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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.
Ep13
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[00:00:00]
Season One Recap
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Fabrice Metan: If you forgot everything we talked about during this first season, every tax law, every strategy, every lesson, this episode is specifically to talk about the seven most important lessons that you should retain out of everything we talked about to save thousands of dollars in your business. After 12 episodes, we're basically wrapping up season number one, and essentially what I realized is that the business owners that are making the most money aren't necessarily the ones making the most revenue, but they're the ones making better decisions. And so here I'd like to discuss the seven lessons that every 765 entrepreneur should remember out of season one.
Fabrice Metan: [00:01:00] All right, so let's dive into it.
Lesson One Year Round Taxes
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Fabrice Metan: Lesson number one is that taxes are not an annual event. They're a year-round business strategy.
So essentially, a lot of what we talked about was the fact that you have to have a mindset shift when it comes to taxes. That you have to become someone who is proactively thinking about his taxes as opposed to reacting to [00:02:00] what happened, right?
And so you think about all the decisions that you have to make, and a lot of them are all about timing. Unless you remember to decide on which way you need to go with your numbers, your financials, and your taxes before the end of the year, you might find yourself in a position where there's nothing that can be done about the past.
There's nothing that can be done to change the facts and put you in a better position to save as much money as possible. And that's why the entrepreneurs who are keeping more of what they earn aren't necessarily the smartest. They're simply the ones who start the conversation sooner, right? By simply bringing up the questions and kind of challenging their thinking. Throughout the year, they get an opportunity to be exposed to the strategies that they can actually qualify for and have enough time to implement them into their business and their life- lifestyle
So if you think about it, planning in December can be [00:03:00] considered damage control, right? It's not that you can't save money in December. We do it all the time, right? People come to us last minute. We find ways to implement strategies very fast and then save them some money, but not everything that they could have saved.
It's a little bit like, think about working out two weeks before your wedding and expecting to lose weight right before the due date, right? It's not that you can't. You might have some results, but not the best results that you were looking for. And that's the same thing when it comes to taxes. We're looking for a way to talk to you sooner so that we have more time during the year to help you implement the strategies that you can actually qualify for
So I don't want you to think about tax season as the finish line. You actually want to look at it like tax season is halftime. It's a chance for you to see what happened and then decide from there, go back to the scoreboard, change the strategy, and go back for the second half of the year. And so at this time of the year, now's the time to do some planning [00:04:00] and try to implement everything that you can so that you're in a better position to save before the next tax season rolls around
Quarterly Planning Support
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Fabrice Metan: , okay, looks like Brian is kind of giving me the look. He might have a question, so why don't we dive into that?
Producer Bryan: So I agree with you. I think it's great that you think about taxes as a year-round strategy.
Fabrice Metan: Mm-hmm.
Producer Bryan: But I'm already... I ca- I can just imagine, like I myself experience it, like I am a small business owner-
Fabrice Metan: Sure
Producer Bryan: and I am already overwhelmed. I can imagine so many entrepreneurs, like just running the business, getting it to grow. Mm-hmm. That takes so much time, effort, and energy to then take something that I used to think about just once a year for panic for like a couple of weeks, and now to say, "No, I've got to think about it year," like how do I make that shift- Yeah
to think about taxes-
Fabrice Metan: Mm-hmm ...
Producer Bryan: year-round? How, how am I even gonna be capable of that because I'm already so overwhelmed?
Fabrice Metan: Yeah. No, I totally understand. And I think if I'm being honest, [00:05:00] I don't believe that it's something that you can just do alone. It's very hard to try to do all of that by yourself. The idea is to have the right professional that can take a lot of that off of your plate, but give you some checkpoints throughout the year.
What we like to do at our firm is meeting with our clients on a quarterly basis. It forces them to sit down just for an hour or two and get a summary picture of where things stand. ~We,~ we're not necessarily asking them to do everything for that picture to come together. We're going to take the heavy lifting, put everything together for you on the back end, and then come to you once a quarter to say, "Hey, this is where things are trending.
