Charge Forward Podcast

🎙️From Overworked to Empowered: Valerie Kemp’s Journey to Balance & Freedom (Part 2)

• Jim Cripps • Season 3 • Episode 8

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What happens when a successful CPA realizes her business is running her instead of the other way around? 

For Valerie Kemp, a realization at her 1st employeer's funeral . He was an old school accountant, after decades of working holidays and endless hours for clients, only a handful showed up to honor him. In that moment, she made herself a promise: “I will not live—and die—that way.” 

Fast forward to today, and Valerie has transformed both her business and her life. In this candid conversation with host Jim Cripps, she shares the strategic decisions, mindset shifts, and leadership lessons that allowed her to reclaim her freedom while building a stronger, more focused firm. 

💡 In this episode, you’ll learn: 

  • Why selling off payroll services—a “sacred cow” she once thought untouchable—was the most liberating decision her firm ever made
  • How empowering her team through weekly knowledge-sharing sessions created both confidence and better client outcomes
  • The power of shifting from transactional to strategic client relationships
  • Why letting go of control isn’t weakness—it’s the key to scaling sustainably
  • Practical insights on recent tax legislation, including misconceptions about HR.1 (the “Big Beautiful Bill”) and its provisions for overtime and tips


For the first time in 20 years, Valerie experienced a tax season where she could watch March Madness without a laptop by her side. That small moment symbolizes the bigger transformation: building a business that serves her life instead of consuming it.
 
Her story is a powerful reminder that professional success and personal fulfillment aren’t mutually exclusive. With courage, clarity, and the right strategies, you can have both.
 
👉 Ready to Charge Forward with a healthier, more balanced approach to business? Don’t miss this inspiring episode.
 

Contact Valerie Kemp CPA
🌐 https://vkdcpa.com/
📘 https://www.facebook.com/VKDCPAfirm
📱 https://www.instagram.com/vkdcpa/
☎️ 615-792-1766


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SPEAKER_01:

I worked um for a tax attorney for 10 years before I started my firm. And he was a wonderful mentor. Thing he taught me was that I wanted work-life balance because he hadn't but a great man. But when I went to his funeral, we there were a handful of our clients there. Just a handful.

unknown:

Yeah.

SPEAKER_00:

Well, and somebody out there is thinking, oh, well, they're getting over on me. No, the reality is they're trying to protect you from accidentally going over that number. And then all of a sudden you uh you don't qualify for that. And now you have a significant tax debt to the IRS. And I can tell you, you do not want to owe the IRS money.

SPEAKER_01:

No, you do not. And that is their logic behind that for sure. And as a tax preparer, and I speak for a lot of tax preparers when I say this, we are so glad that they did it this way because we don't have to worry about it every single payroll cycle. We don't have to worry about what if you have overtime, your wife doesn't have overtime, but you're going to exceed that$300,000 threshold. So it's much better, like what you said, so they're not looking at a big tax bill when they get there at the end of the year.

SPEAKER_00:

Yeah. It's kind of protecting people from themselves.

SPEAKER_01:

Exactly. It is.

SPEAKER_00:

Because that would be terrible to get to the end of the year and all of a sudden you owe$20,000 in taxes that didn't get collected.

SPEAKER_01:

That is true. And we don't, we don't want that to happen.

SPEAKER_00:

We do not.

SPEAKER_01:

Because along with that comes penalties and interest as well. So we don't want that to happen. Another big misconception is uh no taxes on Social Security. So in the beginning, uh they're really pushing not to have any taxes on Social Security income for retirees. Um they decided that instead of exempting all Social Security income uh from your income tax, that uh they're still gonna go by the same calculation that they've been using, which is up to 85% of your Social Security can be taxable based off of your other income that you have. So if you don't have any income, your Social Security is not taxable. But if you do have other forms of retirement, a pension, 401k, interest, rentals, whatever other forms you have, up to 85% of that can be taxable based off that other income. So instead of exempting the Social Security, what they've done is for anybody over the age 65, they get an additional$6,000 deduction from their uh income, from their adjusted gross income. So if you are a couple over 65 uh years old, you would get a$12,000 deduction from your income. So that's how they chose to do that. So Social Security, and it's been a common misconception forever and ever and ever that once you reach full retirement age, you don't pay taxes on Social Security. That's not true. That still remains not true. Um, you will pay taxes on Social Security up to 85% can be included in your taxable income, but you get a deduction for$6,000 per taxpayer over the age 65 against that.

SPEAKER_00:

Yeah. Um, and what would what advice do you give to somebody out there? Because I remember so my parents, because they they didn't have income for a number of years in retirement, because they didn't have they didn't choose to invest in the market. Um, so they didn't pay taxes for several years. They didn't file taxes. I I'm a I'm I'm under the understanding you don't have to if you don't have a taxable income.

SPEAKER_01:

You're correct, you don't.

SPEAKER_00:

Um, but it was also a weird conversation to go, okay. Well, now that you've decided to put some money in investments and you've made some money, now you've got to start filing taxes again.

SPEAKER_01:

Yeah, people don't like that conversation. They're like, well, why why am I why am I even earning money now if I have to pay taxes? And what I will tell them is tax is only a percent. So if I can put my money to work for me and it causes me to have a taxable income, tax is only a percent. So at the end of the day, I theoretically should walk away with the bulk of that money.

SPEAKER_05:

That's right.

SPEAKER_01:

Um, unless I'm in one of the top, top tier tax brackets, and then we're about 50-50, you know.

SPEAKER_00:

So still more money than you have.

SPEAKER_01:

It's still more money than you had. Yeah, yeah.

