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Casey Meyeres is a Tax Partner with ProVision serving successful business owners, entrepreneurs, professionals, and investors with tax and wealth planning to help achieve their goal of financial freedom.
With over 24 years of experience in public accounting, ranging from tax and audit compliance and consulting for a broad range of public and privately held companies, business owners, and high net worth individuals.
The tax season is coming up and you’re looking for ways to save on taxes? This episode is for you! With Casey’s comprehensive knowledge of different industries, you will be able to find which strategy works best with potential investments in order to lower those pesky bills you receive from Uncle Sam every year.
Casey takes you through the ins and outs of tax strategies to help you save money. He provides detailed information about how depreciation impacts your wealth’s bottom line, as well as what steps are next for those interested in exploring this avenue – tax efficiency!
With the wealth of opportunities available to W2 employees, it’s easy for side hustlers and entrepreneurs alike. As long as you have that entrepreneurial spirit Casey is there with a helping hand! Tune in now and don’t miss out on this amazing episode.
In This Episode
- Casey’s background and wealth journey.
- Casey’s wealth strategy and how it has worked for him.
- Tax strategies for investing in oil & gas.
- Bonus depreciation and other advanced tax strategies.
- Creating a side hustle as part of your tax strategy.
- Casey’s biggest wealth strategy advice for tax efficiency.
Welcome to today’s episode of Wealth Strategy Secrets. We’re excited to have Casey Meyeres with us. Casey is a tax partner at ProVision, where he supports successful business owners, entrepreneurs, professionals, and investors with tax and wealth planning to help them achieve financial freedom. With over 24 years of experience in public accounting, Casey specializes in tax and audit compliance and consulting for a wide range of public and privately held companies, high-net-worth individuals, and business owners. His industry experience spans real estate, construction, retail, manufacturing, IT, media, homebuilding, and professional services. Casey holds a bachelor’s degree in accounting and finance from the University of Arizona and is an active member of the AICPA and ASCPA.
Casey, welcome to the show!
Casey: Thanks, Dave. I appreciate being here.
Dave: Absolutely. I’m excited about our conversation today. I know our listeners will find great value in it. I’d like to kick things off with a bit of disclosure: Casey, you’ve been my CPA for about seven or eight years now. Before that, I ran a few businesses and spent years searching for the right CPA. It was a journey where I hired and fired multiple firms, as I knew there was a different approach out there. Once I learned more about taxes, I wanted someone who could fulfill that role on my team. So for our listeners, Casey and his team are not your average CPAs.
To start, Casey, could you tell us a bit about your background and how you got into this field, along with your wealth journey?
Casey: Sure! I’ve been in public accounting for about 25 years now; this January will mark my 25th year. Over those years, I’ve gained a lot of experience. I joined ProVision just over 10 years ago, after working with Deloitte—the world’s largest public accounting firm at the time. At Deloitte, I was in their Private Client Advisor group, working with high-net-worth individuals, entrepreneurs, and small businesses. Although it was a large firm, it was quite compliance-focused. I wanted to be a partner and have equity, but Deloitte offered more director roles than partnership tracks.
I met Tom Wheelwright at ProVision, and we became partners. A few years ago, we purchased the firm from him, though we still work closely with him. ProVision’s unique focus is a forward-looking tax strategy—helping clients minimize taxes and grow wealth in a tax-efficient way. For most entrepreneurs and business owners, taxes are one of the largest expenses, so we focus on reducing that burden to free up capital for reinvestment. I’ve learned a great deal from our clients over the past 10 years about building wealth, and I’ve implemented these strategies in my own life as well.
Grow your wealth and control your destiny.
Dave: That’s amazing. And you’ve personally been building wealth through investments, right?
Casey: Yes. Becoming an equity partner at ProVision was a key part of my wealth strategy. Employees can make a good income, but true wealth often comes from business ownership. After covering living expenses, I’ve reinvested surplus earnings. I own several single-family rentals in Arizona, which I purchased when interest rates and property prices were favorable. The market is a bit inflated now, so I’m exploring franchise opportunities for future investments.
Dave: That’s insightful. I appreciate how you break down these concepts, like the difference between being an employee, self-employed, a business owner, or an investor. You helped me understand that as an employee, I was paying the highest tax rates. By transitioning to business ownership and investing, I was able to reduce my tax burden significantly. Would you say that’s accurate?
Casey: Absolutely. The tax code is designed with incentives, especially for business owners. If you’re an employee, you generally face the highest tax rates. However business owners can lower their effective tax rates to around 20%, and investors may reduce their tax rates even further. The government wants businesses to grow the economy, so incentives are in place to support that.