And so if we don't want this to cost you too much in taxes, here's what we can do to shift everything." Right? And so that way you're prepared. By the time you get to tax season, everything that you were typically doing all at once, you know, at, at one time, and it's, it was very stressful because you're going against a deadline, now everything is relaxed because [00:06:00] we kind of did the work throughout the year.
Does that make sense?
Producer Bryan: Yeah, that does make sense
Fabrice Metan: And I think the, next question that people would probably ask is, "Well, I don't even know if I can afford that." And what we typically tell the clients that we work with, ~and,~ and that's specifically who I always talk about, the 765 entrepreneur, you are already going to pay five figures in taxes.
So knowing that this is the amount of money that you normally would have to pay in taxes, what we're doing is not adding an additional expense. We're trying to bring all of that back to your business, back to your pockets, and then use a portion of that for the professional help that we're bringing to the table.
And so in other words, if we can save you 20, 30, $40,000 in taxes that you were already planning to pay, you would essentially just spend somewhere around 20 to 30% of that in professional fees to make sure that you can get that outcome. So it doesn't cost you anything extra, technically
And with that, let's dive into lesson number two. [00:07:00]
Lesson Two Entity Choices
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Fabrice Metan: Your entity should follow your business, not social media pages. And the simple reason why I say that is because you would have noticed in several of our episodes, we tend to react to different things that are being said, ~said ~online, and the reason why is because every strategy needs a little bit more context.
So on social media, most of the time you see the headlines, right? They're explaining to you what you can do and what the outcome is because that's the hook. That's the best way to kind of draw your attention in. But they're not giving you all the context that allow you to see if this particular strategy can actually work for you, right?
And so we talked about things like the Augusta rule real estate professional status, those kind of things, and it may not be a situation that actually works for you. So what you need to do is anytime you're thinking about ~structure, you know,~ you know, restructuring, you're thinking about new strategies, you want to think about your business specifically, your, personal situation to determine whether that works as [00:08:00] opposed to looking at something and automatically assuming that that's the right thing for you to do.
And so for us, all we say is your entity should follow your business, exactly your position, as opposed to you looking at someone else and trying to do what they do.
Filtering Social Media Advice
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Producer Bryan: Okay, I got to jump in here, Fabrice.
Fabrice Metan: Okay.
Producer Bryan: So what about people that I'm seeing online? How do I know, you know, outside of the people that are professionals I mean, I'm, I'm scrolling social media, like the business advice is everywhere. Right. I get, you know, if I scroll for five minutes, I'm gonna see 30, 40 pieces of content, you know, giving me advice around taxes. How do I know what's trustworthy?
Mm. How do I find advice that's trustworthy?
Fabrice Metan: You're right. I, you know, my thought process is that tax law is so complex, nothing can really be explained in a 30-second, 60-second clip. So the number one thing that I would say to people is, let's assume, and this is assuming that you have nobody in your corner helping you, right?
You don't have a professional that you [00:09:00] may be working with. When you get that piece of content, I want you to then research on long format platforms like YouTube or audiobooks or LinkedIn, and find lengthy videos that are going more in details on that strategy, so you can get a little bit more context and see if it applies to you, right?
Because at the end of the day, if it just that, that piece of content doesn't give you enough context, you have no way of knowing if this is something that can actually work or not. And so in my opinion, you wanna move to long format, long videos or podcasts, ~um,~ audiobooks, things that can actually give you more details for you to make that decision.
But if you have an expert in your corner, I would always send that content to them and try to see what they think
and I would also say maybe reduce the number of voices, right? Like, once you've found a few people that are talking specifically about you and your situation, your industry, the line of work that you're in, ~um, you know,~ the level of [00:10:00] business that you, ~that you, uh, con-~ currently run, you wanna kinda limit yourself to those exact voices so that you're not convoluting your thinking with a bunch of advice from everywhere, right?
