Wealth Building Tactics Uncovered: Insights from Tax Strategist Alexis Gallati

Join us on a journey to financial success and legacy building as we sit down with the incredibly insightful Alexis Gallati, a tax strategist with a knack for making tax planning an accessible and powerful tool for everyone. Imagine a world where even ordinary individuals can leverage the same tax strategies employed by the wealthiest among us to secure their financial future. That's what we unpack in this enlightening conversation with Alexis, where we break down the significant differences between a tax preparer and a tax strategist.

In our journey to financial stability, Health Savings Accounts (HSAs) and retirement plans often go underutilized. Fortunately, we have Alexis to guide us through the intricacies of these tools and how to maximize their potential! From saving receipts for future use to fully leveraging employer-matched retirement plans, we navigate the terrain of cash balance plans—a complex yet potentially rewarding venture that demands careful management. We even delve into the world of deductions that can be claimed for personal expenses through businesses, a topic sure to pique the interest of small business owners and the self-employed!

Tax strategy doesn’t have to be complex, and it’s not just for the super-rich. Whether your income comes from a W2 or 1099s, we’ve got you covered. We explore retirement planning and tax strategies tailored for individuals with mixed-income sources. Alexis also enlightens us on the wide spectrum of deductions that can be taken for personal expenses through a business—from the home office and mileage to per diem for travel. Wrap up your listening experience with our deep dive into Opportunity Zones and 1031 Exchanges, alternatives that could offer tax-free income and appreciation. It’s a comprehensive financial masterclass you wouldn’t want to miss! Remember, your path to a financially secure future and legacy building may just be a podcast episode away. Tune in, and let's begin this journey together!

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Transcript

Speaker 1: 0:00

This is the Legacy Wealth Code podcast helping you build long term wealth and elastic legacy through real estate investing, tax strategies and motivational stories from some of the most successful and influential people out there. Here are your hosts real estate investor and entrepreneur, Michael Notbohm, and real estate investor and attorney, Andrew Hoek.

Michael Notbohm: 0:23

Hey guys, welcome back to another episode of the Legacy Wealth Code podcast. My name is Michael Notbohm, here with my partner in crime, Andrew Hoek.

Andrew Hoek: 0:31

Hey guys, how's it going?

Michael Notbohm: 0:32

So we are delighted to have today. Andrew and I talk about taxes a lot, right, but now we have somebody who actually is in this space as a professional, Alexis Gallati not just you know, we try to tell you what to do. She is the person that can do it for you. So Alexis is the founder of the tax strategist at Cerebral Tax Advisors and the Cerebral Wealth Academy. Also an author of advanced tax planning for medical professionals Over 20 years of high level strategic planning, which I know, Andrew and I talk about every single podcast. So we're delighted to have you, Alexis. Thanks so much for joining us.

Alexis Gallati: 1:13

Yeah, thank you so much for having me here.

Michael Notbohm: 1:15

I'm really excited, so let's jump in. Obviously, you know I think you probably have seen a few of our episodes, but Andrew and I are always talking about build wealth with taxes. Build wealth with taxes because a lot of people just they have almost a negative connotation around taxes. Everyone almost like, oh, I don't want to mess with the IRS. And what we've come to realize is there's such a huge difference between a tax preparer and a tax strategist. So talk about what that means to you and kind of how you have created your business around the strategy side.

Alexis Gallati: 1:49

Yeah, definitely, you know, when I was working for regional, regional and local CPA firms before going out on my own in 2014,. That's really what majority of tax advisors, or safe tax preparers?

Speaker 1: 2:04

are.

Alexis Gallati: 2:04

They're just, they're preparers, they look in arrears, they're reactive to situations and which. That's that's important. I mean you still need to know how to actually properly report things to the IRS and that compliance. But you know, especially with my husband being a physician and you know, at the time before starting cerebral, you know he was in his residency and a couple of years out and I noticed the writing on the wall. I mean he, you know he was going to, we were going to be shifting to another tax bracket, and so I wanted to know why the Warren Buffets and the Bill Gates of the world, you know, were getting those that 15% tax bracket. And so that's when I really started to look at tax planning and being proactive in nature.