SPEAKER_00:

Um well, you know, I know we said we both said this at the beginning, regardless of political affiliation. Um, but I do think this is an interesting time in that I couldn't tell you the last time a president kept or fought this hard to keep an election campaign promise. And he ran on uh, I mean, a number of things, um, but a couple of them were no tack, no tax on tips, everybody thought he was crazy. Another one was no tack, no tax on overtime, everybody thought he was crazy. Right. And then what do we have? Now, is it limitless? No, it's not limitless, and we didn't even anticipate that it would be, right? Because then you'd have some people doing some creative things that are over the line.

SPEAKER_01:

Exactly.

SPEAKER_00:

But realistically, I mean, he's delivered. Now, obviously, it took a lot of people in order to get these things to the door and passed, but here we are, and we have HR one, the big, beautiful bill that has these things in it, and it's going to impact real people.

SPEAKER_01:

Yeah, and it came about so fast, too. I mean, to take something um when he took presidency in January, uh, mid-January, um, and July 4th, we have a big overhaul of the tax code. Um, this bill is so expansive. There are so many different types of credits included in that. There are so many different types of accounts it sets up, or um, just different strategic planning that we can use this bill for. Um, that it is quite amazing that it it was able to be done in the speed that it was done.

SPEAKER_00:

Well, and I think one of the things that I see that people are taking for advantage or taking it for granted is it made permanent some of the 2017 uh tax deductions that we've been enjoying for the last seven or eight years.

SPEAKER_01:

That's correct. So during his first term in office, um, he did another kind of overhaul of the tax code, uh, doing away with exemptions and increasing a standard deduction, almost doubling that, um, and a lot of other, a lot of other rules in there. They were all supposed to sunset. Well, part of what is in this bill that was just passed uh in July is the extension of those. So we have uh qualified business income deduction, which was first brought about during his first term. That has been extended through 2028.

SPEAKER_00:

Did it also get increased?

SPEAKER_01:

Uh no, it's still the same 20%, but it's been extended. Um they uh increased the child tax credit to$2,200 from 2,000. Um, there have been a lot of extensions. The um estate and gift taxes were supposed to plummet where those levels were so low that it would hit almost the majority of Americans that owned their own homes and had a 401k. Um, and now those levels have been uh bumped up again. So it made a lot of those tax provisions from the original taxpayers um act during his first term, it made those permanent. Now, we say it made those permanent. We all know that any presidency, um, any Congress can come in and overhaul it. But many of these have been extended into perpetuity. So unless another administration comes in and tries to change them, they are considered permanent.

SPEAKER_00:

Yeah. Well, one of the ones that that I want to always see protected is the Roth.

SPEAKER_01:

Yeah.

SPEAKER_00:

And, you know, not that somebody couldn't, an administration could absolutely come in and be like, oh, just kidding, we're going to tax this. I think there would be a lot of backlash lashes if that happened, but it could.

SPEAKER_01:

But they would never get elected again. Whoever comes in to do it would not get elected again. So be real, real political suicide right there.

SPEAKER_00:

Yeah. Well, the the thing to it that I always think about is it would be much easier for an administration to stop allowing it. Correct. Than to be so over the top to basically go, nope, now we're gonna tax it. So I tell people all the time, get as much in a Roth as you can possibly get in there. Um one of the things that I've dabbled in is self-directed Roths. Like, don't like, do you see many of your clients using them?

SPEAKER_01:

Uh I see a handful of them using it. Um I like it. Uh if the person is making good decisions about how that's being self-directed. Um so you know, if the person is not savvy enough to understand investments um or how to make their money work for them, it makes me nervous for them to have a self-directed um IRA or a Roth IRA. But I do, I do like that because it opens up some of the investing that you can do.

SPEAKER_00:

Sure. Um one of the other things in the big beautiful bill that uh I think a lot of people either I don't know if it's a misunderstanding or maybe it's just they're so stuck on their politics, is they think that this helps somebody else and doesn't help them. And I I can't really paint a picture for somebody this doesn't help.

SPEAKER_01:

I can't really myself, um, because like I said, there's so much included in this that it runs the gamut of different socioeconomic groups, businesses. So, so there's legislation in here that makes it attractive to bring manufacturing jobs, uh, manufacturing facilities to the United States. Um, so it's hit the big business on that. Uh extended the qualified business income deduction, definitely hit self-employed individuals like myself. Um, there's a lot of middle class tax deductions. Um, they've also opened up the thresholds for some of the income limitations that we typically see that get cut off around$150,000 for um a married couple. Um, they've extended those up on some uh different pieces of this legislation. And we know that the middle class is growing economically, uh, so it hits more of that. Then they've increased the child tax credit, they've increased provisions um for employers paying student loan down where the employee doesn't have to claim that as income. If you will include that.

SPEAKER_00:

Let's let's flesh that one out a little bit because I did not know about that one. And if I've got my thinking cap on, because I was always trying to figure out, okay, well, how do I get pay and paid in the best way so that I pay have the least amount of taxable liability, but the most most benefit from it? So let's just say I was at an employer and I was up for a raise, would this work? Let's just say I had fifty thousand dollars in student loan debt and I asked my employer instead of this fifty two hundred dollar raise, could I have that in tuition reimbursement towards my student loans? If they agreed to that, then I would not pay any taxes on that money as long as it went to my student loans.

SPEAKER_01:

That is correct.

SPEAKER_00:

But it would still be tax deductible by my employer, the same as if he paid me, with the exception of he would not pay employment tax on it.

SPEAKER_01:

Correct.

SPEAKER_00:

So it actually saved the employer money too.

SPEAKER_01:

7.65% uh at the federal level, state level be different. But yeah, so it's a really good tool, not just for tax savings for the employee and the employer, but it's a great way to have longevity with that employee because I can guarantee you if I'm an employee and my employer is paying$5,200 a year toward my student loan, I ain't going anywhere, you know? And so um we have actually seen um our clients be able to employ this um for their employees, and man, it's created a lot of goodwill. It saved them um from having to do a bonus subject to uh FICA taxes. The employee who would be taking that$5,000 uh toward the student loan, he's not having to pay tax on that money. So um they have had this around for a while, but now instead of it being a flat amount, it's indexed for inflation, which means it'll go up every year. So um it's$5,250 currently, and that's indexed for inflation. So each year annually that will go up, and it's a great tool for uh employers uh to be able to give nice bonuses um to their employees without incurring the payroll taxes on that. And then also it's a great way to bonus an employee there where they don't have to pay tax on it. And like you said, they the employer gets to deduct that and the employee doesn't have to pick it up as income. So it's a win-win for both sides.