Dave: That’s a great point. For those who may still be in a W-2 job, is there any advantage to starting a side business to unlock some of these tax benefits?
Casey: Definitely. A side hustle can allow you to access deductions for expenses like home office, travel, and dining, which are not deductible for employees. Whether it’s an online business, a rental property, or something else, generating revenue from a side business can open the door to tax deductions and help transition to a business mindset.
Dave: That’s fantastic advice. Something else that stood out to me about working with your team is the proactive approach. Instead of waiting until tax season to review past numbers, we developed a forward-looking strategy together. Can you explain how you set that up for clients?
Casey: Certainly. Many people only talk to their CPAs once a year, and it’s often a surprise regarding what they owe or receive as a refund. At ProVision, we take a more strategic approach with a tax reduction plan. Clients typically engage us in a series of six meetings, during which we assess all of their assets, investments, and business entities. We look at things from both asset protection and tax efficiency perspectives. By understanding clients’ goals, we can tailor the best structure for their needs and anticipate future needs, whether they’re looking to sell, hold, or pass down their business.
Dave: That’s invaluable. Thanks, Casey. So, I think we did a great job covering the strategy piece. Now, let’s talk tactics a little bit. Since it’s year-end, there’s still an opportunity for people to make some moves with tax planning. Let’s focus specifically on oil and gas. We have many investors in oil and gas opportunities. Could you talk a bit about IDCs and how the structure works?
Casey: Sure. In oil and gas, there are different options—some wells are already income-producing, and others are developmental or exploratory. For income-producing wells, the tax benefits may be less significant compared to developmental ones, where IDCs (Intangible Drilling Costs) come into play. For instance, with a $100,000 investment, you might receive an $80,000 or $90,000 deduction in the first year, with additional deductions in subsequent years. The tax code incentivizes this kind of exploratory development in oil and gas.
Now, if someone invests $100,000 in a fund and generates losses, they would usually be passive losses, offsetting passive income. Without passive income, these losses carry forward until the disposal of the asset or when passive income is generated. However, with oil and gas investments using IDCs, you can deduct those against your W-2 income, provided you hold the position as a general partner during the IDC benefit period.
Dave: Typically, in oil and gas ventures, you might start as a general partner in the first year to receive the tax benefits. Once those losses are exhausted, and the venture begins generating income, it often transitions to an LP (limited partnership) interest. If it doesn’t, you could move it into a single-member LLC or another asset protection structure. Do active losses in oil and gas carry forward like passive losses?
Casey: Yes. If you had non-passive or active losses—say, $500,000 in oil and gas losses—and $300,000 in W-2 income, you could offset the W-2 income, creating a net operating loss to carry forward for future years.
Another question people often have is whether they can receive tax benefits by investing through an entity or trust, or if it’s better to invest individually. I’ve had clients mistakenly invest through an LLC for asset protection, but lose tax benefits in the process. With a single-member LLC, it’s disregarded for tax but not for legal purposes.
However, these benefits are best accessed when invested in your name initially. Afterward, if your interest converts from GP to LP, you can move it to a single-member LLC or another asset protection trust for additional security.
Dave: Investing in energy is one of the top strategies listed in Tom’s latest book, Win-Win Wealth Strategy. Any other thoughts on year-end moves?
Casey: In energy, solar investments offer substantial tax benefits. For 2022, 100% bonus depreciation allows full write-offs on equipment, regardless of losses. This phase down to 80% in 2023, 60% in 2024, and so on. Solar investments typically yield passive losses, which may offset other passive income sources. Energy (oil, gas, solar) and real estate are my top choices for tax and wealth creation.
Real estate is passive by default, generating losses that offset passive income. If you or your spouse qualifies as a real estate professional, those passive losses can become non-passive, with further tax benefits. Lastly, there are conservation easements, although the IRS scrutinizes these heavily. The EARN Act, likely to pass in December, may restrict them significantly, limiting benefits to the amount invested.
We also reverse-plan when beneficial. For example, a client with $40,000 in itemized deductions might lose these if they have no income, so we may adjust their income to match, preserving the deductions.
Another example: A C-corp distributing qualified dividends up to $80,000, capital gain tax-free, while utilizing deductions. It’s about efficient tax planning over a 1-year, 3-year, and 5-year horizon.
Dave: I love that, Casey. You’re doing financial engineering and looking at the whole picture instead of the typical rearview approach.
Casey: Exactly.
Dave: Let’s also touch on syndications and bonus depreciation phasing out. With 100% available this year, any final strategies?
