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Hit 7 figures but losing 5 figures to taxes? Earn a 6-figure income but feel financial chaos? Welcome to the show helping you Simplify Your Numbers.
Most business owners in the $1M–$10M range feel like "passive payers"—surprised by a massive bill every April and wondering why their hard work isn't reflected in their bank account. Host Fabrice Metan, a veteran CFO and tax strategist, cuts through the noise of complex financial data to provide straightforward, actionable insights for the "7-6-5" entrepreneur.
This podcast is the bridge between traditional bookkeeping and high-level advisory. We move you away from a reactive "compliance mindset" and into a proactive strategy where your business becomes your greatest wealth-building tool.
Stop being a passenger in your own financials. It’s time to simplify your numbers, maximize your profit, and hold onto more of what you earn.
Subscribe to join the 7-6-5 community and start your transformation today.
Ep07
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[00:00:00]
Tax Season Isn’t Over
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Fabrice Metan: Most business owners think that tax season ends right after filing their tax return. But in reality, that might be where most of the tax mistakes really happen, because the seven-figure entrepreneurs who save the most in taxes plan immediately after filing their tax return. And if you wait until April, well, you might already be too late.
[00:01:00]
Returns Are a Scorecard
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Fabrice Metan: So to a certain extent, April is not the end of tax season for wealthy entrepreneurs. It's essentially more of a scorecard. You already knew before the end of the year what your tax position might look like if you did proper planning as you went throughout the year. And so when we get to the tax return, essentially all we're doing is the compliance part.
It's checking everything, making sure that everything is labeled where it's supposed to be, checking all the boxes, entering all the numbers, and submitting the tax return to the tax agencies. At that point, you know exactly what you owe or what you're getting back, and you submit everything like you're supposed to.
Plan Right After Filing
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Fabrice Metan: But that is when you understand now what happened last year, and based on that as your baseline, [00:02:00] how do you plan for the current year? So your twenty twenty-six tax bill is actually being created right now.
Fabrice Metan: So there are four mistakes leading business owners to lose money after tax season.
Mistake One Waiting Late
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Fabrice Metan: Mistake number one is waiting until year-end. So there are several things that needs to be planned earlier in the year in order to make sure that you take advantage of the potential tax strategy and a potential tax savings.
Early Year Planning Moves
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Fabrice Metan: For example, entity classification. There's a reason why the deadline to submit an S Corp election is March fifteenth. The IRS understands that at that time, you would have already, you know, submitted the tax return, or you'll be close to submitting your personal tax return to see exactly how you're affected, and then you can then make the election for the rest of the year, for that entire year.
Now, even though you do still qualify for a potential late elect-- late filing election, it is still the [00:03:00] original deadline for a reason. And so you have to know that fairly early in the year, have your estimates, know exactly what you're planning to do in the business in order to make a decision as to whether this is the right year to change your entity classification.
Also, retirement contributions. It's not something that you want to decide at the very end of the year because the cash flow may not allow you to make as much, as many contributions as you would like to make. And so by understanding that earlier in the year and being able to strategize gradually, you may be able to contribute towards those retirement accounts in smaller increments as opposed to waiting for a large chunk to happen before the end of the year.
Quarterly Estimates Calendar
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Fabrice Metan: And also your estimated taxes, right? So the end of the day, as a business owner, you are expected to make quarterly estimated tax payments. Now, those quarterly estimated tax payments generally can already be known based on what your tax liability was in the previous year, [00:04:00] at least to avoid any penalties.
But that number does not include or does not take into account how much revenue and how much profit you're actually making in the current year. And so to be more accurate, you do still need to have some estimates of what your revenue is going to be in this current year and then plan to make some quarterly tax payments as you go throughout the year.
Just to remind you, the quarterly tax payments dates are actually April fifteenth, June fifteenth, September fifteenth, and January fifteenth. So it doesn't necessarily fall right after each quarter, but those are the dates that you are supposed to keep on your calendar to know when you're supposed to make an, a, a quarterly estimated tax payment.
And so you essentially want to be able to know your numbers, have some good estimates to, to be able to submit the payment that you need to as you go throughout the year, so it's not a huge amount that you have to catch up on before the end of the year.