SPEAKER_00:

And what an incredible, incredibly powerful retention tool. You know, because you know, one of the things that I learned while managing and and leading people was if you didn't teach them how to manage their money depending on the age bracket, obviously, but my average team member was like 26. If I didn't if I didn't teach them as a group on how to manage their money, then they would eventually have to leave me over a quarter or over a dollar an hour because they would outspend their ability to work for me.

SPEAKER_01:

I I see that quite often. And a lot of times when people are thinking about making these job moves, they're not taking the benefits into consideration that they receive. Um, and they're also not taking into consideration how far the other employee employer is, and so I think it's a great retention tool. Yeah, and there are things in this legislation that um are good retention tools.

SPEAKER_00:

Oh, absolutely. Yeah, well, and we're actually working on a retention tool currently together, um, and it's working out uh swimmingly for for a lot of different uh clients that have larger numbers of employees. And but it I I think it falls into one of those places in the tax code where people don't think that it's real. So uh for anybody out there, we have a tax product uh or tax program where we can help employers that have at least 20 employees reduce their taxable liability so that they uh they save between$650 and$1,000 per employee, and the employee actually gets some additional benefits uh like access to telemed and uh a hospital indemnity plan, a couple other things. And the employee actually takes more money home. So it's it's win-win-win. The employer saves some money, the employee gets some additional benefits, uh, the employee also takes home some additional after tax money on their every two weeks paycheck or every week paycheck, whenever that is. And some people don't think it's real. What do you say to that?

SPEAKER_01:

Well, seeing is believing, and uh it is real, and we have a few clients that are utilizing that right now. Um, it's a great way, especially if you don't offer traditional health insurance because your business can't afford to do that for the employees. It's a great way to give them some benefits. And so uh we have seen that work. Um, it gives more benefits to the employees, it saves payroll taxes uh for the employer and the employee because it is a pre-taxed medical deduction and insurance deduction. And um, you know, it's like a lot of things in the tax code. Um, it feels like it's written in hieroglyphics, but uh it is a very legitimate thing. And I think now more than ever, we have to figure out ways to retain employees because everybody is so highly mobile these days, uh, moving employers. And then also as businesses, we have to figure out a way to decrease our cost at whatever way we can, because um, all of us, whether you're in a service industry, whether you're in retail, whether you're a restaurant, whether you're in manufacturing, all of our costs have gone up. Cost of utilities, cost of uh the products, software costs, labor cost. So if you can save 7.65% of anything, that that's a big deal in this economy.

SPEAKER_00:

Absolutely. Especially if you can keep the people that you've already trained so that you don't go back to the drawing board with a new employee.

SPEAKER_01:

Exactly.

SPEAKER_00:

Um, it's it's been pretty powerful. And I I kind of liken it to some of the other programs that have been out there that maybe they seem too good to be true, but they're real.

SPEAKER_01:

Oh, yeah. I mean, a lot of people thought the employee retention credit um that came about because of COVID, oh no, no, no, that's not no, you can't do that. And you can if you met certain criteria. And so um just in our firm in Ashland City alone, we were able to help our clients receive over$10 million in employee retention credit. So a lot of things in the tax code seem like smoke and mirrors. Uh, some of the things you see on TikTok and here on TikTok, I promise you it is smoking mirrors. It is not real. But uh the program like what you're talking about, the employee retention credit, um, other things in this tax code, there's one thing that to my knowledge, we haven't had in the last several decades. Um, you can deduct interest on car loans.

SPEAKER_03:

Yeah.

SPEAKER_01:

So when when people talk about that, uh they're like, no, I heard that, but that can't be true. And like a lot of the things in the tax code, there are certain criteria around that. But um, with certain income levels, you were able to deduct up to$10,000 annually in auto interest on a car loan if the car was new, first-time use was with you, and final assembly was in the United States.

SPEAKER_00:

And that one's interesting, in my opinion, just because the fact that it doesn't really conform to it's not like you have to itemize in order to be able to qualify for that.

SPEAKER_01:

Right. So whether you itemize or whether you don't, this is not an itemized deduction. This is direct deduction from ordinary income, from your taxable income.

SPEAKER_00:

That's great. And I mean it's almost guaranteed to stimulate the automotive sales.

SPEAKER_01:

Sure. So it's like you and I have talked about before, tax law is meant to shape society. And so you can look at this tax legislation and see that that's what that's doing. A story that I like to tell all the time when I speak to um high school uh students about taxes is to tell them that tax law does shape society. And a great example of that is in Russia, many, many, many moons ago, uh Peter the Great was a czar there. And he loved uh European and more Western fashion styles. And one of those things was that men in Europe did not have facial hair. And Russian men were known because it's cold, is everything up there, for having big bushy beards. So he enacted a beard tax. If you want a tax, if you want a beard, you were gonna pay a tax for that beard. And so what ended up happening was a lot of people didn't have the money to pay the tax or didn't want to pay the tax, and so they became clean shaven. So just like that tax law uh caused change, this current bill, you can see it's trying to stimulate manufacturing of goods in the United States. Um, there are lots of provisions within the Big Beautiful bill that hit that. Um, it's trying to stimulate the automotive industry for new car sales uh with this interest deduction, uh, trying to make it more palatable for people to spend that higher amount that that we're seeing in cars today. Um, you can also see that it's trying to influence the uh mortgage and the housing market because we have seen the increase in the salt taxes, state and local taxes. So basically we had a$10,000 cap on state and local taxes, and that was sales tax, state income tax, property taxes, ad valorum tax. So several, several taxes fell in that category, but it was capped at$10,000. So if you spent$11, you only got to deduct$10. Well, now they've expanded that to$50,000. So if you have more state income tax, if you have sales tax at your income level plus sales tax on that automotive purchase, plus your property taxes, if that's in excess of$10,000, you're still okay. You've got a much higher threshold there. Uh another way we see it trying to shape um the uh society is now to get a lot of these credits, you have to have a social security number. So before, on many of these credits, uh, many of the tax um incentives, you just had to have a taxpayer identification number. And so the difference between a social security number and a taxpayer identification number is a social security number is for a citizen, a taxpayer identification number is for a resident alien, a non-resident alien, or the dependents and spouses of um those resident and non-resident aliens. And so now you've got to have a social security number to qualify for a lot of these tax incentives.