Alexis Gallati: 2:48

And so that's really what my practice cerebral tax advisors is all about is being proactive and educating our clients on what is available to them, even if you know those strategies that they're not ready to take. It's more about the education. You know, and all the strategies we use are court tested, arrears approved. We don't put anything on a tax return we don't feel comfortable defending in an audit. So most clients when they come to me, they're used to meeting with advisors once a year. You know, it's always it seems like after year end and once they've prepared their turn, they might get a few pieces of advice here and there, but that doesn't help with tax savings. Like you know, you have to do a lot of the strategies during the year in order for them to apply for that year. So being proactive and working throughout the year is really, like I said, the cornerstone of cerebral, and that's why you're having regularly scheduled meetings with your tax professional. It is imperative to make sure that we're up to date on your situation and we can apply strategies immediately.

Michael Notbohm: 3:54

Yeah, that's great. I mean it's funny because a CPA that we've worked with for for a number of years always says he views that the income tax. You know once it once this time for your taxes to be done as his report card for the year. And so many preparers exactly like you said totally, you know, let me just check the boxes and tell you how much you owe and it kind of you know, it's like I understand both sides of it, right. The tax preparer has a thousand returns on their desk. They don't have time to go through and say, hey, alexis, I figured out all these ways after spending hours of research, all these ways I can save you money. It's just going to take me a whole bunch more time to do it. That just doesn't happen with the regular tax preparer and I think that you know there's such a huge need for what you're doing on the tax strategy side. It's awesome.

Alexis Gallati: 4:49

Yeah, exactly Like you said. I don't blame them because I mean they're that's what they're doing, their tax return mills. In a way they're just pumping out the tax returns and most and you got to remember too most of America is not in a position where they're they're necessarily going to be doing a ton of tax planning. You know, physicians and healthcare professionals, I mean they're just kind of in a different realm, in a different bracket where you know they really need to start looking at their situation more strategically so they can keep more of what they earn.

Michael Notbohm: 5:23

Yeah, agreed.

Andrew Hoek: 5:24

Alexis, touch a little bit if you can. One of the things that we talk about a lot is that and you brought up Warren Buffett, for example you know a lot of the time you read these sort of smoking gun articles and, I think, the initial thought process as well. You know, these people are only doing this because they may have a team of tax attorneys and tax planners and professionals around them and that's reserved only into the uber-uber wealthy. But you know, one of the things Mike and I try to coach and preach on a lot is that, yes, while there is a segment of the population that spends way more time and money looking at that because they have to, these exceptions and exemptions are applicable to everybody and it's across the board. And I mean, what do you think, like you know, the run of the mill, upper middle class should be really spending time wise with their tax planner. Do you recommend quarterly meetings? Do you recommend less than that? More than that? What does that kind of look like for you?

Alexis Gallati: 6:23

Well, it really depends on the person's situation. I mean, are you just strictly W2? That's not going to require as much time as someone who owns multiple businesses or is in real estate. So at a bare minimum, they should be meeting with their advisor at least once a year, and I say more likely towards the end of the year.

Alexis Gallati: 6:45

You know, doing a year end projection would be very helpful to one help eliminate surprises. What are you going to owe on your tax return? Is there anything we can do before your end? So it's at least that little bit of productivity once a year.

Alexis Gallati: 6:58

Now if you go all the way to the other side of the spectrum and you have multiple businesses or even just one business, then it's really important to meet at minimum twice a year, and that's what I do with my clients. I meet with them at least twice a year when they have a business. So then that way we're doing a mid-year projection, seeing how things are going. Do we need to tweak anything? And then we meet with them again at year end to basically do the same and make sure. Hey, are we still on track to what we had before? Like with the warm buffets of the world?

