Tom Sega has a sit-down conversation with Jim Hacking, the owner of James Hacking and Associates CPA, on this week’s episode of Leader of the Pack, a podcast by Duluth Pack. In this podcast episode, Jim shares how he became the owner of his own firm and some of his expertise and knowledge as a CPA.
Background on Jim Hacking
Jim jumps into his college years. Growing up in the Twin Cities, Jim went to college at the College of Saint Thomas, now the University of Saint Thomas. Tom asks Jim how he chose accounting as his major, and Jim explains that initially, he was planning on pursuing dentistry. However, a big conversation with his father about his grades during his sophomore year of university led Jim to pursue accounting instead. “Being from an entrepreneurial family, I always knew I wanted to work for myself, but in my sophomore year or a million years, I never thought I would be working self-employed as a CPA, but that is how it worked out!”
Becoming a Business Owner Himself
After graduation, Jim went to work at his first job at a small CPA in Saint Paul. He worked there for about 2.5 years and learned so much about accounting. When Jim got married, he began to think about the quality of life his family wanted, and they decided to move to Duluth, MN. After moving to the northland, Jim worked for a firm for six months before he was let go. Tom asks what happened after that, and Jim explains that his wife was so supportive of him, and he was so thankful because that was when Jim decided to start his CPA firm and build his business from ground zero.
Tom asks Jim about the biggest challenges of starting his CPA firm and how he grew his company to be successful and respected. “It wasn’t easy,” says Jim, he moved to Duluth not knowing anyone, but he comments that he was lucky to be blessed with a personality that is not typically expected from an accountant. Getting his name out there was a big hurdle for Jim, so he hired a marketing firm, and the best advice they gave him was to offer 25% off tax services (at that time), and he acquired so many customers through this. Jim was also on KDL Radio for a call-in tax segment that was very popular and got his name out into the area. These two methods created Jim’s customers initially and created word-of-mouth referrals from these happy clients. Jim explains that most questions he was asked were about deductions. Tom and Jim talk about the benefits of having a CPA that knows you and your taxes to ensure you are getting the most from your returns. Tom comments on the level of service he has received with Jim and how he cares about his clients who have become friends.
Tax Advice for Individuals and Potential Entrepreneurs
Tom and Jim discuss the differences between having a personal accountant versus using a service that is not personal to you. Jim explains that he walks through taxes with his clients to find the most deduction, and part of finding those is knowing his customers and asking the correct questions. Jim says that part of being an accountant is data entry and inputting the information, but that part that some do not do, unfortunately, is working with the customer and seeing how to best help them. This can leave your taxes done correctly but not entirely because potential deductions are not listed. Tom asks what the general population should have to ensure that they are ready for their taxes? Jim lists the following items to have with you or discuss with your accountant: Letter for stimulus checks, the Early Child Tax Credit Advance, W-2s, HSA details, and if you are claiming your children and other account information. Tom and Jim discuss the potential effects college-aged children can have on your taxes, especially if they claim themselves. Tom and Jim then begin to talk about 401Ks and savings from a tax standpoint. They talk about how to ensure that you are ready for retirement. 401Ks and savings accounts are extremely important when preparing for retirement and to start as early as possible with at least a 10% investment in each paycheck, if possible.
Tom and Jim talk about the number of people who are beginning to look at potentially starting their own business or side hustle and how to prepare taxes. They discuss the differences of becoming a Sole Proprietorship, LLC, S-Corporation, and C-corporation. Lastly, Tom and Jim talk about the tax benefits of each one and how to ensure that you select the right way to start your business.
Tom and Jim cover a variety of tax-related topics to help you better understand taxes, along with the benefits that can come from having an accountant that knows you! Taxes are stressful for many people but talking with Jim makes them seem more manageable. Jim also reminds our listeners that if they have a question regarding their taxes, he would be happy to offer free advice and encourage them to call his office. Thank you, Jim, for sharing your success as a business owner and tricks of the trade when it comes to personal and business taxes.