Tax Preparation vs. Tax Planning: Why Your CPA Isn’t Saving You Money | FBO2BO EP5

Cleaned Transcript

Welcome to From Burnout to Bought Out, the podcast for business owners who are tired of being the hardest working, lowest paid employee in their own company. I’m Jon, joined as always by Ryan, and together we’ve spent years inside owner-run businesses helping founders go from running on fumes to running a business that actually runs without them.

Every episode, we break down the real problems nobody talks about—the burnout, the bottlenecks, the blind spots—and show you what it looks like to build a business that’s profitable, sellable, and doesn’t need you in the building every day to survive. Whether you’re grinding through a plateau, thinking about an exit, or just trying to take a vacation without your phone blowing up, you’re in the right place.

Let’s get into it.

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Ryan: Good afternoon, Jon.

Jon: Good afternoon, Ryan. How are you doing?

Ryan: I’m doing pretty well, Jon. I don’t have a worry in the world. You know why?

Jon: No worry. No, tell me why.

Ryan: Because, Jon, despite any government shutdown, despite the IRS having jobs cut, I know for a fact that my CPA is working for them.

Jon: Your CPA is working for the IRS?

Ryan: That’s right, Jon. They have tens of thousands of undisclosed agents. And they are the CPAs. That’s right—agents. Secret agents. Double secret agents.

Jon: When I think of agents, I think of the dudes in The Matrix that materialize out of nowhere and kick the living you-know-what out of you for no reason.

Ryan: And when I think of agents, I think of pocket protectors and glasses with tape on them and people that say “no” a lot to business owners.

Jon: That doesn’t sound very—you don’t have many friends who are agents, do you?

Ryan: I really don’t, Jon. In fact, I don’t have a lot of friends at all. Thanks for bringing that up.

Jon: That’s why you moved. Send him to Colombia. Nobody will care. He won’t be missed.

Ryan: That’s right. The language barrier is the problem now, Jon. Not me. And the agents can’t follow you down there as easily.

Jon: Wow. That is a benefit.

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Jon: But let’s get into it. What do you mean that the CPA is working for the IRS? What does that actually mean?

Ryan: I mean it literally, Jon. Your CPA’s primary job is compliance. They’re here to file correctly, file on time, don’t get audited, don’t get you arrested.

That’s important. Staying out of jail is a solid life goal. It’s very underrated. I highly recommend it. And for those of you who have gone that way, you know what I’m talking about.

But that’s a baseline. It’s not a strategy. It’s about survival at that point.

Their job is to make sure that the government gets what it’s owed. And your job as the business owner is to make sure you’re not paying a dollar more than you legally have to.

Those are two very different jobs. Most owners think that they’re the same person, but they’re not. You’re hiring a referee and you’re disappointed that they’re not calling the plays.

Staying out of jail is a solid life goal. It’s not a tax strategy.

Jon: Well, unless you like big burly men, tattoos, and poor quality food.

Ryan: Well, to each their own. But I’d rather have a choice in the matter and meet the big burly man in a nightclub or something like that instead of surrounded by murderers.

Jon: As you say, life goals.

Ryan: That’s right. I’m never going back to prison again, Jon.

Jon: Yeah. Well, fingers crossed. Our businesses are too tightly connected. Where you go, I have to follow. And I would not do well in prison. That would not be good.

Ryan: You definitely would. You’d be everyone’s dance partner.

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Jon: So what do you mean—like, the CPA is just transactional, looking after very specific things? A lot of business owners say, “Well, my accountant handles everything.” Are they not getting some of the advice that you’re saying CPAs aren’t providing? Like, if CPAs don’t provide it, shouldn’t accountants?

Ryan: Well, CPAs and accountants—depending on the context you’re talking about.

For example, only 7% of CPAs actually specialize in tax. They only do tax preparation and tax returns because—let’s face it—they’re greedy. They just want more money. They want to make all that money in the first three months of the year so they can pay the payroll for the rest of the year without having to do anything else that they’re actually trained to do, which is audits and financial reviews and those kinds of things.