SPEAKER_00:

Yep. And I think there's this false impression out there that it's always been that way.

SPEAKER_01:

No, it's not.

SPEAKER_00:

No, and it blows my mind that at some point uh we either said it didn't, you didn't have to have a social security number or uh we just kept looking the other way.

SPEAKER_01:

And and I don't know which it is or was, but it's not that way now. So uh you will need a Social Security number to take advantage of a lot of these credits. Now, that does not mean just because you have a taxpayer identification number, you don't have to file taxes anymore. You do have to file a non-resident tax return. So uh that's a big misconception that I see that has historically been a misconception. There is a 1040, which US citizens file, and there is a 1040 NR, a 1040 non-resident, that non-residents um will file.

SPEAKER_00:

Yeah. Um you know, circling back just for a moment to the assault taxes, the state and local uh taxes, and that being increased from 10 to 50. One of the things that I don't think people understand is if they didn't raise that number, you would be paying taxes on the taxes you're paying.

SPEAKER_01:

Correct. Now, here in Tennessee, we're kind of okay because we don't have that state income tax. But in can in states like Kentucky, Georgia, uh states all around us that have income taxes and states all across the country that have income taxes. If you were paying more than$10,000 for your property taxes on your residents and uh state income tax when you file annually with them, then you weren't getting that. So it's like double taxation, basically.

SPEAKER_00:

On that money, yeah. On that. And I just ballpark uh ballparking it in my head. Uh, I have friends that live in the state of Georgia that I'll guarantee you were paying taxes on their taxes.

SPEAKER_01:

Oh, I would imagine that, yeah. Because you've also got ad ad valorum and you have ad valorum as well, which a lot of people and here in Tennessee, thank you, Lord, we don't have ad valorum. I mean, I know everybody gets tore up about this wheel tax, but it's only because they never tried to register a vehicle down in Georgia or a state that has ad valorum. And for those that don't know, you're not paying a flat wheel tax, you are paying on the value of that vehicle as assigned by the state of Georgia. So even if it was a gift, even if it was a gift, yeah. So I've seen people pay$1,000 a year to tag that vehicle or more. I was gonna say.

SPEAKER_00:

And I get frustrated because I do own a hybrid. Um, I have several that are not, but I own a hybrid and it blows my mind, or I get frustrated because I've got to pay$200 for that one. But the the just the even the idea of paying a thousand dollars or more in ad valorum tax, and that goes way back. I mean, I can remember my parents, you know, my dad had a$50 Volkswagen bug and was concerned because he didn't know if he could afford the whatever it was, ten dollars in ad valorum tax that he paid in 1968. Um, you know, so that's that's been around a long time.

SPEAKER_01:

It's been around a long, long time, yeah.

SPEAKER_00:

Yeah. Um for business owners, because you know, a lot of the people that watch the podcast, a lot of people that have been on the podcast are small business owners or medium business owners. And there's a lot in this bill for them as well.

SPEAKER_01:

Oh, yeah. The the one biggest thing which we've enjoyed for the last several years is that QBI qualified business income deduction, uh, which has been fantastic. Uh, because it feels like we get hit harder because we pay self-employment taxes when in actuality we're just paying it all at one time.

SPEAKER_03:

That's right.

SPEAKER_01:

Um, because an employee is having uh Social Security and Medicare come out of their wages, the employer is matching that and sending it on. And since we're employee and employer, we have to pay 15.3%. So that 20% reduction from ordinary income has really helped um kind of ease that burden of the 15.3% self-employment taxes. So we've got that. We have uh, like we talked about for the employers being able to pay uh towards student loans for their employees. We have increased section 179 depreciation, that's a big one, which is wonderful because we love using that. Uh, we also have some bonus depreciation. And so there's lots of things in this legislation geared around making it more advantageous for businesses to make capital purchases. Um, also, and I think we talked about this earlier um in the podcast about the manufacturing um facilities. So non-residential manufacturing facilities, um, you can get 100% depreciation on it. So it's really uh can be a powerful tool. Here in Middle Tennessee, uh, we have some pretty high property rates. Um, and so if I'm contemplating buying this warehouse or building a warehouse and it's gonna cost me X amount of dollars, maybe my threshold for what I can afford has just expanded a little bit because I get to write off 100% of that in year one.

SPEAKER_04:

Yeah.

SPEAKER_01:

Um, so I think that it is very, very important for people to work with their tax professionals on this because there's so many different pockets of um industries that are affected by this, um, that it's a great time for people to start tax planning with their tax preparers.