Alexis Gallati: 7:29

Like I'm sure that he's probably not meeting with his people quarterly, but he has people to meet with his people. That's when you know you made it. Yeah, exactly, and I'm sure he's probably looking at like things and overall, like big picture sort of plan. But for people you know more in our situation when you have multiple businesses. Yes, you should be working with your advisor on a quarterly basis, even potentially a monthly basis. It depends on how big and how involved your business is, and so it really depends, too, on the business as well, especially for healthcare providers. You know, when you have you know your medical practice, for example you're going to probably want to, like I said, at that minimum do twice a year, and then, you know, go from there.

Michael Notbohm: 8:20

So I had a client, you know so I'm still an active real estate agent as well and I had a client about a year and a half ago. He was an anesthesiologist. They did a 1031 exchange out of a mobile home park in California, wanted to buy something in Florida. So sitting chatting with them, they had never heard of cost segregation and bonus depreciation. So I walked them through how that works and you know, his wife was basically the property manager already Like that's what she did.

Michael Notbohm: 8:52

She was working with collecting all the rents, making sure everything is leased all the things that you would normally do as a real estate professional. And I remember they bought something in Fort Myers area and that year he paid because they filed jointly, they paid zero taxes. And when we talk about building wealth and what that looks like in terms of you know, five years, if they did that for five years, what does that look like for your portfolio and what your legacy means to you? How often do you have people that are in a similar scenario to that and how do you advise them?

Alexis Gallati: 9:30

Yeah, so I definitely. I have clients that are into real estate and you know the full spectrum of real estate syndications, all the way up to direct ownership. You know short term, long term, etc. And I love real estate for that fact that you know it can really provide a great avenue for tax savings and it just depends on the, the physician's position and if they're married, if you know whether they're not married and you know what, what they're able to do, even if they're single, and you know they could potentially do like a short term rental and qualify for that short term rental loophole. That's amazing, you know, and I have some clients that are like hey, lexus, I just don't have the time for direct ownership. So then you know we look at real estate syndications, which don't have, you know, the same first year sort of effects, tax effects as, like a short term rental does, are doing real estate professional status. But there's still opportunity in the long run and, depending upon their other assets they have, that can really help achieve that lot of savings.

Andrew Hoek: 10:41

That's great. So, you know, one of the things that we're always trying to look for, too, is like what are some of the things that that? I mean we spend a lot of time in the real estate side of things, but what are some of the things that maybe that we're missing, that you would say are like? These are just kind of like everybody should be taking advantage of these tax strategies. Do you have a couple favorites that you like, that you think are really good ones?

Alexis Gallati: 11:02

Yes, yes, probably my absolute favorite is the health savings account, the HSA. I mean, anybody can do it as long as you have a high deductible health insurance plan, and so I advise my clients even if they don't at the moment, maybe they have a loaded up to take a look and see how much more the high deductible is or, like the, I should say the tax savings in it, the cost savings, because obviously depends on your situation and your health and you know what you need for your family, you and your family. But HSAs are wonderful because they're triple tax advantage the money goes in tax free, it grows tax free and then it comes out tax free if you use it for qualified medical expenses. So, and a lot of people including myself, for our HSA, we will actually put the money in every year and not touch it and we will pay for our medical expenses out of pocket and we'll save those receipts and there's we'll submit those receipts in 30 years. There's no rule saying you have to submit the receipt as soon as you get it.

Alexis Gallati: 12:08

You can hold on to that receipt for as long as you can. You know with current laws and when we actually will allow those funds to grow, because a lot of HSA accounts allow you or say, providers allow you to invest that money into ETF or other stock etc. So you can allow that to grow and then in, let's say, 30 years, when you actually want to tap that money, that account has grown and you can, you know, submit the receipts at that time and if you have more money in there, then you have receipts. It acts just like a regular, pre tax IRA individual retirement account. You just take the money out and you, and if it's not for qualified medical expenses, then you just pay at your tax rate at the time.

Michael Notbohm: 12:59

So and so that I guess I was always thinking that when you put into those at the end of the year, whatever you put in you had to use or you lost it. And I think about some that's flexible spending account.

