Dashboard: The Tax Break No One’s Talking About

[Music] welcome to another 21 hats dashboard I'm Lauren Feldman I'm here with Gan marks to talk about the stories and issues we think business owners should be following this week welcome Jean Lauren thank you so much it's great to talk with you it's been a couple weeks always a pleasure always miss you when you're not here thanks for coming back um G let's start with a topic that I know is near and dear to your heart uh the evil things that employees do um the the Wall Street Journal ran a couple stories this week that I'm sure you found interesting um one noted a phrase that I hadn't heard before maybe you had uh but it's in wide circulation now and that is the phenomenon of quiet quitting yeah want to want to explain what that is and what you make of it so yeah I'm glad we're talking about this I have uh first of all I I find it fascinating that the Wall Street Journal do do you notice how the Wall Street Journal writes they'll they'll they'll come up with something like this or they'll write something and then a lot of other people then it's such an influential you know publication The Wall Street Journal since they did that right people are talking about like I never heard of quietly quitting before either and I think that's my point quietly quitting for those of you guys that didn't read the article or are unfamiliar with it like I was 48 hours ago was it's when employees are quietly quitting because they're they're not doing their jobs they're basically doing the bare minimum to get by you know they're they're uh they're not going the extra mile they're not working any extra time or extra hours they're just basically you know just doing whatever they can a lot of them have like side gigs or whatever so it's like they're they're employed but they're really not doing a very good job they're quietly quitting and the first thing that came to my mind is I'm like okay so these are like shitty employees right so so ultimately when you know the the things come home to roost uh employers through performance reviews or whatever these people will be replaced by machines or replaced by better employees I think that's inevitable because whenever somebody's just not they're not doing their job or they're not into it they ultimately get called out that's number one and then number two I was just like come on Wall Street Journal like it's like they're it's like they're coming up with this catchphrase to get clicks like oh quietly quitting what's up I'm like Lauren like what what is there like all of a sudden they're shitty employees you know what I mean like well I I think you you're you're you're right on target with that except for one thing I don't think they came up with the phrase I think I could be wrong about this but the the article cited a Tik Tock video that went viral and I think the phrase so you're exactly right about it being the kind of thing that uh that that draws clicks but I'm not sure the journal came up with it you're right and you've got like the the person who post on TI hey we're quietly quitting because we're shitty employees and not doing our jobs and being for it and then I think to myself like if you would go back and visit a company in the 1940s there were plenty of people quietly quitting them ex except they just didn't have Tik Tock to demonstrate it you know what I mean yes I I think it was a really good story um because I think I'm sure the phenomenon exists the the flaw that I found with it is and this isn't really their fault I guess there's no way to do it but you don't know how widespread the practice is yeah you don't right and you know I think it was like they interviewed some guy from like Gallop who said they did some research or whatever I always call that stuff into question too don't you I mean it's like a you know it's a PE reviewed I don't know how scientific that stuff is do you know what I'm saying well you know I think Gallup is better than many of the surveys that you see out there and I I think it can it can measure sentiment I don't know if it can really measure how much this is actually happening right right they they certainly don't know when I'm going uh Going Quiet in in my job yeah I mean it's just and a couple other points on that first of all it's a um I think people are I feel like the people at the Wall Street Journal were like people are sick of talking about the great resignation great resignation so let's come up you know let's steal another Buzz phrase from somewhere else and it's oh quietly quitting maybe we can get the whole country talking about that and then secondly I also don't know either because I un scientifically you know I have three kids in their 20s um they have all sorts of faults and weaknesses and downsides but they're pretty good workers and I know a lot of their friends I mean we're intimately familiar with a lot of their friends they're good workers as well so I just I just don't know if this is like a thing anyway I feel exactly the same way I have two kids in their 20s and um you know a lot of these people work really hard and really care and you know I had the same reaction when I saw what John Mackey the founder of Whole Foods said and I'd be curious on your thoughts about this but he said that young people don't want to work anymore and that's he was very dismissive about young workers who want to find quote unquote meaningful work and you know to some extent his point was you have to earn that right and you can't expect it right away and you know there's some validity to that but but I wouldn't criticize anybody for trying to find it you know that seems crazy to me I agree and I you know what drives me nuts is like people our age and older we of this generation where we're the ones running the country now you know God forbid but that is you know our generation that's out there and like we don't accept change you know like we still expect