So when you’re hiring an accountant—”My accountant handles everything”—well, what is it? We did an episode on what is your accountant? Is it a bookkeeper? Is it a controller? Is it a CFO? Or is it a CPA—someone who prepares taxes?

And these people—”My accountant does everything”—they’re always looking in the rearview mirror.

Imagine this: You’re Miss Daisy and the chauffeur is driving you and constantly looking in the rearview mirror and doesn’t see what’s coming up ahead. That’s what a typical accountant looks like. They’re always looking back and saying, “Well, we should have done this” or “We should have done that.”

Everyone’s got 20/20 hindsight when it’s a month past due. And we can look back and say, “Oh, this is why this happened.”

Tax preparation is kind of like an autopsy. It’s backward looking by definition. Your financial year is already dead. They’re just determining the cause of death.

Tax planning is not done on April 15th—or April 13th when you give the shoebox full of receipts to your CPA and say, “Here, do my taxes.”

Tax planning is done January 1st all the way through December. Making sure that you’re not paying more than you legally owe.

And I want to stress that: legally owed. There are a lot of loopholes that are built in that you can take advantage of that are legal.

And I need to be fair with CPAs here. When you give somebody two weeks to say, “Help me do my tax planning,” and they’ve got 100 other tax returns to do, you’re not going to get their best advice. Nobody’s going to give that. You ask me to do the same thing, you’re not going to get my best advice.

What you need is someone talking to you about Q3 and how you’re going to save $40,000 when it comes tax time on April 15th. That’s what you need to be doing.

It’s the difference between your mechanic changing your oil and your mechanic telling you your engine’s about to blow because you didn’t change the oil three times 15,000 miles ago.

So you need to have a very frank discussion with your CPA and say, “I really appreciate you handling my tax returns. How are you on tax planning?”

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Jon: Let’s dig in a little more on preparation and planning. Give me some more examples of how planning can actually help throughout the year and help you overcome challenges that you might meet.

Ryan: So preparation is filling out forms after the year is over. The money’s already been spent, decisions have already been made. Your CPA is just documenting what happened, making sure everything is to the eye—i’s are dotted, t’s are crossed. It’s clerical work dressed up in a professional fee.

Jon: And I don’t know about you, but it’s getting more expensive every single year to get my taxes prepared.

Ryan: Planning is making decisions before the year ends. We’re talking tax planning in January for that year coming up. What are the big moves we’re going to make? What decisions do we want to do?

And we’re carrying that conversation on at least quarterly to check in on how we’re doing with forecasting. Are we on budget? Below budget? How’s our cash situation?

Because when you have time to plan, you have time to strategize. And we’re not only talking for this year—we’re talking about where you want to go in 5 or 10 years. Some of those things really have to happen now in order to be successful later. We’re trying to give ourselves a runway.

We’re talking entity structure, timing of income and expenses, deductions you didn’t know exist—again, legal deductions—retirement vehicles, depreciation, the whole playbook.

Here’s the tragedy: Most of these strategies expire December 31st. Most owners don’t talk to their CPA until February—two months after the fact. So the coupon’s already expired. You’re paying full price for a ticket that was half-price six months ago. Nobody told you there was a sale. The sale’s over. Enjoy your receipt.

The problem is you’re not getting the full advice of your CPA if you’re asking them in February. You need to start asking those questions in June, July, August.

Now, if your CPA pushes you off because they’re taking vacation and doing whatever they want, that’s not the tax planning strategist you want. They just want to have that high-ticket preparation bill.

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Jon: Can we give people a few nuggets as well? Like, you mentioned entity structure, timing, deductions they didn’t know existed. Just throw a few nuggets out there that people are completely unaware of.

Ryan: One of our clients takes advantage of something called Act 60 in Puerto Rico. You can legally relocate and avoid some federal taxes that way.

