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Guest

Kelly Erb

Tax attorney and Forbes writer known as Taxgirl; managing shareholder at The Erb Law Firm focused on tax law and planning.

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Guest appearances

1 episodes
#116#116 with Kelly Erb - Tax Expert Breaks Down Trump Taxes and Big Businesses Ran by Few PeopleOct 02, 2020

Key numbers

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In the moments

8 linked receipts
Story

Tax Girl built a brand by writing tax in plain English

Kelly Erb, an attorney, started writing about tax early when most coverage was highly technical. By making it accessible and branding herself as Tax Girl (@taxgirl, taxgirl.com), she built a following most tax pros never reach.

Yeah, no, I actually started out I think pretty early on in the kind of the tax writing business. I was an attorney that just started writing about tax. And at the time, I think a lot of people were writing really technical pieces and I didn't think that made sense. So I was trying to be more accessible. So that's kind of how that evolved.

Steal thisTake deep expertise in a dry vertical and translate it into accessible content to build a personal brand competitors won't touch.

EP 116 · 0:48 · KELLY ERB
Read at 0:48
mfmindex.com№ 0116-48
Framework

Sell Christmas trees in May: publish off-season for outsized reach

Tax articles normally peak in March; nobody reads tax content in September. By publishing a clear, mechanics-focused (not political) explainer of Trump's returns out of season, Erb got 200K+ views on a piece that was shared more than read.

So yeah, to have a lot of views on something that doesn't directly impact you as a tech story, is pretty unusual, I'd say. I did expect some coverage of it. I think the thing that I got a lot of impact on social media, because actually I think it's probably been shared more than it's been read, is that people were interested in the fact that my— that particular article is more about the mechanics and not about the politics.

Steal thisPublish authoritative, non-partisan explainers on a hot topic when everyone else is silent and the demand has no supply.

EP 116 · 2:24 · KELLY ERB
Read at 2:24
mfmindex.com№ 0116-144
Fact

Obama-era bailout rules let businesses carry back losses for refunds

Erb explains that Obama-era provisions extended 'carrybacks,' which let a business apply a bad year against prior good years to either lower future tax or claim a refund on taxes already paid. Trump used this to claim his large refund.

there was one year in particular where the president was able to take advantage of Obama-era bailout provisions to extend what's called carrybacks, which is where you can recover if you have like a really good year one year and that you've had a couple of bad years. You can balance those out so that you can either lower your tax bill going forward or you can get a refund based on years previous.
EP 116 · 6:40 · KELLY ERB
Read at 6:40
mfmindex.com№ 0116-400
Number

Trump's $72.9M refund triggered a mandatory committee review

Erb notes Trump received a large refund in 2010 by carrying back losses to offset taxes paid on good Apprentice-era years. By statute, any refund over $2 million goes to a Joint Committee for review, which is what triggered the long-running audit he cited.

$2M
Refund threshold for mandatory Joint Committee review · USD
That's actually by statute. Once refunds hit over $2 million, they go to a committee. So the people are like, hmm, let's look at this and make sure it's legit, right? So that's what happened. And that was kind of the crux of the audit that the president kept talking about every year when he says he couldn't release his returns because they were on audit.
EP 116 · 7:52 · KELLY ERB
Read at 7:52
mfmindex.com№ 0116-472
Framework

Don't optimize for low taxes, optimize for profit

Erb's core warning to business owners: lowering taxes usually means spending money, so chasing deductions for their own sake destroys profit. Only spend if the credit or write-off also delivers a real return on investment.

But you shouldn't, as a business owner, be too quick to focus on lowering your taxes because as a business owner, you want to maximize your profits, right? Not necessarily just focus on taxes. And a lot of times to lower taxes, you have to spend money. So you want it like those solar panels, right? So you need to figure out, is that going to be a return on investment that makes sense?

Steal thisBefore any deduction-driven purchase, ask whether it improves the business on its own merits; if not, the tax savings aren't worth the cash outlay.

EP 116 · 11:31 · KELLY ERB
Read at 11:31
mfmindex.com№ 0116-691
Fact

Business owners under-deduct out of audit fear

Contrary to the myth that business owners over-deduct, Erb says her clients are so afraid of being audited that they actually claim fewer legitimate expenses than they're entitled to, especially sole proprietors and LLCs filing Schedule C.

When we talk about taxes, a lot of people assume that, you know, people over-deduct. This is, I think, a myth, especially amongst business owners. I find that business owners are so worried about being audited that they actually under-deduct.

Steal thisReview whether personal spending could legitimately be recharacterized as a business expense; most owners leave deductions on the table.

EP 116 · 16:39 · KELLY ERB
Read at 16:39
mfmindex.com№ 0116-999
Tactic

See your tax person quarterly, not once a year

Erb compares using an accountant only at filing time to visiting the doctor only when sick. Meeting at least quarterly lets your tax pro spot deductions, deferrals, and programs (she cites forgivable, tax-free PPP loans for the self-employed) you'd never find in TurboTax.

You should at a minimum be meeting with your tax person once a quarter. Um, and that— let them look at your books and say, you know what, turns out that because of COVID and the CARES Act, you may qualify for PPP money, which is the Paycheck Protection Program, which also not only for people that had employees but also for self-employed persons was applicable. That money was a loan, but it was a forgivable loan. So it's tax-free to you.

Steal thisSchedule a quarterly review with your accountant so opportunities surface before year-end, not after.

EP 116 · 23:37 · KELLY ERB
Read at 23:37
mfmindex.com№ 0116-1417
Tactic

See your tax person quarterly, not once a year

Erb compares using an accountant only at filing time to visiting the doctor only when sick. Meeting at least quarterly lets your tax pro spot deductions, deferrals, and programs (she cites forgivable, tax-free PPP loans for the self-employed) you'd never find in TurboTax.

You should at a minimum be meeting with your tax person once a quarter. Um, and that— let them look at your books and say, you know what, turns out that because of COVID and the CARES Act, you may qualify for PPP money, which is the Paycheck Protection Program, which also not only for people that had employees but also for self-employed persons was applicable. That money was a loan, but it was a forgivable loan. So it's tax-free to you.

Steal thisSchedule a quarterly review with your accountant so opportunities surface before year-end, not after.

EP 116 · 23:37 · KELLY ERB
Read at 23:37
mfmindex.com№ 0116-1417