Tax, Hacks, and Everything in Between with Matt Lents: An EOFire Classic from 2022

0:01John Lee Dumas:Boom! Shake the room, Fire Nation. JLD here and welcome to Entrepreneurs on Fire, brought to you by High Level, the all-in-one sales and marketing platform. On today's classic episode, we'll be breaking down tax, hacks, and everything in between with Matt Lents. And Matt is an entrepreneurial CPA specializing in e-commerce, crypto, and real estate taxes. He's passionate about self-development, helping others, and traveling to 55 countries through travel hacking. And today we talk about how you can achieve success without it being complicated. how to get a financial advisor and plan your taxes wisely, pursue what you love, take risks and chase your dreams and oh, so much more.

0:36John Lee Dumas:And a big thank you for sponsoring today's episode goes to Matt and our sponsors. Cape is a privacy first mobile carrier built from the ground up with security as the priority. If you care about protecting your digital life without giving up your smartphone, Cape makes that possible. Visit cape.co forward slash fire and use code fire for 33 % off Cape for six months today. If you are building a real business, you need real infrastructure. High Level gives you website hosting, funnels, email marketing, automation, calendar booking, payments, and course hosting all on one platform, plus award-winning 24-7 support.

1:09John Lee Dumas:Get a 30-day free trial and my full bonus stack that includes a 15-minute private call with me and much more at highlevelfire.com. Highlevelfire.com. Matt, say what's up to Fire Nation and share something that you believe about becoming successful that most people disagree with? What is going on, Fire Nation? Nice to meet you. Let me think. I'd have to say probably an uncommon train of thought with regards to the question you're asking is, I guess the fact that it has to be difficult or there has to be some form of a lot of resistance or that it's an outward laborious type of journey. By specific example, I just ordered the pre-launch of the Think and Grow Rich movie.

2:00And ironically, you were actually on there. And I loved what you said about if you want to be, do. And I think a lot of people get this idea of success in this journey to accomplish achieving the success so convoluted with it being attached to such strenuous, struggling type events that help them achieve that. And the reality is it's just a very simple thing. And a lot of the outward success that we experience is very much so a byproduct of what we do inwardly. And part of the beginning of the inward journey is just simply making a decision. So if you want to be, do.

2:40John Lee Dumas:Well, I love that you're quoting me here for this first question. So I appreciate that. And I do agree. I mean, it doesn't have to feel hard, Fire Nation. I mean, in fact, wouldn't it be better if it felt light and easy and fun and exciting. And you did bring back some memories. That was many years ago. And I remember, you know, it's my first kind of quote unquote Hollywood experience where it was like a real set. But when I say real set, I kind of say it with a chuckle because they're like, okay, come to this address. And I looked at it and I was like, wow, this address, I've never been in this place before.

3:09John Lee Dumas:I've lived in San Diego for five years, but so we were driving, I'm like looking for this nice kind of glorified, you know, like Paramount Studios, like lot. And it was like under this overpass in this like sketchy, sketchy neighborhood. There was just like this beat up warehouse with like a door that was like scratched and like, it was just like peeling paint. And I'm like, am I, can I really be in the right place? And I like knocked on the door, opened it up. They're like, Hey, come in. And I'm like, Oh, I guess this is where they're setting up shot for today's filming. And of course, you know, it was all professional and they had everything great and set up, but it was just kind of funny of like one's expectations of like what's, you know, quote unquote, a Hollywood set might look like, and then the reality.

3:48John Lee Dumas:And of course, they produced a fantastic film and it was all great and fun, but that just kind of made me chuckle in memory there. But I want to get into tax hacks and everything in between with Mr. Matt Lentz. Let's do it. Right now, brother, we are currently experiencing quite an interesting economic climate in America. And I think things are going to remain interesting for quite some time. So how does this affect the tax landscape? Interesting question. And yeah, I couldn't agree more. Things are definitely interesting out there. You know, one of the first thing that comes to mind for me is the impact it's going to have on those that are in the e-commerce space.

4:28I mean, if we kind of take a step back and look at what's occurred over, you know, the last two years plus in the United States and even globally with all of the shutdowns, if you will, it has created a massive explosion in the e-commerce space. And so I think the IRS and the State Department's revenue are getting very heavily focused on that industry and coming up with very creative and aggressive ways, you know, to target that outside of sort of that macro perspective on a specific industry. I think, you know, if we look at the United States as, you know, a profit and loss statement as a business, you know, all of the money that went out in, you know, PPP, EIDL, credits, printing money.