Casey: If Congress reauthorizes it, that may depend on political shifts. Historically, bonus depreciation fluctuated until 2017, when Trump expanded it to include used and new equipment. Going forward, politics will likely influence these tax incentives.
Dave: This is the last year to get 100%. Do you have any thoughts or strategies as it starts to dwindle over the next few years? Do you think Congress will put it back into play? What are your latest thoughts on this?
Casey: Good question. If they put it back into play, it depends on the politics of it. If the House stays Republican, as it seems likely, I don’t expect many tax changes. A couple of years ago, when Biden came in, everyone anticipated major changes, but due to political factors, nothing significant went through. So, if things remain as projected, I don’t foresee much change.
Now, if a Republican takes office as president in a couple of years, there could be some adjustments. For instance, when Trump took office, he implemented changes to bonus depreciation. Originally introduced in 2001 after 9/11 through the Bush Tax Act to stimulate the economy, bonus depreciation applied only to new equipment. For instance, it applied to new vehicles or newly constructed apartment complexes if a cost segregation study was performed. Over the years, the bonus depreciation rates have fluctuated from 30% to 50% and sometimes even 0% from 2001 until 2017.
The main difference under Trump was moving bonus depreciation to 100%, applicable to both new and used equipment. Before 2017, if you bought a used Ford F-150, you wouldn’t get the full bonus depreciation. But from 2017, even used vehicles and existing apartment complexes became eligible for 100% bonus depreciation, allowing significant write-offs. For example, a $50,000 vehicle or a $10 million apartment complex could potentially see up to a 40% write-off in the first year with a cost segregation study.
Dave: Looking forward, while bonus depreciation was 100% in 2022, it’s set to reduce to 80% in 2023, 60% in 2024, and so forth, phasing out by 2027. Even after this, bonus depreciation could still be beneficial, just not as lucrative as it is now.
Now, let’s talk about recapture as it relates to bonus depreciation. With bonus depreciation, the focus is on shorter-life assets, not the 39-year period typical for commercial property or the 27.5 years for residential rentals like multifamily. Cost segregation allows you to allocate some assets to shorter depreciation periods of 15, 7, or 5 years. When you sell the property, there is depreciation recapture on these shorter-life assets, but it depends on the asset’s current value. For instance, if you allocate $100,000 to dishwashers in an apartment complex, their value may decrease significantly after five years, so recapture would only be on the remaining value, not the full initial amount. This can result in a lower recapture amount than initially expected.
Casey: For entrepreneurs and others considering exits, especially with significant capital gains, there are strategies to defer taxes. One option is purchasing new real estate to benefit from bonus depreciation or using a 1031 exchange to defer gains. We’re not typically focused on deferrals, but for some, this can provide temporary tax relief, with the potential for a permanent step-up in basis if held until passing.
For business or real estate sales, deferred sales trusts (DSTs) offer another deferral strategy by structuring the sale as an installment sale, spreading tax payments over time. This complex option allows sellers to avoid a large initial tax hit, instead paying taxes on smaller amounts annually. Opportunity zones are another route—if you reinvest within six months, you can defer capital gains. This might be ideal for individuals selling a business who want to transition into real estate, providing tax efficiency if they establish real estate professional status.
If an entrepreneur sells a business in 2022 but transitions to real estate in 2023, becoming a real estate professional with 750 hours or more, they could potentially align the business sale income with real estate losses to offset taxes. Real estate allows for leverage, so achieving significant deductions without committing the full sale proceeds is often possible.
Dave: For anyone looking to accelerate their wealth journey, focusing on tax-efficient strategies can make a big difference. The traditional route of working a W-2 job, contributing to a 401(k), and hoping for market growth might help, but taking control of your financial future—through business or side investments—can be far more impactful.
Casey: Thanks for having me on the show today, Dave. You’ve shared a wealth of information, and I’m sure people will find a ton of value.
Dave: If listeners want to learn more or connect, where can they reach you?
Casey: They can visit us at provisionwealth.com. There, you can request a free consultation—just mention you found us on Dave’s podcast, and we’ll take care of you. You can also call us at 480-467-4400. We’re based in Phoenix, and if you’re ever in town, feel free to stop by our newly remodeled downtown office.
You can request a free consultation. In the comment section, just reference that you saw us on Dave’s podcast, and we’ll take care of you. We’ll review those inbound calls to see if there’s something we can do for you and if it would be a good fit.
If not, we’ve turned away plenty of people with a note to check back in a couple of years when they’re doing X, Y, and Z. We’re here for you. Most of the time, if you’re an entrepreneur, there’s something we can help you with.
Dave: Awesome. Thanks so much for coming on, Casey.
Casey: Appreciate it, Dave.
Dave: You bet.