SPEAKER_00:

Yeah, absolutely. And one of the things I'm gonna tell everybody paying attention to this. So if you have a small business, I would encourage you right now to be thinking about the things that you've heard Valerie and I talk about. And those are conversations that should be had with your tax professional, or you need to consider having a new tax professional uh in your life. Uh, you can absolutely reach out to Valerie. Uh, her office number is 615-792-1766. Correct. And one of the my favorite things that Valerie and her team do, especially these days, is they're diving deep into tax planning. If your CPA or your tax professional is not diving into that and really asking you what your goals are, what you're trying to achieve, and then working backwards from that to see what makes sense from a tax planning perspective to limit your taxable liability. I'm not talking about tax fraud, I'm not talking about skirting the system. I'm talking about making sure that you have the optimal tax strategy to align with your goals so that you get there with the least amount of taxable liability, taxes you owe, in that process. Some of the things in this bill, it really should be called the big beautiful bill because of some of the things in here, like uh section 179, like you being able to do the bonus depreciation on some of these big purchases to expand or grow your business or uh do that next expansion. So, again, if you're not having these conversations, you should be with your tax professional or you should be seeking a new tracks professional. And again, you can reach out to Valerie and her team at 615-792125.

SPEAKER_01:

Or you can find them online at www.vkdcpa.com.

SPEAKER_00:

Absolutely. Um, Valerie, one of the things that I love doing is I love referring clients to you because almost nobody, I'm not gonna say nobody, because there there are great CPAs out there, but there are a lot of CPAs that are just tax preparers. They don't actually work with clients in order to say, what are your goals? And let's work backward from there. And oh, who is your banker and who is your real estate person, who is your investment person, so that we can all collaborate to make sure that the strategy we decide on is the ideal strategy in order to get you where you're trying to go with the least amount of effort, the the least amount of roadblocks, and the most amount of profit.

SPEAKER_01:

Yeah, it's so important because if we aren't working as a team with your advisors, um, your investment advisor can make a move, your attorney can make a move, your real estate agent can make a move that doesn't fit with the rest of the team.

SPEAKER_03:

Yeah.

SPEAKER_01:

And so uh today I had a conversation with a client. He's looking at buying another uh rental property. He wondered about structuring it a certain way, uh, had a lot of questions that he was playing the intermediary for his real estate agent. And I said, Hey man, just tell her I'll call her, we'll talk, you know? And so a lot of times, because that's not what the person does day to day, um, and and things get lost in translation. So we love being able to work with our clients to be the direct point of contact with their other advisors. Um, we started this last year when our clients come in, we ask for all their information for their banker, for their real estate advisor, um, for their broker, anybody that's touching their money or having something to do with their estate planning, their attorney, anything like that. We want to be a part of that team. Um, and I've just seen number one, our clients appreciate it because it takes them out of being that intermediary that something may get lost in the translation, but it also lets them know that it's the best for his overall um picture. You know, I've had conversations with people that say, okay, tax-wise, this is what we should do, but you got to do this uh differently for legal liability. So it's not just um err on the side of saving the most money taxes, although that's what we want to do, uh, and we want to fight hard for that uh when we're with your advisors. But like everybody needs to have the same set of goals. And in some years, you know, your investment advisor may say, they've got to offload this stock with this big capital gain because the company is becoming uncertain and we got to get rid of this. And I'd rather you take your lumps and pay that tax today because the investment advisor says, hey, it's only going down. We don't want you to have to pay tax, but let's be honest, we want you to have the most money that you can at any point in time. And so if all of us are working together, we can make that a thing for you.

SPEAKER_00:

Well, and in this one, I know we have not talked about it, so I'm kind of throwing you on the spot. But one of the things that uh I've heard people talk about, especially in crypto, so I think there's some misconceptions. There's still some people out there that think you don't pay taxes on crypto.

SPEAKER_05:

Right.

SPEAKER_00:

Uh, I can tell you that that's why my crypto is inside of my Roth. So yes, I do not pay taxes on my crypto, but there are people out there that are making not so great moves that uh they have I if it's my understanding that there is a task force at the IRS that is tracking the box blockchain to be able to track down who's not paying taxes.

SPEAKER_05:

Right.

SPEAKER_00:

Um, but there's this this concept that I had never even thought of until I heard it maybe a week or so ago, and it was okay, so we may have to sell or we might have we might have sold some crypto and we have a gain. And you know, maybe it has gone down or whatever, and so they I think it was called washing, and that they would sell it and buy it right back in order to have that uh loss to be able to counteract that in that year. Uh is that legitimate? Uh do you see any clients using that strategy? It could be even be with not crypto but other stocks.

SPEAKER_01:

Yeah, so there are wash sales, um, and that's been around for as long as the market has been around. Um, so taxation on crypto, back in the good old days for really anybody knew what in the world was crypto, you you couldn't monitor it, you couldn't figure out as the IRS, as a tax professional, um, we couldn't we didn't know what y'all were doing, you know. Um, but now that it's become so popular, um, whether your crypto is owned within your brokerage account, because a lot of people are owning crypto within an actual brokerage account, they're not on the blockchain on their own by their self. Um, you know, they've got it through their Robin Hood account, they've got it through their uh, you know, Charles Schwab account, whatever. So that is treated just like it's always been um with your stock portfolios. You get a$1099 at the end of the year. Um, but for people who own their own outside of any type of service that's holding it, if you've got it in a wallet, right? Yeah, you still have to treat that like a sale within the brokerage account. And so there are a lot of different rules around that. Um, but yes, it it operates pretty much like the sale of a stock.

SPEAKER_03:

Okay.

SPEAKER_01:

And what you're saying is true. So, you know, 10, 15 years ago, uh I went to a conference in Chicago that the IRS put on, and they were talking about how we we want to tax it, but we don't know how to track it. And so it wasn't until they started figuring out how you track it that they were able to tax it. And then rules were put in place that it's treated, you know, in that certain way. And so, yes, there is a big task force because there are still people who think, well, out of sight, out of mind, the IRS can't find it, so they can't tax it. Um, but you know, people have always felt that way about income too. Well, he paid me cash, the IRS doesn't see it in the bank, blah, blah, blah. And so um, there is nothing new under the sun. And if you make money, the IRS wants a piece of it.

SPEAKER_00:

That's right.