5:11That's a huge expense line item. And so the way that they recoup expenses is by raising revenues. And if you think about what the United States does to raise revenues, it's through virtue of increasing taxes. So we are looking at a lot of movement on Capitol Hill that's heading in the direction of finding more unique and existing ways for them to increase the revenues of the country. So we're probably on the precipice of what's gonna be seeing an increase in our taxes over the next three, five, 10 years.

5:44John Lee Dumas:I mean, Fire Nation, these are the type of things you need to be thinking about as you're planning the rest of your 2022 into 2023 and beyond. I mean, this is Matt, this is what he does. He has his finger on the pulse. And I mean, man, this is gonna affect everything, but specifically it's gonna affect you, Fire Nation, your business, your bottom line. and let's get into your specialization, Matt. So Fire Nation can really get a grip about where your expertise really lies. Absolutely. Yeah, like I mentioned before, e-commerce is a major focus of mine in the tax arena. I also work with a lot of people that have real estate and a lot of people that are in the crypto space.

6:23So ironically, it fits well with your podcast because I essentially say my client avatar are entrepreneurs, right? Typically they have a core bread and butter business, but then they also accumulate their wealth through that business and then disperse that through different diversification of asset classes. So I see a lot of people that'll have a business, real estate, crypto holdings, e-com stores. And generally I like people that have sort of all of that, that bring along that package to me because those are the fun ones to work with. Think of creative strategies to help them with tax savings and kind of help them throughout the journey of their life as the different chapters present themselves.

6:59John Lee Dumas:In Fire Nation, this is what lines up exactly with you, like exactly what Matt did share where, hey, this is Fire Nation. We are entrepreneurs. We are side hustlers. We are solopreneurs. We are small business owners. And Matt, I often have my audience go through this really a lot. I think it's such an important thing to go through. And that's who's your avatar? Who's your ideal client? Like get real detailed here. I mean, I could go on like a 20 minutes rant on who my perfect listener is for entrepreneurs on fire. Now, that doesn't mean I don't have an 84-year-old woman on a walk right now listening and an 11-year-old boy right now pedaling his bike to school listening, but I know who my perfect listener is.

7:42John Lee Dumas:Who are your ideal clients? Who is your perfect customer? I think we can both comfortably say that the word entrepreneur has become the buzzword of modern times, right? But if we really peel back what the French meaning of the word is, That is the type of client avatar that I really am desiring to work with is a true by the heart entrepreneur, somebody that is creative, innovative, forward thinking, and not afraid to take risks and fail. And when I say take risks, I don't mean, you know, stretching the boundaries of what's legal or doing anything nefarious. But I do think people that, you know, just are willing to stretch their comfort zone as far as they can possibly get and, you know, do things that are going to be interesting and exciting and have new endeavors.

8:31Because those are the kind of clients that I particularly enjoy working with and serving. And it's not to say anything negative if they don't fall within that particular box, but those are the ones that are sort of my avatar because it always keeps me in the position to have to tap into my creative energy and ways that I can come up to structure things to be more accommodating and matching energies with them. As an entrepreneur myself, the tax business is just one of the endeavors that I've got going on. So I love building partnerships that are long-term with people that have mutual respect, ideal values, and alignment in our core philosophies.

9:08And so I think as an entrepreneur at heart, I strive to try to build a book of business with other types of entrepreneurs that are very similar to myself.

9:18John Lee Dumas:So let's not use a specific name because I'm not trying to call anybody out, but give us just like a painted picture of one of your favorite clients or one of your perfect clients, like how they came to you, how they found you, how you decided to work together, what exactly you did to really help them. Like, I just love specific examples, like real case studies. And I'd love to hear more about that. Absolutely. I mean, two of them actually come to mind. One is a major, major player in the e-com space, and they actually came to me because they had literally a binder full of state notices because there was not a proper education space that was transpiring as they were building out their processes and going through the integration channels and doing the different things logistically to help streamline and create efficiencies within their business.

10:10So it started a journey for me that, you know, I saw a major opportunity in that space and in that industry where there's a lot of transfer of either prebuilt automated stores or people that are starting to sell online that they are just not privy to just how aggressive and some of the more technical rules that are out there that are causing these massive issues in the state space. you know, Wayfair versus North Dakota was passed some years ago. And essentially what that rule is in a very simplistic explanation is that you no longer have to step foot into a state for them to tax your profits. So now they can come along and say, hey, because you have an economic connection to my state versus a physical connection, you know, we can come in and start assessing and levying and doing all these other aggressive things to increase their share of the revenues.

