9/3/21 Spent my whole life covering up the facts about my money. A lot of this money stuff was constantly shifting around in my head the ways that I can get creative around money, before getting clarity. I grew up hearing dad, my uncle, and my granddad regularly scheming up ways to get creative about accounting, finding ways to save from having to pay much in taxes. I consider myself blessed to have grown up in a family where the discuss around money was not hidden or some secret thing. However, I remember one story that my uncle shared at breakfast on morning at the Waffle House.
He was describing how his Chevy truck was a double tax write off. He created a tax write off for the Microtel Inn that he owned because he tracked the mileage and wrote off all the miles driven. He said he had to go buy supplies for the hotel and run errands around town, so every mile got written off. Then he said that for his car candy stop, Classic Creations, he writes off all the vehicle’s expenses including items like gas, tires, oil changes, tinted windows, a nice radio, brush guard, toolbox, etc. Because he had a business where he wanted to be able to show the clients what the nice radio sounds like and how the truck amenities looked, he had to have a showroom vehicle for them to see how good it looked.
The tax law says that you pick either one or the other. You either write off all the mileage, showing personal vs business miles driven for the tax year or you get to write off all of the expenses related to the vehicle. But you can’t write off mileage one year, then switch to expenses the next year because someone had a bunch of maintenance that year. You have to pretty much pick one method and stay consistent. Well, I was confused because he was doing both! Keeping the receipts for the expenses and turning them in for the tax return for the car candy shop. Then he was tracking the miles and turning those into the hotel as an expense.
My dad said, “Well, isn’t that double dipping?” Jamie said “Yeah, but they take so much of my money from me, I’m going to get away with as much as I can get away with.”
So basically, every single item of his truck was written off between his two separate businesses, thinking that an auditor would never check and catch him. He was taking two different forms of vehicle tax expenses for the same truck and was proud of it.
I grew up hiding my money issues from others, but mainly hiding the truth about money from myself; living in vagueness. It means that i stayed in vagueness towards others around money but what I didn’t realize was that what really happened is that I wasn’t looking at the truth about the financial situation myself. It wasn’t like I was vague with others, but somehow behind-the-scenes I was clear with myself around money. No, I didn’t have the tools or willingness to get clarity and didn’t want help either. I just kept hiding and covering things up.
I constantly tried to manipulate the system, nonstop. I tried to write off dinners with my wife and daughter as “business meals”, keeping receipts from trips to Lowes and just about every store I could scheming ways write on the receipt a word that would leave it just vague enough that the tax auditor wouldn’t know it was actually for personal. I felt some sense of entitlement thinking that it was my right as a business owner to cut as much as I could on paying taxes. That is what business owners do, right?
No, this actually means that the ‘bottom line’ of the business financial statements won’t be showing accurate numbers. When I would try to print the report to show a P&L Statement to a banker or investor, I would have to fix the numbers to show that I was actually making more money. It is a double edged sword. For tax purposes, if I show that the company is not making much money so that I didn’t have to pay much in taxes, then the report looks like I am a struggling business. If I shape the books to look like I am a profitable company, then be prepared to pay taxes. The concept of being truthful and honest in my financial and accounting behaviors as a business owner was not considered in the past. What happened was that that sketchiness can be felt by employees and vendors. They can feel the dishonesty and might even think that “If they screw the IRS, then they might screw me as an employee.” Telling the truth is a much better route to take.