So for example, we have our niche working with seven-figure business owners. If you know that this is who you are, you wanna be able to find podcasts or YouTube channels that are specifically tailored to your position
Lesson Three Planning Beats Deductions
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Fabrice Metan: Now let's dive into lesson number three, which is that the biggest tax savings don't usually come from finding more deductions.
And I know that sounds weird coming from a tax professional, right? Because you're thinking, "I thought the whole point was deductions," right? But if you really think about it, one of the questions that I always get is, "Can I write this off? What about this? What about that?" Right? So people are chasing the next deduction.
In my opinion, it is more about the structuring and planning that you can do around your tax [00:11:00] position. So if you think about some of the strategies that we talked about, for example, when we dive back into everything that had to do with real estate, we had a lengthy episode where we dived into the seven ways to save taxes when it comes to real estate.
And you think about all of those strategies, the BRRR method, cost segregation, being a real estate professional status, those kind of things, those are planning ideas. So you're using real estate as a tax planning tool as opposed to just an investment. Yes, it's an investment, and yes, you're making money as the properties are earning more value, but it's also something that you can use as a tax planning tool to offset all of the earnings that you're making in other areas of your life.
And so for me, I think it's more about the planning and restructuring than it is about the next deduction that might save you a thousand now. What we want is to be able to create a structure that allows you to compound those savings, right? If we plan right, and if we structure you correctly, [00:12:00] every single year you'll be saving more money, as opposed to looking for that very next deduction that can only help you now.
Producer Bryan: So what are the one or two questions I need to be asking myself-
Fabrice Metan: Uh-huh ...
Producer Bryan: that's gonna surface those opportunities that I don't actually know exist?
Fabrice Metan: Hmm. That makes sense. I think instead of asking your tax professional, "What can I deduct?" What you really wanna be asking is, "What are the behaviors that the tax code rewards?"
So in other words, ~if you,~ if you know exactly what will create tax savings for you, you can get a game plan to behave as such. And generally, that ~will,~ will bring more savings to your overall tax structure than simply looking for what are the things that are deductible right now.
All right.
Lesson Four Optimize Not Just File
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Fabrice Metan: And lesson number four is that your tax return can be [00:13:00] correct and still cost you thousands of dollars. So when you think about how business owners think and basically what they've been exposed to, somewhere along the line, it became general consensus that if my CPA filed it correctly, then it must be all good.
That's the best that I could have had. When in reality, filing a tax return is completely different from optimizing that tax return. Optimizing is essentially thinking about the tax return from a strategic standpoint and figuring out if things could have been done better, if things can be retroactively changed, or if we can use that as a roadmap to know what not to do and what to do moving forward
And so you could file your tax return on time, file it correctly, and still be paying way more than you need to. Why? Because compliance [00:14:00] is completely different from optimization So compliance is asking, did we follow the rules?
But optimization asks, did we use every opportunity within those rules
And so I think if there's anything you want to remember from this, is that a tax return is telling you what happened, but a tax review is asking the question, could it have happened differently? Could things have been changed to work in my favor? That's the difference, and that's what you need to keep in mind when, when it comes to your tax position.
Producer Bryan: so if I've paid my taxes, and I know that there was a more optimal way to do it or I figure that out-
Fabrice Metan: Mm-hmm ...
Producer Bryan: can I get any of my money back?
Fabrice Metan: Yes, 100%. So here's the great thing about the tax law. We have three years to amend a tax return and recover some of the taxes that we've paid. And so typically, when we do tax return reviews, we [00:15:00] like to ask for the last three years worth of tax returns, so we can take a look at it and see if there's some changes that can be made.
