The Jasmine Star Show
The Jasmine Star Show is a conversational business podcast that explores what it really means to turn your passion into profits. Law school dropout turned world-renowned photographer and expert business strategist, host Jasmine Star delivers her best business advice every week with a mixture of inspiration, wittiness, and a kick in the pants. On The Jasmine Star Show, you can expect raw business coaching sessions, honest conversations with industry peers, and most importantly: tactical tips and a step-by-step plan to empower entrepreneurs to build a brand, market it on social media, and create a life they love.
The Jasmine Star Show
Tax Secrets Every Entrepreneur Should Know with Karlton Dennis
Let’s be real—taxes aren’t sexy… but keeping your money? That is hot.
In this episode, I’m sitting down with Karlton Dennis, a licensed tax strategist who’s on a mission to help entrepreneurs stop overpaying the IRS and start building generational wealth.
From tax write-offs to entity structure to real estate hacks—you name it, Karlton breaks it down with energy, clarity, and humor. (Yes, we actually laughed while talking about tax codes. Who knew?)
And here’s what makes Karlton different: He doesn’t just focus on taxes. He helps you think like a CEO and build a wealth plan that aligns with your vision.
Here’s what we cover:
- Why your business structure matters more than you think (S-corp vs LLC vs sole prop—oh my!)
- How to LEGALLY write off things like your home, travel, kids, and even your car 🚗
- The tax strategies you need to know before you hire your first employee
- Why the tax code isn’t “rigged”—it’s a blueprint for how to operate your business
- How wealthy people use taxes to build empires (and how you can too)
This conversation isn’t about loopholes or sketchy advice—it’s about understanding the rules of the game and using them intentionally.
Whether you're just starting out or hitting 7-figures, Karlton shares insights that can put real money back in your pocket. Trust me, you’ll want to grab a notebook for this one. 📓
P.S. Karlton even flipped the script on ME in this conversation—and gave me some clarity around my business structure. So if you're an entrepreneur, freelancer, or CEO-in-the-making… don't skip this episode.
Click play to hear all of this and:
[06:48] Why the tax code is designed to help business owners (and how to use it to your advantage)
[12:36] The difference between an LLC and an S-corp—and when it’s time to switch
[21:42] How to legally write off business trips, your home, and even your children
[28:19] Why wealthy people pay less in taxes—and how you can apply the same principles
[36:55] Common mistakes entrepreneurs make that cost them thousands
[45:20] The real power of tax strategy: freedom, flexibility, and generational wealth
Connect With Karlton Dennis:
Karlton Dennis is a licensed tax strategist, real estate investor, keynote speaker, and content creator who specializes in helping business owners reduce their tax burden, increase profitability, and build long-term wealth.
With millions of views across social media and a reputation for making complex financial strategies simple and relatable, Karlton is the go-to expert for entrepreneurs who want to grow smarter (not just harder).
He runs a tax firm and offers education and consulting programs to help founders—from solopreneurs to multi-million-dollar CEOs—design tax strategies that serve their lifestyle and legacy.
Learn more at: karltondennis.com
📧 Join my Newsletter for a weekly cocktail of insider business strategy, personal reflections, and the journey of being a thought leader: https://jasminestar.com/newsletter 📧
For full show notes, visit jasminestar.com/podcast/episode578
Jasmine Star 00:00:00 Do you want to pay less in taxes? How will pay zero in taxes? Is there a way to plan tax strategy versus just preparing those taxes? I'm here to answer those questions. Well, actually not me. Like the Grand Master, the Master blaster from Lancaster. Except he's from Corona del Mar, Newport Beach. He's here. And he teaches entrepreneurs how to save money on their taxes legally. Welcome to the Jasmine Star show. Carlton Dennis.
Karlton Dennis 00:00:25 Oh my goodness. Thank you so much. That was one of the strongest intros I think at the stop Shop.
Jasmine Star 00:00:30 I'm gonna make you take it back right now. You want to know why? Oh, what? Okay, because we're, We're gonna play a game. Oh, I told you. I said you're ready for everything, but. So I'm not going to tell you anything. So what I'm going to do, let's do this, is I'm going to play a game, and I'm gonna set a timer. Are you ready? Okay. Yeah.
Jasmine Star 00:00:43 Here we go. Okay, okay, okay. So I'm going to set a 62nd timer. And so welcome to the show. Welcome to the show. We're gonna hit the ground running. Here it is. Six tax loopholes in 60s. Are you ready to play?
Karlton Dennis 00:00:52 Oh okay. Here we go, here we go, here we go.
Jasmine Star 00:00:54 Here we go one. True or false? You can. Right. If your dog. If they appear in your content?
Karlton Dennis 00:00:59 No, that's not true.
Jasmine Star 00:01:01 Two. Can you write a clothes for a brand photo shoot? Yes or no?
Karlton Dennis 00:01:04 Yes. If this is a part of your outfit or costume. Three.
Jasmine Star 00:01:08 What's your favorite write off? That feels scandalous, but totally legal.
Karlton Dennis 00:01:11 The Augusta rule where you're renting your house to your business.
Jasmine Star 00:01:13 Four. Yes or no? Business owners who make content for YouTube can write off their haircuts and manicures.
Karlton Dennis 00:01:18 Not necessarily. It needs to be a part of your brand.
Jasmine Star 00:01:22 Oh five. Can you write off a vacation if you feel content while you're there?
Karlton Dennis 00:01:25 Yes, but it needs to be business intent first.
Karlton Dennis 00:01:27 It cannot be labeled as a vacation.
Jasmine Star 00:01:29 Six what's the most surprising thing people didn't know that they could write off.
Karlton Dennis 00:01:33 Most people are unaware that they can place their children on payroll. You could place your children on payroll if they're doing legitimate work underneath the age of 18, without them needing a filing tax return.
Jasmine Star 00:01:40 Last 10s this is a bonus one. If the IRS had a theme song, what would it be?
Karlton Dennis 00:01:45 Born in the USA.
Jasmine Star 00:01:49 The poor thing is worse than I told you. You were gonna take a night. That was so good. That was so good, Janice.
Jasmine Star 00:01:55 Okay, y'all, I have to tell you. I have to tell you. I have been creeping.
Jasmine Star 00:01:58 I know. Did I make you sweat? I was like the air conditioner. I don't like this.
Karlton Dennis 00:02:01 I felt like I was in an audit for a second. Oh my.
Jasmine Star 00:02:04 God. Okay. Okay.
Jasmine Star 00:02:06 Here's the thing. I have done so much creep in research on Carlton. I just before the cameras came on, I told him I was like, I am not your typical podcast guest.
Jasmine Star 00:02:15 I don't know much about taxes. I want to know the differences, definitely, between preparation and strategy. That is why you're here on the show after that beginning part. Everything else is going to be super easy.
Karlton Dennis 00:02:25 You're okay.
Jasmine Star 00:02:26 So we started off. We had a lot of fun there, but I usually don't start the show with a little bit of backstory or origin, but I think it makes a lot of sense and eases in on how we framework what this conversation will be about. So can you give us how you got to where you are today and what it is that you do?
Karlton Dennis 00:02:40 Yeah. So I started working out in my mother's company right when I graduated college. What I realized in her company is most people don't pay my mom just to file a tax return. They were paying my mom to think of ways to reduce their tax bill. It was a completely different business model to a normal CPA firm where you're trying to build up a book of business of all these clients to try to file a return.
Karlton Dennis 00:03:01 She was building up a book of business of clients who she can save money on taxes for. And so once I learned tax strategy inside of her business, I knew that I needed to take this information to the world. But my mom at the current time wasn't focused on content or social media. So I decided to start a YouTube channel back in 2019, and I put out videos around LLCs and S Corp and placing children on payroll. And right when Covid happened, my YouTube channel took off and we grew Tax Alchemy and my now business, which we help small based entrepreneurs leverage the tax code to the fullest extent.
Jasmine Star 00:03:34 Okay, so talk to me though. How did you start working with your mom?
Karlton Dennis 00:03:38 Yeah, so it's kind of funny. I actually went to school to play football, and after I found out that the NFL doesn't really take a whole lot of people that are five, nine, five, ten for the cornerback position. Reality started to set in. I got a job working for Gallo Wine Company first, and then I started doing modeling and fitness training part time.
Karlton Dennis 00:03:58 Turns out that when you make 1099 income, you're supposed to report all of it to the IRS when you file your tax returns. So I got a letter in the mail telling me that I owed more money to the IRS than I had in my bank account. I had should have called my mom, should have set up an LLC. But of course, you know, just being a young kid just was doing things by the fly of the whim. Called my mom up. She got pretty pissed off. And she said, listen, we're going to get you on a payment plan. And if you want, you can come start a sales division inside of my office. So I said, okay, well, I'm already in a sales job here working for Gallo. Why don't I come over to the family business and build out a sales division with you? And that's what happened early on. I'll be honest with you. I didn't make a whole lot of money because I was more focused on fitness and eating.
