In this instructional video, CPA‑attorney Mark J. Kohler presents a five‑step “Zero Tax Blueprint” that shows small‑business owners how the wealthy design their tax situation rather than react to it. He explains that the blueprint works for any entrepreneur who understands the tax code, and it integrates tax planning with asset‑protection and wealth‑building. Step 1 – Right legal structure: Start with an LLC for branding, liability protection and banking, then convert to an S‑Corporation once net profit reaches roughly $40‑$50 K. The S‑Corp allows splitting income between reasonable salary and distributions, eliminating self‑employment tax on the distribution portion. Step 2 – Smart owner compensation: Owners can take money out as W‑2 salary, profit distributions, expense reimbursements, retirement contributions (including Roth strategies), and even pay family members. Each method has distinct tax treatment, and using a mix minimizes overall tax liability. Step 3 – Turn everyday spending into deductions: Treat personal‑benefit expenses that have a legitimate business purpose (travel, home‑office supplies, vehicles, technology, education, etc.) as deductible business costs. The key is to document the primary business purpose and avoid aggressive, non‑compliant claims. Step 4 – Proactive use of the tax code: Identify and act on tax incentives, credits, and deductions (opportunity‑zone investments, ADA improvements, EV purchases, etc.) before year‑end. Wealthy owners view the tax return as a scorecard, not a planning tool, and schedule fourth‑quarter planning sessions to capture all available benefits. Step 5 – Move money to tax‑free vehicles: Shift taxable dollars into Roth accounts, Roth 401(k)s, Health Savings Accounts, and real‑estate strategies (depreciation, 1031 exchanges, stepped‑up basis at death). These vehicles either defer tax or eliminate it entirely, allowing wealth to compound without government cuts. Kohler emphasizes that the blueprint is repeatable each year, that the IRS enforces laws created by Congress, and that disciplined planning—rather than reaction—creates wealth. He concludes with a call to action to contact his firm, Kkos Lawyers, for a personalized implementation checklist.
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Most business owners go through life thinking taxes are just something that happens to them, like gravity. You earn money, you pay taxes, end of story. It is what it is. But there's a whole different world that the wealthy live in. In that world, taxes aren't something you react to, there's something you design around. Wealthy business owners don't wait until April to find out what they owe. They build their financial life, so the tax code works for them instead of against them. And here's the secret nobody tells you. You don't need to be rich to use the same blueprint. You just need to understand the rules of the game. I'm Mark J. Kohler, CPA attorney and small business advocate. And today I am breaking down the zero tax blueprint. Every business owner needs to know. These are the same steps the wealthy use year after year. And once you understand them, you'll never look at taxes the same way again. Let's unlock it. Step one. The right structure is the key to everything. Wealthy business owners don't operate as sole proprietors. They may have started out as a sole proprietorship, but they create a legal structure that they can build their business on, one that supports their tax, asset protection and wealth building strategies. And this is an important distinction because if you're trying to save taxes, you want that tax strategy to work in concert with all the other strategies you're trying to build upon. If you just focus on wealth building and forget taxes, you're not going to succeed and vice versa. And if you just focus on asset protection, you could be undermining a tax strategy on the other side of the fence. So we need to bring it all together and make sure it's coordinated. What we've helped clients build is what we have termed the trifecta. The trifecta puts their operations on their left, their assets on the right, and it all flows down to their 1040 where we make a smoothie if possible. We want to blend all the write offs together and save the most tax tax as we can and offset all the gains with write offs and other losses and strategies that bring the whole thing together on the 1040 for maximum tax savings. Now, on the operations side, most entrepreneurs, that means starting out as an llc. This is going to help them get their brand going, their banking, separate liability, protection, and then they're going to convert to an S corporation once their net income hits that sweet spot, around 40 to $50,000 of profit. Otherwise stated, every successful entrepreneur with an operational business is going to be an S corporation at some point. And why well, it's because the S Corp is where the tax savings really start. That's where you split income between salary and distribution or think of wages and profit and you stop paying self employment tax on every dollar you make. That's what happens in a regular LLC or sole proprietorship. Well, the wealthy don't get penalized for success. They change the structure before the bigger taxes kick. So the more money you make, the more you save. Step two, Pay yourself the