Stop Overpaying Taxes! How to Make the Most of Your Income

Brad Nelson: 0:00 

Hey. So today, guys, we’re diving into a topic that most people completely overlook until it’s too late Taxes and tax strategies. Now understanding the basics of tax planning can make a huge difference in how fast you can get ahead. So when should you start thinking about investing while you’re still in debt? Are there tax strategies that you can leverage right now to speed up your journey and getting out of debt? And what about mindset shifts? Do you need to make any of those to get out of debt but also stay out of debt for good? Now, to help us unpack all of this, we’ve got a Chase Insagna, an expert in tax planning and financial management who’s helped countless individuals and business owners transform their financial futures.

Brad Nelson: 0:46 

Hey guys, welcome to today’s show. I am Brad Nelson, the founder of Debt Free Debt. I paid off about $45,000 of debt, have been debt free now for over 12 years, and I’ve also been fortunate to help thousands of other people save and pay off tens of millions of dollars with the work that we do here at Debt Free Debt. Now, after listening to this episode, you, guys, if you’re ready to take things to the next level, you’re ready to break free from living paycheck to paycheck? You want to reduce financial stress. You want to build your savings and finally pay off debt for good, but maybe you’re just not sure where to get started. We’ve created some incredible free resources here at Debt Free Dad to help you get there, and I’ll be sharing some details about how you get started with those later on in today’s episode.

Brad Nelson: 1:25 

So hey, Chase, welcome to the Deferred Ad Podcast. So glad you’re hanging out with us here today. Thanks for having me. Yeah, so how did you get into all of this tax planning stuff? Because for a lot of people, tax is a very confusing thing. A lot of us aren’t taught about it, we don’t really understand it. So how did you get in to be an expert in this and get started in this field to help people?

Chase Insogna: 1:46 

Yeah, great question. I would say I was just like natural at studying tax. It’s one of those things that I can read it and I immediately remember it In college if you didn’t study accounting you wouldn’t know this. But there’s only one tax class that they allow you. They have to take in college. When I was taking it I’m getting my degree and I immediately picked it up very succinctly and very easily. So I was like maybe I should follow this Plus personally. I was like if I remember all these rules, I’ll be able to personally benefit from the tax code and that’s kind of where it generated from. And then since then I’ve been helping do taxes for business owners and individuals and it’s just kind of been a career 25 years later, of developing that tax knowledge.

Brad Nelson: 2:34 

What are some of the I guess, basics that every person, no matter if you’re a W-2 employee or run your own business, like? What are some of the basics that we should all understand about taxes?

Chase Insogna: 2:51 

One. You have to pay them.

Brad Nelson: 2:52 

That’s the basic understanding, unfortunately.

Chase Insogna: 2:56 

And then two for individuals. It’s making sure your W-2 is adjusted. Adjusted, I think a lot of perception is oh, I want to have a big refund but you’re just paying the IRS and not getting a return on that money if you’re not contributing it to your check every month. So adjusting if you’re single or married or those things have changed you want to take a look at what your holding should be and adjust it appropriately and come tax time that you’re filing right now we’re in tax season as we record this If you get a big refund, you might want to adjust your current year holdings. So this year you get more money every month but you’re not going to get that big check.

Brad Nelson: 3:34 

Yeah.

Chase Insogna: 3:35 

So you know, that’s my recommendation to individuals. When it comes to business, it’s very all over the place, yeah it probably depends on the business.

Brad Nelson: 3:40 

Yeah.

Chase Insogna: 3:41 

You’ve got consultants that maybe have W-2 and 1099 income. You know there’s that aspect. You’ve got just business owners. Do you make the estimated quarterly payments, do you not? I would say half my clients are it’s 50-50 over here Half like to pay it quarterly because they don’t want the penalty. The other half, including myself, I don’t pay it because I want my cash liquid as a business owner in case I need to go get some of it and use it. I don’t want to have to go to get a line of credit, chase down a bank or a hard money lender to get cash. So I keep it in a high yield savings account and I pay that estimated tax penalty on my 1040, which is very minimal, by the way. So I like to approach it with my clients as it’s your own line of credit interest, basically that you’re paying on that money to keep your cash liquid throughout the year as a business owner. It doesn’t get a paycheck for extra money. So it just depends on the situation for everybody.

Brad Nelson: 4:39 

Yeah, I love that. You brought up, by the way, the tax refund, because I was just talking to someone close to me. I was out to lunch with them and they said they were getting a tax refund and they said they call it a bonus. I’m like, no, it’s not. It’s not a bonus, it is, you said, the IRS too much money and they’re just sending it back to you. That’s it.