Karlton Dennis 00:04:42 But after about two months into it, I saw my mom, you know, onboard these customers, and she brought in over $100,000 worth of revenue that that day just for selling tax plans. I was writing workout programs for $100 a month, and my mom was bringing in $100,000 a day. Right then and there, I realized, you know, what I thought I wanted for my life was not matching up to the types of income or goals that I was seeking in the fitness space. So that's when I started to go all in on tax.
Jasmine Star 00:05:10 And you started off with sales, though?
Karlton Dennis 00:05:12 Yes. Sales is my background.
Jasmine Star 00:05:13 Okay. So you're selling on behalf of your mother's business. Yes. And so then what happens now? I know that you brought in like you recruited a friend. Yes I did. Okay. Talk to me about that.
Karlton Dennis 00:05:22 So I brought in one of my friends from college. Him and I were working at Gallo Wine Company together, and both of us were kind of getting to a point where, like, okay, we need to figure out where we're going to go to make commission, because Gallo was not a non commission based sales job.
Karlton Dennis 00:05:35 It didn't matter how hard you worked, you weren't going to make any more money than your salary was. So my mom allowed for us to create our own commission based structure. Pretty awesome. So we made it a very tiny, tiny salary in a massive commission side of it. But when we got into her company. I'll be honest with you. We didn't make a whole lot of commission because we didn't understand anything about taxes. Okay? So she made us sit down and listen to her one day. And that day changed everything when I saw her on board customers and bill them for 20 K 30 K, I started to see, wow, she has a superpower in her language and in her understanding of tax. But these are only 25 and 30 minute conversations that she's having. She's not, you know, talking to these people for multiple hours. And to me that was just so powerful to see someone communicate how they can help somebody over 20 to 30 minutes and be able to build them and the customer understand the value.
Jasmine Star 00:06:29 Okay. So I just want to take a quick second and put context into why Carlton's here, Carlton's here, and he's talking about his mom, and he's talking about what he's doing because people are paying him a lot of money. But it's his knowledge, his insight, and how he saves business owners, specifically entrepreneurs and people, well-to-do folk, how to legally save on taxes. Yes, you're an entrepreneur and you are watching and you're listening right now. He's going to come in and he's going to be sharing his insights on what he's doing to prepare you for that. And I was first a student, and now I get to be an interviewer. And one of the things that I thought was really compelling is that you're like this really cool combination where you can create content. You've created a very successful business and you're also a business owner. So you're seeing things from like three different perspectives. And so I liked how a lot of the times you explain theory with story. Yes. And so I just pulled out a couple of the stories.
Jasmine Star 00:07:21 And so I want to talk where like a major weakness for me was you're going to think it's really basic, but I'm like, I'm going to ask this question and I'm gonna start here because I need help. Yeah. Of course. Okay. So you say, as entrepreneurs, we should be logging all of our receipts. Yes. And you said it's never been easier to log your receipts. You just take a picture of your receipt and then maybe write a note who you're dining with.
Karlton Dennis 00:07:39 Yes, absolutely.
Jasmine Star 00:07:40 That's, like, physically impossible for me. It's like I take photos of everything, all the ways. And so how am I going to be cataloging my receipts? Yes. And, like, tell me the system.
Karlton Dennis 00:07:48 Yeah, absolutely. So the reason why I am a stickler on receipts is because when most business owners get into trouble with the IRS, it's in an audit where they can't prove why they had the expense. Yeah. When you're looking at your bank statements and you went to staples or you went to Home Depot, it may say that you spend $1,000 at staples, or you spend $1,000 at Home Depot on your bank statement, but it doesn't tell me what the actual expense was.
Karlton Dennis 00:08:16 So now you're having to describe to me what the expense was. Imagine if you're describing expense after expense after expense, and you have hundreds and thousands of transactions in a year. Yeah. This becomes a fight with the IRS on what expenses that they're going to allow for you to take if you don't have proper documentation because they want to see what is the actual expense that you spent your money on, was $500 at staples for you to buy personal items for your at home computer system? Or was that for your business because you didn't keep any of your receipts in? IRS requires that you keep your receipts? Yes. So this is why you need to take pictures of it. So the system is take a photo of your receipt. With your iPhone, you can do 1 or 2 things if you're at the level where you already have accounting software. Great. You can go ahead and send this to your assistant. Or go ahead and send it and upload it directly to QuickBooks. QuickBooks will categorize the receipt with the transaction.
Karlton Dennis 00:09:05 Any transaction that's over $75 needs to be saved. Any transaction that's under $75 is considered de minimis. So you don't have to save those receipts. But if you're making transactions over $75, let's go ahead and take a snippet of it. Upload it to QuickBooks. Let's say we don't have QuickBooks. Well, then I want you to go ahead and take a photo of it and upload it to your iCloud notes section. As soon as you send it in a text message to your iCloud notes section, it pops open. What is this note for? And write a brief description of why you took that expense. If it happens to be a meal, write down who you are with so the IRS if you're ever audited, we'll be able to justify that that business meal had a business intent.
Jasmine Star 00:09:42 Okay. That's it. That was the thing that was the missing piece for me because I'm like you said, to take a photo. Yeah. And then I'm like, it's just gonna sit there in there. And so now I know to sit to text it to my notes account and then explain, okay.
Jasmine Star 00:09:54 See, that's what it is. Yeah.
Karlton Dennis 00:09:55 So and receipts get lost. We had a client one time who they were had a hurricane happen in their property in Florida. All of their tax documents going back to 2013 got lost. They got audited over the course of four years. IRS did not care that they did not have their tax documents and receipts. So then they had to go into an offer and compromise with the IRS where they had to offer a reduced amount and compromise, hopefully with the IRS to be able to pay the off their tax balance. That was a horrible situation. And ever since then, I knew that it was important to have digital copies of your receipts, not just physical copies of your receipts.
Jasmine Star 00:10:27 I felt like one of the things I was scared about, having this conversation with you is like, you know, when you become aware of something and then it's going to happen. I felt like by me inviting on my podcast, I was like, I'm gonna get audited, like I'm gonna.
Jasmine Star 00:10:38 Get out of it. It's like, I know, I know, I know, I didn't want to see it.
Jasmine Star 00:10:41 But I'm.
Jasmine Star 00:10:41 Like.
Jasmine Star 00:10:42 You know what? Like, listen, listen, listen, I'm gonna come in and I'm going to be prepared, and I and I'm going to hope that if I do like my lips and God's ears, I hope not. If I do get out of it, it would just be like five years from now because I'm going to get my books. I know, I know, that heavy sigh I know, Carlton, yes, I know, I mean, I feel like I'm mostly organized, but we have a bookkeeper and so I'm like, am I just going to be uploading these receipts to the bookkeeper?
Jasmine Star 00:11:03 Absolutely you are.
Jasmine Star 00:11:03 Oh, really?
Karlton Dennis 00:11:04 Yeah. Me, my bookkeeper and my wife have a text thread. Yeah, that bookkeeper gets text messaged every day. Me and my wife just left RH and just had dinner. Say, left? We just left, you know, ocean 48.
Karlton Dennis 00:11:16 Here's the receipt. Oh, 150%. Yes. Whole system in place and
Jasmine Star 00:11:22 Okay. Wow. This is not in my notes. Wait, is your I feel like I'm shook right now and your your bookkeeper is okay with that 100%. And are you paying extra for that? Yes.
Karlton Dennis 00:11:34 Receipt logging is a part of her job. Every single month is to log my receipts. Good. I'm not going to see.
Jasmine Star 00:11:39 Okay. See, I was like, I can kind of get behind the text message to the to the iCloud. Yeah, but that wasn't really me.
Karlton Dennis 00:11:44 But then who's going to go?
Jasmine Star 00:11:45 That's what I'm. That's what I'm saying.
Karlton Dennis 00:11:47 So keeper.
Jasmine Star 00:11:48 Oh okay. And on that note see the video crews look at me like.
Jasmine Star 00:11:54 So Saturday my one of our content creators and I are going to a conference. And so we're going to go out to dinner after watch me take my receipt and say me and Aisha creating content 100%. That's right. And then I'm going to text it after I get the co-sign from my bookkeeper and say charge me more.
Jasmine Star 00:12:09 Yes, because I'm going to send you be texting.
Jasmine Star 00:12:11 And because.
