[quote=hotair1]With respect to trips, you pay taxes on them.  Twice.  Jones trips, we pay taxes once. It’s a silly point but you guys love to play that card and its dead wrong.  I personally look forward to paying tax twice on my trips.

[/quote]

I think you need to explain that one.  How am I paying taxes twice on my trips exactly?

My wife and I book a trip to Prague as a “corporate officers retreat”.  Let’s say it costs $5000 (which is about what it was).  It is paid out of the business account.

I’ve reduced my business income by $5000.  Where is the tax?

It is not considered a vacation.  It is a working trip. 

So far, I haven’t been taxed.  Explain.

[quote=Moraen]

[quote=hotair1]With respect to trips, you pay taxes on them.  Twice.  Jones trips, we pay taxes once. It’s a silly point but you guys love to play that card and its dead wrong.  I personally look forward to paying tax twice on my trips.

[/quote]

I think you need to explain that one.  How am I paying taxes twice on my trips exactly?

My wife and I book a trip to Prague as a “corporate officers retreat”.  Let’s say it costs $5000 (which is about what it was).  It is paid out of the business account.

I’ve reduced my business income by $5000.  Where is the tax?

It is not considered a vacation.  It is a working trip. 

So far, I haven’t been taxed.  Explain.


[/quote]

That might work from time to time but let’s be honest you are not taking an international trip and writing it off like that or even the majority of your trips.  The IRS is strict about that.  You also pay sales tax, baggage fees, hotel taxes, etc. - all of which Jones people don’t pay.   Hence you are taxed twice.  ALSO - YOU ARE PAYING FOR THOSE OUT OF YOUR POCKETS.  Sure, I pay for them through lower payouts but I can also take a CHECK if I don’t want to trip.

I just hear indy guys bang that drum all the time and I think its bogus.

Here’s the bottom line with working at Jones…



First, don’t compare the first 3 years to working independently. Jones is a great place to start for all the reasons listed in some post above. Most people can’t start indy from scratch, so you really have to start with year 3 at minimum (more likely year 5) as a comparison.

Second, Jones (IMHO) is one of the best places to be for people that will NEVER (as in N-E-V-E-R) go independent, and don’t need to fish upstream for $1mm+ clients. Doesn’t matter their reason (complacent, comfortable, no interest in owning business, whatever).

WHY? Wirefirms are not well suited for smaller producers and people that cater to lower net worth individuals. Some people can do very, very well servicing 700+ households at 100K average, and be very, very happy. Jones will leave you alone, you can make a few hundred thousand, and you can have a very simple work day.

Now, can you swim upstream? Yes. However, I have only seen select Jones FA’s that have been very successful at it, and it’s usually after being in the business for decades. However, the wirehouses (and successful indy/RIA forms) really have corner on that market in most metro areas.

Also, Jones, as said above, is really the “bee’s knees” (to quote a Geico commercial) when it comes to rural areas for obvious reasons.



So, I think the underlying problem with the whole Jones vs. Indy debate is that most people that decide to go indy don’t want to follow that path (above) of 700+ households. Most are happy with servicing 50-250 of their best clients and getting a great payout for it, and having a simple way of life.



I don’t really think there should be a big debate, as both channels have their merits. Some guys at Jones will always be perfectly content where they are, doing what they are doing.

The IRS is strict within certain limits.  But do you think the GPs pay for their trips.  The partnership pays for their trips.  And guess what?  They are not taxed on them.  Producing GPs maybe, but not HO GPs. 

For instance, if Jim Weddle is going to speak to the FAs in Sydney Austrailia, do you really think that that isn’t a tax write-off and that he is paying for it?

He’s not.

All of the things you are talking about, are paid through the business and are thus deductions.  So anything I pay in sales tax is a reduction of my taxable income and so is offset. 

Jones people pay taxes on the trip though.  Also, the cash you can receive is significantly less than the value of the trip. 

Us indy guys can beat the drum because it’s true.

Since opening up, EVERY trip we have taken has been a retreat.  My wife is co-owner and we do discuss business.  In fact, some business is conducted.  We do team-building exercises (ziplining through jungles, climbing mountains).  All things which corporations are allowed as expenses. 

Now, when we take our child, the child’s expenses are NOT tax deductible.  But really, if she’s staying in our room, the only real expense is the plane ticket.  Which, correct me if I’m wrong, but don’t you have to pay for additional rooms and tickets for a certain number of children?

Look, the trips are NOT the perk Jones people make them out to be.  Like I said, my trips are tax deductible.  There is absolutely no justification for NOT allowing me to write them off when corporations are allowed to do it all of the time. 

Morean,



I totally agree with you. However, if you ever got audited, I would bet a C-note that the auditor would get you for violating the spirit of the law. If they actually looked at your business, and saw that it was a husband-and-wife team, and they were the only employees on the trip, and you deducted it, I could almost guarantee it would be rejected.



I believe they would tell you it is deductible to the business, but taxable to you as individuals. Therefore, no real tax deduction.

I'm just curious - what is it about Jones that gets people so fired up? I don't know anybody who works for EDJ. But i have never seen a company stir up so much controversy and debate than Jones. Why is that.

