206: Build Wealth and Grow Your Business with Expert CPA Tips
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Welcome back to The Richer Geek Podcast! Today’s guest is Chase Insogna, founder of Insogna CPA, a highly successful CPA and investment advisory firm based in Austin, Texas. Chase specializes in helping business owners not only manage their finances but also strategically grow their wealth while building their businesses.
In this episode, we're discussing...
Why finding a CPA who doubles as a business advisor can transform your financial strategy
The importance of proactive communication and collaboration with your CPA
What to expect during the client onboarding process with a CPA
Proven strategies to minimize taxes and save money as a business owner
Smart investment approaches to build long-term wealth while running a business
Resources from Chase
Resources from Mike and Nichole
+ Read the transcript
Mike Stohler
Hey everybody, welcome back to another episode of The Richer Geek Podcast. Today we have Chase Insogna. He's the founder of Insogna CPA. It's a highly successful CPA firm in Austin, Texas, and what makes him different from others is that they also do investment advisors. He works with business owners in particular, so all of your business owners pay attention. He helps you to build wealth while you're building your business, something that I needed 10-15, years ago. Welcome Chase. How are you doing?
Chase Insogna
Yeah, great. Thanks for having me.
Mike Stohler
Yeah. You know, I like the fact that you want to help them build their wealth or keep their wealth while they're building their business, instead, like some of us just like going, "I'm worth some money. Now, what do I do?" And then you tell me, it's like, "Well, yeah, you lost a lot of it, or you didn't gain a lot of it." First, before we dive into some of these things, who are you? What got you started in the love of CPA, and why did you choose business instead of like an individual?
Chase Insogna
Great question the start of the firm in 2011 going back from there, I've been licensed since 2009 the CPA. I was in corporate accounting for over a decade and but always was entrepreneurial. Even in college, I would do bookkeeping and taxes on the side for people and small businesses. And I was working and studying with CPA, doing the same thing, and then just had an opportunity to start my own firm. So I started off by buying a bookkeeping firm. Don't ever recommend it, but, you know, as a waste of money looking back, but get me started. We immediately became, for those of you know, listening or familiar with Dave Ramsey, immediately became a Doris local provider for tax here in Austin, so that kind of helped with lead flow initially. I mean, we're still one of his endorsed local providers now, and here in Austin, we've been since 2011 but that kind of helped build the lead flow initially, and then from there, we just have grown organically. So I started with myself, and then eventually myself and a bookkeeper to help. I did all the taxes for five, six years, and then finally found a great tax manager that we have now. And we have a team of 20 people doing accounting, tax planning, and mitigation. Mainly we're getting into, we do the daily accounting to get into advisory and controller fractional CFO services, where we're focused on daily, weekly, monthly advising larger clients looking to grow their business, budget, forecast, cash flow, planning, those type of exercises is where we add value today with our team to answer your question on building wealth while building your building your business, is where I got that from, is I always was more of, like a business coach, business advisor, than I was just a normal CPA. That's how people told me that I was approaching it years ago, and so that's what we've continued to do. But I just kind of like, what would I do if I were in your shoes? Kind of advice. And as I build my business over the years, I'm not the typical CPA with a lifestyle business where Iam waiting to the end of the rope and then hoping I sell my firm and getting a check, and then, I can do whatever, and or die at my desk, like a lot of CPAs have done, my goal there and myself. And what I try to promote to clients is, yes, you're reinvesting in the business. I do the same thing, but not all of your money reinvested in the business. When you have gone over the hump and are able to have liquid cash that you don't know what to do with, it's just sitting in savings. You know, max out the retirement accounts. Obviously, you start there in the basics of IRA and 401(k) then you get into maxing out larger retirement plans, maybe defined contribution, or maybe it's getting into tax mitigation strategies where you've got, you know, you're doing, like charitable contribution plans or remainder trust, or deferred sales trust, or maybe buy a jet, and you get 100% deduction a couple years ago. So those types of things, like we are helping advise clients with their liquid cash. And so same for me my philosophy. I mean, I love dividend investing, so for me, it's like paying the tax in an ultra low tax rate environment. We are right now, 325% and investing it for the future. That way I don't have to wait for the rope and the check at the end of the day where 85% of small businesses never sell is the Forbes statistic. So everybody waiting for the end of that rope, that one day comes, likely will not come. Are you going to be the 15% or the 85% most people are the 85% so let's save along the way. Let's build and have a recurring income through dividend investing. That's my goal. Other people have their own goals, but that's been my goal, so that's what I've been working towards. And so I don't have to wait for the end of that journey to cash out and go do what I want. I could stop doing what I do now and still enjoy life.