SPEAKER_01:

Um, and so uh it same holds with crypto.

SPEAKER_00:

Yeah. Um, somebody out there is doesn't really think that what their side hustle is is um worth uh trying to do deductions or isn't trying to claim the money. Uh I mean, my advice to them, just as a uh, and I'm not a CPA, my advice is every dollar in, every dollar out, claim it and just sleep well at night. Um, but what what do you do what do you say to that that side hustle person that's collecting cash or is taking Venmo or or whatever they're doing?

SPEAKER_01:

Well, I will say this um if you're taking Venmo and PayPal and all that kind of stuff, which is the new cash, uh, because most people are not paying anybody with cash, but that too. If you will use the letter of the law and track those deductions, a lot of times you're better off by going ahead and claiming that because a lot of these side hustles, especially in the formative years when they're just getting off the ground, they're spending more than they are making. So I had a client um two weeks ago, his wife has started a little screen printing and making hats. And she's not selling a whole lot of them because she just started out, she's just learned how to do it. But she is trying to operate to make money. And so I told him, I said, We we need all those expenses. You bought her a screen printing machine and all the stuff that goes with it, the inventory for the hats and this, that, and the other. So we need to look at all that because what it can do is offset W-2 income. Um, also, the IRS says if you're collecting money with the intent to make money. So uh if you're trying to operate like a business, your intent is to make money, then you need to report that. Now, eventually, if the entity continues to lose money, lose money, lose money year after year, they're gonna consider it a hobby. But we can cross that bridge when we get to it.

SPEAKER_03:

Yeah.

SPEAKER_01:

Um, and so I think it's really important because a lot of times people don't realize until they put pen to paper what all they are spending. Because if you're running a business out of your home, you get a home office deduction against that income. You also can probably take a portion of your cell phone that you're already paying for anyway, mileage to get your supplies and to go to these different events that this woman was going to to sell her hats and t-shirts. And so just lay it all out there. I mean, you ought to treat your uh financial advisor, your tax preparer, your CPA like a priest at confession. Get it all out, say every bit of it, because we may find a tax deduction in there for you.

SPEAKER_00:

Yeah. And sometimes I am surprised at what they don't tell you.

SPEAKER_01:

Oh, yeah.

SPEAKER_00:

Because you had a client a couple years ago that didn't tell you for three years that they had another child.

SPEAKER_01:

That's true. And they and they looked at the tax return or should have looked at the tax return every year when they signed off on it. Um, and we don't know unless you tell us. That's why we do have organizers and we send out questionnaires because that helps jog your memory. But definitely, if you had a child, if you had a major life experience, if you had a child move to college, um, if you had um some kind of health issue, I mean, tell us everything that's gone on during that year because a lot of these things are deductible.

SPEAKER_00:

Yeah. And I'm gonna plead with basically everybody that's listening or might forward this on, or if it if we chop it up into a TikTok. If you have a small business, okay, if you've got a side hustle, you've got a small business, you've got a real business, you've got a big business, I don't care. If you are an owner of one of those businesses, there are very few exceptions that I think that your child should not be on payroll in some shape, form, or fashion. There are so many legitimate, I'm not talking about anything fake or false, uh, but I had a conversation earlier today with a gentleman that owns a business and has owned a business for three years. Uh, he has a seven-year-old, and the seven-year-old is not on payroll. And some of you may be thinking, well, the seven-year-old shouldn't be on payroll. No, this child could literally be, you could take a picture for your social media of this child looking at this big building that his dad creates, and that could be you could do the use that in marketing, and you could pay that child as an actor, and I would get that the maybe the seven-year-old doesn't need money, okay? But then because they had earned income, you could put it into their Roth IRA, which grows exponentially, okay? So we did a little bit of math, and I just said hypothetically, if you put a hundred dollars a month into a Roth starting right now, versus waiting till they were 11, it was a$980,000 difference. So get started now. If you have a side hustle, you have a business, figure out how to pay your kid to clean up, to do paperwork, to do something in your business, and start them a Roth IRA with that earned income. Now, Valerie, keep me honest. Did I say anything inappropriate or do you want to add to?

SPEAKER_01:

No, I would definitely agree with that. Now, the IRS wants to see that they have done something for your business. So the younger children, print ads, social media ads, uh actors and commercials, that sort of thing, because kids are getting paid to do that uh all over everywhere. Um, you know, when I was a kid working in my dad's grocery store uh at 10 years old, I could put cans of green beans on the shelf, you know?

SPEAKER_02:

Yeah.

SPEAKER_01:

And so there's a couple things. Um, number one, I love that it teaches a child how to be an employee, how to work. Um, so just from that aspect, it's fantastic. But like you said, the child earns income that can be put into a Roth IA to grow tax-free for them to use um as a retirement vehicle, or there are some exceptions for how you can get that Roth out without paying penalty before 59 and a half, one of which is first-time home purchase, education expenses. So lots of good for the child. Also, the dad, the mom, they probably have a higher tax bracket than the child. So what you've done is you've taken that income from the parent, moved it down to the child, and now mom and dad aren't having to pay tax on that. And if the child is under 18 years old, the child and it's under the standard deduction, the child's not having to pay tax on it either. Because as long as they are your child and they're under 18, you do not have to pay Social Security and Medicare for those uh children on those wages. And so, man, it's a win-win for a lot of different reasons from a societal family standpoint of teaching a kid responsibility and how to work and a work ethic, uh, which I'm so glad. Uh, I can say that today my parents gave me. Now, when I was 16 years old and they made me work till 10 o'clock on Friday night in their grocery store and smell like fried chicken, uh, because they had a daily bakery there, I was not so happy with them teaching me work ethic, but I can say that as a 47-year-old woman, I'm very happy that. So, from a family standpoint, from the employee getting to the child to put money into a retirement vehicle, fantastic. And then the parents are saving money doing that too.