Alexis Gallati: 13:12

Yeah, so that's different FSA, fsa you got one letter. That one letter is a big deal.

Michael Notbohm: 13:20

Exactly, yeah, and so is there a cap on how much that people can put in?

Alexis Gallati: 13:26

Yeah, it changes every year. In 2023 for a family plan at 7,750. And next year, for 2024, goes up to a 300. And you have all the way until the filing of your tax return to actually make April 15 to have to fund that HSA. So there's still time for 2023 to do that if you have a qualified plan, okay.

Michael Notbohm: 13:52

Yeah, that's great, all right. So what else I mean? Because this one was good, so yeah.

Alexis Gallati: 13:57

My absolute other favorite is retirement. You know, depending upon your situation, if you're even if you're just w2 making sure you're maxing out your retirement, it it seems so basic, but you'd be surprised the number of People that come my way that are not maximizing that benefit, especially if their employer offers some sort of match. So I mean, if there is any sort of match, you got to make sure that you're taking advantage of that and putting in that Minimum amount, otherwise you really should be maxing it out. And if you own a business, then you might want to take a look at cash balance plans as a defined benefit plan as opposed to defined Contribution plan, which is what a 401k is, or even a step by array. I love cash balance plans.

Michael Notbohm: 14:45

I'm sorry, yeah. So I was gonna say just for people that don't know the difference.

Alexis Gallati: 14:50

Yeah.

Michael Notbohm: 14:50

I explain what that would look like.

Alexis Gallati: 14:52

Yeah, so with a 401k, those are defined contribution plans. So what that means is that the IRS defines how much you are allowed to put into your plan. So for, like 2023, the maximum you can do for your employee deferral is 22,500. Next year will go up to 23,000 for a Define benefit plan. The IRS is Defining the benefit that you will are allowed to put in. That maximum amount you'll have to put in by the time that you retire, and so when you set up the plan, you define that age. So let's say it's age 62 and if you're aged 30, then you have 32 years to Make to get up to that defined amount. And so right now it's about 3.4, 3.5 million dollars. It changes every year with inflation, and so You're able to put in a much higher dollar amount With a cash balance plan than you would with the 401k plan by itself. Even with a profit sharing, you're maxed out there at 66 thousand dollars for 2023 and 2024 at 69,000.

Alexis Gallati: 16:00

I have clients that you know start this sort of plan, let's say, around age 35. I mean, they're easily able to put in About six figures into their retirement, so it really allows you to put so much more away. Now they're very. There's some quirky things about them which I'm happy to go into if you want. But yeah, so I mean you have to fund it for a minimum of three years and keep it open for a minimum of five. Now, that's a A general guideline.

Alexis Gallati: 16:31

If you know, god forbid, there's like another COVID, or you know you decide like, hey, I'm not gonna do 1099 work anymore and be an independent contract anymore, I have my own business, then you can close it down for legitimate business reasons, but in general you need to keep it open for those few years.

Alexis Gallati: 16:48

And then also too, there's a. It's a pre-tax account, I should mention. Both of them are so this money is going in, you're getting an deduction for it. But you you need to keep the the growth of the account at a fairly consistent rate in order to take advantage of the tax Benefits year after year, being able to put in that six-figure amount every single year, because Otherwise, if it grows too quickly, then you're gonna reach that defined benefit amount a lot sooner that 3.5 million, let's say yeah, for age 62, and so then you won't be able to put in as much the next year. So, like I said, there's a few nuances. It's definitely a much more advanced type retirement plan and I highly recommend working with you, know Professional, to make sure that it's being saying compliant and properly administered.

Michael Notbohm: 17:40

So okay. So because I know you work a lot with the healthcare, you know you said your husband's a physician and I think your parents were physicians as well, right, which is kind of how you got indoctrinated into that whole realm and you're like I don't want to be on call at 2 am, I just want to help you guys save money. So I totally get.

Alexis Gallati: 17:59

I do not have the science gene at all. I have the dollar gene in my head.