There’s a way you can structure your entity five years before you want to exit, and up to millions of dollars can be tax-free and avoid capital gains.

There’s Section 179, which everybody falls in love with, where you can buy a bunch of assets—or lease or finance them—and you can speed up the accelerated depreciation for that year. So you can take the whole expense of the million-dollar crane that you just bought, even though you’re financing it over five years.

There are ways you can take advantage of retirement plans and put $55,000 to $75,000 away in your retirement plan that’s completely expensed by your company.

Those are just a few of the bigger ones where it doesn’t necessarily cost cash in order to take advantage of these deductions.

Jon: That’s real money. That’s real dollars. We’re not talking a thousand or two. This is significant funds. What can the real cost be here?

Ryan: The real cost of not having a tax strategy?

Jon: Not having a tax strategy—but also, the tax benefit you just discussed there. We’re talking tens and tens of thousands of dollars for each one of these things. People should be taking advantage of it. What does that total up to?

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[Sponsor Break: Cruncher and Sons CPA Group parody]

“For over 40 years, Cruncher and Sons have been filing tax returns accurately, on time, with absolutely zero strategic advice. Their motto: We don’t save you money—we just count it after the government takes theirs. Cruncher and Sons: where your tax return is always correct and your tax bill is always higher than it needs to be.”

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Ryan: It can total up to millions of dollars, Jon.

We have one client who’s taking advantage of the R&D (Research and Development) credit and is getting five-to-one on their return on investment. They saved over $2.5 million in taxes in just five years.

Jon: Holy smokes.

Ryan: So this isn’t saving a few grand here and there. This is really significant dollar amounts.

But also, if you save a few grand here and there, that actually adds up to tens of thousands of dollars as well.

Jon: Yeah. That’s an exercise in addition. And if you sock it away in your Profit First account, you can stare at it and smile.

Ryan: That’s right.

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Jon: So why don’t CPAs offer this? Why isn’t this just something they do proactively?

Ryan: You want the real truth?

Jon: Well, we’re generally pretty truthful and transparent in this podcast.

Ryan: If you find a great CPA, keep them. A great bookkeeper, CFO, controller, CPA is worth their weight in gold.

Unfortunately, a lot of people have just gotten lazy and greedy. That’s the simple truth.

Tax planning takes energy. It takes using the laws. Instead of saying “no,” it’s saying, “Yes, we can do it if we do it this way.”

The end result is that you want to save $100,000 in savings—like the Puerto Rico strategy—well, we could do that. But it only works for about one out of 10,000 people. And that’s usually like a U.S. congressman or senator. I mean, that’s who creates these laws, folks.

That’s why you have the Augusta Rule. That’s why you can deduct interest off your second home—because they can afford a second home, which is their home state plus Washington DC. Put the two together. It benefits them. It only benefits a certain number of people, but it takes effort.

To say, “If we want to save $100,000 in taxes, we can’t necessarily take advantage of Act 60, but we can do this, this, and this.” And here’s the code we’re going to use. Here’s the form we’re going to have to use. Here’s how much savings it’s going to take.

And it’s going to cost you 10% of your savings, or it’s going to cost you $20,000 to get there. Now you’re paying somebody for what’s here—not necessarily how fast they can get your tax return done.

And it’s not malicious. It’s structural.

Most CPA firms are volume shops. They want hundreds of returns coming in. And then they work on other things.

If you have an S-corp, you have to file by March 15th. That means you have to have your stuff ready for your CPA probably by February 15th. That’s a quick turnaround for a year-end.

So if your CPA gets it on March 1st, what do they do? They file an extension. Now you have until September 15th to file.

And then the same thing happens on April 15th. They’ll file an extension for your LLCs or your Schedule C’s. Now they have until October.

And so what happens April 16th, the day after tax day? CPA is on vacation for like two to three weeks. Why? Because they just spent the first four months of the year doing tax returns for 12 to 18 hours a day.