SPEAKER_00:

Yeah.

SPEAKER_01:

So it's a win-win-win.

SPEAKER_00:

So I just want to do some math on that. We're we're gonna do loose math here. So it's not like we're gonna break out the financial calculator. But so let's just say I was a business owner and I'm I'm uh I'm taking home$150,000 a year. Um ball bark me on what kind of taxes I'm gonna pay on that. I'm gonna pay self-employment tax.

SPEAKER_01:

So I'm gonna pay self-employment tax of 15.3%. And then depending on my itemized deductions, let's just go ahead and say they're in the 15% bracket because the average American is in between 12 to 15%, average middle class is 12 to 15 percent. So let's go ahead and call that 25, 25 conservative, conservative, 35, so anywhere between 25 and 35 percent.

SPEAKER_00:

I want to be respectful of the advice from Miss Jordan Grubbs because Jordan uh said she's very conscious of not putting her child's face on social media, that she doesn't post pictures with with with his face on there, she doesn't say his name uh in social media, she doesn't list it out there, uh, so that the digital footprint that he has is very intentional once he is old enough to make those decisions. So when I tell you as a business owner that I would have them in your ads, there's nothing that says that it the picture couldn't come from behind them as they look up to this building if you're in construction. Or let's just say you work on exotic cars as the child looks up at this Lamborghini and you see you the shot is from behind them. It doesn't mean you have to exploit your children, uh their images on on social media. I'm just saying use it in a tasteful way that makes sense for you and your family's decisions. But let's just say it was$100 a month. Well, reasonably with that 30%, that's only going to cost us$70 a month.

SPEAKER_01:

Correct.

SPEAKER_00:

Well, I can tell you because I did the math earlier, if a seven-year-old you were doing a hundred dollars a month into their Roth account at 10%, which the market has averaged that or more over the the life of its uh of its existence, you're talking about at retirement age, you're talking about roughly three million dollars. It's insane.

SPEAKER_01:

That alone, if there's no tax savings.

SPEAKER_00:

Right.

SPEAKER_01:

But there is a tax saving component of that because, like you said, that$100 only cost the business owner, the parent,$70. Right? So even if we took that tax savings out, who wouldn't want to put$100 a month into their child's account so that they could secure their financial future in retirement? But add to it that they're gonna be saving thirty dollars every month uh that they can put toward that child's needs, the business needs, whatever it is.

SPEAKER_00:

Yeah. There's just a there's almost no reason you wouldn't do it. I mean, I'm not gonna say there's not one. You maybe there's a use case out there where it doesn't make sense for somebody, but I haven't seen one yet.

SPEAKER_01:

Yeah, I mean, there are so many things that, and a lot of people tell me, oh, well, my kid can't work in the business. Well, you own a mechanic shop, they can sweep, can't they? Uh you know, they can shine the doors. It doesn't have to say that it has to be some high-level job. Um, you know, my my nieces, um, they're in high school. They're excellent at naming documents, filing electronic thing. I mean, like, there's so many things. What I see a lot of parents these days having their teenagers do is at social media, not being in the social media, managing the social media of the business. Um, and so I mean, that's a great way too, right there. That gives them a job that I mean, I I'm not crazy about doing that's why I thank God for Jordan every day. Um, but it gives them something where they are performing an actual function of the business. So the IRS doesn't say that it's got to be super high level, they just have to work within the business.

SPEAKER_00:

Yeah. Um, so and I know it's been a bit of a soapbox. I know we we went on a bit of a tangent there, but it is so critical. And and if you if you just use rational thought on that, so let's just let's just say that's 70 bucks, right? Or you know, it that hundred dollars cost you 70. Well, realistically, that means you could put a 130 in, and it's uh net neutral, you know. That's rough math that there, but really more like 133. And all of a sudden, you've gotten 33% of your money, just like that.

SPEAKER_05:

Right.

SPEAKER_00:

And your child's now looking at retirement, that's gonna be more like four and a half million dollars instead of three million dollars.

SPEAKER_01:

Right. But another thing it does is when you teach your child what you're doing with that hundred dollars, it creates a habit for your child. And let's be honest, finances are habits, they're habitual. Blow in money, not having good finances is taught. Um having a strong financial stability, that's taught as well. And so if we can train children that saving is important from the age of seven, they're going to think that's important. For me, um, when I was a child, my parents, 10% went to church, 10% went into a savings account, 80% you got to blow, and then begged to get to blow the other 10% in your savings account. And so what that's done for me, that 80, 10, 10, uh, I am a believer in tithing. That's what I my parents trained me to do that. Uh, they didn't have to tell me that that's what Jesus wanted. That's just what Donnie Kemp and Jackie Kemp said that you did, and that's what you did. And so I think that if we can create habits within our spending that are good financially sound habits like that, the child is gonna pick up on that. And maybe they'll stray for a while, as we all do. Um, but they're gonna they're gonna realize what an importance that is, and they can continue to grow that.

SPEAKER_00:

Yeah, and I'm also I'm gonna add to that and just say involve them in that process as much as humanly possible. Uh, I took Castle to the bank with me um as before he could even walk. And then, you know, that progressed to, well, when you get this payout on with the money you've earned, we're gonna take it to the bank. We put it in the bank so that it shows that it went into the bank, and then we turn around and we have a countercheck made out to the investment company, and then he goes with me, he has to give uh the investment guy. So big shout out to JB Kent up at Kent and Crowley in Clarksville, Tennessee, and he takes his investment money to JB, gives him the check, he gets his receipt, and then he can see what's in his Schwab account. So he is fully, he he could probably tell you right now within$100 of what's in his Roth IRA right now. And then if you asked him what date, what year, he could tell you pretty close to what it should be worth. I would say there's college kids and maybe other adults that wouldn't be able to do that as well as my 11-year-old.

SPEAKER_01:

The majority of adults. And and and I hate to say that, but we know that Americans save negatively every year. And it's really only getting worse because with inflation, it's harder for us to do that.