Mike Stohler
Yeah, something that I learned got big enough. Ladies and gentlemen, with your business, as where you can draw a W-2 or you can draw a salary, or just the owner draws, or whatever. You know, how important is it? I found this out to put a certain amount of your money into a tax deferred, whatever. Because usually, if you take a salary and just put it in your account, that is taxed higher than maybe when you grab it from a tax deferred because now it's not this whole income. You're just paying taxes on what you're pulling, right? Or how does that work?
Chase Insogna
Yeah, kind of many different strategies. I mean, a lot of them depend on the tax bracket. Obviously the state you live in. I'm kind of referring to Texas, because we're based here in Austin, so I don't have state income tax. But if you're in California or on the East Coast, certainly it makes sense to defer it, because you have to add five to 10% on top of the federal effective rate you're paying. And then looking at those strategies if you're in those high tax states, because deferring it today, and then things like got like oil and gas leases, or you can invest in an exotic wildlife like here in Texas, there's a big ranch and a business that does it, where you get back that capital over three to five plus years is the goal, in addition to getting 40 to 80% tax write off in the first year or two as an active investor if you qualify. So those types of things. We don't do that internally, but we know of it, and we're recommending a third party to go talk to to make that happen. But at the start of it, we're seeing the numbers, day to day, month to month, and that's what we're looking to advise our clients with. Going back to, we're not just doing bookkeeping and taxes here. That's part of the coaching and the advisory and the planning mitigation that we do throughout the year before we get close to the end of December 31 here.
Mike Stohler
Yeah, it's something that I learned really quickly, is to get a CPA that also advises it's so important. What I hated a couple years ago is when I get the tax bill, it's like, "Oh, you owe X amount of dollars. So I'm like, "Why? You could have told me that six months ago." He knew that that was on track to start doing this, and then that was the last time I used that firm. And now, you immediately, I don't know if you do monthly or quarterly, but what is the importance of sitting down and saying, "Okay, this is where you're at Q1 and then compared to Q2." And then saying that, "Hey, you know what you need to do this or that, because you're seeing a trend." And preparing them for what they're going to see or need when they actually file their taxes. How important is that?
Chase Insogna
It's very important, and it's what we're trying to communicate when we're onboarding somebody or talking to a new lead, because a lot of times they're just price shopping, and obviously you get what you pay for, okay? Because if you are looking for just tax services, you're only going to get transactional experience, whether they're CPA or whatever. If you're just paying them to do taxes, they're not going to check in with you. They're not incentivized to call you monthly and say, "How's your business doing?" That's what your bookkeeper should be doing, or your fractional CFO if you have one, but if you don't, aren't at that level yet. That's why we at least require business owners that we work with to reconcile the books with half our businesses. It's necessary to have in house accounting, but we're at least getting our hands in the data at the end so we know it's accurate on what we're advising on the other half. Obviously, we do it all for them, data entry all the way through, but that allows us, to your point, to have that conversation in real time. Larger clients doing eight figures, we're doing it weekly. If you're five to six figures, maybe it's monthly, quarterly. This one orders consultants, maybe it's semi-annual, or at least kind of checking in in the summer, seeing how things are going, how's the business going? And then Q4 we do formal analysis, make sure we're on track before December 31 but that's the real key. Is to find a firm that's engaged in at least those services. Because if you're just a bookkeeper and you just have a tax person, and maybe you have an additional like fractional CFO controller. Those three are not incentivized to communicate with each other at all, and you're missing the boat if you don't bring those services, most of them in house, and that's where you're going to get left with the poor experience on why is it April 15, and I'm owing so much taxes because nobody is incentivized to be proactive with you.
