Entrepreneurs on Fire · John Lee Dumas of EOFire

Plan Ahead: Take Action Today to Reduce Your Tax Bill by Thousands Next Year with Matthew Dominic Sercely: An EOFire Classic from 2022

·19 min·1 clip

An attorney explains how creating a second business saved a client $23,000 in taxes this year alone.

This classic episode of Entrepreneurs on Fire features host John Lee Dumas (JLD) and tax attorney Matthew Dominic Sercely, who specializes in helping business owners reduce future tax liabilities. The conversation focuses on proactive tax planning strategies for entrepreneurs. Sercely defines tax planning as structuring your business, expenses, and entity setup to legally minimize taxes owed over time. He shares a case study of a client with a day job and a consulting side business earning over $400,000 annually. By legally creating a second business entity, this client is projected to save approximately $23,000 in taxes this year. Another example involves a small construction business owner netting $60,000-$70,000 in profits, who is set to save about $6,000 annually after a tax plan. Sercely stresses that tax planning is distinct from accounting and requires holistic, forward-looking strategy. A key insight is that "hope is not a plan," criticizing the common mistake of delaying tax strategy until a business is highly profitable or tax season arrives. He advises entrepreneurs to start planning as soon as it makes financial sense, noting implementation can take months. Sercely argues the IRS is reasonable if you engage in good faith, describing its mandate as collecting what is legally owed rather than maximizing revenue. He identifies cryptocurrency tax classification as an area where IRS rules currently lack logic. He recommends meticulous record-keeping for all expenses, using tools like QuickBooks or simply emailing yourself photos of receipts. Common mistakes include failing to deduct legitimate business expenses like portions of cell phone bills, home office costs, or personal computer use. Sercely claims clients typically see a 100-200% return on investment from tax planning within three years, with first-year savings exceeding his fees. He suggests not focusing on taxes until a business is consistently profitable, offering rough thresholds of $60,000 profit for a primary business or $20,000-$30,000 for a side hustle. The tone is educational and conversational, blending direct advice with specific client examples. The style is motivational, urging immediate action from listeners. This episode is ideal for entrepreneurs or side-hustlers who are becoming profitable and want to understand proactive, legal tax strategies. Listeners who are not yet earning significant income from their business, or who prefer entertainment over tactical financial advice, might choose to skip it.

As heard by us

Practical tax planning guidance for founders who are already earning.

This Entrepreneurs on Fire classic focuses on planning ahead instead of waiting until tax season. JLD brings in Matthew Dominick Sersoli, an attorney and tax planner, to explain how a business can be set up to save tens of thousands in future taxes, why planning should start…

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Why you'd press play

You want next year's tax bill to shrink before the calendar turns.

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