They’re a volume shop, and that’s what happens. Planning takes time. It takes energy. And that’s not necessarily a specialty of your CPA—because only 7% specialize in tax.

So you’ve got to find the right 7%.

And by the way, the clients that are doing the Puerto Rico act—they have a U.S. attorney and a Puerto Rican attorney, and they both have to talk together, and they both specialize in what’s going on there. It’s a specialty. You can’t just move and expect to get it. It has to be well thought out and planned.

And I talked to these people on April 10th. They weren’t doing 100 tax returns. They took my call. We had a two-hour meeting. Because it’s their specialty. That’s what they do.

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Jon: I mean, clearly there’s a whole strategic approach to tax here. So what should you expect from a real tax strategy? You’ve alluded to some elements of it. What does it actually consist of, and how does Synergy help with that—like the whole seven-pillar approach with the Synergy Hacked methodology? Tax is one of them. How do those two things work together?

Ryan: At minimum, you should have a planning conversation in Q3 with your CPA.

At Synergy, we do Q1, Q2, Q3, and then Q4 to button it up.

And we also double-check. If we’re not doing the tax return—please, have your great CPA continue to do your tax return—we double-check that the planning was done. That the right strategy was used.

It’s a good thing to have a second set of eyes on your CPA who’s doing literally hundreds of tax returns. There are transpositions, fat fingers, simple mistakes that happen because a lot of this stuff is key-entered.

The conversation you have in Q3 at minimum needs to cover:

• Your entity structure
• Estimated payments
• Retirement contributions
• Depreciation
• Timing of big purchases or hires
• Anything that changes the picture—even “I’m getting married” or “I’m getting divorced”

A great tax strategist—and that’s who we hire at Synergy—is someone who can actually talk to business owners and help them strategize. Take the Greek IRS code and make it plain English.

And there’s a million pages of IRS code for a reason. Look at the people in Washington.

A great tax strategist looks at your business like a chess player. They’re always a few moves ahead. They’re not waiting for a pile of receipts in February. They’re calling in September saying, “Buy that equipment before December.”

Also, a very common strategy is delaying your December invoices and putting them in January—into a different tax year. That way you’re not paying as much because you’re making a lot of money. You’re not having as many sales go out in December and inflating your taxable income.

But here’s the problem with that, Jon. When I send out that invoice in January instead of December, I’m now 30 days past when the cash would be coming in.

Your CPA doesn’t worry about your cash flow. They worry about the tax liability. Those things don’t connect.

Synergy says, “Whoa, hold on here. There are other strategies we can use so you continue to bill on time and receive your money on time—because we have a plan for that money. Oh, and by the way, we’ve already planned for your tax liability because we’ve been planning for it since January. Your forecast confirmed it in June. We’ve developed other strategies along the way to make sure we’ve lowered your tax liability as low as possible.”

That’s the difference between a CPA working in silos and people working in connection.

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Jon: Yeah. That’s important. The most expensive words in business: “I wish I’d known that sooner.”

Ryan: Exactly.

Jon: Speak a little bit more about how tax interweaves with other facets of good financial management. Obviously, Synergy Hacked layers the seven different pillars on top of each other. How does tax weave its way into all the different facets of that methodology to create a compound effect?

Ryan: It’s baked into how we think about cash and financial operations.

The first thing we do is evaluate: Is the advisory team working together? Spoiler—they’re usually not. They’re not even in the same zip code.

The CPA is usually the biggest gap. We’ll have our operations person, our sales and marketing person, maybe our finance people, a couple department heads, all talking about things. But where’s the CPA? On the beach. In their office. “Just give me the numbers. Let me crunch them.”

So we have to bring the CPA into the conversation: “Hey, here’s our goal. Here’s where we want to go. Help us get there.”

When we weave all the pillars together, we make sure that cash, profit, and tax are managed as one system. They’re not three separate conversations with three different people who’ve never shared a calendar invite.

