217: Zero Tax Bracket: How the Wealthy Legally Avoid Taxes
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Are you tired of overpaying taxes and feeling like your wealth is constantly slipping away? In this eye-opening episode of The Richer Geek Podcast, we dive into the tax secrets used by the ultra-wealthy with Mark Miller, President of Hilton Tax & Wealth Advisors. For over 30 years, Mark has helped business owners, physicians, and high-net-worth clients save tens of millions in taxes while increasing their wealth by over $200 million. As a best-selling author of The Tax-Free Business Owner, he reveals how business owners can zero out their taxes just like Fortune 500 companies. Featured in top publications like The New York Times and Kiplinger’s Personal Finance, Mark’s insights will empower you to reduce your tax burden and accelerate your path to financial freedom.
In this episode, we’re discussing…
Beyond Basic Compliance: Don't mistake standard CPA services for proactive, advanced tax planning that can significantly reduce your tax burden.
Family Office Strategies for Main Street: Learn how strategies historically used by the ultra-wealthy, like the Hilton family, are now accessible to a wider range of investors.
The Power of a Formalized Tax Plan: Just like a business plan, a strategic tax plan is crucial for minimizing your biggest lifetime expense: taxes.
Debunking Tax Myths: Understand that aggressive, legal tax planning doesn't necessarily increase audit risk and that IRS audits are often less intrusive than perceived.
Safety First Investing: Discover the investment philosophy of the wealthy, prioritizing safety and security as the foundation for consistent, long-term returns.
Actionable Strategies Exist: Explore advanced tax mitigation techniques beyond standard deductions and retirement contributions, potentially leading to a significantly lower or even zero tax bracket.
Resources from Mark
LinkedIn | Hilton Tax & Wealth Advisors | The Tax-Free Business Owner | Hilton Wealth: How to Invest Like An American Dynasty
Resources from Mike and Nichole
Gateway Private Equity Group | Nic's guide | Franchise With Bob
+ Read the transcript
Mike Stohler: Hey, everybody. Welcome back to another episode of The Richer Geek Podcast. Today we have Mark Miller. He has over 30 years in the tax finance services industry, helping his clients grow and protect their wealth. He has worked with hundreds of business owners, physicians, executives, high net worth clients, cutting their taxes significantly.
He helps them grow and protect their business retirement assets in good times and bad. But he's not just a CA, he's just not an advisor. We'll get to know what Mark does and how he does it. And how are you doing Mark?
Mark Miller: I'm doing great. How are you?
Mike Stohler: Doing good. Thank you for coming. I always like to start my podcast, give us your background, your history and how you got involved in a very famous family.
Mark Miller: Yes, absolutely. I'm the manager of the Hilton Family Office. For those on your podcast that don't know what a family office is, probably a lot of them do. But basically it's a bunch of wealthy people get together and they bounce ideas off of each other.
Mike Stohler: They have advisors that work for that quote, family office and cut costs, all of that type of thing. I'm the manager of the Hilton Family Office, but today I'm here in the capacity of a spinoff company that I've done with Brad Hilton, who is the grandson of Conrad Hilton, which I'm sure many people have heard. He's the patriarch of the Hilton family. And Brad and I started a company called Hilton Tax and Wealth Advisors. Our whole concept is to bring these high level family office strategies more down to Main Street or the average investor, you don't have to have $20 or $30 or $40 million to participate.
That's good because that would limit your participation in your clientele. If you say, "Hey, we'll talk to you if you're worth $50 million or more." Bringing it down to the rest of us is good. Everyone has a CPA, whether it's H&R Block or whether it's a CFO.
Mike Stohler: Tell us the differences between you have your regular CPA and then people that specialize within the CPAs. At what point do you think you need to start thinking about something other than just your 'bean counter' or CPA normal CPA?
