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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.
Ep01
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55 W-2s Missing Overtime Info: What Went Wrong?
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Fabrice Metan: [00:00:00] My client called panicking. 55 employees who worked over time in 2025 and received their W twos with missing information.
But why did that happen? Find out now so it doesn't happen to you.
[00:01:00]
Welcome to Simplify My Numbers + Why 2026 Taxes Will Be a Mess
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Fabrice Metan: Hey, welcome to Simplify my numbers. The show for the 7, 6 5 entrepreneur. You remember seven figures in annual revenue, six figure take home income, but you're stuck paying five figures in taxes. Now we're here to try to change that, right? And so in this first episode, the one thing that I wanted to discuss was 2026, and the reason why is because I believe this is going to be one of the most confusing tax season in a very, very long time.
Right.
Mid-Year 2025 Tax Law Changes You Must Know
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Fabrice Metan: And the reason why is because we had a change in the tax code in 2025. A lot of changes literally happened in the middle of the year. So when we started the year, we started to run our business a certain way, and in the middle of the year we found out about a new tax code that kind of changed everything for several reasons.
We hear about overtime being tax exempt, [00:02:00] social security, earnings being tax exempt. We hear about a change in the SALT deduction. We'll talk about that. How about bonus depreciation coming back, but only for assets purchased after a certain date? So again, a lot of changes that just appeared outta nowhere and now we're in the process of catching all of those changes on the tax returns that we're filing at the beginning of this year.
And so I really consider this to be one of the most confusing tax season in years. And if you are a 7, 6, 5 entrepreneur, if you're an entrepreneur, you know, with a business that's typically generating seven figures in annual revenue, more than likely you have a few employees. So your employees are going to be affected, especially if they're working overtime for most of the time.
If you are in a business where you're buying a lot of assets, right, you're definitely going to be affected if you invest in a lot of real estate. That also applies to you. And so I'd like to [00:03:00] kind of give you some pointers and some of those things and also mention some of the stories that I can share with you because we went through it over the past few months.
Bonus Depreciation Is Back: The Write-Off Opportunity Explained
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Fabrice Metan: so one major thing that happened when the new OBBB tax bill was approved, is that bonus depreciation came back, which is a big deal if you're buying a lot of assets in your business. Now, let me backtrack. What exactly is bonus depreciation, right? When you buy an asset like equipment, vehicle even a plane, believe that, or you know, invest in real estate, right?
Your asset is supposed to have. A useful life, and we apply depreciation by expensing a portion of the cost of that asset every single year. So for example, if you're buying a vehicle, we're supposed to expense that over five years. You buy a vehicle for $50,000, you're supposed to only be able to depreciate or to take about 10,000 of that [00:04:00] expense as a tax write off.
In each of the next five years, if we just apply book depreciation just to make it simple right now, when we talk about bonus depreciation, it's the opportunity to actually accelerate the depreciation on that asset, allowing you to essentially write off the entire amount of, you know, that you paid for the asset in year one.
Now, the reason why that's a big deal is because say you're buying a $50,000 asset and you are only required to put a $5,000 down payment. With bonus depreciation, you're now allowed to take that $50,000 as a tax write off against your ordinary income, but you only spend $5,000 out of pocket, right? So instead of stretching it over several years, you'll be able to now accelerate the depreciation and wipe out the income that you have.
Now, bonus depreciation was supposed to phase out, and if I'm not mistaken, off the top of my [00:05:00] head. 2024 would've been back down to only 40% being able to be a write off in that year. But we're taking the bonuses depreciation back to a hundred percent. So now a lot of clients understood that in 2025, it was an amazing opportunity to go out there and buy more assets if you needed them in your business.
The Catch: 100% Bonus Depreciation Only After Jan 19, 2025
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Fabrice Metan: But here's the catch, it only applied for assets purchased. On or after January 19th, 2025. So let me tell you a story. I have a client who actually purchased an asset, purchased a new vehicle on January 7th, and used it for business, but technically does not qualify for bonus depreciation because it was purchased before that date.
And so for a lot of business owners, especially my 7, 6 5 entrepreneurs. This is something that you're gonna have to deal with. Go back to look at [00:06:00] when was that asset actually placed in service? Am I actually within that window to be able to qualify for Bruno's depreciation? And keep in mind, it's not always the right thing to do.
You really need to make sure that you need to use up all of that depreciation in your one. Or sometimes it makes more sense to just stretch it out over several years, right? Definitely an item that's going to be confusing this tax season as we file all of these tax returns. Make sure that your tax professional is aware and see what you can qualify for.
Overtime Tax Exemption: Rules, Limits, and Who Qualifies
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Fabrice Metan: Now here's what happened with my client with 55 employees who received the W twos with missing information with the new tax code. Overtime is essentially tax exempt up to $25,000. Only the premium part of the overtime pay. In other words, most companies would pay time and a half, so only that half portion of the overtime wages received to that employee is supposed to be [00:07:00] tax exempt up to $25,000.
And also that only applies to employees with income under $120,000. Now my client actually has a large shop. You know, fabrication of, can't give you too much information 'cause I can't disclose that, but essentially 55 employees who worked a ton of overtime in 2025 received their W twos that were, you know, generated in the system and provided to every single one of those employees.