Your Profit First allocations, your tax strategy, and your exit plan are all connected as well. Do we have the right entity structure? Are we ready for an asset sale versus an equity sale? All those things come together and they’re planned years ahead so we’re getting there.

And then there’s no surprise. Our tax bill is no surprise. Our estimated payments are no surprise. Neither is our exit.

When you have good tax planning, you’re going to have more cash. When you have more cash, you can have more marketing. When you have more marketing, you can have more operations. And off it goes—working in tandem instead of silos.

Jon: A cycle of growth upwards, self-sustaining, as opposed to going the opposite direction.

Ryan: You’re absolutely right.

Jon: Yeah. A $50,000 unexpected tax bill can cause a lot of problems with a company.

Ryan: Oh, heck yeah. That impacts every facet of the business, what you’ve got planned. To suddenly come up with a chunk of change like that—that puts you in a tough spot. Especially if you’re following a CPA’s advice and not invoicing or leaving your invoicing until later and disrupting your cash flow already. That can be a real challenge.

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Jon: I ask this each episode. If somebody’s listening and they’re still awake—because we’re talking about tax—but this is interesting stuff. And they’ve never had a tax planning conversation. What’s the first move here?

Ryan: Call your CPA this week. Tax season’s over. Vacation hopefully is over.

And ask one question: “What’s one thing I should do this year before year-end to reduce my tax bill?”

If they give you a clear, specific answer with dollar amounts and deadlines, you might have a planner. Buy them lunch. They’re rare and deserve a sandwich.

If they pause and say, “Well, we’ll see how the year shakes out,” and offer to circle back in January—you have a filer.

“Circle back in January” is CPA for “I’m not going to save you any money.”

So keep the filer if they’re good at what they do. But you need someone else in the room. Someone whose job starts where your CPA’s job ends.

The money isn’t hiding. It’s sitting in plain sight. You just need someone whose job it is to look for it. Your current CPA’s job is to count it after the IRS already took their cut. The party’s already over and you’re picking confetti off your shoes.

The problem is that filers fall into a rut. They just want the information because when they’re done filing their returns, they’ve made hundreds of thousands of dollars throughout the season. They paid all their payroll. They just want to go sit on the beach.

And then when they come back, they want to do what they were trained to do—financial reviews or audits or those kinds of things.

When you have that 7% out there that does the preparation and the planning, you’ve got a good CPA.

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Jon: Gotcha. All right. Great words of advice. Powerful stuff. Really affects the dollars and cents in an organization.

Let’s have the takeaway, Ryan. What is the takeaway for this episode?

Ryan: Generally speaking, your CPA’s job ends where tax strategy should begin.

If you’ve never had a planning conversation before year-end—with dollar amounts, deadlines, and specific moves—you’re not being advised. You’re only being processed. It’s your turn.

The money you’re overpaying isn’t hiding. It’s sitting right there in plain sight. You just need someone whose job it is to look for it before the IRS takes their cut.

Your CPA should not work for the IRS. Your CPA should be working for you.

Jon: Awesome. Let’s hope there are very few CPAs listening to this conversation because your inbox will be full.

Ryan: Look, if you’re a great CPA, I will refer you personally.

Jon: Yeah. The world needs great CPAs and no more jail time.

Ryan: Absolutely.

Jon: Exactly. I’m not going back, Jon.

Ryan: No, no, please.

Jon: That’s a wrap. Thanks, Ryan. See you next episode.

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That’ll do it for this episode of From Burnt Out to Bought Out. If anything we talked about today hit home, do us a favor—share this episode with another owner who needs to hear it. And if you’re sitting there thinking, “They’re talking about me,” good. That’s the first step.

Head to the show notes and book a free triage call with our team. No pitch, no pressure, just a real conversation about where you are and what’s possible.

You can also find us on LinkedIn and at wearesynergysolutions.com. New episodes drop every week.

Until next time, stop running the treadmill and start building something you can actually sell.