Michael Notbohm: 18:05

But so you know, for a w2 income earner, if they, if their Business or you know company they work for, offers a Retirement plan, they would not be able to do this. Cash retirement plan, cash option retirement plan.

Alexis Gallati: 18:20

No, it's such. I was saying the very universal answer to most things tax.

Andrew Hoek: 18:25

It depends, unfortunately, so like an attorney there.

Alexis Gallati: 18:33

If you are w2, but let's say you have fifty, sixty thousand dollars of 1099 income you know income is independent contractor. Maybe you're doing consulting or you are doing some locum work on the side Then you can do that retirement contribution on top of what's happening in your employer's plan. The only thing you can't duplicate is the employee deferral you know, for example in a 401k. So if you have a 401k in both spots then you can't duplicate the employee deferral but you can do the employee or contribution Between both okay, yeah, that's grabbing Like so much value there to me that, like I think, most people don't know about yeah.

Alexis Gallati: 19:19

And that's the majority of our clients are those that have at least fifty, sixty thousand dollars of 1099 income, and if we have that, we're able to work so much magic in terms of retirement planning, deductions, making sure, using proper entity, etc. And all of it together can really help save a ton of money.

Andrew Hoek: 19:41

Does it have to be 1099 or that? Can it be k1 as well?

Alexis Gallati: 19:46

So when you start to get into k1 you start to get in into things called controlled group and affiliated, affiliated service group issues. Okay, so if you let's say that you're a partner in practice and you get a k1, but let's say there's eight other physicians, then most likely you cannot create your own retirement account because of Even if it's completely the independent income of the group big. Since you are a 8th owner in that partnership, you have to go and include any employees in that group in that plan got you so in the plan that you've set up.

Alexis Gallati: 20:32

So it doesn't work well in that situation. So you got to be very careful about those cork. It's under a RISA rules, so it's er is a don't ask me what the acronym is I, but if you look up, er is a RISA rules that basically those are rules that protect the employees, like the little guys, from the owners, you know, not including them in any sort of retirement.

Michael Notbohm: 20:59

And it. You know, it's kind of funny because so one of the things we teach a lot is is that the tax code is thousands of pages and Yet only very small amount of it Actually tells you how the IRS can apply taxes. The rest of it is really how the IRS Incentivizes you to do different things, and so it sounds to me like you know, some of the stuff you've already shared really is incentive based that most people I don't think really even know about. Now, how often do you work with small businesses? I guess there's some tax advantages that they should know about that they may not be taking advantage of.

Alexis Gallati: 21:35

Yeah, majority of our clients have small businesses and you know because, like you said, you know, to be honest, the code is really built for those that own businesses or have investments. If you're strictly W2, I hate to be the bearer of bad news, but there's really a limited amount of things you can do, and so you start, until you start getting into more investment type strategies like oil and gas or solar credits, things like that, short term rentals Short term rentals, exactly, real estate as well and, yep, exactly.

Michael Notbohm: 22:08

Sorry, shameless plug.

Alexis Gallati: 22:10

No, no, exactly no, that's, that's, that's right. And so when we start working with our clients, especially if they own businesses, we are we're looking at entity. You know entity selection is such an important thing Because even if you're only own, you know, have $50, $60,000 of 1099 income, you can, if you go and choose the correct entity, does open up a ton of doors in terms of different strategies, such as, like, if you only have $50,000 of 1099 income and you're a sole proprietorship, you can't run a loss due to a retirement contribution. So if you want to do any sort of retirement contribution on that $50,000 of revenue, assuming that you dwindle it down with other expenses to zero then you really have to do an S corporation in order to take that loss and, you know, do a retirement contribution based on the wages which you make, that you just make that as high as possible, basically to max out your retirement.

Alexis Gallati: 23:16

But otherwise I'd love to always look at what my client spending habits are and see how many personal expenses we can make to be legal business deductions through their business, like home office and mileage. I love per diem as well because that allows you to take additional deductions that you don't have to pay for and I'd say per diem for lodging and meals and incidentals when you travel over 50 miles away. So that's great strategy for locum workers that travel a lot. Those are some of my favorite, and so we always just look to make sure that you're maximizing out as much as possible.