Mark Miller: I think if you have a company that's making maybe $500,000 a year or more in revenue, which is not a ton but you're also maybe at an GI level of $250,000 to $300,000 and above, you need some more advanced help. We're very fortunate to be partnered with the Hiltons because they are considered on the institutional side of the business, the best tax mitigators really probably that have ever existed in America. They've done it remarkably well over the years. And what we do is plug our clients into the Hilton Financial Network to take advantage of some of these more advanced tax mitigation strategies.
Mike Stohler: Now, when someone goes to your website and say, "Hey, you know what, I'm interested." Do you have a minimum worth or business acumen? Is there something that's you need at least assets under management or something of X amount of dollars.
Mark Miller: On the tax side, I mentioned those minimums. Yeah. But then we've brought it down to a relatively, and I'm not gonna say this is not a lot of money, but we work with folks that have $250,000 or more. Now obviously we have a lot of clients that have a lot more than that but if you have $250,000 to invest or more, we'll get into some of these advanced wealth planning strategies that come down from the family office because that's really Brad Hilton's and I passion, that's why we're doing this. We're both spending so much time growing Hilton Tax and Wealth Advisors, this desperate passion to get out to as many investors as we can. That they can invest so much better to where they'll pay less in fees, they'll have less volatility. They'll have tons more safety in their portfolio, and in the long term, they'll make a lot better returns. Just like basically the model of the wealthiest of the wealthy, how they invest. We've deliberately kept those minimums pretty low because we want to be able to help folks and help them get wealthier faster in a much more efficient way with the strategies that we use.
Mike Stohler: People probably don't know what those strategies are or even what you do. We're used to, "Okay, end of the year, here's my box." Go at it, and you get your draft, you get your return. There it is. You either owe or you get a refund. You take it up to another step. Talk about what an advisor does, you know, the meetings, the plannings, the consultations.
Mark Miller: Back to our tax planning side. First of all, it all starts with designing a formalized tax plan. We all have a formalized business plan. We usually have a marketing plan, all of that. But actually the biggest expense of your life is your taxes and nobody has a plan. Their plan is to go to a CPA, I'm not gonna say cross their fingers. Most people believe if they're with a good CPA, that CPA is saving them everything you possibly can.
That's not the case. They're usually just doing basic compliance work using an advanced version of TurboTax, which by the way, Intuit does have an advanced version of TurboTax for CPAs.
Usually what it has attached to it is just a CRM so CPAs can keep track of the hundreds of tax returns that they do.
On the tax planning side, it starts with that formalized tax plan. And then we have some basic bulwark strategies that we get much deeper into the code than your mortgage expense deduction or home office.
By the way, there's three different ways that you can take deductions in the home office, people usually use one.
Mike Stohler: Yeah.
Mark Miller: Most CPAs only use one, whereas other ways you can save a lot more money if you utilize it and the IRS says we can do that. Fringe benefit strategies, various of these kind of deep code strategies and then we'll layer in there, advanced tax mitigation strategies, which usually come from our family office. A lot of them are proprietary in nature but some of them aren't and then we'll layer those on top of those work strategies.
Our goal with Hilton Tax and Wealth Advisors? Bringing the family office concepts down to Main Street and almost virtually no family office members in the entire world pays a lot of taxes, and most of them are in the zero tax bracket. We're teaching folks again at a lower investment level or a lower income level, how to do that.
We don't guarantee everybody's gonna get to a zero bracket. Especially the first year. Maybe we'll save you about 50% or in your taxes by putting a formal plan together. Then we'll gradually layer strategies and get them to a zero tax bracket, as my book is called "The Tax-Free Business Owner". So that's what we wanna get people to.
Mike Stohler: Within that book, we'll talk about it a little bit. It's kind of funny, people talk about it. It's like, you make all this money, you don't pay any taxes. It's just not fair. And I'm like going "Well, I do pay taxes." I have a good CFO or CPA tax advisor, where I get it back through depreciations or through tax deferment and things like that.
So there's this common mistake: the rich don't pay their fair share, they don't pay taxes.
Mark Miller: Don't pay their fair share. There you go.
Mike Stohler: Don't pay their fair share. They pay 98% of all of it. They just get depreciated and they have smart advisors. First all of a sudden I heard about cost segregations. It's like, why aren't you doing this? They self-directed this and set up all these different things. And I was like "Because no one told me."