SPEAKER_04:

Sure.

SPEAKER_01:

Um, and so it's it's just not a priority for a lot of people. And so we have to figure out a way to help our children and just help everybody make that a priority.

SPEAKER_00:

Yeah, absolutely. Well, Valerie, I appreciate you coming in and spending some time with me. Um, for somebody that is maybe just catching the end of this podcast, what what are a couple things that you'd like for them to know about the big beautiful bill, about tax planning, about working with uh a Kemp CPA? What what what does that look like?

SPEAKER_01:

Yeah, so what I would like the takeaways from the Big Beautiful bill to be, um, regardless of your political affiliation, it's not all bad. It's not all good, it's not all bad, but it there's a lot of really good stuff in there. Um, there's some common misconceptions uh in the bill because it went through so many forms before being passed. And so I would encourage everyone out there um to read up on it, consult your tax professionals, especially if you're self-employed. Uh, we're in the third quarter, fourth quarter is rapidly approaching. The end of the year we'll be here before we know it. So schedule a time. It is going to be well worth whatever fee you pay to that tax professional to sit down and make a plan for the rest of the year based off of these new changes. Um, and then what I would like to say um if you choose to contact us or become a part of our client base um at Kemp CPA's, that we're going to help you navigate these rules. Uh, we're not just going to take your information, regurgitate it into a tax return. We're going to take all the pieces of the puzzle, your children, your spouse, your family members, how can we best make this work for your business? And and what are your financial plans too? We'd like to work as a team with your other advisors, and uh, we'd love to have you on board.

SPEAKER_00:

Well, one thing I would do want to add to that, because somewhere out there somebody's thinking, well, if she talks to my other advisors, that's going to cost me more money. And the reality is it's going to save you money.

SPEAKER_01:

Yeah, it it should. I mean, there is a cost associated with that, but if we're all working on the same page, it's either going to save you money in the short term or make you money in the long term. Um, because if we fail to plan, we're gonna fail. You know? And so by having everybody plan together, um, it's much better. And that's why if you look at um healthcare in the United States now, um, there's a new position uh that's come over in the last decade called a hospitalist. What that hospitalist does is that takes what the neurologist, cardiologist, uh, dermatologist, all these allologists, and it takes all of that together instead of looking piecemeal at the patient, they look at them as a whole. And so, same thing with your financial um future. We need to look at it as a whole, not just from a tax perspective, not just from a legal liability perspective, not just from an insurance perspective, but look at it as a whole together.

SPEAKER_00:

Yeah, absolutely. Well, again, thank you for being a rock star. I love the fact that I can refer clients to you. And like, don't get me wrong, they they often call. In fact, this afternoon, um, one grabbed at me, grabbed me at my lunch and was like, hey, I got my meeting with Valerie. We're meeting X date. I'll let you know. Awesome. Um, and it's just it's easy, like it as a business coach, it makes it very easy for me to have those conversations because I don't worry about them anymore. I know that the next conversation they're gonna be excited about, hey, we're restructuring, we're gonna do this, or hey, this is gonna be better if I do it this way. They get to you teach them why you do what you do.

SPEAKER_01:

Well, and likewise with you, it's easy for me to refer people to you because I've seen it work with my firm. Um, and you know, when when I'm an old woman and look back on my life and look at these different milestones and these different people who've really impacted my life, I will say Jim Cripps is gonna be one of those people uh because just uh the peacefulness of my office, the work-life balance, and less stress with more success, uh, that's what you've helped me achieve. And so I really appreciate that as well.

SPEAKER_00:

I love it. It's great working with you and your team. Thank you. Um, and so this is a little bit of a side note. Um, Valerie and my lovely wife, Emily, are going to their first CrossFit.

SPEAKER_01:

Pray, Saints, pray.

SPEAKER_00:

With an with another previous uh Charge Forward podcaster, uh Miles uh Reidelberger. Yeah. So it's open week next week where basically anybody can come in. And so you and Emily are going to your first CrossFit class.

SPEAKER_01:

We are, and I told Emily the reason we're going is because I cannot keep dodging everybody that goes to CrossFit and loves it and tells me I have to come. I've been promising people for like three years now that I would show up. And so if she doesn't wimp out and I don't wimp out, we're holding each other accountable. We're gonna be there Tuesday at 4:30.

SPEAKER_00:

I love it, I love it. Well, team, you heard it here on the Chargeboard Podcast. I hope this kind of look behind the curtain on the Big Beautiful Bill or HR one, whatever you want to call it, again, regardless of political affiliation, just about every U.S. citizen is going to be in a little bit better tax position, either because of this bill or because of what this bill extended. A lot of people are not quite sure on kind of what what rules were changed a few years ago, and those were set to sunset this year. So the fact that these are extended is a huge benefit for just about every American. Um, again, we come to you from HitLab Studios. If you are looking to grow your digital content, if you are looking to uh maximize what you're doing online or maybe your your social footprint, uh reach out to HitLab Studios. They do a fantastic job, whether you're talking about podcasts or whether you're talking about your social media uh or whether you just don't know what exactly you need. Uh Nick Heider and the team here do a fantastic job. Please hit them up. Uh, also our other sponsors, Sense Custom Development and Charge Forward Solutions. Until next time, I'm Jim Crips. Take care. Team is Jim Crips here with the Charge Forward Podcast. I just want to tell you, I love you. I appreciate you listening. I appreciate you for subscribing and sharing the Charge Forward Podcast with people you know and you love because that's what we're here for. We are here to share the amazing stories, the things that people have been through, the ways that they were able to improve their life so that you can take little nuggets from theirs and help improve your story and be better tomorrow than you were today. I hope that this is the tool you needed at the right time and that you find value in the amazing guests that we bring each and every week. Thanks so much, and don't forget new episodes drop every Thursday.