0 (2s):
Boom, shake the room, Fire Nation. JLD here and welcome to Entrepreneurs On Fire brought to you by the HubSpot Podcast Network with great shows like Being Boss. Today, we'll be breaking down. How to plan ahead, take action today to reduce your tax bill by thousands next year, to drop these value bombs. I brought Matthew Dominic Sercely into EOFire studios. Matthew is an attorney and tax planner who helps you set up your business to save tens of thousands of dollars in future taxes. And today foundation, we'll talk about tax planning, specific examples and case studies, the ROI of taking tax planning seriously and so much more. When we get back from thanking our sponsors.

0 (48s):
Let's get real. Let's talk Roll by ADP. The first chat-based mobile payroll app designed for small businesses and startups. It makes running payroll as easy as sending a text visit, getroll.com/fire to get your first three months free. Business Made Simple hosted by Donald Miller takes the mystery out of growing your business. Recent episodes, like how to attract and retain top talent and how to make more money with your current products are straight fire. Listen to Business Made Simple wherever you get your podcasts. Matthew say what's up to Fire Nation and share something that you believe about becoming successful that most people disagree with.

1 (1m 30s):
What's up Fire Nation. The thing I believe about success is that you never are a success. You all, you're always working for it. You're never done. And only successful people understand that.

0 (1m 42s):
Well, something else successful people understand is planning ahead. And that's what we're talking about here today. Plan ahead. Take action today. Fire Nation to reduce your tax bill by thousands a year. And I want to start with the obvious what the heck Matthew is. Tax planning.

1 (2m 1s):
Tax planning is sitting down and doing things in your business, setting things up, whether that's how your company is set up, how you pay expenses when you pay expenses. So that down the road, you owed us taxes. Some of tax planning may be just shifting taxes around paying taxes in two years instead of than a year or today instead of next year.

0 (2m 22s):
So Fire Nation, when you're thinking about Matthew's explanation of tax planning, are you part of that process? Are you spearheading that necessary evil in a lot of people's eyes now isn't that something that our CPA should be helping us with Matthew?

1 (2m 39s):
So if you have a CPA, your CPA might also be a tax planner, but most CPAs will their accountants, their numbers, people texts, timing. It's a lot harder. It takes thinking it's not just math or calculations. You have to look at the whole piece because you know, it's really easy to make a change that, oh, I'm going to save a thousand dollars here, but it's going to cost me.

0 (3m 1s):
So, one thing that we love on these episodes, Matthew is specific. Examples are case studies that we can really connect the dots with. Now. I don't want to use people's names and businesses for obvious reasons, but give us some real life examples of the sort of things that you can help save people's taxes on like real life scenarios, where people have come to you and walked away for the better.

1 (3m 30s):
So one of my recent clients, he hired me last December had both the day job as well as a consulting business on the side. And he was doing very well for himself making over $400,000 a year. And we made a couple changes. We actually had him create a second business legally, and that one change alone saved him about, or is going to save from about $23,000 in taxes this year. Although,

0 (4m 0s):
So the more examples in case studies that we can hear the better, because now my listeners can start to put themselves in the situations that these individuals that they resonate with, that they feel like, Hey, I'm similar to this person, to that person for various reasons. So let's go through a couple more examples,

1 (4m 16s):
Have a client with a small construction company. He does most of the work himself or hires, you know, independent contractors sometimes, but does a lot of work in houses and such. He's pulling in about 60 to $70,000 a year in net profits. We just actually did his tax plan a few weeks ago, and he's going to end up saving about $6,000 a year in taxes.

0 (4m 44s):
Now, if you could give Fire Nation a set of instructions of something that they can do as a years going forward, that can really help them quote unquote, plan ahead. What would be some of those things, those strategies, those tips, those tactics that you would want the listeners to know

1 (5m 2s):
The first most important thing is keep records of everything. Financial keep records. If you can use a bookkeeper or something, keep all the receipts, because if you don't write down what you're spending, you can't expense it off. The next most important thing is actually sitting down and having a plan. Hope is not a plan thinking, oh, I think I know how this works is not a plan. Sit down regularly, ideally, you know, every quarter and go has my business changed. Do I need to change how I'm doing things because of it?