the workplace to be just like it was when we were in our 20s and it's not you know and so you there yeah there are employees that would prefer young employees that want to work for companies that have a mission statement and they're doing something that Dov tailes into what they want to be doing and they feel passionate about what what's wrong with that you know and they they have so many choices nowadays and so many options that employees can make some of those choices I think smart business owners have to wake up and realize that it's a different type of workspace and we have to be the ones to adapt to it if we want the best talent the Second Story the journal ran this week um was about how more and more uh because of the desire to be good Ro Role Models it's often on a Friday it's the boss who's in the office while employees are at the beach what did you make of that Jean that is exactly what we talked about two weeks ago you and me we talked right we talked about the co article that I wrote about it being like the G best get out of work for free card ever say oh I tested positive for Co I don't have to go for it and yet no business owner I know would pull that you know they're they are working as long as they're doing it safely but they're working and then sure enough two weeks later big thing in the Wall Street Journal that says up looks like the business owners the bosses they're the ones working because all these employees or they're not coming into work for whatever Myriad of reasons although it's the same thing I don't know how wide surely it happens how widespread it is I don't know and some cases you know the employees clearly there's an issue about going back into the office and employees are fighting that and some companies are winning and some companies are are losing but some of those employees who aren't in the office on Friday are working hard some of them aren't I agree I agree and you know anyway it's it's it's all about you know it's such demographic driven and area driven and age driven and all that kind of stuff and a lot of these surveys and things that come out here again I I question the data and the methodologies and all that kind of stuff but even so I am seeing it with my own eyes that uh my clients that run businesses they are working hard they always work hard and they work through whatever illnesses and sniffles and whatever they might have whereas you know a lot of employees you know are are taking you know advantage of their employers and the shortage of Labor and you know not doing what they what they could be doing the only thing I can say to you is that you know Lauren all these things come to roost at some point we remember the great employees and we take care of them we keep them along and the not so great employees are either out of a job or replaced by a machine so that's ultimately what happened well the other point I'd make is that a lot of the employees we're talking about here especially the ones referred to in the Wall Street Journal stories um are employees who work for Corporate America and that's different I think that's really an opportunity for for smaller businesses because I think in many T many cases it's easier for a smaller business to provide meaningful work and engage employees and have them looking forward to working hard and being in the office I'm so glad you brought you there was we we weren't planning on talking about this I know but there was a a study that was just released this past week by indeed you know the payroll plat you know the you know job search platform um and Forester I think partnered with them and it was this expansive study that found out that employees would take less compensation um if they were happier at work you know just happier at work and I and I I was talking about that with a number of my clients this past week saying that like listen whatever you might be complaining about how competitive it is to find people and you're competing against big corporations and the government if it's okay if you you can't keep up with compensation as long as you're in the range if you're providing a really good place to work with a good mission and you're passionate and open door policy and flexible work hours and nice people around you that's what people want man you know if they're in the office for eight hours a day even if it's three days a week they want to enjoy what they're doing and who they're working with and they'll even take a little bit less pay for that and I think small businesses have that advantage in a big way and most of them don't realize it they they they think like you know they're going to lose employees to a big Corporation it doesn't have to be that way I think that's a great Point all right next topic let's talk about the inflation reduction act you wrote several pieces about it this week uh one said it will hurt small businesses three ways another said it will offer small businesses five ways to save on taxes does that mean that small businesses win five to three yeah yeah we have a net plus two you know I first of all I we've talked about uh you know I write uh for those of you that that don't read my stuff or know me and you know you're probably smarter because of of it um I write you know for the guardian which is like to the left of center and then I write for the Washington Times which is to the right of Center and I I'm very proud of that you know and I also write for the hill which I'm not quite sure where the hill is I think it's slightly right but it's mostly in the middle so I'm proud I can have different points of view right right Lauren and the inflation reduction act it does hurt small businesses I think in three ways um you know I I think first I don't like it when the government goes after big corporations and the healthy with new taxes and we've talked about this in the past that I think that that trickles down and and filters into small businesses and uh