The art of taxes

Death and taxes are two inevitable things in our lives. As an athlete, I do things to minimize the risk of the former and improve my longevity. In the meantime, as a Certified Public Accountant (CPA thereafter), I put just as much attention and efforts to minimize the chance of the latter and increase tax efficiency for me and my clients.

For my health and longevity, I eat a moderate amount of healthy food and work out every day; I do intermittent fasting and practice meditation on a regular basis every week; I go hiking, running, and cycling frequently which helps me destress, balance, and regenerate my physical and mental energy; last but not the least, I try my best to stay away from sugar - my No. 1 enemy and help myself stay in shape and obesity-free.

There were dark moments in my life where I was challenged emotionally and mentally. When human body is undergoing intense and prolonged stress, health issue starts to occur. My immune system was collapsing and my health was on the decline. Those dark moments paid a toll on me. But human body is just as resilient as human mind. As soon as I set my mind into forming a habit of positive thinking and started taking actions accordingly, my health picked up and so was my happiness and productivity.

After I set off my journey of taxation with graduate school studies, I was lucky to join Ernst and Young LLP where I began learning and understanding more and more rules of taxes. At the very beginning, I thought it was just black and white because every taxpayer has those rules to follow and there is no other way around to avoid or decrease the amount of tax owed at least for most taxpayers. As I learned more and put more thoughts into the reason why I was treating one situation this way but another situation a different way, I started understanding why with taxes, it is always “it depends.” As I explored more in and out of work, I realized how significant an impact taxes make in our lives.

It is too simple to say that the more we make, the more taxes we pay. Instead, your tax liability, in a broader sense, has everything to do with what type of person you are in terms of business. Robert Kiyosaki, the famous author of “Rich Dad, Poor Dad”, developed the ESBI module and made it well-known. According to this concept, there are four different types of people as they relate to money-making, i.e., E (employee), S (self-employed), B (business owner), and I (investor). Each of these four types of people makes a different type of income. For example, employees make active/earned income; self-employers make linear income through running their own businesses; business owners leverage others who they work with and who work for them to make money; while investors earn mostly passive income. If you follow this logic, you will get a sense that the tax laws that apply to income made by these four types of people are different. Most taxpayers, especially those Ss, Bs, and Is rely on their tax CPAs to handle their taxes because they think tax is too complicated and too specialized. Yes, you are right that the complexity of taxes is intimidating and overwhelming and it does make sense to hire a qualified professional, like a tax CPA or a tax attorney, to help you with your taxes. But for anyone who would like to be or is already successful in business, learning tax knowledge is perhaps one of the best asset an entrepreneur should invest in. The compounding effect of your tax knowledge will in time help you save a lot of money down the road. As an old saying goes, a penny saved is a penny earned.

You might wonder “Hey Su, you are a tax CPA who owns and runs your own tax practice. Aren’t you are supposed to promote your business and get as many quality clients as possible? Why do you seem to be on the track of encouraging your clients to do part of your job? Doesn’t that reduce your chance of getting hired and having more business?” That is a terrific question. It actually leads me to bring up the mantra of my business - The more you understand about your financial situation and how it is related to tax, the more constructive and useful support you will be able to provide me. I will end up spending less time digging through all the information you provide including critical, important, less important, useful and non-useful information. This will help me spend more time focusing on the more creative and fun part of my job - tax planning - which is also the most value-added service, and make the working process more efficient.

This blog is dedicated for my two children, Julianna and Jacob, who are my source of love. They kept me self-motivated and positive during my darkest moments. This blog is also made for all the entrepreneurs out there, who, with the power of strength and resilience, welcome life pushing them around, soar amidst uncertainty, dance with the chaos, embrace the turmoil, and are daring to forge their visions into reality with passion of life. I am here in support of you and will guide you through the currents of taxes and ensure you a smooth ride.