Karlton Dennis 00:12:11 Uber, Uber, if you tap in to take an Uber, also sends you an email. You can set in your email to forward all receipts from Uber to your bookkeeper.
Jasmine Star 00:12:19 I mean, see, here's the thing. People are going to come across the video and they're gonna look at me like, girl, you are so simple. And guess what? That's right.
Jasmine Star 00:12:25 Okay, I'll be simple and rich.
Jasmine Star 00:12:27 Okay, so what's one tax move millionaires make that beginners miss?
Karlton Dennis 00:12:31 One tax move that millionaires make that beginners miss.
Jasmine Star 00:12:34 How about this? How is this? Oh, no no, no. Go ahead. Go ahead. Go ahead.
Karlton Dennis 00:12:37 Millionaires have the ability to take loans from their own businesses. When you get to a certain status, you'll switch your businesses to C corporations. When you get to a big enough status, you'll move away from the S Corp, which is awesome. You know what's big enough? Big enough is like 10 million.
Karlton Dennis 00:12:54 Okay. It's like when you get up to like 10 million. Yeah, you're probably going to be in a C corporation. Okay. Then you start issuing yourself stock and then you could just take loans against your own stock. It's non-taxable. It's non-taxable money. So you can take money out of your own corporation C Corp are taxed at 21% flat tax rate right. It only can be so much you could do to keep drawing down drawing down your tax until eventually you want to shift out of an S corporation into a C corporation that has a flat 21% tax rate. But then if you take money out of a C corporation to pay yourself, you're going to pay taxes on the salary that you give yourself. So now you have this like double taxation that most people hate with C Corp. But what most people don't know is that large corporations like Tesla and Amazon, they operate like C corporations, but you can operate like a C corporation too, and take loans against your own stock in your own corporation that's been issued to you.
Jasmine Star 00:13:42 Oh that's good. Yeah.
Karlton Dennis 00:13:44 So I would say like, that's like a big millionaire hack. And there's definitely a lot more that we can cover.
Jasmine Star 00:13:49 Okay.
Jasmine Star 00:13:50 So talk to me about the story about the gentleman who came in and your mom was supposed to meet with him. And.
Jasmine Star 00:13:55 Oh.
Karlton Dennis 00:13:56 Yes. I'll never forget.
Jasmine Star 00:13:56 That. Okay. Because it had an impact on me. And that's why I asked this question, like, what's the move that they make? But it was beyond that. So let's go. Let's go there.
Karlton Dennis 00:14:03 Yeah. So I met with this guy. His name was Carl. Never forget, because my name is Carlton. You don't forget that. Carl's and Carlton's always remember each other. That being.
Jasmine Star 00:14:11 Said. All right.
Karlton Dennis 00:14:12 How many Carlton do you.
Jasmine Star 00:14:13 Run into? You'll probably do with the K that swag you.
Karlton Dennis 00:14:16 Run into, like, five Carlton's in your lifetime. You'll remember those Carlton's, by the way. You're like, ooh, that's a distinct name.
Karlton Dennis 00:14:22 Okay, so this guy's name was Karl. He was older. And when I say older, I'm talking to like, in his mid 80s. Older like, you are making it into an office today, sir. Okay. You're moving well. And he had his wife with him. They were dressed so nice. They looked like the king and Queen of England. Like in very, very pristine clothes. Very nice earrings. They came in to meet with my mother. My mother had to leave her an emergency. That meant that her calendar fell into my lap. I had to do all the in-person meetings for her that day. This customer came in explicitly to get his returns reviewed, to figure out where he could reduce his tax bill. At that current moment in time, I did not have a tax license, I had a sales background and I was selling tax plans, but I never had to meet with clients or figure out ways to help them. He came into the conference room with all of his documents like pause.
Jasmine Star 00:15:09 Yes, there is a difference between tax planning and tax strategy.
Karlton Dennis 00:15:12 Yes. Or tax preparation.
Jasmine Star 00:15:13 Okay okay okay, okay. Can you explain that before you get into this story. Because that was helpful for me to understand when I started doing work around you.
Karlton Dennis 00:15:19 Yeah, absolutely. So tax preparation is the process of collecting all of your documents and inputting it into the tax software to keep you in compliance. Every single person who makes over $15,750 has to file a return. So that's tax compliance. Most CPA certified public accountants are perfect to go to to get your returns filed into accounting. Enrolled agents are what my background is now. We do tax strategy. So when it comes to consulting with you on ways to help you reduce your tax bill, we are working in the down months of tax season. Normally. June, July, August. September. October, November. To try to figure out how to reduce your tax bill before you come into tax preparation season. This guy was coming in during those down months in July looking for tax strategy.
Karlton Dennis 00:16:02 And he wanted to speak to my mother and she wasn't there. So now it fell to me and I was like, oh, here we go. But I was prepared because I had sales knowledge. I knew how to sell people. On working with my mom in the company. Here's what happened. He sat down across from me, and he went on to explain to me that he had multiple different businesses, and he had been working with tons of CPAs, and he was so elated about my mom because she spoke tax strategy and she gets it and understands depreciation. He was so excited to be there. I said, awesome. Well, let me explain how tax planning works. And I went through my elaborate pitch and I hadn't touched his tax returns yet. He's like, oh, this is amazing. He's like, yeah, man. You see my returns right there. Just let me know what you're capable of doing. And I opened up his returns and blam right there. Front page, 100 million in revenue.
Karlton Dennis 00:16:49 Whoa. Someone 85 years old is pulling in to this day, active revenue of over $100 million. I've never seen this before. Ever on a tax return. And I start flipping and I start flipping, and I just see companies that he owns. He owns a meat company, he owns distribution companies. He owns farmlands and and wildlife. And then he also owns tons and tons and tons and tons of investment properties. He he owns so many investment properties. If I, I, I grabbed a stack of the pages and I just started flicking through it and it was all the same type of schedule of real estate. It was just tons and tons and tons and tons and tons of investment properties. If I had the knowledge that I had today, it would have probably taken me an hour and a half just to go through those returns to prep for the call. I close the manilla folder and I said, so this is what we're capable.
Jasmine Star 00:17:42 Of.
Karlton Dennis 00:17:42 Doing for you. And I went through my pitch again and he stopped me and he said, it looks like you don't know how you can help me right now on my returns that you have in front of you, can you? I said, sir, listen, this is something normally that's reserved for my mother and the other tax pros.
Karlton Dennis 00:17:58 I'm here to just tell you how you can work with us. And he paused right there and got up. Him and his wife stood up and said, listen, let your mother know this was great, but I'll be back when she's ready to meet with me. Have a good day. And he walked out. Now, Jasmine, I work out a lot. All of my testosterone, my body felt like it left me right then and there. I felt like a little dog with a tail tucked between his legs. And I'll be honest with you, I was super embarrassed to the point where I didn't even want to tell my mom. Like, I didn't even want her to know how that meeting went. I went on to my computer later that day and I was like, okay, how do I become a tax strategist or get the highest license in tax. Strictly tax. That's what I need to be. And it wasn't the CPA license. It was the enrolled agents license. The highest designation the IRS gives out for tax.
Karlton Dennis 00:18:44 You are proficient in tax strategy representation. And most importantly, you can represent people in all 50 states and not have to worry about whether or not I was talking to California clients or Florida clients. So I spent six months and got that license, and after I felt like I had superpowers, like I got hit by a bus and woke up the next day with the super powers like I could see through the matrix of tax. Now, I wanted to talk to people. I want to talk to the most wealthiest of people, because I knew I could do a lot for them based off of my knowledge. Now. Now I can kind of see what's happening and I knew how to communicate it.
Jasmine Star 00:19:19 So your who's your ideal client? Like when is somebody reaching out to you?
Karlton Dennis 00:19:23 I would say someone who's reaching out to me is making over half $1 million a year. Yeah. And I would say we camp out right around like 100 million.
Jasmine Star 00:19:30 Okay.
Jasmine Star 00:19:30 Yeah. And so this is making a half $1 million a year as their personal take home.
Karlton Dennis 00:19:35 Yeah. It's personal take.
Jasmine Star 00:19:36 Home. Got it. Okay. And so what is the majority of the people who are doing that? Entrepreneurs.
Karlton Dennis 00:19:40 Yeah, I would say majority of entrepreneurs, high W-2 taxpayers that are working in corporate companies, maybe getting issued stock options. We work with a lot of people that are doctors and physicians. Doctors and physicians make a ton of money. W2 insurgents make a lot of money. W2 as well.
Jasmine Star 00:19:59 And so what are the common opportunities that you see. Somebody comes to you. What are the like maybe 2 or 3 common opportunities immediately when you get a new client?