you know and I think ultimately hurts small businesses that that's one thing the the other thing is is that it is and most importantly for all this is that um the the inflation reduction Act is putting $80 billion towards um the IRS and that's going to increase they're doing it right now because they want to increase um you know you know Audits and and make sure that people are well they're also doing it because they have computers that were made in the 1840s and you know terribly understaffed yeah it's first of all there were no computers in the 1840s but I think I understand your point the bottom line is is that yeah right it's hyper I can't even spell that word it is it is it's money well worth spent because it needs to be spent I get that um you secretary treasury secretary Yellen um you know she specifically said we are not going to be going after people with less than you know you know $400,000 in income and my response to that is that I do have plenty of business owners that have income in their businesses that are more than $400,000 but of course they reinvest it in their you know in their companies it's not like they're driving around and you know you know in in in rolls-royces um so I think they will be impacted I also think when you look at the numbers there's been a few analysis done of this that they're looking to raise like 250 billion dollars or something like they can't get all this from the rich there is gonna there is going to be an impact on I think smaller companies and and some individuals well a lot of that impact will be smaller companies that haven't been paying their taxes quite possibly but the at the other side even if you are selected for an audit the administrative cost of having to respond and comply with whatever even if you don't owe the IRS a penny um is still extremely disruptive to a business although I would point out that a guy named Jean Mars wrote another piece about this this week for the Philadelphia inquire where you quoted a bunch of experts about things that businesses can do to decrease the likelihood that they will be audited and the the things that you mentioned I thought were pretty basic um not not that difficult to do like uh you know um pay your taxes pay them on time have your taxes prepared by a professional uh don't ignore requests from the IRS if they happen to come um it is so funny when you're like don't ignore requests from the IRS like who does it who ignores a request from the IRS but I can actually name you a few people that I know that like right in the trash bin so yeah you're right there there's you know listen if you're running a good business and you've got your act together and your books are in good shape and you're paying professionals as the right advisors even if you're selected for an audit which by the way if you're doing the things I lay out in my inquire article you will reduce your chances but even if you're selected the the process should be relatively you know less painful than if you were a complete mess problem is that there are so many small businesses that are just a complete mess but period you know what I mean like they could be honest people but their books and Records aren't good or they don't do the things um but I said that they do so I think that's just you know it's a potential now having said that having said that I do also want to say um and I didn't put this in the article and really I should have is that it it's still like such a minuscule amount I mean you know there's like obviously you know 30 million small businesses in this country 7 million employer owned businesses you know it's the amount of people that will be audited from all this is going to be such a you know a tiny tiny percentage that it'll it'll likely won't be disruptive but it will be disruptive to some and that was my point let's get to the good news yes please those are the downsides but the inflation reduction act um is you know for if you're planning out your your expenditures there are a lot of good things for small businesses in here number one um the small business deduction for passrs um it is was from the 2017 tax reform act it's basically you take a 20% deduction right off the bat on your income if you're an S corporation or a partnership which most small businesses are it's a huge deduction like it's a great great thing for most small businesses there are some that are not eligible um that was going to expire in 2025 that was extended to 2027 so it's great news man right we have another 5 years of enjoying that so that's number one for businesses hasn't got a lot of attention actually I know I know that's what I'm trying for the four people that read my article they know nobody else seems to know in addition the research and development tax credit which people blow off they think it's for like pharmaceutical companies it is not I mean you can be a job shop or a manufacturer or a landscaping firm but if you are working on legitimate new products and services and you're testing things out or doing demonstration or sending samples to customers all these costs there's a lot of costs that fall under that umbrella that would qualify you for this R&D tax credit they've expanded it now you can not only take this credit against your income but you can also take it against your payroll taxes too and and they they they Rose the amount of payroll taxes that you can take it against so it's it's it's an expansion of this credit which is a big you know great thing for this small business is smart enough to take advantage of the R&D tax credit so that's two and then there's a myriad of deductions and credits related to energy efficiency so if you go and buy like an electric vehicle and Lauren I don't know if you Dre like I'm not buying a Tesla but I I was U I was away somewhere last month and I um rented a Nissan Leaf you know um it was freaking awesome like that thing was great like a 300 mile radius and it like