0 (5m 40s):
Are there any apps that you ever recommend for people to keep track of records? Like I've seen some where you take pictures of receipts and it kind of automatically files. And does those things, anything along those lines that you've used or you recommend your clients,

1 (5m 54s):
You definitely want to use some sort of an accounting program. QuickBooks is the most popular, but in terms of apps on the phone, all I do for my own business is I use my camera and my email and I just take a picture of any receipts. And then I email myself that email, and then I might email, I mark it as a business expense. I mark it as the type of business expense and I mark the year it was. And then once a month, I just go through that and save that all on my computer. And I've got everything saved.

0 (6m 26s):
You said the phrase hope is not a plan. Can you expand upon that?

1 (6m 31s):
Sure. A lot of people are when it comes to tax planning, well personal, when it comes to taxes, some people just don't do their taxes and hope they won't get caught, which is obviously a terrible idea. But when I say hope is not a plan, so many people, especially like their businesses, just getting going, they're just becoming profitable. And they just kind of say, well, I'll figure it out. The tax stuff. Eventually not understanding how to forecast their taxes, not understanding you should be setting money aside to pay your taxes. So you don't have to come up with 10 or 20 or 30 grand. Next April.

0 (7m 8s):
A lot of people are terrified by those three letters. I R S should they be,

1 (7m 14s):
If you're cheating on your taxes or not paying, you probably should do. If you're acting in good faith, you really don't need to be scared of the IRS. The IRS it's actually relatively unique among the tax collection authorities in the world. Their mandate is not to collect as much as possible. Their mandate is to collect what is legally owed. And so they're one of the few agencies in the world that if you overpay your taxes and they realize you did it, they'll just send you the refund.

0 (7m 44s):
So how often do you personally deal with the IRS?

1 (7m 48s):
I almost never deal with the IRS. In fact, as a tax advisor, thankfully none of my clients have ever been audited by the IRS knock on wood. I did have one client best for last year who did get a letter from the IRS regarding something. And I sent a letter to them and they basically said, oh, okay, that makes sense. And I've done that on my own personal life, you know, three or four times in my life I've filed my taxes. And then a year later, or two years, three years later, you know, oh, you owe this or, oh, you owe that. And as long as you pay attention to it, respond to it, explain what happened.

1 (8m 29s):
It's usually not too big of a deal. Ignoring the ed on the other hand, which again, a lot of people do. That's a big mistake.

0 (8m 38s):
So you're basically saying that the IRS is reasonable. And if you're doing the right thing, or even at least trying to do the right thing, that you have a chance on getting a fair shake in the deal.

1 (8m 50s):
Exactly. Now that said the IRS is not about being just if the rules say you're in the wrong, even if they're stupid, they're still going to enforce those rules. They'd have to be logical. They're going to follow their rules, but when the rules are ambiguous or when they can, again, they don't want to ruin your life. It it's human beings doing the job. Most people, the IRS, they don't want to ruin their life. They just have a nine to five job that they wanted

0 (9m 18s):
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0 (9m 58s):
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0 (10m 50s):
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1 (11m 40s):
Oh, that's a good question. I think one of the really hard, well, their whole current PA pacification of how they're doing with cryptocurrency is totally illogical and really doesn't fit with what other agencies are doing. So if you're buying and selling and investing a lot in crypto, like don't, don't trust the logic for what is and is not the tax consequences for that. Just read what they say and do what they say,

0 (12m 6s):
Or just moved to Puerto Rico and have 0% capital gains.

1 (12m 9s):
Yes, if possible, that's, that's also another aisle. You get an opportunity.

0 (12m 14s):
Let's talk about ROI. Let's talk about return on investments. So what kind of ROI are we talking about? If we do in fact, take our tax planning seriously.