Karlton Dennis 00:20:06 Yeah. When I get a new client, what they normally tell me is my CPA has already told me I maxed out all of my deductions and I'm like, okay, but have you maxed out all of your investments? And this gets them to kind of think back and they're like, hold on a second. What do you mean maxed out my investments? And I'm like, we can strategically invest money to help you offset your tax bill, even though you may have maxed out your 401 K or your average deductions that you're able to claim.
Karlton Dennis 00:20:27 And for somebody that's maybe a W2 taxpayer or a business owner that's just getting into profitability. We might look at doing a short term rental strategy. This is one of the ways in which we can get them to have a active business on the tax returns, but also be able to use the tax code to accelerate depreciation on the investment property, which can offset W2 or even 1099 income. It creates a loss on the tax return that the taxpayer gets to experience.
Jasmine Star 00:20:52 Can you explain a little bit more into that? Because it was after listening to your content that I like, a big move for me in 2026 is to get our first rental property because of the because of the stuff that I've been learning. Can you break it down for people and get them inspired the way that's inspired?
Karlton Dennis 00:21:05 Yeah, absolutely. So the IRS created a rule in 1976 that said there is now non passive income and passive income. Before 1976 we just had income. So if you invested in a rental property it was just income. If you worked a W2 job it was just income.
Karlton Dennis 00:21:21 If you had a business it was just income. After 1976 we had the Tax Reform Act and Ronald Reagan changed everything. And he said, hold on a second. If you're investing in real estate, this is kind of passive. You just collect a check. So we're going to call it passive income. And if you're working a W-2 job or you're showing up to a business, we're going to call it non passive income. And if you have any deductions or losses from something that's on the passive side, it shouldn't be able to offset the active side. Well this is an issue for all of us that want to invest in real estate to offset our active forms of income. We would actually probably never be able to offset our active forms of income by just investing in real estate. So the IRS gave us ways around these rules that Ronald Reagan put into place in 1976. And one of the ways around his whole passive activity loss rules is by becoming a real estate professional. A real estate professional is someone who can show the IRS they're spending 750 hours in the year managing their own investment property, or they can show that they're spending more time in real estate than any other thing.
Karlton Dennis 00:22:22 Well, if I'm spending 750 hours in the year managing my own investments, and I have to spend more time in real estate than any other job that I have. W-2 job or 1099 job? I'm essentially doing real estate full time. For most people, they can't justify being a real estate professional because they don't have time to be a real estate professional. If you work 40 hours a week for Tesla, you would have to spend 41 hours a week managing your real estate portfolio. That's 81 hours a week of work just to get some tax deductions. No one can do that. So this is why I introduced the short term rental strategy back in 2020, after doing more research inside of the tax code. When I sat there in Covid and I was thinking, how did Ronald Reagan think about Airbnb and Vrbo when he didn't have Airbnb and Vrbo back in 1976? And it hit me like a bag of bricks in 1986, and it hit me like a bag of bricks. This was a hotel motel business for Ronald Reagan and all of taxpayers back then.
Karlton Dennis 00:23:18 Being able to rent out a house was very similar to being in a hotel or motel. A hotel or motel is an active business in the eyes of the IRS. If customers are coming in seven days or less. On average. So most people who are running an Airbnb are having people coming in seven days or less. If you can abide by this rule seven days or less on average, and make sure that you're managing your Airbnb for 100 hours in the year, you have an active business in the eyes of the IRS. So now we can take an active loss from your Airbnb by accelerating depreciation to offset your active W2 or S Corp or LLC income. This is where depreciation starts to become so important. People understand the word depreciation, but they don't know how to leverage depreciation. Depreciation is just what you're thinking when you drive a car off a lot. It goes down in value. But the same thing exists for investment real estate. It's sitting outside in the rain, the sleet, the snow. So it's technically losing value structure wise, even though it may go up over time because you bought the right property in the right location.
Karlton Dennis 00:24:27 The government gives you a right off. As your property depreciates, it gives you a write off for the whole building's value, the whole building's value. You get to write it off on your tax returns. The sad part is it's over 27.5 years. So most people are like, okay, great. I'm writing off my whole building over 27.5 years, but this is a really long time. Is there any way I can speed this up? This is where we enter the cost segregation study as a strategy for those short term real estate investors. If you do a cost segregation study, what someone is doing is getting the cost of all of the non-structural components that make up your property, such as like the appliances, the windows, the flooring, these non-structural components. The IRS says you can write them off in one year or seven years or 15 years, as opposed to 27.5 years. So by extracting 30 to 40% of your building's value in accelerating depreciation. You're creating such a massive loss that flows on your tax return.
Karlton Dennis 00:25:30 That's an active loss that can offset active forms of income. So it's pretty awesome.
Jasmine Star 00:25:35 How many do you mind. Can I ask you a personal question.
Jasmine Star 00:25:37 Of course.
Jasmine Star 00:25:37 Do you have rental properties. Yes. And how many are you. What's your goal. How many do you have? What do you want?
Karlton Dennis 00:25:42 We have 17 properties right now and close to about 28 doors. Between those properties, I think my goal is to probably get to 1000 doors.
Jasmine Star 00:25:50 Wow. Yeah.
Jasmine Star 00:25:52 And do you have a strategy on how you're going to get there?
Karlton Dennis 00:25:54 I'm just going multifamily right now and just been acquiring multifamily apartment complexes.
Jasmine Star 00:25:57 Wow.
Jasmine Star 00:25:58 Oh that's okay. That's an entirely different episode. I'd love to hear more about that. Okay, so there was one thing. My husband and I are thinking about getting a new car. And I've heard you talk about writing off 100% of a £6,000 car. And other years you're only writing off 60%. Can you explain that? Like how that works and what I should be looking for?
Karlton Dennis 00:26:17 Yeah, absolutely.
Karlton Dennis 00:26:18 So last year we were able to take 60% bonus depreciation on vehicles. And the reason why is because we didn't have Donald Trump's big, beautiful bill that got signed into law July 4th, which is pretty awesome. Now we have a 100% bonus depreciation, but what does that mean? What it means is the tax code works in favor of people who are buying vehicles, who are business owners that way over a certain amount of pounds. The the tax code is incentivizing you to buy vehicles that way over £6,000. And for most taxpayers, if you find a vehicle that you like and purchase it, you're most likely going to purchase it with OPM other people's money. So the benefit of you buying a vehicle and using 100% bonus depreciation is your arbitrage debt to save money. If I am going to go buy a $100,000 F-150, I could put a $5,000 down payment down. If I'm in the 37% tax bracket, and I write off $100,000 on my tax returns 100,000 times 37%, that's $37,000. I put $5,000 down to get $37,000 worth of 737 $37,000 worth of savings.
Karlton Dennis 00:27:22 I'm arbitrage and I'm saving $32,000 right then and there by using the tax code bonus depreciation to buy that vehicle and placing inside of my business. But here's the one thing I want to make sure everyone knows. Jasmine. Most business owners aren't using vehicles 100% for business. I would I would argue that most are probably using vehicles about 80% for business. So before you go rush off to buy that car, make sure you calculate based off of how much depreciation you're going to take. What does that look like for yours? Tax savings.
Jasmine Star 00:27:51 That's good. And I had heard that you had mentioned an app that you could use to track mileage. Do you remember what that is?
Karlton Dennis 00:27:56 Yeah, absolutely. So QuickBooks allows for you to track mileage as well. And then there's an app called mile IQ that will also track your miles as well. So you can write off your vehicle claiming mileage. Or you can write off your vehicle claiming actual expenses. Actual expenses are the things that you actually spend your money on. Gas, tires, cars, car washes or mileage means that I'm just going to write off $0.70 per every single mile that I drive in the year.
Karlton Dennis 00:28:18 IRS only allows for you to choose one or the other. You can't write off both.
Jasmine Star 00:28:21 Okay, see? This is the good stuff. This is good stuff. Okay, in that Q&A, the flash fire the game. In the beginning we talked about haircuts and manicures. And then there was like the caveat if it's for your brand, that seems pretty like vague.
Jasmine Star 00:28:33 Yeah it is.
Jasmine Star 00:28:33 Can you describe can you describe that?
Karlton Dennis 00:28:35 Yeah. So there's IRS court cases that have not sided in the favor of taxpayers who have tried to write off haircuts and Rolexes and watches?
Jasmine Star 00:28:44 I didn't say a Rollie.
Jasmine Star 00:28:45 I just tried to get my manicures. I'm gonna get my manager sends it right off.
Karlton Dennis 00:28:49 I'm glad you didn't think through.
Jasmine Star 00:28:50 The Rolex, because that was.