smart way. Most entrepreneurs have no idea that there's multiple ways to take money out of their business. Some that don't even create tax liability. They think, oh, if I just take money, that's what I'm going to pay taxes on. And that's all there is to do. So an entrepreneur could be compensated in multiple ways. A W2 salary draws or distributions, reimbursements for expenses that they don't even pay taxes on but the business gets a write off for and then retirement contributions. You can be taking a write off to build tax deferred income or even use a Roth strategy where you never pay taxes again on that money you're building. And finally we have family members to think about. Why are you taking out all the money and paying taxes at your rate and then just supporting family members? And this could involve even more creative planning with your spouse and how they're compensated. Lots of options in each one of these different ways you could take compensation and is going to be taxed differently. And the wealthy use all of these methods to pay themselves. To be more strategic. If you just take money out of the business to pay yourself, you're probably going to pay way too much in tax. And that brings us back to that S Corporation strategy at the very top. We want to take out wages and we're required to kind of a reasonable compensation. But as much as possible we want to take in other ways which could be distributions or profit or some of these other tax strategies we're going to continue to unpack here. But bottom line, pay yourself intelligently and intentionally. That way you'll unlock deductions, payroll strategies and retirement planning options most business owners never get to. Wealthy business owners don't ask how much should I pay myself? They ask what's the smartest way to take the money out of my business. And this brings us to step three, turn everyday business spending into deductions. A lot of times I call these personal conversion expenses. You're going to pay for some of these things personally anyway. So let's make sure they're related to the now you get a write off and it's tax free income. So you're taking money out of the business for an expense. That's justifiable, it's a business expense, but it might also have a personal benefit. That's when things get fun. So let's talk about travel just for a moment here as an example. As we go through this. Let's say you've got to go to Dallas anyway to go see your mom or maybe your visit your brother or sister. But come to find out you have a client there or a vendor and if you're in Dallas to go have a meeting with them and have a legitimate business purpose, you could be writing off the entire trip to go have that business meeting. And while you're there, stop it and see mom or brother or sister. And that's legitimate. If we don't get too aggressive, we need to make sure we have a business purpose for the trip. But if you can squeeze in a little personal time, perfect. Now we're taking money out of the business for a write off, not paying taxes on it, and knocking out two birds with one stone. Well, the average small business owner leaves thousands of dollars in legal write offs on the table every year. Not because the deductions don't exist. It's because they don't think through the strategy and think ahead of time or even know the rules. The wealthy treat every business expense like a tax planning opportunity. Travel like I just talked about, Home office supplies and equipment for the home office, family involved in the business, having your regular annual board meetings, vehicles and auto expenses, technology, cell phones, computers, cameras, and then even education and trainings. I went through that list. You were probably thinking, yeah, some of that has a personal benefit, but as long as it's primarily for business, I'm going to try to write off the whole darn thing. And we have to remember the IRS isn't the enemy. Congress and our legislators created the law. The IRS is just there to enforce the rules. And if you know the rules of the game, those deductions can be yours. And here's another important point. The wealthy just don't spend money to get a write off. They spend money wisely trying to create more income or revenue or business opportunity or knowing that that expense might have a personal use, that they were going to spend that money anyway. So now it becomes a deduction. I want you to start thinking about how every expense is could have a valid business purpose. Step four, use the tax code proactively, not reactively. And what do I mean by that? Do you know the tax code was built to motivate Americans to do certain things? Go build homes in this opportunity zone and we'll give you better tax strategies. Go put in ADA accessibility features at your business and we'll give you a tax credit. Go spend money on an electric vehicle or solar or this or that. All these things come and go to help motivate us to make America a better place or do things the government's bad at doing. So if you're a business owner, you want to be looking for tax code strategies that are there for the taking. It's not unethical or inappropriate to find a loophole. The loophole is typically a law the government created to help motivate you to do something. And you get to benefit with the tax strategy now by being