Now, certain tax, ~um,~ strategies can be retroactive, others cannot. So for example, if you come to me and you were not an S corp last year, and now you're asking me to file your tax return as an S corp, I can't necessarily do that because there's strict deadlines on when to ask for that election. But if you filed your tax return with new properties that you bought last year and you claimed normal depreciation, I can still go back to that tax return and perform a cost segregation study to accelerate the depreciation.
So depending on the tax law that we're talking about, we can actually go back and recover some of the money that you've paid
Lesson Five Understand Strategies
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Fabrice Metan: and lesson number five is very simple. Don't copy tax strategies, understand them. I simply don't want you to look at someone else's tax, ~uh, um,~ strategy or situation and automatically make the assumption that it works for you, and then [00:16:00] go ahead and copy that, right?
On social media, we hear it all the time, "You got an LLC, you should become an S corp." Or someone else comes around and says, "Oh, what you really need is a C corp or a trust," and all these things, right? We don't want you to s- just simply copy them. We want you to understand them, which is the whole reason of this podcast is simplify my numbers.
We try to simplify everything that seems to be complex, so you have a better understanding, and you can now decide whether or not this works for you. And so that's the better way to look at it
Producer Bryan: So why do we so often default to something that's more complex?
Fabrice Metan: I think it's the, it may be the big headline as far as like how is it presented to you and what it can do for you, right? If someone tells you that by doing that, you would never, because I see that all the time, you would never have to pay the IRS if you were doing this, this, and that.
So now people are thinking, "Oh, I hate taxes, so I don't wanna do that. Yes, let me do this strategy so that I can avoid all the taxes." But the truth is, does it actually [00:17:00] work for you? Is that something that you can actually do, right? And sometimes we just create more complexity than we really need to. You have people that are creating 15 different entities, and they show you all this structure, and then when I find out exactly what they were trying to achieve through it, it's like, you really didn't need to do all that.
Producer Bryan: So you would actually say that people just don't have clarity around what they're trying to achieve, and so they just make something complicated 'cause they think it's got to be complicated.
Fabrice Metan: Exactly. They think the more complicated, the more tax savings I'm going to get. And sometimes that's not the case.
I mean, we just gotta look at it from a case by case, .
Lesson Six Profit Versus Cash
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Fabrice Metan: And then num- lesson number six is that profit is not cash, and confusing the two can have you lose your business. And what I mean by that is simply that at the end of the day, I get-- I have so many conversations with business owners where they don't understand how we looked at their P&L and basically sh-showed that they made X amount of dollars that they can't seem to see in their bank account.[00:18:00]
And so we had an episode where we, we did a really deep dive into the concept of what is the number that you see on your profit and loss, and what are the other areas where your money can go that has nothing to do with how you will be affected from a tax standpoint. Whether you're using that profit to pay debt, which basically doesn't reduce your taxable income, whe-whether you use that money to take a distribution as the owner, which again, doesn't reduce your taxable income.
So you're basically using all of that cash flow, but not reducing your tax exposure. And so you have to strategically think about the things that can actually reduce that, like reimbursing yourself for certain things, for certain business use of your personal assets, right? Things of that kind, but that can only be done through planning
Producer Bryan: So instead of being surprised, you know, at the end of the year- Mm-hmm ... and, and seeing whatever profit I think I should have had, what number should I focus on daily or weekly that's going to help [00:19:00] me be healthier with my business financially?
Fabrice Metan: Mm, gotcha. I mean, I think the n- number one is gonna be the net profit of the business, right?
That's the first thing, because you know that whatever that number is saying is gonna be very close to what is actually your tax, you know, what you will be taxed on from the business, right? So that's the number one thing. The next thing is going to be how much distributions I've actually pulled from the business.
And I say that because sometimes that would allow you to understand how much of that profit you've actually taken and what should be sitting in that bank account. Outside of what you've taken in distributions and what you've either invested in new assets or in paying more debt, all of that money should be sitting in cash.
And so those are kind of the two numbers. I think a lot of the times business owners are running their business by what's in the bank account today, right? But that doesn't necessarily tell you the whole story when it comes to taxes.