11:01so it was sort of the linchpin that caused me to go to the drawing board and create essentially an info product that talks through all of these issues and creates a color by numbers point and shoot process for people to avoid having to get into that trap and it also includes you know 10 calls with me and several other different resources that drive a tremendous amount of value to people that are in the income space so by virtue of them coming to me with a problem it caused me to go inward and really dial in on some creative energy and get into a collaborative mindset with this client and build out something that's been beautiful and a great journey and that's been very successful for me and it's really helped a lot of other people in the e-com space.

11:43So I have to say, number one, that was probably one of my favorite experiences. And then number two, I had a guy that basically liquidated his life savings and took a big risk some years ago and built out a prototype of a certain invention and that was successful and he raised a hundred million dollars in venture capital and you know they wound up for instance repeating that process over and over and over again and wound up taking the company public and sold it for oodles and oodles of money and you know now he's in a situation where you know he's if fat fire is a

12:16John Lee Dumas:concept in the fire nation I'd have to say he's egregiously morbidly obese fire and you know he gets to use that as life energy to do a bunch of cool stuff. He's got a couple of venture capital funds and a lot of real estate holdings and holds a bunch of land. He owns one of the four mountains in a city in Montana. And he's just got a bunch of cool stuff going on and a lot of freedom. And he's an overall pretty cool dude. So I'd have to say those two were the ones that came to mind when you asked that question. Well, I do love that. And thank you, because that's exactly what I wanted was kind of a breakdown for that.

12:48John Lee Dumas:So Fire Nation can kind of to understand what does it look like in the real world when it comes to identifying your ideal clients. And we have so much good stuff coming up when we get back from thanking our sponsors. Fire Nation, if you're growing fast, your backend can't be stuck in slow motion, bills flying in, approvals getting bottlenecked, vendors chasing updates, that kind of busy work drains your energy and steals your focus. That's where Intuit QuickBooks BillPay steps in. QuickBooks BillPay helps you stay in your zone of genius by automating backend tasks. I'm talking bills, vendors, payments, even 1099s.

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15:35John Lee Dumas:When you sign up at highlevelfire.com, you also get my exclusive bonus stack. a 30-day free trial, a private 15-minute call with me, JLD, access to my weekly live office hours, a digital copy of my book, The Common Path to Uncommon Success, my 50 Days to Something Execution Roadmap, and more. Visit highlevelfire.com and start building your something today. So Matt, we're back and I want to talk about the different sectors that you are seeing more issues in than others? What industry are you seeing these developments happening that are both having issues and are developing? Absolutely. Great question.

16:17You asked some brain busters. I know we mentioned earlier the e-com piece, and I don't mean to beat a dead horse, but I can't overemphasize. When we look at the United States as a business, and the IRS and the Department of Revenue, they're businessmen, so they are looking to maximize their profits, just like we as entrepreneurs are. So anytime there is an upward tick in a certain industry, legislation and regulation is going to follow so that they can accomplish that goal. And, you know, e-com has certainly exploded over the last decade and primarily a huge influx of people stepping into that industry with COVID because with the brick and mortar stuff being very restricted, you know, it's been something that's caused people to go to the drawing board and find a new way to earn a living.

17:02So I am definitely seeing a lot of issues in that space. And then the real estate side of things as well. The Build Back Better program was just a slight niche away from actually becoming law just at the turn of the year. And that would have had a massive, massive impact on the real estate industry. There was a lot of things they were thinking about taking away and limiting. For example, the 1031 exchange was discussed to be rendered practically obsolete because it would have been so limited and a lot of other tax benefits that are afforded to real estate people. So we're very grateful that that wasn't passed because just the state of the union we're in right now, I don't know that we could absorb something like that.

17:42So a long answer short, I'd have to say e-commerce and real estate.

17:45John Lee Dumas:E-commerce, real estate. Where are you seeing more of the developments right now? Where are people focusing? Where are people actually having some potential success, even in these tough times? Cryptocurrency is sort of the Wild West right now. It seems like as that particular industry is evolving, the IRS and the Departments of Revenue are in a very fast-paced frenzy to try to keep up with how to manage this adoption of this massive movement, which I am infatuated with on all sides of things. I love the technology behind it. I love the development. I love the culture. I love the concept that it stands for.

18:25And I like that it challenges conventional thinking. So I'm seeing a lot of people have a lot of success in the crypto space. And I am also seeing people have a lot of success in the e-commerce space, despite all of the challenges that are being presented. There's still a lot of gray area out there for people to really structure up to unique tax structurings and put themselves in the position to be very successful and very, very profitable despite the current challenging landscapes that are out there.