Karlton Dennis 00:28:51 A real tough.
Jasmine Star 00:28:51 Argument.
Karlton Dennis 00:28:52 And then there's taxpayers who have been able to do that, and it's based off of facts and circumstances. Okay. Because each person's situation is different for people like me and you, Jasmine, we're on camera every single day sometimes.
Karlton Dennis 00:29:04 So it makes 100% sense that our appearance needs to be on point in order for us to generate revenue, and it's an ordinary expense for us to be able to have a haircut because we're on camera every single day.
Jasmine Star 00:29:15 Men. Yes. Yes. Yes. We are in my hair off. We are. We are.
Karlton Dennis 00:29:20 Entertainers. We are entertainers by trade. And as entertainers by trade. We have to wear a costume. We have to have camera equipment. We have to show up and have makeup. This is a part of how we perform. I wouldn't imagine why I wouldn't be able to write off my haircut if I'm performing in this capacity every single day, or it's a part of how I generate revenue.
Jasmine Star 00:29:37 And just as a side note, just in case I ever get audited, I make sure that when I do iPhone content, I'm including my hands in it. Oh good. I am like, I'm just being look at how I'm pointing at this.
Jasmine Star 00:29:48 And they're like, how could you use it? How did you 374.
Jasmine Star 00:29:52 Short form content of my nails.
Jasmine Star 00:29:54 Okay. That's that's that's that's super helpful and very helpful. Good to know. Now, I want to know on that note, because you said we weren't going to write up. We were not going to write off a rolly. Yeah. Now we can talk about situations in which that might be the case. But you did work with a client where she wrote off her yacht.
Jasmine Star 00:30:08 Yes, I.
Jasmine Star 00:30:08 Did. Okay. So let's.
Jasmine Star 00:30:09 Talk.
Karlton Dennis 00:30:09 About different than a Rolly because a yacht is a vehicle.
Jasmine Star 00:30:12 The vehicle. Oh, okay. Oh my God. Okay. Levy. Levy. Like, is my husband watching this. Yeah, like buying me a vehicle, baby. Buy me a vehicle.
Karlton Dennis 00:30:18 Categorized as a vehicle. And, she leased the vehicle to her corporation, and she was able to deduct the vehicle as a as a as a vessel. So, yes, we were able to write off the yacht and we won that audit.
Jasmine Star 00:30:30 Okay, but tell the story about the audit.
Jasmine Star 00:30:31 Oh, that's the this woman.
Karlton Dennis 00:30:32 This woman came into our office. My mom was there for this one. and we sat in the conference room. Cool thing was, is we went into this, like, not knowing who this woman was. She was very anonymous on the phone before coming into the office. She didn't really want us to know a whole lot of details about her. And when she came into the office, she was wearing this fool Louis Vuitton dress. And then she had her Louis Vuitton purse, that master Louis Vuitton dress. So she was just like, dolled.
Jasmine Star 00:30:57 Up.
Karlton Dennis 00:30:58 And she was kind of frustrated. She had her tax documents with her and she said, hey, I have already met with 14 other CPAs. Let's see what you guys can do. And slid her manila folder across our conference room table and it fell into my lap. So I opened it up. There's two returns, one for me and one for my mom. So I gave one to my mom and I looked at her tax returns, and it was already marked up by other tax accountants, like she'd given us returns that she had brought to other people.
Karlton Dennis 00:31:22 Here's what I noticed. Right when I opened up the returns, I noticed that she was making a couple of million dollars. But then I saw on the very next page that she had a notice from the IRS that said judgment $1.1 million. And I was like, whoa, she needs to pay the IRS $1.1 million in three weeks. So we immediately opened up and said, hey, why is the IRS assessing you and how can we help you? She said, listen, I, I purchased a vehicle, I went to other CPAs. They told me it wasn't a vehicle that should be placed on my tax returns, and now I have nobody to support me with this. I believe this vehicle is a business expense for me and I need support on it. And we said, what's the vehicle? And she said, it's a yacht. And I.
Jasmine Star 00:32:00 Said.
Karlton Dennis 00:32:01 I took a big gulp and I looked over to my mom. She was super stone cold and so, okay, all right. We've been here before, apparently.
Karlton Dennis 00:32:07 So my mom went on to say, okay, well, express to us how are you using the yacht for business? And she said, well, I use the yacht as a real estate agent. I speak on the TV show Million Dollar Listings and I do broker previews on my yacht. This is where I bring all these real estate brokers and we go over different deals on my boat. I also have different actors and athletes who I take out on my boat here in Orange County. I take out celebrities like Shaq and Kobe Bryant on to my boat, and these are the people who I sell houses to. I have made transactions this year just because I brought them onto my boat. As I'm hearing this, I'm like, who is this woman? I'm like, whoa, Kobe. Like mentally, that's where the dude inside of me with my mom was like, tax code. I was like, whoa, that's cool. Awesome. And my mom went on to ask this question, which was, do you have documentation? She immediately started off with her iPhone photos and we're like, okay, yeah, that's great.
Karlton Dennis 00:33:00 You have photos of people that are on and off your yacht, but what documentation do you have of you making transactions directly after people coming on and off your boat, or like people that we knew actually made it onto your boat at a specific time. And she's like, oh, my captain. My captain has a log booklet and he documents in chronological order the date, the time, the activity of everything we're doing on the boat and who we were with. We said, perfect, can we get that? And she's like, absolutely. We asked her to send the photos. That log booklet and her transactions that she'd closed that year. We went into a field audit. Field audit is where we invite the IRS to our office. IRS was on the fourth floor. We were on the third floor, so it wasn't a big deal. They come down, we handled the IRS audit inside of our office and we open up with our customer has purchased this vehicle, which we believe should be a business vessel, underneath her tax returns, underneath code section 162 A that states a business owner can take a business deduction if the business deduction is ordinary to the business owner, necessary to the business owner, and reasonable to the business owner in the pursuit of income.
Karlton Dennis 00:34:01 This was an ordinary expense for our business owner. She's a seven figure earner, a reasonable expense for our business owner. She's a seven figure earner. And we also were able to show you that she has documentation and substantiation of every single person that's come on and off for a boat. You'll notice here one of them's a Laker star down in Southern California. That's Kobe Bryant is Shaquille O'Neal. Here are the transactions that she's been able to do. Here's her log booklet. Logging every single person that's come on and off of her boat. This is deductible under code section 162. A is a business vehicle. And the guy was like she knows Kobe and Shaq.
Jasmine Star 00:34:31 The dude came by. Yes, the IRS is normal.
Karlton Dennis 00:34:36 They're normal.
Jasmine Star 00:34:36 They watch sports I knew it.
Karlton Dennis 00:34:39 And now that changed everything for me. I was like, okay, one documentation is absolutely everything to getting.
Jasmine Star 00:34:45 Out.
Karlton Dennis 00:34:45 Of an audit.
Jasmine Star 00:34:46 Like it's.
Karlton Dennis 00:34:46 Everything. She was so well documented because she had a team of people that were surrounding her.
Karlton Dennis 00:34:51 Yeah, like she had a captain, she had an assistant. Someone was logging her receipts for her. So she had a team of people that was surrounded by her. But most importantly, we knew the tax code. When we went in there, we weren't shooting like we were trying to get over on the IRS. We showed that she was making legitimate money by having this business vessel, So it worked out.
Jasmine Star 00:35:10 That's so good. That's so good. So people are hearing this and maybe they're not in the, in the phase of life where they are having a yacht and they need to write it off. Yeah. One of the things is we talk about on this show quick action. Like what's something that they can do to start getting their business in shape so that they could work with you? If they're not at that stage right there. So if someone's making and I'm going to increase the increase the monetary amount, if somebody is making 10-K a month, what's one thing they should stop doing immediately?
Karlton Dennis 00:35:37 Stop doing your bookkeeping right around ten k a month is where you're probably hiring a bookkeeper.
Karlton Dennis 00:35:40 You probably had your Excel document, and you were categorizing your own expenses to try to cut costs to grow your business. But now you're about a six figure earner, and you probably have somewhere around a 40 to 60% profit margin. So you probably need to have a bookkeeper on your team now.
Jasmine Star 00:35:53 That's good. Now when somebody is making 100 K a month, what should they stop doing?
Karlton Dennis 00:35:57 You should stop relying on your CPA to come up with strategies to reduce your tax bill, because now you're almost pretty much a seven figure earner at 100 K a month. You are doing tax preparation and you're probably paying an estimated tax payments, you're probably maxing out your for one K, you're probably an S corporation, you're probably already taking payroll, and you're scratching your head wondering why you're still owing every single year. And it's because you don't have somebody on your team that's solely focused on strategy. You've only hired a CPA that's filing your returns.
