’s sitting at the pool, whether it’s going on a vacation, I have the luxury of being able to get up and get out of town because I’ve worked my tail off and that’s really where it lies for me right now. That’s where the priorities could change tomorrow. But for now, that’s my answer. I’m sticking to it.

Phillip Hearn: [00:24:22] That’s a solid answer. And I also love that you were able to tap into your past to make the adjustments where you need to be now to. I think there’s so many times that as entrepreneurs and just humans in general, we don’t give ourselves enough grace to tap into that and use it as a positive long term. So kudos to you because again, you’ve got a ton of really good stuff going on over at and to be able to take a little bit of time away, although the golf thing, I know you’ll probably get back into it the older that the kiddos get too. So they’ll they’ll be a trade off at some point here just won’t be right away It sounds like that’s okay.

Tommy Thornburgh: [00:24:55] There will be there will be a time I joke I’ve got a very very supportive, amazing wife that I tell her and we joke all the time. Moderation is impossible, right? People tell you, you got to balance, You got to work a lot. I really care a lot about what I do. And having someone that’s supportive of that is I wouldn’t be able to do it without it. And my my word of the not so wise is that I think moderation is fake. If you’re going to do something, you got to do it right and enjoy yourself throughout the process. I genuinely enjoy helping business owners understand how to save money in taxes and how to build and grow a business. So it is a passion of mine that. I’ve enjoyed and I will continue to do so. I really believe that.

Phillip Hearn: [00:25:46] Well, you can just hear the passion you have about the work because it doesn’t even sound like work when you talk about it. Right. And most people would say taxes by themselves or work, let alone creating the right entity and everything else. So kudos to you and your team. How would our listeners find you and Prime Corporate Services? What should they do? Where should they go to check you guys out?

Tommy Thornburgh: [00:26:07] Yeah, great question. It’s prime corporate services on everything and I would recommend to everyone give give us a follow on Facebook or on Instagram. We try and do a tax tip of the week to keep you thinking about taxes throughout the year. To your point, it’s not the most exciting topic, but as I mentioned earlier, no one cares about your money more than you do. And if we can stay in front of you helping you understand what to be aware of, how to track your expenses, giving you a tax tip that’ll resonate with your business to hopefully save you hundreds if not thousands, if not tens of thousands of dollars at the end of the year. That’s ultimately our goal. So prime corporate services, Facebook, Instagram, LinkedIn, and then also, I know we got you a link so that we know where you’re listening from and you can schedule a call to speak with us for a free 45 minute, two hour consultation around your entity structure around how we could potentially save you from a tax standpoint and the other services that we obviously offer.

Phillip Hearn: [00:27:16] Yeah, and again, personally, I highly recommend utilizing that 45 minutes to an hour. It is chock full of a ton of really detailed and solid information, but you’re walking away feeling like you know more about it and it’s not as overwhelming. It’s still overwhelming because it’s taxes and we try to figure it out. But like how you break it down throughout the year. But that 45 minutes to that first hour really gets you going on the right path. So I love it. And again, we’ll make sure that we share that link so our listeners can take advantage of that free session just to kind of get them going and and figure out what’s the best route for them moving forward. So, Tommy, it is always a pleasure to talk with you. I always enjoy the conversations. I now I’m going to have more questions for you because now we got to talk about the new little one and all that. So we’ll talk about that off there, but we’ll keep that conversation going. But our thanks again to Tommy Thornburgh, the president of Prime Corporate Services. You have been listening to Doc’s discussions. I’m Dr. Philip Hearn, and this is Saint Louis Business Radio X. Take care.