Mark Miller: Yeah, that's right.
Mike Stohler: I could even do it.
Mark Miller: You don't know what you don't know, right?
Mike Stohler: Exactly. Now you're talking about setting up these little things, but what does it really mean? Zeroing out your taxes? It's not, you're not paying it. People like, "Oh I don't have to pay taxes."
Mark Miller: Let me tell you, and let me go back just a little to your first comments. Studies have been done on this. At certain levels of income, and I'm talking about the ultra-rich. For every dollar they save in taxes, it means $10+ that is put into the economy. Now think about that. instead of paying the government giant chunks of money. What it does is it helps us all by the wealthiest of the wealthy, paying less in taxes because they're the smartest of the smart people.
And I'm not gonna dispute that. Maybe some of them are greedy and might be taking the people a little bit. But that's a very small percentage of people. And I work with people that have hundreds of millions of dollars, and they're incredible great people that are doing great philanthropic work.
The Hiltons are great. All of them are great people. They're doing good things and so it comes back to what's your fair share? We don't sit there and go, "What's your fair share because you're a billionaire?" I would rather save that person as much money as we can, and then ultimately it cycles back to all of us in the economy via economic growth. If we have more economic growth, then guess what? We keep our taxes down. So anyway, let me dispel that myth right off the bat.
Mike Stohler: Yeah.
Mark Miller: Because people don't think about it. They listen to the politicians and they listen, "Oh, that guy's not paying any taxes. He's a cheat and he's ripping people off."
That's a misnomer. And they know it. The people at the highest levels, they know it. It's just politics. I apologize because I lost the end of your question there. I went off on a tangent.
Mike Stohler: That's okay, and I love that.
Mark Miller: It happens.
Mike Stohler: It happens. It was just some of the different areas, you have the tax strategies but then you say, "Hey, are you taking, you're an entrepreneur, you make X amount of money. You need to not just set it in a bank account, a savings account that makes 0% interest." Why are you not doing these other things that you're putting into these different retirement accounts?
Mark Miller: Sure.
Mike Stohler: That also can help you save money or defer those taxes.
Mark Miller: That's basic strategies putting money in retirement accounts. We really don't call that tax planning, but it can be part of your tax plan. No doubt about it. But I go back to the fact that if you, and when we talk to people about putting tax plans together, we always put a dollar value on it.
If you spend X amount and we put this plan together for you, you're gonna get, probably, the largest investment return of their entire lives because again, taxes are their biggest expense. Okay? If you can save $10,000, $20,000, $50,000, or millions of dollars on your taxes, then it's a massive ROI on your money.
We want to dive deep into some even deeper strategies and more complex strategies that have a lot more benefits long term, and can move us towards that zero tax bracket other than just doing the regular deductions that you get on your 1040. And then what CPAs will do, and you know this, they'll say, "Hey, we wanna make sure you have the right entity planning and if you're in the proper entity and put money in a 401(k) or an IRA." And then they stop.
Mike Stohler: Yep.
Mark Miller: And they call that tax planning. It's not even close to tax planning. It's not, first of all, another thing too true tax planning is not putting money out to then get benefits back.
Because let's say if you want to reduce your taxes by $3,000, you have to put $20,000 up and put it in a 401(k).
Mike Stohler: Yeah.
Mark Miller: In our world, in our kind of advanced tax planning world is not a tax strategy.
Mike Stohler: What would you do in addition to those?
Mark Miller: We have over 130 different strategies we use now, and it's growing by probably two or three every month.
Those bulwark strategies that are more direct code strategies. Then we start getting into advanced tax mitigation strategies that are all private letter ruling case law strategies that we're diving more into the more esoteric kind of strategies. And when I say esoteric, I don't mean things you might've heard of before.
Many of them you do. Before we got on air, we talked about a strategy that uses Section 1 79 and 168(k) of the codes gets us accelerated depreciation on different things we purchase into LLCs. That's a strategy that barely anybody uses.