Producer Bryan: So net [00:20:00] profit and then amount of distributions I've taken.
Fabrice Metan: I think those are the, the simplest way for you to look at it.
Awesome. It's like, okay, so I took all, all of this money out of the business. I can understand that we did make this profit if I was able to take that. The next thing is, if this is not sit- the rest of it, the difference, is not sitting in cash, it must have paid debt or it must have been invested in assets.
It's kind of the areas where the money can go.
-
Lesson Seven Get Second Opinions
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Fabrice Metan: And to me, lesson number seven is never stop getting a second opinion. We're not necessarily asking you to come to us for that second opinion. We're simply saying never, never stop asking, right? Even if it's the same professional, going back to them and asking again, "Are you sure that we did everything that we could have?"
Because I have multiple situations where a client, after filing a tax return, is saying, "You know, I don't know why, but it just doesn't feel right. The number that I'm about to pay is just so big. I just want you to take a second look." And as we dive into it, we start asking questions like, "Can we get the entire general [00:21:00] ledger?
Let's see if there's anything that can be reclassified. Could they have claimed something a little bit faster, accelerated some depreciation?" All of the right questions that are then allowing us to reclassify certain items and lowering that tax position, right? So to me, every single year, or at least every three years, you should be asking that question.
If it doesn't feel right, if you feel like you're overpaying, that might be the right time to ask.
Producer Bryan: I'll be honest, I would feel like a complete jerk. Like I'm, I feel like I'm sneaking around behind somebody's back who's a professional, who's claiming to help me every year with my taxes. For
Fabrice Metan: sure.
Producer Bryan: Or even just questioning them.
I don't know about this. Like, what, what right do I really have? I, I just feel like a, a jerk-
Fabrice Metan: Hmm ...
Producer Bryan: you know.
Fabrice Metan: Asking that question to your professional? Asking
Producer Bryan: that question. Yeah.
Fabrice Metan: No, I mean, I think, I think that is the professional's duty to try to help you save as much as possible, right? To try to optimize your situation.
That's literally what you're paying them for, right? It [00:22:00] shouldn't be that they're basically just getting paid to check boxes. You know what I mean? Or just put numbers on the right forms. It should be that they're really looking at the situation in your best interest. And so to me, I don't think, I don't think that's an issue.
~Um,~ I would say that if you're uncomfortable asking that question to the person you work with, maybe they never put you in a position to feel like that was what you c- you had the right to ask. That's when you may consider a second opinion somewhere else. And it could be just as easy. I mean, we have a simple process where a secure link is sent to you, you can upload the returns, someone reviews it for you, and put something on the calendar for you to discuss what they found.
And so~ it's a,~ it's a very easy process that doesn't cost you anything. I mean, very little. And essentially when you do that, you get a chance to now talk to a professional that says, "Here's what could have been done, and if you want that to be done in the future, here's what we can do." Very simple.
Final Recap And Season Two
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Fabrice Metan: And so in conclusion, this was season number one. It was an [00:23:00] exciting process. Over the last six months, we dropped 12 different episodes, but the seven lessons that I want you to retain from everything that we talked about, just to recap, are that, number one, taxes are not an annual event. It's something that you need to think about all year round.
It's a business strategy. Lesson number two, your entity should follow your business, not social media pages. Lesson number three, the biggest tax savings aren't from simple deductions. They're gonna come from being proactive in the structure that you have. Lesson number four, your tax return can be correct and still cost you thousands of dollars.
Lesson number five, don't copy tax strategies, understand them Lesson number six, profit is not cash, and confusing the two can cost you your business. ~And lev-~ And lesson number seven, [00:24:00] never stop getting a second opinion. So that will be it for us. We'll be back very soon with season number two with more interviews, more reactions, more strategies, and more ways to simplify your numbers.
We'll see you next time
[00:25:00]