America's 'Funniest Tax Guy' offers tips to Longboaters

Edward Lyon, chief tax planner with Excel Empire and the "Funniest Tax Guy in America," frames filing taxes as navigating a set of traffic signals

"Red lights" are flat items that straightforwardly need to be paid, like gross income as broadly defined in Section 61. Other areas are "green lights," where a savvy tax advisor can find savings for their clients. For example, business owners can examine how they file medical expenses, taking something that could possibly be tax-deductible if itemized to absolutely deductible under an applicable code.

"A friend and client of mine plays hockey at age 58," he said with a comment about how wise that may or may not be. "He tore his shoulder, and his doctor prescribed a hot tub. So, we deducted the hot tub under the medical expense reimbursement plan. That is an example of a green light."

Lyon held a pre-tax season workshop organized by the Longboat Key Chamber of Commerce on March 10 at Lido Beach Resort. He recently co-wrote a book with Longboater Michael Jaspan, titled "How to Beat the IRS, Legally." Jaspan is the co-founder of Safe Money Advisory, LLC.

Photo by Dana Kampa

Lyon is the founder of Tax Master Network with the Tax Architect software that has trained several thousand tax professionals.

He presented his perspective that no one should pay more in taxes than they legally owe.

Sometimes, it takes some creativity on the part of a tax professional to find those savings, Lyon said. However, any such "green light" solutions must adhere to legal — and ethical — obligations, he emphasized.

"My goal isn't to make you an expert in taxes," he told attendees. "My goal is to change the way you think about taxes. ... Tax planning is something most anybody can do."

Lyon said the No. 1 mistake he sees clients make is inadequate planning. There is truth to the cliche that failing to plan is planning to fail.

"A lot of people will think, 'I make my income from a W-2,' or, 'I'm retired, and I just have IRA contributions and investment income and Social Security, and there are no fancy tax strategies I can use to offset that income.' In fact, that's often not the case."

Lyon said adequate tax planning is imperative for business owners, considering it can be one of their top expenses.

Jaspan also cited a Forbes statistic indicating that about 93% of small businesses overpay on taxes.

"That's a startling number, a very high percentage," he said. "However, we also have strategies to recapture taxes that have been paid, going back up to three years."

Lyon framed investments in drumming up business, like social media campaigns, as "financial offense." But spending less money is an important "financial defense," and tax savings is one big area to examine.

"For most business owners, taxes are their biggest single expense — more than your mortgage, more than your kids' college education, more than your Disney vacation fund," he said. "If you're looking to spend less money, why not start with the biggest expense?"

Planning strategies should ideally be as proactive as possible and detailed, not merely rolling over what worked last year to this year, Lyon said.

"The problem is, most people don't understand the amount of planning they can do and the opportunities they have to pay less," he added.

Many filers start building their financial advising team with a Certified Public Accountant. But Lyon said CPAs often do a good job of telling clients what they owe, but not necessarily how to pay less or figure out when is the smartest time to plan for deductions.

"There are a lot of strategies that are tax time machines," he said. "For those who have seen the 'Back to the Future' movies, we do a lot with DeLoreans in tax planning."

Other tips he offered included not letting potential future changes to tax law overshadow what makes sense now.

Lyon said he started injecting humor into his tax coaching to help make a technical, somewhat daunting subject approachable.