Jasmine Star 00:36:22 And for somebody who's making a million a month.
Karlton Dennis 00:36:24 If you're making a million a month, what you need to look at is how can you do income shifting strategies? How can I take income off of my tax returns and putting it into tax deferred vehicles? One of the things that I love looking at also is how can I invest my money that's going to create active losses on the return? For most of our clients, they invest into movie films, which can give them a forex deduction.
Karlton Dennis 00:36:42 It makes them an active investor in the movie film. We have clients that also will invest into oil and gas. If you invest into oil and gas as an active participant in a working interest, you can claim active losses. Some of our clients are receiving a 90% deduction relative to their investment, meaning if you put in $100,000, you're looking at a $90,000 tax loss in year one. That's a cash flow producing asset that you're acquiring right there. And then outside of that, I love the idea of having a foundation at this amount. If you're making a million a month, chances are you've thought about it. If you haven't already, you're philanthropic. Why not write a check to your own private family foundation? The IRS gives you a 30% deduction based on your AGI, and only 5% of the charitable assets that you put inside of your foundation has to be donated out to another 501 C3 other than your own.
Jasmine Star 00:37:24 I felt like I was watching like a Beautiful Mind over here. And he's just sitting here and he's just, like, spitting it off.
Jasmine Star 00:37:29 Here it is, here.
Jasmine Star 00:37:30 It is, here it is. Yes.
Jasmine Star 00:37:32 One thing that I love hearing you talk about is having your children involved in your business. Love that. And can you can you explain a little bit more about that?
Karlton Dennis 00:37:39 There's two different ways in which we can have your children involved in your business. We can set up a FMC, which is a family management company, or we can set up a rental management company. Let's just say that you're running a real estate operation. Great. What if you decided to set up an LLC management company where you're managing your own investment properties? Now you can get paid for managing your own real estate, but rather than moving money from the left hand to the right hand, you instead choose to work with your children. Children are the perfect employees to have working inside of a real estate management company. Take them with you in the car when you're going to go check out the property.
Jasmine Star 00:38:07 Make them.
Jasmine Star 00:38:08 Age. Is there an age? Like my daughter is.
Jasmine Star 00:38:10 505.
Karlton Dennis 00:38:12 Years old is the perfect age. I would say right around five years old is where we start placing children on payroll. It's a perfect age to start placing children on payroll, because normally they'll end up being either child models, or they'll help mom out with picking up staples off the ground. Trash basic things, and we're going to pay them a wage relative to their age. We're not going to.
Jasmine Star 00:38:28 Max out the standard six figure. We're going to max.
Karlton Dennis 00:38:31 Out the standard deduction with them. But you know, it's awesome knowing that we have options to be able to pay our children without our children needing to file a tax return and without us needing to pay payroll taxes. The mistake that business owners make when they're s corpse is they'll place their children on payroll through an S corp. This is why I say the family management company might be better. You can set up an LLC that is a family management company to the S Corporation. Now your children can be on payroll inside of an LLC that gets paid to manage the S Corporation.
Karlton Dennis 00:39:02 Let's just say my corporation is doing podcasting, but my family helps me run the show part time. They can get paid outside of my S corporation through a separate LLC, so that way I don't have to pay payroll taxes for placing my children on payroll who are under the age of 18. That saves you 7.65%, which is Social Security and Medicare taxes, essentially.
Jasmine Star 00:39:23 That's incredible.
Jasmine Star 00:39:24 Yes.
Jasmine Star 00:39:25 That's incredible. And so when my daughter is is getting paid as a five year old, am I making if I heard it correctly, I want to make sure that she's making less than $15,670.
Karlton Dennis 00:39:35 Yeah, $15,750. You definitely wanna make sure she's making under that, because I don't know many five year olds that can justify making that much money, but that's the maximum you can pay them without them needing to file a tax return.
Jasmine Star 00:39:45 Okay. Yeah.
Jasmine Star 00:39:46 Okay. Is there a I mean, advice? This is not this not advice. This is just like, what would that number be?
Karlton Dennis 00:39:52 Not legal advice. It just depends on what the role is.
Karlton Dennis 00:39:55 So let's just say that you have your daughter doing modeling for you, and she appears on the website, and you build this modeling shoot per hour at $100 per hour, and she does this 3 to 5 times a month. You might that might be up to $1,500 a month over a 12 month period. You could start to kind of max out how much you want to pay her in that sense.
Jasmine Star 00:40:16 Okay, that's really cool. Thank you. That's amazing. And then from an advice not legal advice perspective. That money that she gets paid, what would be the best way for us to invest that.
Karlton Dennis 00:40:25 Okay, great. So what I would highly recommend all parents do is to take advantage of the custodial Roth IRA. Because once you've paid your children, let's just say you max out the 15,000. You can take 6000 of the dollars that no one paid taxes on and put it into a custodial Roth IRA at the age of five. If your children do not touch it, and you only do this once, by the way, at the age of five, if your children does not touch that Roth IRA account, by the time they're 65, they should have about $1.4 million.
Karlton Dennis 00:40:54 If all of that money is invested into the S&P 500 with an 8% rate of return, made your children a millionaire tax free by making one move in one year.
Jasmine Star 00:41:04 That's incredible.
Karlton Dennis 00:41:05 Pretty awesome.
Jasmine Star 00:41:05 That's incredible. That's incredible. And, you know, I just have to, like, take a second. This was totally not a part of the notes. But when I hear you talk about that way, I can't help but think I'm the daughter of an immigrant. And so the first of my family to go to college for my family to start a business, and I think to myself, the things that we've done and then the people that I get to meet gets to change, like massive legacy like, and I never, ever saw it or ever considered it. So thank you. Yeah. Like that's cool, that's cool. Like her mama gets to make her a millionaire.
Jasmine Star 00:41:31 That's amazing. Yeah. Okay, so.
Karlton Dennis 00:41:33 And it's not just about the transfer of of money. It's about the transfer of information.
Karlton Dennis 00:41:38 Because what did mama learn along the way that got you that million dollars? That's in the Roth IRA? Because mama's going to spend time making sure that real wealth is the transfer of information. And how I teach you how to build a legacy for your family.
Jasmine Star 00:41:50 So do you have children?
Karlton Dennis 00:41:51 I do have a daughter.
Jasmine Star 00:41:52 Oh, how old is she?
Karlton Dennis 00:41:53 She is 13 months.
Jasmine Star 00:41:54 Oh my gosh. Yeah. Yeah. She's she's.
Jasmine Star 00:41:57 Isn't it the best.
Jasmine Star 00:41:59 Isn't.
Jasmine Star 00:41:59 It? Like, are you just obsessed?
Karlton Dennis 00:42:00 I got back from Europe with her, and it was the best idea to take her to Europe for her first birthday. We're like. We're traveling for her one year, her first birthday, and that's so awesome.
Jasmine Star 00:42:07 That's amazing. Yeah. What are you going to do to set your children up for, like, wealth proficiency?
Karlton Dennis 00:42:13 Yeah. so what I'm doing right now is I set up a life insurance policy with the cash value component to it. So I'm currently paying into life insurance for my daughter.
Karlton Dennis 00:42:21 She has a 529 plan. Part of the reason why is because I believe in college, and I do want her to go to college and have access to funds for college. But what I love about the 529 plan now that just got updated this past year, is whatever funds that aren't utilized in the 529 plan can be rolled over into that Roth IRA account that I set up for her. My daughter will be on payroll starting next year. I'm going to take the year off and strategically.
Jasmine Star 00:42:44 Strategically.
Karlton Dennis 00:42:45 Map out how she's going.
Jasmine Star 00:42:46 To be on such a slacker. She's only going to be two. Step it up, bro. Her apparel right?
Karlton Dennis 00:42:51 Right around to. And that's where it'll start. That's where the journey will start for her. And my biggest thing is I just want to buy one property a year that I can have for her. So far I'm up to two so far for her, so we'll just keep that going. Hopefully by the time she's 18 years old I'll have north of 18 properties for her.
Jasmine Star 00:43:08 So some of the lessons that your mom taught you, what are you passing on and what do you think you would reserve?
Karlton Dennis 00:43:13 I would say the lessons that I'm passing on almost, almost have entirely to do with how I act. My mom taught me a lot about respect, honesty, being a good person, not cutting corners, working in ethics. And those are the principles I want to pass on. I absolutely know that my daughter is going to absorb all this tax information, being next to a tax wizard like me, and, you know, I want her to gravitate towards her own passions. But I'm going to pass on the information that I know about strategy, because it's not about tax strategy. It's about being savvy in all phases of life and whether it's having a strategy with your fitness, having a strategy with your finances, having a strategy on how you're going to get out of debt if something happens. I want to be able to teach her how to strategize and how to recognize patterns. And I think that's what's helped me find success at an early age.