To put it simply, tax [00:05:00] planning in December is damage control I'm not saying that we don't do that for certain clients. We still get a lot of people that come in in the last quarter of the year, but we would much rather work with people earlier in the year for better results.
Mistake Two Entity Review
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Fabrice Metan: Mistake number two is never reviewing your entity structure. It happens all the time. Your business evolve faster than your structure, so you're not realizing exactly when you're supposed to switch from a single-member LLC to an S corp, or if your S corp should instead be a C corp, or if you need to have a partnership set up or a sole proprietorship for some reasons.
Essentially, all of these things need to be evaluated as you go throughout the year so that they can be effective for that current tax year.
How Entities Get Taxed
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Fabrice Metan: And why does your entity structure actually matter for your tax position? It's because entities are actually taxed differently.
So if you think about it, every entity gets taxed differently, right? So sole proprietorships, single-member LLCs, [00:06:00] multi-member LLCs, and S corps are pass-through entities. They do not pay taxes at the entity level. The owners of those entities pay taxes at their personal level, right, at, on their individual taxes.
But when you have an LLC that you then convert to an S corp, it changes your tax structure because you're now taxed on your wages a d- different way than you are taxed on the net profit of the business, which is different from the single-member LLC. Now, when you are C corp, that C corp is its own separate entity that pays its own taxes at a max of twenty-one percent at the federal level.
So as you can see, every single one of those entities have a different tax structure. And so if you wanted to get a little bit more details on that, you would definitely want to subscribe to our channel so that you don't-- you catch the very next episode where we go, we do a deep dive on every single one of those entities.
Mistake Three Bookkeeping
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Fabrice Metan: Mistake number three, ignoring bookkeeping until next tax season.
See, messy [00:07:00] books equal expensive tax returns. Essentially, if you don't know what your numbers are, you're not able to take advantage or maximize all the deductions that you can actually take. You're not able to estimate exactly where you are, so you can, you know, plan for the tax liability that you might have.
And you're not able to exactly determine if it's time to make a change in your entity. And so being able to n- to allow yourself not to neglect your bookkeeping throughout the year is extremely important so that you know the numbers better and you're able to adjust as you go
Mistake Four Prior Returns
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Fabrice Metan: and mistake number four is never looking back at prior returns. Yes, your tax return has been filed, but you have to know for sure that it has been optimized as well. So you always want to go back to the previous tax return, make sure that there was nothing that was missed, make sure that you get a professional review and know exactly where everything stands prior to deciding what needs to change in this current year.
And so it's always good practice [00:08:00] right after tax season to take a look at what was, was filed and start asking questions. Was I supposed to pay as much taxes as, as I did? Was I overpaying taxes throughout the year and essentially received too large of a refund? Because that's also another situation that you kind of want to avoid.
Why would you essentially loan your money to the government that gets repaid to you with no interest, right? So the idea would be if you could be at a net, net zero, it's perfect. Some people might use it as a savings account, and I understand that as well. But half of the time, you could have that money to either grow your business or even invest it in the market to try to multiply, you know, h- your returns.
Four Mistakes Recap
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Fabrice Metan: All right, so let's review those four mistakes. Mistake number one, waiting until year-end. Mistake number two, never reviewing your entity structure.
Mistake number three, messy bookkeeping. And mistake number four, never reviewing your prior [00:09:00] tax returns.
Proactive Tax Strategy Mindset
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Fabrice Metan: And so the entrepreneurs who make the most money are not always the ones who have the most revenue, but they're simply the ones who strategize and plan better, right? They're being more proactive about understanding their numbers and treating taxes as a strategy as opposed to a once-a-year event.
So as long as you are in that mindset of making sure that you have your tax planning, your tax strategy in order, that you don't treat tax season as the last time that you need to talk about taxes throughout the rest of the year. And I understand a lot of business owners, that's the last thing they want to hear about, right?
No one wants to talk about taxes. No one wants to pay taxes. And so essentially you're thinking, "Why? Why should I even worry about it once we got my tax returns done?" Well, the idea is simply to use it as part of your strategy inside your business, so you can keep more of your hard-earned money.
[00:10:00]