1 (12m 26s):
Even after somebody hires me, even after they pay for things, like if they need to set up an LLC or get a bookkeeper or whatever I have yet to take on a client that did not end up saving more in taxes in the first year, that cost. And in future years, even if you have any still working with you, it's way more affordable. So you can very easily in three years have a 100 to 200% return on investment

0 (12m 54s):
Fire Nation. That's a fantastic use of your time. That's a fantastic ROI on your energy, your bandwidth, and then again on your finances. So who should not be thinking about tax planning yet,

1 (13m 10s):
If you aren't making money, you don't need to worry about taxes. You need to worry about making money. If you're only making a little bit of money, you need to worry about making more money, general guideline rule of thumb. If your business is your sole source of income, if you're not making at least 60 grand profit, you probably don't need to worry about it. If it's a side hustle or something, if you're not making at least 20 to 30 grand in profits, it's not time to focus on taxes. It's time to focus on building your business. First

0 (13m 41s):
Beyond the things we've talked about, like not keeping a records and ignoring letters from the IRS. What are some of the biggest mistakes that you see people make on a year to year basis when it comes to their taxes?

1 (13m 55s):
Well, it also excludes just ignoring cats. That entirely the biggest mistake people make is they don't deduct enough of their legitimate business expenses. I mean, there's a lot of things, especially in the modern day that you should be deducting. If you're using your cell phone or your business, you should be deducting at least part of your cell phone bill from in your business. If you're using your personal computer for your business, you should be deducting. At least part of that cost for your business. If you're not deducting, you know, your utility bill in your house, if you're not using the home office deduction, there's so many deductions, there's so many ways to cut down your tax bill for things you're already entitled to, but people just don't take advantage of.

0 (14m 39s):
So Matthew let's end with a bang. I'm going to hand you the mic. Stand up on the Fire Nation pulpits and talk to us for a minute. Talk to us about what you really want to make sure we get from this episode. This episode is all about planning ahead, about taking action today about reducing your tax bill by thousands of dollars per year. What is the message you want to make sure our listeners get above and beyond everything else.

1 (15m 4s):
You need to start working on this as soon as you can, once you're making enough money for it to make sense, because it can take weeks or months to come up with a plan to put into place and it can take months more, but the taxi starts saving you money. So the sooner you get started, the faster you get started, the better things are so many people that either worry about this at December, or they worry about it in April, or they got an extension. They worry about an October. There's no reason to not start as soon as you're ready to start.

0 (15m 35s):
So what a Fire Nation is listening to this right now. And they're like, I kinda like what this guy Matthew's got to say. I really am jiving with his thoughts, his ideas, his recommendations, his tips, tactics strategies. How can my audience connect with you? How can they contact you any call to action you have for us right now and then we'll say goodbye.

1 (15m 56s):
They should go to my website, agoristtaxadvice.com/FIRE. And there's a slash of fire. There'll be a special link there where you can set up a free 15 minute consultation with me, where basically I spent 15 to 20 minutes with you and see, are we a good fit? Can I help you? Can you afford to hire me? Does it make sense to do it now? Or does it make sense to get back together in a year

0 (16m 22s):
Fire Nation? You're the average of the five people you spend the most time with? You've been hanging out with MDS and JLD today. So keep up the heat and head over to EOFire.com and type Matthew in the search bar. And the show notes page for today's episode will pop right up and Matthew, one more time. What's that URL to connect with you?

1 (16m 42s):
agoristtaxadvice.com/FIRE.

0 (16m 50s):
Matthew, thank you for sharing your truth, your knowledge, your value with Fire Nation today, for that we salute you and we'll catch you on the flip side. Hey, Fire Nation today's value bomb content was brought to you by Matthew and Fire Nation. Over the last decade, I've interviewed more than 3000 of the world's most successful entrepreneurs, and I've created a revolutionary 17 step roadmap to your financial freedom and fulfillment. I put it all into my first traditionally published book, The Common Path to Uncommon Success personally endorsed by Seth Godin and Gary Vaynerchuk. The Common Path to Uncommon Success is the step-by-step guidance that you need to achieve the lifestyle of your dreams.

0 (17m 32s):
Visit UncommonSuccessBook.com and I'll catch you there, or we'll catch you on the flip side. Let's get real, let's talk, Roll by ADP. The first chat-based mobile payroll app designed for small businesses and startups. It makes running payroll as easy as sending a text visit, getroll.com/fire to get your first three months free. Business Made Simple hosted by Donald Miller, takes the mystery out of growing your business. Recent episodes, like how to attract and retain top talent and how to make more money with your current products are straight fire. Listen to Business Made Simple wherever you get your podcasts.