Breaking Down Business Taxes: Key Insights from FBA’s Broker FUNdamentals Session

Truth is, it's easy to get caught up in the complexities and nuances of running a successful business. But sometimes, the most powerful insights come from revisiting the fundamentals. That's why, in our latest Friday Broker FUNdamentals session, we took the time to focus on a critical aspect of business and franchising that often gets overlooked or misunderstood: taxes.

Let’s recap last week’s mentoring session, "Turn Your Tax Tragedy into a Tax Strategy."

Understanding taxes makes you a better Broker (and your candidate a better Franchisee)

The focus of this topic was to highlight the benefits of working with a CPA, tax principles, and its significance for both Brokers and Candidates.

This session began with our host and FBA Broker, Amanda Vargas, introducing Michael Reeder, a former Franchise Broker and current CPA. Michael highlighted the common issue of potential Franchisees lacking a CPA or being discouraged by conservative approaches, emphasizing the importance for Broker’s to understand the client's own knowledge on finances before advising. 

The "can't afford to miss" topics we covered

In this session, we covered a range of crucial topics that every Franchise Broker and candidate should be aware of. Here's a glimpse of what was discussed, but remember, the real value comes from attending the sessions to dive deep into these golden nuggets:

• The Role of CPAs for PZEE Candidates: Understanding the critical importance of introducing a CPA early in the franchise process and the value they bring, especially in terms of tax strategies and optimal business structuring for high-income earners.
• Entity Business Structure Advantages: Exploring the potential benefits of choosing the right entity for specific types of buyers, including the advantages of an LLC over a C-corporation in certain scenarios.
• Applying Real Estate Tax Strategies to Franchising: Discussing how real estate investors use cost segregation to increase losses and offset taxes, and how these principles can be applied to the franchise business model.
• Creating Passive vs. Non-Passive Losses: Delving into the creation of passive losses and their potential to offset W-2 income, and why investing in a franchise might generate non-passive losses, which can be advantageous for tax purposes.
• Strategic Tax Planning in Business Purchases: Highlighting the importance of strategic planning around tax considerations, such as purchasing equipment to increase losses in a particular year, and its impact on overall business strategy.

GOOD stuff, right? Don't miss the next one!

Join the next Friday Mentoring at 2 PM EST: https://fbamembers.com/events/calendar/brokering-fundamentals/

Why Broker FUNdamentals is a must-attend mentoring session

In upcoming mentoring sessions, Michael will be back and diving into the specifics of the ROBS plans (Rollover for Business Startups), offering a balanced view of their advantages and disadvantages. This knowledge is invaluable for any Broker looking to guide their clients with tax confidence and expertise. 

Be sure to be there!

Moreover, Broker FUNdamentals sessions like these introduce you to the critical tools you need to do GOOD business. This week's focus on understanding taxes in the context of franchising, and effectively communicating these complexities to candidates, is a perfect example.

Many franchise candidates may not be aware of these intricate tax strategies, and as their guiding expert, it's your role to provide clarity and direction. Equip yourself with the knowledge and insights to fulfill this role effectively.

Want to learn more and speak to an expert? Explore CPA services for you and/or your candidates. Schedule your FREE consultation at Reeder CPA Group.

Find the best franchise opportunity for you: https://www.franchiseba.com/find-franchises/