Hey, Sharon, how are you? I'm good. How are you, Jeremy? I'm good. I'm good. We've both been running again today, but we're going to talk about something that's going to be so interesting to you today. Oh, absolutely. I mean, you've got death and taxes. I'm not real sure which is something I'd rather discuss, but today we're going to be talking about taxes. Yeah. And we're really going to be talking about tax compliance versus tax avoidance. And then we're going to throw in a third term called tax evasion. And that one, you know, that one we'll spend a little bit of time on, but, you know, one of the things when CRNAs do go 1099 is you want to make sure that you're taking advantage of every opportunity that is available to you. And, but we don't want to step over the line. So let's kind of define this. So tax compliance, Sharon, anytime you hear compliance, you know, what do you think of? That you're adhering to something. Exactly right. I mean, it basically says that we're doing things the right way. We're doing things the way the government says we should be doing them. And we're not going to get fines and interest payments and possibly jail time. And, you know, tax compliance also says everybody's paying their fair share. You know, the government has set up that they want everybody to pay their fair share, whatever that means. People think that can be subjective. But I heard you say something the other day and you said, you know, you don't like paying taxes, but you do like the benefits that it gives me. Driving on roads, walking on sidewalks, you know, we all like those things, but none of us like to pay taxes. And I need to be compliant because orange is not in my color wheel. What about black and white stripes? Well, the black and white's good, but the stripes is a no. Well, you know, we have a duty to follow all the regulations that the government has set for us. I mean, we should file our taxes on time unless you file an extension. There's nothing wrong with that as long as you do it right. Making sure you've got accurate records, paying the taxes owed. You know, a lot of times I find that people don't understand this, that one, there's nothing wrong with filing an extension for your taxes. Thank God we do it every year. I do it every year too. That's because you're doing everybody else's taxes, you don't have time to do your own. Very true. But you know, at that time, when taxes are due, come April, your tax is due at that moment. If you don't pay the tax and you wait to file till September or October, you are going to have penalties and interest in there. So complying with all that is a big deal, you know, and in order to do that, you've got to understand the tax laws and Sharon, I can tell you, nobody truthfully understands the tax laws, but you know, even if you've got a good account at CPA, you know, a tax attorney, there's a lot that goes into that. There's a lot of regulations and a lot of times you do need professional help. You know, I always kind of look back at this and I think, you know, could I intubate myself? Jeremy can intubate himself. But should you? But should I? And the one thing I cannot do absolutely without a doubt, Sharon, is wake myself up. So everybody has a job. Everybody has something that they're good at. And taxes are something that you don't want to play with. You want to work with somebody that can obviously help you get the most bang for buck. So let's define this thing called tax avoidance now. So tax avoidance, on the other hand, is legal. You know, what you're doing is you're trying to reduce the amount of tax that you owe either through as an individual or as a business. You know, sometimes people can view this as ethically questionable. And what does that mean, Sharon? Why would people view this as ethically questionable? Well, they're wondering if you are not paying your fair share. Exactly. And that is our duty as citizens to pay our fair share. But tax avoidance could be such things as contributing the maximum amount to your retirement plan. See, I love this whole thing, because I think the terminology is off-putting. Tax avoidance. There needs to be another term for it, because it can be a positive thing. Well, absolutely. I mean, one, you're saving for retirement, you're making use of the tax laws. You know, what are other things that you can avoid taxes with, you know? If you're spending money on marketing your business, that's an avoidance. If you are taking clients out to dinner, that could be an avoidance strategy. If you have a vehicle that you purchased for business use, that is a tax avoidance strategy. I mean, there are a lot of strategies out there. I did that. Yes. And there are a lot of them that you can utilize to avoid paying more taxes. And people do that, one, to lower their income and minimize the liability that they might owe at tax time. And there are a lot of loopholes out there, but your average person has no idea what that is. You know, we've got the most complicated tax system of anywhere in the world. Sharon, it is a hodgepodge of if you do this and go around your right arm and you duck under your elbow and you come back around your knee. And, you know, there are a lot of things you can do, but you've got to know that you can do them. Right. Yeah. So, you know, taking advantage of credits that are possibly out there. You know, the child tax credit. Some CRNAs get the child tax credit now. Not a lot of people are using offshore accounts anymore, especially CRNAs. But there are things that you can do as well for that. So that's the definition of tax avoidance. Tax avoidance is taking advantage of the laws and the loopholes to make sure that you are paying the correct amount of tax. You're not just taking what the government says you have to do. That's compliance. This is things we have to do. Tax avoidance is saying, all right, I'm going to delve down into the code, the IRS code, and I'm going to see what are some strategies that I can utilize to lower my taxes. So that's, you see the differences there? I got it. And we've got a whole module on things you can do to avoid taxes. Right. Or to lower your taxes. Yes. Well, see, that's why tax avoidance sounds like a misnomer. Yeah. Well, some people actually cross that up with tax evasion. Evasion. And tax evasion is where you look good in pink. Like the Stewart? Well, you remember down in Davidson County where you're from. Oh, yes. The guys down there in jail, they wore pink. You made them wear pink. Yeah. So I thought you'd pick up on that one. You know, tax avoidance is the failure to pay when you deliberately underpay your taxes. Now, what are some things there? You're lying. Okay, that's the bottom line. You're lying and you know you're lying about something. But you just don't want to pay. You know, maybe that vehicle that you bought isn't really for business purposes, but you've written it off. Or you're not utilizing it 50% for business. Or you possibly invoked a strategy of buying an RV to do your traveling around the country. And you're actually utilizing that for personal use when you really shouldn't be. You owe the IRS money and you're not paying them money, basically. And the consequences of tax evasion can be pretty severe. I mean, you've got penalties, fines, interest, and even criminal penalties if they prove that you acted fraudulently. And, you know, was it just something that I did because I just didn't know? Or was it something that I intentionally knew and I was fraudulent in? And, you know, that's when they can pursue those penalties to make you go in stripes or orange or whatever there. So those are the differences between the three. Is that pretty clear? Got it. Okay. All right. So evasion is bad. Avoidance is good. And all of us want to comply. I like it. You like it. So the consequences of tax evasion, you know, as we talked about, are a lot of legal penalties. You can even be jailed. We said that, you know, you can have backlash about that. People find out that you're a tax evasion person and you're probably not going to be known in social circles the same way anymore. And then it really does harm the country because it reduces the revenue streams. I mean, you know, some of us are questionable about what the government spends money on, but we do have a duty to pay taxes. And these are just some of the consequences there of it. So, again, concluding here, we want to comply. We don't want to evade. We always want to avoid.

tax compliance

tax avoidance

tax evasion

government regulations

financial responsibility