But we've had tremendous success with that. Sometimes get a six-to-one deduction from what we actually put into the strategies for clients.
Mike Stohler: Oh, absolutely. And people don't realize it. What does acceleration mean, all this sort of stuff. And ladies and gentlemen, I did one cost segregation and my first year of depreciation was over a million dollars. It was seven figures.
Mark Miller: Yes.
Mike Stohler: And all of a sudden the K-1s came out, and especially my investors, the people in California were like going, "Oh my God." You know, how much that saved them?
Mark Miller: Yeah.
Mike Stohler: Because their taxes are so much higher than the rest of the people. So It's fantastic, ladies and gentlemen, if you're investing, if you have some money. And the first thing people say is, "Oh my God, it costs so much money to hire people like Mark." And I'm like going, "What does it matter if I come out ahead? If it costs me this, but he saves me this." Is that not worth it, ladies and gentlemen? It's like when you'll spend $10,000 on this, $50,000 on this, but if they can save you $80,000 a year for the rest of my life because I still come out ahead.
What are some of the misconceptions and when we were looking in your book that the business owners commonly have about tax planning because they're like, "I don't know. Just do it." You know? What are some of the things that you've written in your book about that?
Mark Miller: Let me say two big myths. One myth is, my CPA is doing everything for me. And I'll tell you folks, we've taught about 95% of the time we find that the CPAs are not, because it's not their model.
And I'm gonna offer our book to you. We send a complimentary to folks. We will talk about that in a minute. Send complimentary to folks and they'll understand why that is. People hire CPAs. They're very trusted because for the most part, they're very honest. They do the numbers well, all of that type of thing.
And they can trust their CPA.
But they hire them thinking most people, the myth is. " This person is competent and they are saving me everything possible." No, it's because they're not doing the deeper dives. They're just doing the basic stuff.
The other thing is a common myth.
We do tax planning because CPAs put this myth out there because they want to keep people in compliance mode. Let's just do your tax return. Most CPAs, if you show them any kind of strategy. Oh, what are they gonna say? "Red flag. The IRS is gonna come after you." I can't support that.
That's just the way they are. Now, our proactive planning CPAs aren't that way, but most are that way. The reality is by doing a formalized tax plan, you'll reduce your audit risk. Number one. Just off the top, the less you pay in taxes, the less possibility you're gonna be audited. Okay?
I won't go into those details, but there's several other things we built into the plans to bring that audit risk down so people are afraid, gosh, if I do something, my CPA says, "Hey, that'll cause a red flag. And the IRS will be after my butt." That's just not reality.
That's not how it works. What happens, their algorithms now, especially with advanced systems they have, when they go in and they analyze a tax return and they've seen certain things you've done that are within the law and legal and ethical, just like we do with Hilton. Their algorithms tell me, "Yeah, you don't really need to talk to this person."
Because they know they're right. Now, they may still send what they call a desk audit. There's another myth. That I'll get audited, period. Forget tax planning or anything we would do with them. What if I get audited? They're gonna audit me. They're gonna come into my house. They're gonna come into my business.
They're gonna do all that. That's the old days, when there were 125 million people in the country. The IRS does not have that capacity. They do what's called a desk audit, and I know you know this. They do a desk audit where you get a letter. That's why they call it a desk audit. I don't know why they call it a desk, maybe because it comes across your desk.
I don't know. They call it a desk audit or their desk in their cubicle. They say, "Hey, we said, see that you've done this and this. Please send us the supporting documentation." That's what they all come down to. "Oh, you send them supporting documentation."
They send you a letter. Matter closed. You're done. Those are a few of the myths people have and misconceptions they have about what goes on in the CPA world and the world of getting your taxes done with the IRS.
Mike Stohler: Let's talk about how people can find your website, the company name Hilton Tax and Wealth Advisors. Ladies and gentlemen, people go on the website, what are they gonna find?
Mark Miller: hiltonwealth.com is the place to go. Over the holidays, we've done this on purpose, we're making a transition into a new website. So, I apologize if there's a few glitches, maybe please forgive us on that.