Chase Insogna: 4:54 

And you could have the government.

Brad Nelson: 4:56 

Right Right Bonus for the government because they get to use that money throughout the year and make money off of it.

Chase Insogna: 5:00 

Especially in a high interest rate environment like we’re recording this in 2025 here. So you can earn four or 5% on your money just in a savings brokerage account. Just think if you’re getting a $10,000 refund, that’s four or $500 a year that you’re missing out on that. You could be using cash for yourself, Something to think about as you adjust your withholdings there.

Brad Nelson: 5:23 

Yeah, yeah, you’re right. You’re absolutely right, because if you’re someone who is just living paycheck to paycheck or every month is a little bit of a stretch and you’re getting these big refunds, you could easily put some new cash flow by dispersing this refund throughout the year and actually getting that money more up front rather than giving it to the IRS. Yeah, so if you’re getting a big refund, something for you guys to think about what are some common misconceptions about tax or maybe some of the big mistakes that you see people making? I’ve worked with small business owners. Now I don’t get into taxes with them, but just talking to them about their finances. I know for some small business owners I know one of the biggest mistakes is they don’t file at all. It’s like yikes, you can’t be doing that. But what are some of the common mistakes that you see people making?

Chase Insogna: 6:01 

Definitely have some that don’t file. That’s not a good idea, especially if you owe or owe to refund after three years the IRS doesn’t give it back to you technically, so you’re missing out there if you have a refund. But I think the biggest thing is if you have to have to be doing a mortgage, you can use TurboTax. It’s not a big deal, I mean, it’s pretty straightforward.

Chase Insogna: 6:19 

Yeah not really going to miss out on anything. We tell clients when you have a small business, you have 1099 income, you have rental property, you have stock options. We’re based in Austin, so there’s a lot of tech here with a lot of stock issued and exercise. Those is where tax software one does not play in the gray area and two is tricky on capturing basis on options. So if you’re getting into those things, I mean I would definitely recommend getting a CPA and adding value. Yeah, you know, you’re paying to get your return done.

Chase Insogna: 6:50 

I got a side note. I got a friend here, that long friend. He texts me. He’s like hey, you know, I owe a lot of money to the IRS because he had a bunch of stock options with one of the Fain companies. And I was like, yeah, my team does taxes. I don’t personally do taxes Actually recording that, my team does it here at the firm. And so I’m like hey, you want to pay my team to do it? They’re happy to. It’s a very reasonable price. And he’s like, oh, I just do it with a free software. He sent me the link. I’m like well, you get what you pay for.

Chase Insogna: 7:21 

You don’t want to confirm that. You owe that to the IRS and it’s a lot of money. I’m not going to give out the amount, but it’s a lot in most people’s eyes. No-transcript minimal amount to just confirm this is the big check you’re going to write to the IRS. That’s on you, buddy, so I don’t know what to tell you.

Brad Nelson: 7:39 

Yeah, right, I would totally agree. Yeah, if you’re a business owner and hiring a CPA and having them on your financial team, I think is I would never do it. I have a CPA. I send it all to them. When they just keep me updated, it’s so nice and it is worth the investment, just from a time-saving standpoint, of making sure that they caught everything, because I don’t keep up on it all the time. It’s not what we focus on here, so having that expert in your corner is really important.

Chase Insogna: 8:02 

Yeah, and I would say with, especially if you have 1099 income or rental property. Some of the examples I like to give just off the cuffs tax software does not play in the gray area. So if you own a rental property, for example, they’re not going to ask you for your cell phone or your home Internet that you manage the property to.

Chase Insogna: 8:19 

That’s like a couple thousand bucks maybe you know 800 for Internet or 200 for your phone that you could take as a deduction on your rental property. Same thing for 299 income. They ask for your home office but they don’t ask you to split out home internet. So you’re going to get pennies on the dollar for recording your internet on a tax software versus the $800 deduction on your Schedule C for the small business. So again, that’s why I always recommend, if you have those things, the CPA can add value. We’re always looking to add value on the returns we prepare. That’s why we recommend TurboTax or whatever for W-2 and a mortgage tax-outwear, because there’s really no value out there. We want returns where we know we’re going to add value and our fees justify preparing it for you Right.