Karlton Dennis 00:44:09 And part of the reason why I'm finding success right now.
Jasmine Star 00:44:12 How do you teach strategy.
Karlton Dennis 00:44:13 Time, time with people? Recognizing patterns, pattern recognition, understanding that it's more about critical thinking than having a fast solution. Yeah.
Jasmine Star 00:44:23 Okay. Not part of my notes. I consider myself a strategist. It's the world that I live, and, well, I actually never really considered that I could teach strategy. Like, I'm just like, well, it is. It is of me. I can't help it. Like, it's just what I do. And so you linked pattern recognition and strategy. Can you connect it to for me?
Karlton Dennis 00:44:41 Well, see, what I look at is I look at successful people and I try to study and mimic some of the things that they're doing. Okay. And then I try to come up with strategies on how I can utilize this in my day to day life. And so for me, I have a strategy around how I approach my mornings. I have a strategy around how I approach taxes.
Karlton Dennis 00:44:58 I have a strategy around how I approach this wealth building, but it's not something that I just came up with one day. It's from doing due diligence and recognizing what has worked. I think I have an unfair advantage because I get to see into the tax returns of everybody. So I get to see the real, the real noble, and you see all these people who share these ideas and tell you to do all these things. And then you look behind the curtains and you look at their finances, and things can be an entire disarray. And so I have been able to recognize patterns of people who walk the walk and are capable of talking the talk and people who simply just talk.
Jasmine Star 00:45:41 Oh.
Jasmine Star 00:45:42 Oh, that's real. And you know it. It isn't until you just laid it out like that that I'm like, that's what I do.
Jasmine Star 00:45:48 Like 100.
Jasmine Star 00:45:49 100. Okay. Can we talk about your strategy about content? Because now we talked about like your I like the word tax wizard. I'm only going to see Carlton.
Jasmine Star 00:45:58 And just like there goes the tax wizard.
Jasmine Star 00:45:59 You know going down PCH.
Jasmine Star 00:46:01 Okay. But let's talk about you're a business owner, you're an entrepreneur and you're an entrepreneur who knows taxes. Okay. Great. What is your strategy when it comes to content? Because you're you're probably just as much of a content wizard as you are a tax wizard. Can we talk about that?
Karlton Dennis 00:46:15 Yeah. I mean, my strategy on how I grew in my content was very simple. What are people searching for and get out in front of it? YouTube is a search engine. It is owned by Google. There are an absence of tax accountants and tax professionals that realize that if you put out content, your video will come up first. They just don't understand this. So in 2020, when I went on the internet and I researched, how do you pay yourself as an LLC? There was only three videos on it. How do you place your children on payroll? There's no videos on it. Okay. When you switch from an LLC to an S Corp, there's two videos on it that has over 100,000 views.
Karlton Dennis 00:46:56 Where is the YouTube person teaching taxes? There's some. There's there's YouTube for everything. If I want to cook an omelet, I can there's 1100 omelet videos. Where is the 1100 LLC to escort videos? So I went on Google trends.com. I found out that Google Trends tells you exactly what people are Google searching. So if I type in how to pay myself as an LLC, I can see over the last month how many people have researched how to pay myself as an LLC. So this is exactly what I did. I went on the internet and I looked up what are people searching the most in tax? And I created videos on that. First, the algorithm of YouTube. Loved it and picked it up. Within three months of me being on YouTube, I already had 100,000 subscribers on YouTube in three months because I was doing what YouTube wanted me to do, I was solving a problem, and then I just went on YouTube and I said, okay, where else is all the real estate and tax? Because now I'm not viewing real estate.
Karlton Dennis 00:47:50 YouTube is just a search engine. I'm viewing it as real estate, as digital real estate, and I need to take up all of the digital real estate. So if someone looks up how to place their children on payroll, I need a video for it. Someone looks up how to convert a traditional IRA to a Roth IRA. I need to have a video for it. If someone looks up, how do you save money on $100,000 worth of income? I need to have a video for it. So I went and created videos on every thing tax related. So now anytime anybody searches, searches, anything in the tax space, Carlton Dennis has a video for it. I took up all the real estate. This is how I built my business so quickly is because I bought up all the real estate, and then I turned around and monetized it and said, hey, by the way, come here to tax alchemy. I give away all the strategies. I gave away all the information and the traditional CPA.
Karlton Dennis 00:48:37 They found value in gatekeeping information. Oh, pay me this fee and we'll be able to figure this out for you. Pay me this fee and we'll figure out how to reduce your tax bill. What? Give them the information and let them choose on who they want to work with. Who has who can explain it the best? Who do you gel well with? And so I leaned in hard on that.
Jasmine Star 00:48:54 And so Tech's alchemy. Talk about the business structure of it. Like now I was talking about the entrepreneur side of what it is you do. You had to scale you. So you became the magnet.
Jasmine Star 00:49:03 Yeah.
Jasmine Star 00:49:03 And then you had to disseminate what is like what is your team size look like? What is the structure? What are you how are you spending most of your time?
Jasmine Star 00:49:08 Yeah.
Karlton Dennis 00:49:09 So early on, I was spending a lot of my time doing all the fulfillment inside of tax alchemy. I was the YouTube guy. I was the marketer. As a sales person. I was the fulfillment.
Jasmine Star 00:49:17 And how.
Jasmine Star 00:49:17 Did you do.
Jasmine Star 00:49:18 That?
Karlton Dennis 00:49:18 It was a lot. I did it for about a year and a half.
Jasmine Star 00:49:20 Two years. Okay.
Karlton Dennis 00:49:20 Yeah, it was all right. But Tax Alchemy started off with a program. We created a real estate program because I loved real estate and teaching people how to invest in real estate to offset W-2 in 1099 income. Robert Kiyosaki was a big influence on me, and so was Grant Cardone. So I really gravitated towards real estate investing in the tax code. I wanted more people to know how they can invest in real estate to offset their taxes. So I started off with a program. Hundreds of people bought that program. Then they said, Carlton, how do we work with you? Not just your mother's firm. We want to work with you. We've we've spoken to them. They say we can't work with you. How do we work with you? That's when I decided to create my private client group.
Jasmine Star 00:49:58 So was this a course?
Karlton Dennis 00:50:00 Yeah. It started out as a course tax.
Karlton Dennis 00:50:01 Alchemy started out as a real estate course.
Jasmine Star 00:50:03 And then it.
Jasmine Star 00:50:04 Out. How much was.
Jasmine Star 00:50:05 It?
Karlton Dennis 00:50:05 It was $2,000.
Jasmine Star 00:50:07 Yeah. Get out! Yeah. We have over.
Karlton Dennis 00:50:09 3000 people inside the program.
Jasmine Star 00:50:10 Okay. So the course led to people wanting to work with you? Yeah. And so then.
Karlton Dennis 00:50:14 But I had no way for them to cashflow me outside of the course. I was like, you're gonna get on the phone with my sales team at my mom's office and work with my mom's company. Yeah, well, you can't work with Carlton Dennis. I'm just doing tax education and tax strategy. Even though I have a tax license, I'm still not the one who's doing the tax strategy right now.
Jasmine Star 00:50:32 Okay.
Karlton Dennis 00:50:32 It wasn't until I built my own department, my private client group department that I said, okay, I'm going to be the one that actually does the tax plan. Now, I will get on the call and actually explain it to you now.
Jasmine Star 00:50:43 Okay.
Karlton Dennis 00:50:43 And this was brand new and I charged a lot of money for it, because I knew now all of the strategies that I could leverage for somebody, and I knew how to use the software, and I knew how to explain it and implement it because I was doing it myself on my own tax return.
Jasmine Star 00:50:58 You were like, expert level wizard.
Karlton Dennis 00:50:59 I was feeling pretty.
Jasmine Star 00:51:00 Good about it. I was feeling pretty good.
Karlton Dennis 00:51:02 So I started selling people tax planning through my business tax alchemy, because my mother's company primarily worked with thousands of clients, and I was just going to work with a handful of clients. I was like, I'm just going to work with a boutique, small amount of clients and make it only high net worth individuals. They have to be making over half $1 million a year, because I want to make sure they're leveraging the real estate strategies they need to have liquidity to do real estate, and that's what birthed. I started getting investors to work with me, and they started buying real estate, and I started doing the cost segregation study strategy. And the business grew from, you know, ten clients to close to about 1000 clients now.
Jasmine Star 00:51:39 And what about the team? How have you grown that the team?