But they can go to hiltonwealth.com. It'll pop up there. They can order my latest book, which has gotten really good reviews, it's called "Hilton Wealth". Which is about how the Hiltons have maintained their dynasty nature over the years and how so many of them are still so wealthy, how they invest and I do a deep dive into specifically how they invest and how we can help you plug in to the same things.
The main book we talked about today, a lot of the taxes, is "The Tax-Free Business Owner". Either one of those you can get on the website through the resources section or those popups throughout the website. You can read a little bit more about us, read about all our offerings, and I always tell everybody, "Hey, get a complimentary book."
We'll send it out to you for free. Check us out, and we're happy to talk with you and see if we can help you in any way.
Mike Stohler: Absolutely. When you first started with the Hilton family, all of a sudden you're like going, "Wow, these people are smart or they are doing something." What was one of the nuggets when you started getting into their tax and wealth? You just started nodding your head and it's. like, "Yeah."
Mark Miller: I'm nodding my head because I know exactly what I'm gonna say here. Okay. This is a big thing. For many years I was in the world of equities and it's all about buying stocks and bonds, and all of that, and these managed portfolios and trying to get the best return.
You can think about it as a retail investor. How do they sell? Retail investors, say like mutual funds, which is the biggest seller on the retail side. They sell it by the 1, 3, 5, 10 year performance. I've always thought, even looking at stocks, "How's this performed?" What's good, you know, they always say, past results aren't future results, but you still think that way. The retail world teaches us to think and the average investor to think that way. I learned when I came over to what we call the smart money side, and I talk about it in my book, "Hilton Wealth".
The institutional side of the business is that the wealthiest of the wealthy first focus on safety and security first. You'll see many of these wealthy people, and we divide designed our true wealth portfolios to mimic this. The vast majority, like 50-60% of the portfolio, is very safe, very secure.
So If something really goes off the rails. Then we've still got the majority of our money intact. The rest of it, and you'll see with the wealthy, maybe they'll take 15-20% maybe 30% of it and roll the dice, gamble with it. Calculated gambles. Okay? Don't get me wrong. That is the thing, the mindset that I had to change and it finally was like a light bulb that just went off in my head and went, "Wait a second." I can get better returns than I've ever gotten in my entire life by being aggressive and finding, picking the right stocks, all that stuff I did for all those years. I can make better and more consistent returns and sleep better at night. By the way, the richest invest and that's simply because there's less volatility. So, we get better returns generally on the smart money side too. The fees are lower. All of those things, it did take a while because I was a stock chunky.
Mike Stohler: Yeah.
Mark Miller: And I did okay. I made a lot of money.
I lost a lot of money. I'm just being transparent with everybody. I don't do that anymore, and none of my clients do that anymore. We consistently pretty much make money year after year, and when we do have a tough downturn, it's a very small downturn that is manageable, and then we can get back to even really quickly to start making returns again.
That's the big light bulb that went off in my head and the nugget that I give people is focus on safety first. The returns are gonna come. Focus on safety first.
Mike Stohler: Absolutely.
Thank you very much, Mark. Again, Mark Miller with Hilton Tax and Wealth Advisors, www.hiltonwealth.com. Sir, it's been a pleasure. Thank you for coming
Mark Miller: pleasure was mine.
Mike Stohler: The Richer Geek. Take care.
Mark Miller: Thank you.
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ABOUT MARK MILLER
Mark Miller is the President of Hilton Tax & Wealth Advisors, with over 30 years of experience helping business owners, physicians, executives, and high-net-worth clients reduce taxes and grow wealth. He has helped clients save tens of millions in taxes and increase wealth by over $200M.
A best-selling author, Mark’s latest book, The Tax-Free Business Owner, teaches business owners how to minimize taxes like Fortune 500 companies.
He’s been featured in over 200 publications, including The New York Times, Kiplinger’s, and Money Magazine, and has appeared on numerous radio and TV shows, including Fox News.