Andrew Hoek: 23:58

I like that. I'm going to put you on the spot here. I know we didn't chat about this at all prior to the show, but I'm getting ready to do a 1031, and I have a call with an intermediary tomorrow to start to ask some questions. But I just figured I'll fire him at you too if we have access. So I'm interested in and I don't know how much 1031 work you do, but I suspect you've got some working knowledge of it, of course.

Andrew Hoek: 24:28

But I'm interested in doing kind of a non-traditional exit on. So I'm selling a property that I own with three partners and basically we're all going our different directions and so we're not going to do a like-kind replacement as far as a typical, just sell that property and buy another property. So I'm aware that there are some options out there that are like you can kind of go in on almost like a fractional ownership and you can buy a bigger asset that you own some percentage of, and that can be done in lieu of a 1031. Somebody was telling me that you can also do a scenario that's kind of similar to that, but as long as you're not touching that money, it can be some other company that you own, almost like the idea of kind of like a self-directed IRA. Do you have any knowledge of that? Is that something that you can actually do? Have you ever dealt with that or come across that?

Alexis Gallati: 25:28

I have not come across that before, but have you ever considered an opportunity zone or an opportunity fund?

Andrew Hoek: 25:36

Yes, and I've kicked that around too. That's actually one of the things I wanted to explore a little bit with them with them tomorrow too, but tell me, I guess, a little bit more about your take on that.

Alexis Gallati: 25:46

Yeah, so what I love about opportunity funds is that you're able to so. With a normal 1031 exchange, let's say you have proceeds of a million dollars but your gain is only 300,000. Well, in a normal 1031, you would have to move that full million dollars into the next project, but with an opportunity zone you get to just move that 9, or, sorry, the 300,000. Instead you only have to invest the gain, and so then that helps to go and defer the gain until 2026. And so I mean, these have been around for a good while, yeah we're like two years too late, right.

Alexis Gallati: 26:32

I know you can at least get to defer for a couple years and some of the programs that I've been introduced to have been really great that they'll go and you get to defer that gain. But then you get a guaranteed 6% income every single year on that money and then that money is tax-free. And then when you have to go to pay those taxes so for 2026, you pay in 2027, they will provide a distribution to help cover the capital gains tax and then between that time and 10 years so usually your money does have to be tied up for 10 years then they'll give you a. The appreciation that you have on that investment is tax-free as well. So it's a pretty sweet deal, especially if you don't need access to that money right away. Then you get to defer that gain. They'll help pay for it, you know, essentially out of your distributions, and then the and then 6% tax free income guaranteed every year plus the appreciations for tax free. I mean yeah.

Alexis Gallati: 27:53

I wish I had some capital gains, to put it, and that doesn't have to be just from a 1031 exchange. You can be any capital gains. It can be even from you know investments in the stock market and or even like, if we have with sometimes we'll have clients that will sell equity in you know to private equity firm, you know, to the part of their practice, and we'll use that strategy. So that might be something to think about and discuss with with them tomorrow.

Andrew Hoek: 28:20

Yeah, I like that.

Michael Notbohm: 28:21

Yeah, the opportunities on thing. I always laugh because so you know, like we talked before the show, we're down here in Tampa and I think the misconception people often have is opportunity zones must mean that it's a really bad neighborhood and that's not the case. You know there's a lot of examples, but one of them is downtown Tampa. Jeff Vinick, who bought the Tampa Bay Lightning a number of years ago, started a project called Water Street and it's about a what two? $3 billion project, andrew, you think by the time it's done. And you know Bill Gates is one of the investors. You know and you know you can imagine how much it's going to be worth at the end of this.