Karlton Dennis 00:51:41 We went from me having an assistant and one tax Pro two. Now I have 25 tax professionals and a staff of about 46 individuals.
Jasmine Star 00:51:51 And so where do you spend most of your workday? How do you spend it?
Karlton Dennis 00:51:54 I spend most of my workday doing content, so I will wake up. My assistant probably will send me my schedule for the day. She's already responded to the text messages I don't want to respond to, and responded to the emails that I don't want to respond to. I'll typically map out the content that I feel like doing for the day, and then jump right into it with my team. My team will show up to my house or I'll show up to my studio. We're typically filming for 6 to 8 hours and normally doing YouTube videos, short form content, podcasts.
Jasmine Star 00:52:21 How many days a week?
Karlton Dennis 00:52:22 Just twice. Two days a week. I do that two days.
Jasmine Star 00:52:24 A week.
Jasmine Star 00:52:24 And then the other three.
Jasmine Star 00:52:25 Days.
Karlton Dennis 00:52:25 Meeting Wednesdays. Thursdays is my family day, and then Fridays I'll do meetings again half day.
Jasmine Star 00:52:31 And so do you have an operator?
Karlton Dennis 00:52:33 Yeah.
Jasmine Star 00:52:34 Well, and.
Jasmine Star 00:52:36 They leave you in your zone of genius.
Jasmine Star 00:52:38 And that's content. Content. And you're still the magnet attracting. Deal flow.
Karlton Dennis 00:52:43 Deal flow.
Jasmine Star 00:52:43 Yeah. Wow. And so, how many direct reports do you have?
Karlton Dennis 00:52:47 People who report to me. I have an operations manager. I have a president. I have a my film and production manager. I'd say three and then my HR manager. So yes 3 or 4 people. Wow. Yeah.
Jasmine Star 00:53:01 And so in terms of content I did have a question and I can edit it out if you're not comfortable talking about it. Yeah. The school of hard knocks. They came up to you in a street and they said you didn't pay any taxes.
Karlton Dennis 00:53:12 Yeah, they found me in Beverly Hills.
Jasmine Star 00:53:14 So? So I've always thought, is this planted?
Karlton Dennis 00:53:17 No, they they come up to people.
Jasmine Star 00:53:19 So you say okay, okay.
Karlton Dennis 00:53:21 They're now scripted.
Jasmine Star 00:53:22 Okay.
Karlton Dennis 00:53:22 Yeah. Because I know. JM so now I do content with him. So I've been on his podcast show. He's unscripted. Most of the time he'll just go up to you.
Jasmine Star 00:53:29 Okay. So explain explain the story.
Karlton Dennis 00:53:31 So I pulled up, I was I was shopping, I was going to the Goyard store, which is in Beverly Hills. It's only Go Yard store in California. So I was going there and I pulled up in my drop top Ferrari. I don't have that for anymore. I've sold it for a nicer car. But I love that Ferrari.
Jasmine Star 00:53:46 Gosh, it's so lowbrow. Dropped off Ferrari. Come on, Carlton, step it up.
Karlton Dennis 00:53:49 I love that car. I love that car. But I had I had to. I had to part ways with it. So I pulled up in this white Ferrari. Drop top, red interior. You know, looking like a straight chocolate drop. I was ready to go. And then he comes up to me and he shoves a microphone in my face. So I immediately like, was like, who the hell is this? Am I gonna have to fight somebody right here in Beverly Hills? LA is a little crazy.
Karlton Dennis 00:54:12 And he's like, excuse me sir, excuse me sir, can I interview you? And I was like, yeah. And like, I know LA has a lot of those young guys that like.
Jasmine Star 00:54:20 To interview.
Karlton Dennis 00:54:21 People and like, I'm a internet personality. So I'm like, okay, I'll do an interview. Like, can I ask you, like, what did you do to be able to afford a Ferrari like this? And I'm like, oh, easy. I was like, I run a tax consulting company. And he's like, okay, and how do you help people? I was like, I help people legally pay 0% income taxes. And and then he asked me how much money I had made. And he's like, okay, do you pay any taxes? And I was like, no, I don't pay any taxes. And I think it's more patriotic to not pay taxes. And so that went viral. I guess a lot of people kind of, you know, had affinity to that.
Karlton Dennis 00:54:51 And yeah.
Jasmine Star 00:54:52 It definitely went.
Karlton Dennis 00:54:53 My right. It definitely blew up our brand too a year or two ago.
Jasmine Star 00:54:57 Incredible. Yeah. And then they came back. So that was I actually thought it was scripted. Really. Oh yeah. 100 because I was like, you just it just looked too perfect. It was like, excuse me, sir, can interview you and you're sitting in your car and you didn't seem like you were caught off guard. You're like, hey, like, you know, I guess like a chocolate drop. Indeed. Yeah. and so I was like, oh, yeah, it's got to be this. And then they came back to your house and did an interview. Yeah, a long form podcast.
Karlton Dennis 00:55:19 A year later, they did a long form interview.
Jasmine Star 00:55:20 Okay. Did you get any heat for people saying, oh, he didn't pay any taxes?
Karlton Dennis 00:55:25 No. Honestly, that was my best year of business. Yeah, yeah. Being completely honest.
Jasmine Star 00:55:31 With people saying like, oh, it's when people say it's it's you.
Jasmine Star 00:55:34 When you said it's patriotic not to pay taxes. Yeah. Aren't there people who argue the opposite?
Karlton Dennis 00:55:39 I mean, there are, but I don't believe those people have the right education. Be honest with.
Jasmine Star 00:55:44 You. Okay. Explain it.
Karlton Dennis 00:55:46 if you look at how the tax system was built, I mean, we didn't live off of taxes in the in the United States in 1913 was when we introduced a formal tax system. Before then, we lived off of excise taxes. We used to tax tobacco and alcohol. That was it. And we thrived. We were doing completely fine. And we had World War One. And then the government said, okay, we're just going to take taxes out of your paychecks temporarily. Well, guess what? That temporary document got signed into law and then it became permanent. Now you have a permanent way of taking taxes out of our paychecks. And then then the IRS got created a year later, and it just kept going. It just became this permanent thing.
Jasmine Star 00:56:21 So it's patriotic in that we go back to the roots of our founding fathers.
Karlton Dennis 00:56:24 Our founding fathers did never wanted us to be taxed. You had a Boston Tea Party where people were literally throwing mounds of tea into the ocean. Over 1% tax. Yeah. We're at 37% now. We're at 37% now. So you know. Yeah, I think it's more patriotic to not pay taxes. I think it's more patriotic to use the tax code to not pay taxes. And I think those who set the tax system up set the tax system up to tax the most earned income earners and to reward those who invest the most amount of money.
Jasmine Star 00:56:59 Yeah, I love that answer.
Karlton Dennis 00:57:01 Yeah.
Jasmine Star 00:57:01 And I love that you are here and sharing this wisdom and knowledge. I have spent endless hours consuming your content, a lot of which I understood and a lot of which I didn't. And the more I listened to it, the more accustom I got to the language. It made me feel a lot more powerful. I knew what I wanted to do, and I set goals that I had never set before.
Jasmine Star 00:57:20 And so I felt challenged by your work to take a lot more ownership in what I'm doing, to catalog, to diversify how we are setting ourselves up for the future, and then to bring in our daughter and show her how we can change wealth and set her up for future legacies. And that's why I wanted you on the show. I just wanted you to come in and inspire other people to make those similar decisions. Now there are a group of people who are more than qualified to become a future client of alchemy. Absolutely. Where can people go to get more information?
Karlton Dennis 00:57:46 Yeah, absolutely. Guys, listen. Free education is on our YouTube channel at Carlton Denis. Check out our YouTube channel first and familiarize yourself with some of our strategies. But what if you're ready to, you know, hop on a call and talk to a tax strategy team to formulate strategies that are proactive instead of reactive. Go to tax alchemy. Com. Be sure to schedule a complimentary consultation would be more than happy to help you.
Jasmine Star 00:58:06 That's amazing. And let's shout out your YouTube and Instagram where you're creating content.
Karlton Dennis 00:58:10 Yeah, absolutely. Carlton Dennis on all platforms. You can also visit us at Tax Alchemy Advisors as well. I'll be happy to help you guys.
Jasmine Star 00:58:16 I, I was looking forward to this interview. I knew that I could throw a game at the beginning of it. I knew that he would be game. And you just came in again and just blew my mind. You added different elements to stories and education that like really had a profound difference. So thank you so much.
Karlton Dennis 00:58:29 Absolutely.
Jasmine Star 00:58:30 For those of you guys who are watching and listening, thank you for watching and listening to The Jasmine Star Show.