Brad Nelson: 9:04 

Can we flip it a little bit and talk a little bit about debt? You mentioned in your bio you help people with debt payoff strategies and helping people turn around their finances. Do taxes fit in with debt payoff or anything, or are they separate or what are your thoughts on that?

Chase Insogna: 9:18 

I would say certainly don’t get into tax debt because it never goes away. A big thing. With business owners or people that own e-commerce that have a lot of cash flow type businesses, the big thing they run into is they don’t plan for the taxes due in April and then they just get in the debt. They just build up debt and they’re behind always paying it off with current money. That’s a situation you don’t want to be in. So we try to advise our clients when we’re working with them monthly with businesses, that hey, this is where your estimated tax is this month, this quarter. You need to put this in a savings account. It’s not going to go away come April. Even though it might not be in the bank account, your taxable profit still exists, that you’re going to owe it on because you’re reinvesting the money back in the business. So that’s a big one.

Chase Insogna: 10:07 

Just personally, I had debt when I was younger. I had a student loan. It took me 10 years to pay it off. I had credit card debt that I was constantly moving from zero interest card to zero interest card and paying the 3%, and it took me a good 10 or 15 years out of college to finally get over that hump and not have that debt burden anymore. And I would say to your viewers, if you’re still in that debt window and you get past it, once you go over the mountaintop and start down the other side, where you’re investing your money, that you’re not having to pay debt on.

Chase Insogna: 10:46 

It’s a totally different situation of my own personal wealth after I got over that debt mountain and it really does build on itself quickly when you put it in dividend paying stocks and it does make a huge difference. Now, outside of a mortgage, I’ll personally never pay that off. I hit the bottom in 2020 at two, three, seven, five, 30 years. So that’s like free money to me. But I’d say for most people, just if you can get out of the student loan debt, make sure your taxes are paid off. Get out of credit card debt. Make sure those are paid off every month. It really does make a difference personally.

Brad Nelson: 11:27 

Yeah, and that’s I was going to ask you that. I also want to talk to you a little bit about, you know, investing and debt payoff and where you feel in your profession where that fits in. But for someone who is, say, struggling with credit cards and student loans and they’re dealing with a lot of financial stress, and as a tax professional and expert, where would you recommend because you’ve been through this?

Chase Insogna: 11:48 

you’ve gotten out of debt yourself. What do you feel made the biggest difference for you? Well, I would say, to back up there, I heard from JP Morgan one time people only have a two-year horizon and I told you it took me 10 years to pay off a student loan at 15 to get a credit card debt. It’s not going to be overnight. If you budget your money and you’re diligent at paying down the debt over time, it will eventually turn a corner for you. But it’s going to take time and you’re going to have to invest and change your lifestyle, maybe to become debt-free. But I would say, on the back end of that, once you are debt-free, being able to max out retirement accounts, being able to build up short-term savings accounts, having a lot of liquid cash, putting all the other cash in my brokerage accounts and letting it earn money on the money that it’s earning it definitely is a huge difference, you know, knowing what it can do for you after the fact.

Brad Nelson: 12:42 

So going back to my investing question is a lot of people ask, brad, when should I start thinking about investing? I’m paying off my credit cards, I’m paying off my student loans, I’ve got a vehicle payment I’m paying on and there’s not a whole heck of a lot of money left at the end of the month to start investing. But should I start thinking about it? Is there anything that you could say to individuals who are in that situation, even from a tax standpoint, that they may want to think about?

Chase Insogna: 13:06 

Oh yeah, I apologize, I didn’t understand your question. Yeah, I would recommend if you’re at work and you get a match, I would at least take the match if your budget affords it. Yeah, beyond that, I don’t recommend putting any more into retirement accounts beyond the company match until your credit cards are paid off and then from there depends on your student loans. If it’s not a payment that adjusts based off your tax return annually, I would say let it run out for the term depending on the interest rate. If you’re six or five or 6% or under, you’re fine, but in these days if you’re eight to 10, you might want to fast track that a little bit. And then from there at least, the next step is to just do an individual IRA, which is 7K individuals right now, you and the spouse, and do one. If your income is too high, you can always do a traditional IRA and you can backdoor that into a Roth to grow tax-free. That’s a start and then from there the next level is to go back to your 401k. Beyond the match, I would be maxing out a Roth IRA. If you’re under age 55, I’d be putting as much possible in a Roth.