Mike Stohler
Yeah or it's October and we haven't even filed yet. There's that.
Chase Insogna
Yeah.
Mike Stohler
And then there's that, the other side of it. So for the small business people out there, let's say that they're making six figures, 100K to 500,000/year, something like that. They come to you and say, "You know what? I agree. I've been using just a CPA. They've just been punching stuff in the software and giving me a bill." How do you onboard them? What is that conversation? How personal to get as far as what their needs are, are they looking to sell? Are they looking for a multi generational bill? Business. Give me some examples of what you do specifically that sets you apart from the others. When someone actually comes to your firm and wants to talk.
Chase Insogna
Yeah. In the 1 to 500 range, depending on what the business activity is. Sometimes accounting is necessary. Sometimes not a lot of times it might be one of our consultants, just they can keep track of their expenses to keep their costs down, but how we engage them is on a monthly recurring price. We're basically looking at annual CPA costs and dividing by 12. So we're including those likely semi annual check ins or quarterly if necessary. We were looking at bookkeeping. If we're doing it for them, if necessary, payroll, likely an S corp from there, what's your reasonable salary? We have a third party tool to tell you what that salary should be based on the task you're doing, not just guessing a number and then retirement planning. From there, do you have the cash flow to do it? I mean, if so, how much do you want to contribute as an S corp that needs to run through payroll? So you can't ask for the employee portion, so you don't want to run payroll before you, you know, make that decision, paying kids, paying the spouse. It's kind of low level stuff, and then from there, making sure we're keeping track of the expenses properly. If they're doing it on their own, or we're doing it for them, if it's a semi-annual check in, again, in the summer, we'll check kind of soft check in. How's the business going? How are you doing? Like we're not doing the accounting, like we don't have the insight to the numbers. And then Q4 we're checking in. We've done their taxes. We'll run it through our tax software, see what strategies are out there if they want to take advantage of them before your end. And then sometimes, you have a big contract, and you're blowing it out of the water. Maybe you went from 300 to, you know, seven figures, and maybe it's a one off thing, so getting into the mitigation strategy, but if you're looking to buy a house or, looking to use the cash to pay down medical student debt, that's the smart way to do it, in a low tax rate environment that we're in now. But if you have extra cash available, then look at the mitigation strategies, talking to our third party referrals, seeing if it makes sense for you to take that write off in hopes of getting the capital back in three to seven years. Though you don't actually lose the cash it comes back to you and the tax write off you get.
Mike Stohler
Let's say they've been doing this. They've been slowly growing. At what level do you approach the business owner and say, "You know what? We need to tell you that you're growing, which is a great thing, but now we need some other strategies." And what are those strategies?
Chase Insogna
Yeah. All levels, from one hour consulting, you're doing a couple 100,000-300,000 a year, because, again, we're having those regular check-ins with our monthly clients, or recurring clients, I should say. And then those that we keep track of, accounting for monthly we're certainly seeing the data. I mean, we're data entering every two to three business days. We're just reconciling, obviously, in the month. So my team is identifying spikes up or down in net profit, and classifying things correctly, purchasing whatever, and having those conversations, whether we have the formal check in on the list or not. Maybe you're quarterly, but next month something happened, so let's jump on a Zoom call. Have a conversation. You know what's going on in your business? Let's talk about it. We want to be on the forefront. We want to be proactive with our clients. We're all about communication here. So we don't want to wait six months and then talk about it and it's too late to do things. Or maybe your business has dropped during COVID. Or this year has been a weird year for some industries, depending on what you're in 2024 so maybe your business has dropped. So let's have a conversation. You shouldn't be payrolling yourself, and you should stop and just take owner draws. Maybe you don't have the cash flow to contribute to your retirement this year. Hold up on it. Those kinds of conversations just proactively, is what our team is all about and what we're trying to mitigate at the end of the day. So it's not April 15, and you're looking back and saying, "Why didn't I have this conversation six or nine months ago?" But that requires paying for what you get. Because if you're just paying us to do taxes and send out an agreement in January, we're not going to do that proactiveness with you. You know, we're not going to be checking in like that.