Michael Notbohm: 29:02

And conveniently, it was petitioned to be added as an opportunity zone. And I just laugh because it kind of always goes into that mindset that a lot of the tax code is really it was written because there was very rich people petitioning for certain things. But what we try to teach everyone is that, even though, yes, that might be the case, those are the same things that you can take advantage of if you know about them. And just most people just don't have access to the strategy side of taxes. They're just checking boxes or doing TurboTax, and they never know about any of the stuff that's actually available. So we, you know, we certainly appreciate you jumping on. So let me ask you what are you in all the state like? What states are you taking clients from?

Alexis Gallati: 29:52

Yeah, we are all over. We have clients in 40 plus states, we're 100% virtual and so, yeah, we. We have a ton of clients in California, texas. Like I said, we're in 40 plus states and so I don't think we have any in Kansas. So if anybody in Kansas wants to help check off that box for us, I'd appreciate that.

Michael Notbohm: 30:16

And what's your who's your ideal avatar, like who you know? I know you you deal a lot with with the healthcare industry, but it sounds like you're pretty knowledgeable about small business. You know W2 workers. Who are you looking for?

Alexis Gallati: 30:30

Yeah. So our ideal client are those that earn over $400,000 a year from all their sources and also have 1099 income or income as an independent contractor of at least 50 to $60,000. With that we're able to provide a guarantee in our tax plan design services which we guarantee to 2x their investment in our services. So if they pay us $10,000 to design a plan, I'm going to guarantee a minimum $20,000 per year in tax savings or they get the plan for free. So you know we're a very small, boutique type firm. We only have about you know it's time of this recording about 120 clients that are on our tax maintenance packages, and that's by design. We have criteria to work with us and we want to make sure that we're working with those that we know we can save a lot more than what what you're paying us.

Michael Notbohm: 31:30

Yeah, that's awesome, that makes it funny how, how synchronized the mission of what the legacy wealth code is. When we created it. It was, like you know, andrew and I both we met, actually in a networking group and both of us had similar goals for what we anticipated our net worth to look like in the future and what our legacy was to our family and our friends. And for us both, it's teaching other people how to build wealth, because I'm convinced you know, especially granted a partial to real estate, but there's a lot of different investment vehicles, but I'm convinced that anyone could really be a multimillionaire if you have the right disciplines, you have the right network in your corner, because there's so many opportunities that people just don't take advantage of, and I just love the fact that your mission seems definitely in alignment with what we're doing.

Alexis Gallati: 32:21

Yeah, I 100% agree, and it's with cerebral like. Like I said, we're very big on education and we don't take so many products, we don't get any commissions or kickbacks, and so those that work with us know we're, you know, giving unbiased advice, and it truly is around education. I mean, if there's strategies that our clients don't feel comfortable with, that's fine. The most important thing is that we're bringing new ideas to the table and that you know about them. So maybe in a couple years you're ready for that short term mental, you know.

Michael Notbohm: 32:55

So why do you think so many people not and when I say people, I would even say tax professionals are so nervous about dealing with the IRS? I mean they're it's almost like they steer their clients away from anything that might be, you know, in the gray area. But it's not. It's like it's not really in the gray area if you know about it and know how it works.

Alexis Gallati: 33:17

Yes, I agree. I think it's just because they probably don't have as much experience with the IRS or feel as comfortable in their their own education or skills. You know, I did a three year fellowship in IRS representation and so I'm just very comfortable with it. Also to I, there are some areas where I'm a little more conservative than others, because I know the IRS like meals, for example, I tell my clients don't go crazy on trying to write off all your meals, because that's one area that IRS loves to nab people on and it's such an easy area for people to see like, hey, why'd you spend 10,000 last year? Announced 50,000? Well it's, it's just a very easy spot. So knowing where the IRS likes to audit more is important.

Michael Notbohm: 34:06

I guess the IRS workers were not buying eggs during this period, Because I mean that would make sense. That's where it's $10,000 to $50,000. That's almost automatically.