Chase Insogna: 14:20 

I know it goes back and forth between the conversation there of traditional pre-tax and post-tax. But I would say I just talked to somebody the other day. I told them what you want to do is follow the old people and their advice, because if you listen to most of them in their 60s and 70s when they’re drawing social security, they’re all like we wish we would have put more money in Roth. So go listen to those people and then that’s what I tell my clients. Like Roth is the best option because when you get into retirement you don’t want that taxable income, you don’t want the RMDs to have to deal with against your social security.

Chase Insogna: 14:56 

So go back to your 401k, max that out for the employee portion up to Roth and then from there. Then if you have a small business, then we get into other retirement plans that we can work on, but if you’re an individual W-2 employee, from there it’s brokerage account. Go find a financial advisor, manage your own portfolio, like I do, and just find what philosophy fits you best. I do dividend stocks and value investor. So go, start building your brokerage account, letting it earn money for you as you look to retire one day or saving for something important for you.

Brad Nelson: 15:29 

Yeah, that’s great. So if I’m interested in hiring a CPA, what are some things that I should watch out for? Do you you know, like there’s these corner name brand tax outfits that are out there? They put on all the Super Bowl commercials and everything. It’s tax refund season, and what are things that people should know, because most people are going into this with very little education. What are some signs to look out for like you’re working with the wrong person, or what are some things maybe to qualify them that they’re experienced enough to help you with your particular tax situation?

Chase Insogna: 15:59 

A great question, I would say. They’re just entering numbers and giving you the paperback and go file it and what their value is For us. We’re pushing clients for deductions. We’re constantly asking them like, hey, do you have this, do you have this? We have a whole list of questions that we ask.

Chase Insogna: 16:17 

I’d also say, if there’s a lot of individual tax shops out there, I like to tell your audience that there’s no requirement to be a tax professional and file taxes with the IRS. You don’t need a certificate, you don’t need a degree. You can literally hosting the show, can go tomorrow and open up your own tax shop, pay 40 bucks to e-file returns and now you’re a tax expert. That’s all it takes, yikes. And if you’re not, at least an enrolled agent or a CPA.

Chase Insogna: 16:49 

Those are the two things I think your viewers should look for, because, at the end of the day, if something’s done wrong on your return and they’re not one of those two designations, there’s no recourse for you to go back to and chase down the mistakes that were made and have them affect their career with the mistakes they made. So again, I see it all the time on TikTok and Instagram and Facebook. All these people in these tax shops out there, these individuals just doing taxes. That’s not the person you want to work with, in my opinion. You want somebody that’s at least have put forth an effort in continuing education with an enrolled agent license and then from there certainly a CPA that’s licensed and state board protected.

Brad Nelson: 17:34 

That is fascinating to me, that you do not need a license to file taxes for people professionally. I get if you’re helping out your brother or your sister, your mom or your dad, but man, to do it professionally you don’t need a license. I never knew that. That’s crazy.

Chase Insogna: 17:46 

Wow, and America is one of the only countries that allows this. I mean, you have foreign rental property and you can’t just open up a tax shop and file taxes in most countries without any education.

Brad Nelson: 18:00 

Yeah, wow, fascinating Well, chase. This has been some great information for our listeners. If people want to learn more about you, where can they get that information from?

Chase Insogna: 18:08 

Yeah, happy to help. You can visit our website at insognacpacom. It’s I-N-S-O-G-N-A-C-P-Acom. Just hit us up on the contact page. We have a team of 20 people here, so it’s not me doing all the with you see if we’re the right fit. Cool Sounds good man.

Brad Nelson: 18:27 

Well, thanks so much for being on the show and just sharing your expert advice and just some amazing insight, and hopefully a lot of us learned some things here today too.

Brad Nelson: 18:34 

Yeah, thanks for having me. Yeah, absolutely All right, guys, if you’re ready to break free from living paycheck to paycheck, you want to reduce financial stress? You want to build savings, finally pay off your debt for good. But again you’re not sure where to get started. Don’t worry, we’ve got you covered here. Simplify my Money is sent each Sunday to your email. It’s your step-by-step roadmap to better financial control and you also learn easy to follow strategies to manage your money effectively. It’s going to be stress-free money decisions. Of all the tools that we’re going to give you, these are going to help you simplify your financial life with proven tips that actually work. You’re also going to gain the tools and confidence to tackle your financial goals head on. You can sign up for Simplify my Money by clicking the link at the top of the show notes. Hey, we get that getting out of debt isn’t easy, but with our help and with your consistency and discipline, we promise you guys, this will be some of the best work that you guys do in your entire life.