18:51John Lee Dumas:We don't just like talking about issues. We don't just want to talk about developments. We want to talk about solutions. Like what are the solutions you're putting your clients through? Like maybe even a specific example here of a client of yours came to you with a real issue or they were developing something. Maybe one of each if something comes up for you. What solutions did you bring to them as their guy? In my best James Earl Jones voice, this is not considered tax or legal advice. Please consult your CPA for any advice given. I mean, you know, I'd have to say like being receptive to what I'll call special purpose entities where, you know, you can take a look at, let's just say company A and almost break it down into its individual components and say, hey, there's multiple streams of revenue that are coming from different types of services, if you will, into this entity.

19:50can we have a legal entity rationalization conversation where we can take that entity and we can split it up into multiple entities and kind of think through where the location of those entities should be and parse out what would be one stream of income into multiple streams of income and place each of those entities into the correct jurisdictions that they're applicable to and shift around some of the income in a legal and in a virtuous manner in order to help reduce tax savings. And also take a look at the structure of the entity. Are you being taxed efficiently and planning efficiently for the best tax answer that you could possibly have by the way that you're currently structured?

20:32Are you a C-Corp? Are you a partnership? Are you an S-Corporation? Do we need to think through restructuring some of that? So I typically look at the entity first and how we can optimize that and create some tax efficiencies and some tax planning strategies to implement for the clients.

20:49John Lee Dumas:Let's talk future. Where do you see the overall tax landscape heading in the next five, 10, maybe even 15 years? And probably most importantly, what can we as listeners, as entrepreneurs, as businessmen and women do to prepare for it? You know, I couldn't agree more with your sentiments around, you know, being solution focused and not problem focused and I don't enjoy burying anything but great news but you know the unfortunate reality is I don't necessarily have a crystal ball I can only speak to you know what my network has and you know one of the people in my rolodex are actually you know on the hill and working the ways and means committee so I'm super blessed to have access to information that would be considered water cool talk right that not a lot of people you know have access to because it's not currently inked in the law, but the writing is certainly on the wall that we are going to be seeing an increase in taxes.

21:46And I wish I had a better answer than that. But if you look at over the last hundred years, as bad as taxes are, it still is the lowest percentages that we've experienced in this lifetime and many lifetimes before. So with them printing all of that money and all of the economic incentives that they provided as we absorbed the pandemic, You know, they are coming up with ways that they're going to try to think through getting a lot of that money back. Right. Inevitably. So that is effectively what, you know, we think that is going to occur over the next three, five, 10, 15 years. So I have to say in order to be prepared for that, get with your financial advisor, your CPA, or other people that are educated in the space and start conversations now looking out over the future and make effective tax planning decisions.

22:39One of those that is extremely unsexy that a lot of people don't like to hear is if you are a business owner, one of the most important things you could do is just have your data current. Have your books current because you are basically having speculative and conceptual conversations if you don't have real data to really work with. And start thinking through ways to optimize your tax planning in the current time so that way that you can be successful over the coming years as these taxes start to go up.

23:08John Lee Dumas:So one thing I want to do now is kind of take a step back, Matt. And we've talked issues, we've talked development, solutions, ideal clients. I mean, we've talked about the landscape. How do you want to end this conversation? Take the microphone from us, take a step back, give us the one grand Matt Lentz takeaway from this entire episode here today. The one grand Matt Lentz - No pressure though. Takeaway. Nah, pressure is a good thing. It helps drive growth, right? I mean, the Matlince that you hear that is a CPA is not inherently who Matlince is, right? You know, Matlince is somebody that is super focused on self-development, spiritual growth, law of attraction, and mindset.

23:58And so I think, although we did touch on a lot of things that were quantitative on the surface that meets the eye, I guess if I had one message to send to a large audience, it would just be, pursue what you love. we only get one chance at this thing called life. And I know that you only live once as sort of a played out type label. But the reality is, is that I see a lot of people by virtue of my particular network and my large client base that simply just don't take that step to the other side because they're scared of it. And I would just encourage people to have the courage to pursue what it is that their dreams are and not be scared to take risks and fail because it keeps too many people inside of their comfort zone.

24:44And that's one of the major fundamental principles for self-development, entrepreneurship, and then ultimately achieving freedom in this lifetime. Because on the other side of that, there's just nothing sweeter than that experience that we can have here in our short journey that we're here on earth.