proactive. Successful business owners don't wait until the spring in April to try to implement strategies that had to be taken advantage of in the current year. And especially at year end, they are busy. They're tuning up payroll, finalizing deductions, funding retirement plans, running year end meetings, talking about how they're going to pay their family members that maybe help throughout the year. And they'd already given their kids or family members money. So how can we generate a write off with that? And we want to execute charitable and gifting strategies, clean up the books, the list goes on and on. But we're doing it proactively and we're also doing it intentionally before year end. Because if we're doing the taxes in April and looking in the rearview mirror, there's not much we can do. Wealthy people love to have planning sessions at year end. The tax return isn't a planning document, it's a scorecard. It's after the fact. So the wealthy don't ask, how much do I owe? They ask what moves can I still make before December 31st to save step five. And this is the real trick. Why even pay taxes in the first place? Move your money from a taxable world to a tax free world if you're a follower of mine. You know, I talk about this all the time. This is where the zero tax blueprint goes on steroids. Now, at the outset, remember there's two types of dollars, really. Taxable dollars, money the government gets a cut of, or tax free dollars, where it's money the government never participates in. Again, no taxes. Well, the wealthy spend their working years moving as much money as they can from bucket one to bucket two. Now this could be as simple as a think 401k or an IRA, I'm going to take a tax deduction up front and I can invest that money tax deferred. I won't pay taxes. I make money, but when I pull it out, I will pay taxes. Well, even better than that is this Roth switch strategy. With the Roth strategy, you put money in you've already paid taxes on, but you'll never pay taxes on that again. So if I pay taxes on $1,000 to put it in there in a gross tax free investing however I want and it goes to $10,000, let's say I don't pay tax on that $10,000 and I'd rather pay tax on $1,000 than on that $10,000 later. So the Roth strategy for me is a super powerful weapon that you can use in your arsenal to build wealth and save taxes. But it doesn't stop there. There's all sorts of strategies that have this type of angle. You have the Roth 401K. Whether it's a Solo 401K you created or even part of your company plan, you can start building Roth money even faster. Inside that 401k, being able to put away more. The health savings account. Oh, the triple tax benefit. You get a write off to put the money in. It grows tax free and it comes out tax free for any expense at any age, immediately if you want. They're like a Roth account for health care and you get a write off to put the money in. You get the best of all three worlds. And then there's real estate. Real estate is exciting too because you can be building tax deferred wealth where you don't pay tax until you sell the property and then maybe even use a 1031 exchange and roll it into another property. And when you die, your whole family gets it and don't have to pay tax on it at all. And then along the way you can create tax free cash flow by using depreciation. Real estate is so creative and fun and almost every one of my wealthy clients it has some form of rental real estate. Please do not discount that. And those are just the big ideas. There's even more talking about investing in oil and gas and using charitable remainder trusts or deferred tax planning with installment sales and other strategies. Bottom line is as you start to build wealth, you're going to have these planning meetings, looking at your situation and planning with your tax advisor for the best strategy that fits you. And this isn't something you do once, it's something you do every single year. If not regular meetings throughout the year. You don't build wealth with what you make, you build wealth with what you keep. And the tax free world is where wealth multiplies. Now in summary, and let's get real. Most business owners treat taxes like weather, something they have to live with and have no control over. But the wealthy treat taxes like a game they know how to play. And you can play it too. Now here's your Zero tax blueprint in one sentence. Structure your business right, pay yourself the smart way, turn your spending into deductions whenever possible. Make sure you do year end planning in the fourth quarter and then move your money from the taxable world to the tax free world whenever possible. And you don't have to be rich to use this blueprint. You become rich because you use it. If you're ready to build your plan, not someone else's plan, reach out to my law firm, Kkos Lawyers, for your comprehensive tax and legal consultation. We'll help you implement this blueprint in your trifecta right away and give you a checklist you can begin immediately and start keeping more of the money you've worked so hard for. If this video has been helpful, hit the like subscribe and turn on notifications because you deserve to understand the same strategies the wealthy have been using all along. I'm Mark J. Kohler. Thanks for watching and I'll see you in the next one.