Alexis Gallati: 34:15

That's true, there's always some per inflation. But yeah, otherwise, I've always loved tax and the fact that it's really more centered around law. I mean, it's really not that math related. All you need to know is basic arithmetic, and I actually even took the LSATs and was ready to go to law school, but my husband and I decided that medical school bills were enough for us at the time. But yeah, it's just one of those things that, like I said before, a lot of preparers nowadays are just more into being tax return mills. But you can definitely see, especially with the advancements in AI, that if you're not giving proactive advice, then most likely those people will start to fade out.

Michael Notbohm: 35:07

Yeah, I would definitely agree with that.

Andrew Hoek: 35:09

Your fellowship that you just said you did on representing, I guess, individuals with regards to the IRS what's the name of that? Just so that I mean, I think that's something people should be asking their CPA like, hey, do you have this? Is that something you do? Because I mean, what a way to set yourself apart.

Alexis Gallati: 35:28

Yeah, it's an NTPI fellowship, so NTPI is National Tax Professionals Institute. Hopefully I got that right. But yes, they're really great with, like I said, doing that that three-year fellowship in and just really making sure that their advisors know how to properly handle everything, whether it's like offering compromise or trying to get penalty abatements, things like that. So, in full disclosure, I don't do a ton of offers and compromise or things like that, but when it comes to maybe some back taxes or penalty payment, I do those on a more regular basis.

Andrew Hoek: 36:09

Sure Makes sense.

Michael Notbohm: 36:10

The first quarter is just how to stay on hold for hours and hours without losing your mind, because you're like, how come no one's picking up?

Alexis Gallati: 36:19

Well, that's where you tap into your tax professionals, because they have a practitioner priority line, so we usually get in a little bit faster.

Michael Notbohm: 36:29

So sometimes we're on hold a lot. So I tell you what I mean. We certainly appreciate it, and I know that when we first did this there's like five or six topics, so I'd like to proactively invite you back at some time in the future to cover some of these others, because you've definitely given us so much good stuff today. How can we help you? You need somebody in Kansas. What else can we do for you?

Alexis Gallati: 36:53

Well, yeah, I would love to be back on. I like I said, I love talking tax and providing help that can hopefully save people money, Because the more we can take out of the IRS's pocket, the happier I am. But yeah, I actually have a website that's dedicated to legacy. So if you go to wwwcerebraltaxadvisorscom forward slash legacy, that will go and show you kind of what we offer. That has on there a free bonus tracker and year-end tax planning list. Go and check that out and make sure you have kind of thought about everything before going and doing your tax return for the year, as well as a link to my book which is Advanced Tax Planning for Medical Professionals.

Alexis Gallati: 37:43

That was really a brain dump, basically, of a whole bunch of different strategies from real estate to the retirement, to entities, et cetera, and it was a real labor of love and so many people have gotten so much value out of it and which I'm very grateful for. And then also on there I have Cerebral Wealth Academy, which I just created within the past few months to really go and educate those that have 1099 income that $50,000, $60,000 of 1099 income. But our more do-it-yourselfers, Cerebral tax advisors we're really a white glove, hand-holding type of service, and so we really promote amazing communication et cetera. But we have some people that come that are perfect for us, but they're like, hey, we really want to do it ourselves, and so the Cerebral Wealth Academy course will really help them do it on their own. And there is a $300 off coupon in there. It's exclusively for Legacy's podcast, and then there's also a link there. If you want more of that hand-holding white glove service, you can book a free discovery session with me and see if we're a good fit. That's awesome.

Michael Notbohm: 39:02

That's great. Yeah, and all of these links will be in the description of the podcast when it publishes here in a few days. Andrew, you got any final tax questions for the Wizard of Tax here? This has been great.

Andrew Hoek: 39:15

I don't, but, alexis, I really appreciate it. It was a lot of great information that you shared today, so thank you for your time and your wisdom.

Alexis Gallati: 39:23

Yeah, thank you so much. I really appreciate the two of you having me on.

Michael Notbohm: 39:26

Absolutely Until next, guys. This has been the Legacy Wealth Code podcast onward.

Speaker 1: 39:32

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