quiet and the things I've been reading about the the Ford what is it the F-150 Lightning uh I think about you know the pickup that it I figure if you can do it with a pickup truck you can probably do it with a little sedan yeah these cars are really great and and they are um and now you you can get like giant tax credits for buying not only a new new electric vehicles but now what's what's also new is you can used electric vehicles for yourself or your business and there's always overlap so that's a big deal for your next car and then if you make improvements to your there's a residential tax credit it's I it really doesn't impact business property um I don't you know I'm looking into that to see if there's any wiggle room you know like it's if you buy energy efficient appliances and things for your house basically you know or you buy solar panels you get a big credit for doing that and then of course it cuts down on your electric bill um so right now it's residential but the last time I checked my was business owners most of my clients do live in homes so you know they have they have diswashers and washing machines that at some point need to be replaced and this is a giant credit for them to take advantage of and then if you're in the business of making there's a whole industry of green companies small businesses that are involved in making energy efficient Products Manufacturing them there's giant tax credits for them as well and so I I just my advice to everybody listening to this if you're running a business is to sit down with your accountant and go through this you know um inflation reduction act um and and pick out what you think you might be applicable to you and you'll be make if you're going to be buying this stuff or making Investments anyway in the next two years make sure that you're you keep this thing in mind it's a huge tax incentives to do this stuff of course uh the one part we haven't discussed is the fact that this actually could make a difference in the climate on uh on our planet which would be thing as well but that leads me to one final question which is would you have voted for the uh inflation reduction act W yeah that that's a really good question yeah I would have supported the inflation reduction act I mean first of all I hate the name and I I really do important part of it yeah it's the least important part but you know what Lauren it is it's annoying to me because it's like it's is the least important part and yet they're hyping up that it's an inflation thing that you to sell it which I think is like what do we idiots you know what I mean I just think it's like you know you think the American people are dopes that because you have inflation in it but let's put that aside yeah I would have voted for it and I'll tell you the reason why I wrote a you know a year or so ago in the guardian about how like California um right you know was was basically had a new law saying that anybody that had small motor um equipment you know uh lawnmowers and weed eaters and you know small engines that were combustible they're not going to be able to buy those things after I forget like 2025 like it's coming up um and there's a big uproar about it or whatever but you know what people adapt Lauren you know what I mean and that's the same entrepreneurs in particular yeah they figure it out it's kind of like the whole plastic straw debate you know like just ban plastic straws trust me we'll be fine you know it's okay if you don't have a straw with your milkshake you'll still be able to drink it just you're that concerned about that but the only way it's going to happen is if the government does get involved and offer incentives to do the right things and frankly I think everybody should have an electric car and I think we should all be using you know you know energy saving appliances and then some and um some people don't get the memo but if the government dangles enough incentives they'll do it and that's why I think it's a good thing you know J I think we agreed on almost everything this week the I don't know what went wrong I let's go back one bone to pick with you my one bone to pick with you is you kind of made a joke about how people who don't read your stuff are smarter than the ones who do and I'm compelled to mention that I've had lots of people in the 21 hats uh community ecosystem uh say to me that they've learned really important things from your stuff which I've highlighted in the morning report and and in these weekly conversations and I think you know the uh the stuff about the the potential tax savings in the inflation reduction act are a great example of you know I made a big decision first of all thank you and secondly I made a a you know just it takes me so years for to to Really sink in but my market is employer own businesses you know what I mean which um and there's 7 million out there and these are existing companies that have employees and have been around for long enough to have employees and there's a lot of issues that we face and a lot to write about that's you know so although there's some overlap with startups and Freelancers and entrepreneurs it's people that are running existing businesses need you know a lot of information to help them run them you know smartly you know what I mean absolutely Jee marks is a CPA who writes weekly on small business for the guardian the hill the Philadelphia inquire the Washington Times Forbes an entrepreneur you can also hear on hear him on ABC radio's eye on the world with John Bachelor Jean hosts two small business podcasts of his own with paychecks Corporation and the Hartford thank you Jean Lauren we'll speak next week I look forward to it actually we won't Oh no you're going to be away I'm going to be away uh dashboard's going to take a couple weeks off we'll be back in September uh but I look forward to picking things up then me too we'll talk to you then have a great week everyone [Music]