Published July 2019 on YouTube

136 | How To Fund Your Child's Roth IRA with the FI Tax Guy

1. Seeking Financial Independence

Discover the secrets to financial independence and early retirement with insights from the ChooseFI community. Join like-minded individuals who are taking control of their lives in pursuit of financial freedom.

2. The Tax Guy

Sean, an accountant and member of the Financial Independence community, shares his expertise on the tax code and how it can work to your benefit. He discusses tailored strategies for achieving financial independence.

3. Fi Concept Building

Sean Mullaney shares how he discovered the Fi concept through the ChooseFI podcast and how it helped him build a financial house using various tactics like Roth IRAs, Mega backdoor Roth, and high savings rate. The conversation also touches upon the tax side of things related to financial independence.

4. CPA Money Talk: Personal Finance

Sean shares how being a CPA doesn't necessarily mean being great at personal finance. Many CPAs serve large corporations and have little knowledge about personal finance. Sean's personal finance journey started separately from his professional pursuits.

5. Finding Alignment

Brad's journey towards financial independence led him to an inflection point in his career where he realized he was uninspired. However, his background in accountancy has been valuable in other aspects of his life. Sean and Brad discuss how aligning their financial goals with their career goals has been key to their success.

6. Choices Made by Tax Analysts

Sean shares how he strategically planned his career path by identifying opportunities and using financial independence concepts to pursue a law degree that eventually led him to a high-income job in a Big Four national office.

7. Long-term Planning

Sean shares his experience on how he established Virginia state residency to get in-state tuition for law school. He talks about how he got a job in Virginia and studied for the LSAT during his two-year tenure, while also getting his Virginia residency. He also shares how he received a scholarship from George Mason University for law school.

8. Post-Bacc MS in Accountancy Pay

Sean shares insights on the different career paths in accountancy, from working at big firms to starting your own small firm. He also discusses expected pay scales and the potential for high income in corporate America.

9. Choosing Accounting As A Degree

Brad and Sean discuss the benefits of having a background in accounting, including becoming a structured and planning-oriented person, having a broad range of career options, and gaining a fundamental understanding of how businesses should be run.

10. College ROI

Jonathan discusses the importance of considering ROI when choosing a college major, with accounting being a valuable option for those unsure of their career path.

11. Fully Funded Change

Sean shares his story of making a fully funded lifestyle change from corporate taxation to personal financial planning, providing insights on saving up money to fund a career change and the degree of stability it can provide.

12. Slow Approach

Sean discusses his cautious approach to change, which started with a financial planning program in 2016 and included a move to California. He explains that sometimes the slow approach is the right approach, but other times you just need to rip off the Band-Aid.

13. Starting from Scratch

Sean and Brad discuss how to start a business from scratch and get clients, including building relationships, establishing a blog, and taking advantage of speaking opportunities. Sean shares his personal experience of ripping off the Band-Aid and starting his own financial planning firm.

14. When Did Your First Clients Come?

Sean shares his experience of starting his own business and how nerve-wracking it can be. He emphasizes the importance of being comfortable with being uncomfortable and using every opportunity to learn and grow.

15. Bradley Furniture's Nimble Vision

Sean discusses his vision of having a nimble business that is location independent and low expense, allowing him to serve clients from anywhere. He prioritizes building relationships and getting clients in the door over adding employees.

16. Funding Children's Roth IRA

Jonathan and Brad discuss a pain point in their community: funding their children's Roth IRA. Sean provides a disclaimer before they dive into the topic, but the hosts stress the financial benefits of this strategy.

17. Child Roth IRA

Roth IRA for Kids:Sean explains how parents can employ their children and create a tax deduction for themselves while also creating runway to put money into a Roth IRA for their kids, which can grow tax-free for an absurdly long amount of time.
Child Roth IRA:Sean and Brad discuss the benefits of setting up a Roth IRA for a child's earned income from a sole proprietorship, and the importance of ensuring the pay comes from a trader business reported on a Schedule C. They also touch on the de minimis threshold and the potential payroll taxes, emphasizing the long-term benefits of a Roth IRA.

18. Child Tax Benefits

Child Employment Taxes:Sean explains the tax advantages of having your child work in your business and how to document their income with Form W Four and W Two. Jonathan asks about the process for parents and children unfamiliar with these forms.
Child Roth IRA:Sean and Brad explain how to set up a Roth IRA for your child through payroll and provide easy-to-follow instructions on filing the necessary forms. Jonathan emphasizes the importance of this tactic, stating that it is the most powerful vehicle for tax-free growth and encourages listeners to take advantage of it.

19. Expert Tax Advice

Sean, an expert in tax law, joins the podcast to discuss how the new tax law affects controlling your tax rate and what to do with your old 401K. Listeners will gain valuable insights on retirement planning.

20. Optimizing Charitable Giving

Optimizing Charitable Giving:Sean explains how tax reform has changed the landscape of charitable giving and offers strategies to optimize donations. One strategy is to use a donor advised fund to accelerate deductions for multiple years' worth of contributions into one tax year.
Donor Advised Funds:Sean, Brad, and Jonathan discuss the benefits of donating appreciated stock securities to a charity or donor advised fund to avoid capital gain taxes and receive a deduction for the fair market value of the securities. They also explain how to determine if using a donor advised fund is worth it based on your other deductions.
Tax Deductions:Brad and Sean explain the difference between standard and itemized deductions and why it's crucially important to know where you are on this threshold. Sean breaks down the different kinds of tax deductions and highlights that some deductions are quote unquote, itemized deductions, but you only take them if they exceed your so-called standard deduction.

21. The Choose Your Own Hot Seat

Sean and the guest discuss how to break free from the chains of debt and rampant consumption, highlighting the secrets of those who have successfully done so.

22. Favorite Blog Post of All Time

Sean shares his favorite personal finance blog and article, recommending J.L. Collins' book and his own humorous post on Cosmo Kramer's embodiment of financial independence. Jonathan chimes in with a quote from Seinfeld, adding to the fun and lightheartedness of the conversation.

23. #3 Your Favorite Life Hack

Sean shares his favorite life hack of fasting every other Friday, which has spiritual, health, and financial benefits. It's a form of intermittent fasting that saves money and is good for the body.

24. Financial Mistakes

Sean shares his biggest financial mistake of chasing yield instead of pursuing total return, and the importance of prioritizing total return over high yield.

25. Sean On The Money

Minimalist Printing:Sean shares his minimalist approach to paper reproduction by purchasing an HP LaserJet printer and scanner that only requires black toner. This purchase has benefited his business the most in the last twelve months.
Supporting ChooseFI:Brad and Jonathan encourage listeners to support ChooseFI by leaving a review, signing up for travel credit cards, setting up a Personal Capital account, and spreading the word to friends and family. They also invite tax questions for future episodes.