[quote=Sportsfreakbob]

I’m just curious - what is it about Jones that gets people so fired up? I don’t know anybody who works for EDJ. But i have never seen a company stir up so much controversy and debate than Jones. Why is that.

You need to go back and re-read my friend.  No Jone’s guy got fired up … just a bunch of ex-Jones haters with 5th grade reading comprehension. 

My point is that if the reason you went Indy was work/life balance and you left Jones to do that you probably didn’t achieve your goal.  Note I said, probably. Jone’s is a sweet gig after a few years if your goal is a work/life balance.

[quote=hotair1] You need to go back and re-read my friend.  No Jone’s guy got fired up … just a bunch of ex-Jones haters with 5th grade reading comprehension. 

My point is that if the reason you went Indy was work/life balance and you left Jones to do that you probably didn’t achieve your goal.  Note I said, probably. Jone’s is a sweet gig after a few years if your goal is a work/life balance.

Bob,

I think Jones only stirs up controversy on these boards because so many former Jones FA’s are now indy, and it’s natural to see the weaknesses in a business model once you are gone. Many Jones FA’s have no idea what it is like outside “The Firm”, other than what they are told by GP’s (certainly not a biased viewpoint ).

Part of this is because Jones’ model is sort of the closest thing to the feel of being independent, without actually being independent (strictly because of the physical setup of their model), so it seems easier to compare Jones to being indy versus wirehouse to indy. Also, it’s easier for a relatively new Jones FA to see how to run an independent practice versus a wirehouse newby, since so much is done for you at a wirehouse behind the scenes. For example, despite what some say, I can reconcile down to the penny where all my money goes in my office P&L. I know exactly what it would cost to run my own practice. If I were 4 years in at Merrill, I would probably have no access to that info. Once you see all that, you begin to realize that running a practice is no different than running any other business. You just have to worry about revenues and expenses.

Does that make sense?



As far as the doorknocking question…most FA’s doorknock at Jones in the beginning for lack of knowing any other method. I only doorknocked heavily for about 6 months. After that, things just started to take off in other directions, and I figure out what I was doing. Truthfully, the whole doorknocking thing is overblown. Only relative newbies doorknock (and a few insane FA’s that actually like it) to get their business started. Most stop after 6 months to a year. Most stop within 2 years. That’s a blip on the screen of a career. But since most Jones FA’s on this site, as well as most indy’s that came from Jones (after just a few years at Jones) have doorknocking fresh in their minds, it gets a lot of press on these threads.

[quote=B24]Morean,



I totally agree with you. However, if you ever got audited, I would bet a C-note that the auditor would get you for violating the spirit of the law. If they actually looked at your business, and saw that it was a husband-and-wife team, and they were the only employees on the trip, and you deducted it, I could almost guarantee it would be rejected.



I believe they would tell you it is deductible to the business, but taxable to you as individuals. Therefore, no real tax deduction.[/quote]

I’ll take that bet.  My accountant is a former IRS auditor.  I was going to make it taxable to us as a couple, but was told I didn’t have to.  They would have to change tax law for everybody, if they did that to us.

As for hotair’s supposition that us ex-Jonesers have a 5th grade education… I think that’s a little harsh.  If you look at the list of reasons you gave for work/life balance, most of them don’t contribute to a work/life balance. 

I took you point for point and agreed with you on some things. 

You put “training” on a post about work/life balance.  How is that related to work/life balance.

Regardless, Jones is a good company.  There is good work/life balance there, but I believe it is better as an independent.

Moraen, I hope you’re right (RE: taxes). It just surprises me that it would pass the “smell-test.” He would know better than me, though.

[quote=Moraen]

[quote=B24]Morean,



I totally agree with you. However, if you ever got audited, I would bet a C-note that the auditor would get you for violating the spirit of the law. If they actually looked at your business, and saw that it was a husband-and-wife team, and they were the only employees on the trip, and you deducted it, I could almost guarantee it would be rejected.



I believe they would tell you it is deductible to the business, but taxable to you as individuals. Therefore, no real tax deduction.[/quote]

I’ll take that bet.  My accountant is a former IRS auditor.  I was going to make it taxable to us as a couple, but was told I didn’t have to.  They would have to change tax law for everybody, if they did that to us.


[/quote]

Liar

[quote=DD]

[quote=Moraen]

[quote=B24]Morean,



I totally agree with you. However, if you ever got audited, I would bet a C-note that the auditor would get you for violating the spirit of the law. If they actually looked at your business, and saw that it was a husband-and-wife team, and they were the only employees on the trip, and you deducted it, I could almost guarantee it would be rejected.



I believe they would tell you it is deductible to the business, but taxable to you as individuals. Therefore, no real tax deduction.[/quote]

I’ll take that bet.  My accountant is a former IRS auditor.  I was going to make it taxable to us as a couple, but was told I didn’t have to.  They would have to change tax law for everybody, if they did that to us.


[/quote]

Liar
[/quote]

Oh, hey DD.  I guess you don’t live on the east coast.  Would have been a pain to get to the library.

I’m just curious - what is it about Jones that gets people so fired up? I don’t know anybody who works for EDJ. But i have never seen a company stir up so much controversy and debate than Jones. Why is that.

It is a shame that what starts out as a good educational discussion turns into another discussion on Jones.