Mike Stohler
Yeah, as we talked prior to hitting recording, I dealt with that also. And ladies and gentlemen, some people are like, "Oh my god, I'm not paying a CPA that much." They have to get out of the mindset, even though it says CPA in your title, you're just so much more than that. You can't look at it like, "I don't pay CPAs 10s of 1000s of dollars." You're so much more than a CPA. You know, at that point, right? You're becoming the advisor, you're part of the team. And you'll also get to the point where, "Hey, Mike Stohler, you've been investing in your business. We're doing everything in your business, but now it's time to invest in yourself or your family." What does that conversation look like, where you're starting to take the W-2s, you're starting to take all that sort of stuff. But now there is this level of stuff that W-2 people don't have access to, but because I'm an entrepreneur, what are some of those things that people don't even know about, that business owners can. Open up in order to either defer taxes or save payroll stuff, or just all these different retirement type accounts that entrepreneurs have. What are some of those things that you advise on? Are you talking about just basic retirement plans, retirement stuff? You know, say I'm 50 years old, and I now have built my business up, but I don't have any retirement accounts, I don't have anything to draw on, and I've just been spending it, or I've just been putting it in a checking account. You know, there's these IRAs that are specific to entrepreneurs, all these different things.
Chase Insogna
Yeah. I would say the first step is, what level of financial discipline are you? Because if you're just spending a lifestyle, then it's going to be hard to save for retirement. So that's the first step. What are you doing with your money? And what do you want to do with it? Just from a basic level, if talking about one to 500,001st levels, are you maxing out an individual IRA and and then from there, is it a self IRAdepending on how much you want to contribute, we want to do, like 20k plus. And we're probably talking, we're not a big fan of solo plans, but talking about solo 401(k) and what I refer to as a company for 1k and then we have a third party that thinks with payroll and contributes it automatically. And that company for 1k allows you to do the 100% employer match and allows you to do the profit sharing on top of it. Solo plans are different because it's just 25% of your W-2 for employer match and profit sharing. So depending on the level of how much you want to save there, and you're adding your spouse to that, if we're maxing their retirement out, that's kind of the level of like, what you want to retire. This is the onboarding conversation we have with clients initially when they come on board as a new recurring client. My team is having to call the S corp salary test and then the retirement conversation, because, again, it needs to run through payroll depending on what you're doing. That's one of our onboarding goals, is to capture that information as well as what your financial goals are, as you mentioned in the very beginning, are you looking to sell your business? Are you looking to, you know, just kind of have a lifestyle business? Are you bringing on equity partners, etc, like, what is the goal there? And because that also depends on the business coaching and then the advisory and how we're working towards helping you scale your business towards those goals, because they're very different, all three of them.
Mike Stohler
What are some examples where you've onboarded a client, and you just sit there and shake your head. You're just like, man, we've got some work to do. Or are there some stories just like, "I can't believe these people are doing this, but I'm glad they came to us, because we can fix what just happened."Because some of our listeners may be doing those, some of those things.
Chase Insogna
I would just joke and say that no client is like that. They're all perfect when they come in. So we can help them. But yes, what we get excited about is we have a couple clients that we're onboarding now . They just haven't their books are a mess. They have no idea what's going on the financials, but we show them and educate them on what they should be looking at and what's wrong and how we're going to fix it. So we know why our bill is going to be high when they get it in the project phase, but once we have it cleaned up again, my team is excited about adding value. So what can we do to get you to the next step and get you to why you came here? What because you're looking for something different that you're not getting somewhere else at the end of the day? That's what we're trying to do, is just help people and communicate with them actively and proactively, and help them reach their goals, helping them build their wealth while they're building their business. And when it comes to S corps, we've been doing S corps for a long time . The first thing is, like, "What's your structure?" If somebody comes to me making six figures in a schedule sole prop business. Obviously you're getting what you paid for, or nobody's ever bought it to your attention, and it seems basic to me, but a lot of people are wasting 1000s, if not 10s of 1000s, of dollars in unnecessary FICA payroll taxes. That's the first step. And back to your statement a while ago, where you talked about, you know, adding value for the price. That's what we're initially looking at here, where we talk about the Schedule C, like we're not going to put you in an LLC S corp, unless we're justifying our costs. Because obviously you've got an extra business return. You're going to need to set up payroll. You know, you're paying us for the advice and the ongoing proactiveness, but even with our fees included, you're still saving money. Versus last year, you just paid it all to the IRS. So there's that mindset of like, do you want to pay it all to the IRS, or do you want to pay us some and then still save some? That's what we're trying to communicate a lot on our initial calls. Is the mindset of, like, "Yeah, we're charging you, but we're also saving you this much." And we get into that with Q4 when we send out our analysis of we show them how much they're saving, as an S corp owner to remind them, like,"This is why we got you into it, because we're saving you this much, even though you're paying us a percentage of what we're saving you," but that's we're not going to ever recommend anything that we don't think makes sense. Again, if we were in your shoes, what would we do from a financial perspective?