Payroll Software Fail: Fixing Incorrect W-2s for Overtime
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Fabrice Metan: The problem is, because the new law happened in the middle of the year, most of that. Information was not already built within most of the payroll providers, right? Most of the payroll software that companies were using out there. So all of those employees already paid the taxes on their overtime. The only issue is they're not aware of how much of that overtime they've paid [00:08:00] taxes on or how much overtime they actually gotten paid.
Most employees don't even check their pay stub. As long as the money is in the bank, who cares? Right. Well, at the time of filing their tax returns, the tax professional should be asking the right questions.
How much overtime did you actually have last year? And if you did, can we make sure that we have that number so that we properly deducted on the taxpayer's tax return? Well, all of those w twos went out without the information actually being rec reported on the W2. And so when I received the phone call from my clients.
Employees were upset. They went to file their taxes. Then they found out that some of that overtime should have been exempt. And so of course, everyone is pointing the finger at the owner when in reality it was the payroll software that did not have that update already included. Right? In 2026, it'll be fine, but for 2025 tax.
year A lot of people probably did not have the [00:09:00] information. I have tax professionals today calling me, letting me know that, hey, we received some W-2s and the amount that the person had reported as overtime was actually less than what that employee believed he worked or was paid. And so the deduction that the employee is able to claim on a tax return is understated.
Those are the things that we need to be able to catch, and so we have to go back to that business owner and essentially revise. Some of the W twos to add the information for another client. All we did was essentially break down the payroll summary per employee showing the total overtime pay, breaking down the portion that would've been exempt, right?
Because it's only the half portion, right? Not time and a half. Not the total paid in overtime, but the small portion that is exempt. Breaking all that down for each employee and include that in the same envelope where the W2 was. And so as a 7, 6, 5 entrepreneur, your business is generating over a million dollar.
More than likely, you [00:10:00] cannot make that type of revenue by yourself. So you have a lot of employees, and if that's your your situation, you have to make sure that those w twos were issued correctly with the right information for all of your employees.
SALT Deduction Changes: Standard vs Itemized (and the New $40K Cap)
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Fabrice Metan: Now let's talk about the SALT deduction. SALT, right. The reason why that's a big deal. So if, if I take you back to what the tax code used to be, you essentially have two ways to claim what we call the standard deduction, right? If you are a single individual, just to keep it simple, your standard deduction for the 2025 tax year is supposed to be 15,750.
In other words, on the first $15,750 in income. You do not have to pay taxes on that portion of your income. You pay taxes on everything above that. Now. You have an option or an alternative to either use the standard deduction that's already given to you or itemize your deductions, but to itemize your deductions, [00:11:00] that total has to be above the standard deduction amount because otherwise we might as well use the standard deduction.
Now, what does that mean when we talk about itemizing your deductions? Well, there's several things that goes in that category. Your medical expenses. Above 7.5% of your A GI, which is adjusted gross income, your state and local taxes, right? So state income tax, personal property taxes, those kind of things.
Your mortgage interest, your donations, your gambling losses, right? So all of those items are supposed to make up a total that is above the standard deduction for you to itemize. The problem was that before 2025, the SALT section of those deduction, which is the state and local taxes, was essentially capped at $10,000.
Now, if you live and earn your income in a [00:12:00] state with high taxes, right, with a high tax rate. I think in Kansas we're looking at five point. 4%, 5.7% off the top of my head. In certain states, if you're paying very high taxes, you end up losing a portion of that deduction because it's capped at 10,000.
So we have clients in Connecticut, New York, Florida, no, Florida of, of course it's tax exempt, but in certain states, essentially with high taxes. Those clients were paying 20, 30, $40,000 in state taxes, and were not able to include that in their itemized deductions because it was capped at $10,000. Well, the amazing thing that happened with the new big bill essentially was that you can now include up to $40,000 of those taxes.
And so we have a lot of clients that are making 2 3 $400,000. In, you know, wages [00:13:00] or business income that are now going to be able to itemize the deductions at a very high number as opposed to settling for the standard deduction. Again, those are the confusing things that literally happened in the middle of the year, and I'm recording this episode to make sure that you're capturing all of that information.
Final Takeaway: Plan Early, Ask the Right Questions, Save More
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Fabrice Metan: And so the final takeaway is this planning. At the end of the day, if you plan, you never have to react at the last minute. And I know a lot of business owners that essentially only think about taxes at this time of the year when it's too late. When you can't really go back and change the facts for 2025, right?
You did not realize that bonuses, depreciation was applying for a lot of the assets that you could have purchased, and so you looked more at your cash flow as opposed to the tax advantage. Both important, but you have to consider everything, right? You were not aware of the change in overtime and how that was gonna play out for your employees.
You ended up providing W [00:14:00] twos the same way that you did every year, previously, and now finding out that you've reported that information, not necessarily incorrectly, but did not provide all of the information that you needed to for your employees, and they might lose on their potential tax refund simply because you were not aware and your payroll provider did not mention that in that information.
And then the SALT deduction. You know, you could have found ways essentially to pay less in state taxes last year, which means less of a deduction. But if you continue to pay just as high as what you did in previous years, this time you get an opportunity to deduct a lot more. So those are the items that you definitely don't wanna miss and make sure to bring that up to your tax professional.
To take advantage of everything that you can qualify for this year, and so I believe 2026 is gonna be pretty confusing, but hopefully you get to this episode before filing your tax returns this year.
My name [00:15:00] is Fabrice Matan, founder and lead tax accountant at Simplify My Numbers. [00:16:00]