Mike Stohler
Yeah. And ladies gentlemen, it's so important. It's like, why bitch about, "Oh my god, you know the CPA's cost me 40 grand a year." And I said, "Well, they just saved you 90 or 100 plus." So it's like, "Shut up and pay it," because they're saving you money. And it's probably some protections down the road also on how you can keep it, but it's crazy.
Mike Stohler
Chase, before I let you go, is there anything that I did not cover? And then we'll get into how people can find you. Is there anything that you want to let our audience know that I didn't ask?
Chase Insogna
No, I didn't have a great conversation. I love it. And, you know, I would just say we're always promoting license versus unlicensed, look for a licensed CPA professional to have kind of a different view and make sure your information is protected. I don't see a lot of CPAs on American Greed shows out there, you know? So a licensed CPA is generally going to protect their professional license. We've worked a lot hard for it, and a lot of times I see a lot of these unlicensed people offering ridiculous advice on TikTok and social media, and they're not licensed, so they're not signing your return. They don't care what they tell you, you know?And then we have to mitigate what the actual facts are, and people think that we're not proactive or, like, aggressive enough, but in actuality, we're just trying to protect our professional liability as a licensed professional, and you definitely need one on your team to make sure you're protecting yourself. Oh, there's no red flags from the IRS, and you eventually get audited for stuff you shouldn't be doing.
Mike Stohler
Yeah. Amen to that. That's what keeps me up at night, is just knowing that I have a good CPA, that I know that you know when I talk to my investors, when I talk to all these different people, it's they've got it down. Hopefully there's no mistakes, and you back your word. And that's why I also do not do in house bookkeeping. I want it all. Third part, I want me to not touch it. I want you to do it, and so that there's no way that anyone could come and say that I was cooking anything. Number one, I can't cook but I don't want to cook the books. Chase, where can people find you?
Chase Insogna
Yeah, please hit us up on our website, insognacpa. I-N-S-O-G-N-Acpa.com. Reach out to us, call us, fill out the form. We'll immediately get back to you. We're not going to sit on it for weeks, like some firms. We don't go on vacation for months at a time. We're here all year. I have a business deaf person that'll reach out to you pretty much immediately, within one or two business days, you know, let's have a conversation. That's all we're trying to do is see if we're the best fit. Offer some advice, set you on the right path, whether you work with us or not. We're just here to help.
Mike Stohler
Perfect. Ladies and gentlemen. Chase Insogna, the founder of Insogna CPA. Thanks bud for coming on The Richer Geek Podcast. I appreciate it.
Chase Insogna
Thanks for having me.
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ABOUT CHASE INSOGNA
Chase Insogna is the founder of Insogna CPA, a highly successful Austin, Texas-based accounting firm specializing in helping small and medium-sized businesses, including e-commerce ventures, grow their wealth while scaling their operations. Passionate about entrepreneurship, Chase focuses on providing personalized tax strategies and investment advice to save clients money and accelerate their success.
Insogna CPA stands out by leveraging cutting-edge technology and tailored solutions to help business owners build sustainable financial growth. Chase's mission is clear: empower entrepreneurs to save and invest in their future, ensuring they can enjoy the fruits of their labor without being solely tied to their business.