Commission splits ate $229K (23%). Payroll took $180K (18%). Education/coaching consumed $88K (9%) -- including TaxAlchemy $50K, Decentralized Masters $25K, and Fynanc $13.5K. Credit card payments took $85K+. Business OpEx ran $120K. Living expenses, debt service, and IRIS contributions consumed the rest. Total identifiable outflows: ~$871K. The gap is credit card interest and untracked miscellaneous.
Three structural problems: (1) Tax account was raided -- $18,882 pulled from Taxes to pay BofA Corp CC on Feb 10, 2026. (2) Debt service is $5,334/mo minimum on $304K total debt. (3) OpEx consistently exceeds allocation -- the "Bleed" pattern from Profit First shows OpEx running negative every year. The business generates strong GCI but outflows match or exceed inflows every month.
Yes. Key levers: (1) Maximize retirement contributions -- SEP-IRA allows up to 25% of net self-employment income (~$23K-$45K deduction). (2) Real estate professional status if Joe qualifies (750+ hours). (3) Entity structure optimization with TaxAlchemy. (4) IRIS/LOC interest may be deductible as business investment expense. (5) Home office deduction if applicable. Current tax due: $72,908 vs $17,025 in tax account = $55,883 shortfall.
| Category | Amount | % |
|---|---|---|
| Commission Splits / COGS | $229,000 | 23.4% |
| Payroll (Owner + Team) | $180,000 | 18.4% |
| Business OpEx (Software, Dues, Office) | $120,000 | 12.3% |
| Education & Coaching | $88,000 | 9.0% |
| Credit Card Payments | $85,000 | 8.7% |
| Debt Service (HELOC + Previous BofA) | $64,000 | 6.5% |
| Living Expenses | $61,000 | 6.2% |
| LOC/IRIS Contributions | $36,000 | 3.7% |
| EFTPS Tax Payments | $8,000 | 0.8% |
| Unaccounted (CC interest, misc) | $108,000 | 11.0% |
| TOTAL | $979,000 | 100% |
| Program | Cost | When | Notes |
|---|---|---|---|
| TaxAlchemy | $50,000 | Oct 2025 | Tax strategy coaching |
| Decentralized Masters | $25,000 | Dec 2025 | Crypto/DeFi education |
| Fynanc Year 2 | $13,491 | Apr 2025 | IRIS/PLEX coaching (Grow Capital) |
| Total Education | $88,491 | 9% of gross income |
Monthly minimum obligations total $17,542 before any discretionary spending. On months with no closings, the business bleeds. Even on closing months, the net margin after splits leaves thin coverage.
| Obligation | Monthly | Annual |
|---|---|---|
| BofA Corp CC Minimum | $4,068 | $48,816 |
| IRIS/LOC Contribution | $3,000 | $36,000 |
| HW HELOC Payment | $3,800 | $45,600 |
| Living Expenses (Fixed) | $3,045 | $36,540 |
| Creek HELOC Fixed | $636 | $7,632 |
| Creek HELOC Variable | $630 | $7,560 |
| Living Spaces (Synchrony) | $303 | $3,636 |
| Best Buy (Citibank) | $270 | $3,240 |
| Variable Living Expenses | $760 | $9,120 |
| TOTAL | $16,512 | $198,144 |
| Does NOT include: payroll ($12K/mo), business OpEx (~$2K-8K/mo variable), or tax set-asides | ||
| Date | From | To | Amount |
|---|---|---|---|
| Feb 10, 2026 | BofA DG TAXES CHK X6094 | BofA Corp CC X0701 | $18,882 |
| Feb 10, 2026 | BofA DG INCOME CHK X6886 | BofA Corp CC X0701 | $8,269 |
| Feb 10, 2026 | BofA DG OPEX CHK X2961 | BofA Corp CC X0701 | $10,000 |
| Feb 3, 2026 | BofA DG OPEX CHK X2961 | BofA Corp CC X0701 | $15,222 |
| Total to BofA Corp CC (Feb 2026 alone) | $52,373 | ||
This single month pulled $18,882 from the tax reserve to cover credit card debt -- creating the tax shortfall.
| Metric | Amount |
|---|---|
| 2025 GCI | $979,000 |
| 15% Tax Allocation (target) | $146,850 |
| Actual EFTPS Payments Made | $8,000 |
| Current Tax Account Balance | $17,025 |
| Tax Account Raided for CC Debt | $18,882 |
| Total Tax Shortfall | -$55,883 |
The following are potential levers. Joe paid $50K for TaxAlchemy -- these strategies should come from that engagement. This analysis identifies the levers; TaxAlchemy provides the implementation.
| Strategy | Potential Savings | Complexity | Notes |
|---|---|---|---|
| SEP-IRA / Solo 401(k) Contribution | $15,000-$45,000 | Low | Up to 25% of net SE income. Schwab SEP already open ($20,142). Immediate deduction. |
| Real Estate Professional Status | $20,000-$50,000+ | High | If Joe qualifies (750+ hrs in RE activities), losses from rental properties become deductible against ordinary income. Requires documentation. |
| S-Corp Election (Entity Restructure) | $10,000-$25,000 | Medium | Reduce self-employment tax by splitting income between salary and distributions. Current S-Corp status unclear. |
| Home Office Deduction | $3,000-$8,000 | Low | Simplified: $5/sqft up to 300 sqft ($1,500). Actual: proportional share of home expenses. |
| Accelerated Depreciation (Vehicles) | $5,000-$15,000 | Medium | Section 179 on business vehicle. Auto expense already at $13K/yr (2022). |
| Business Interest Deduction (IRIS LOC) | $2,000-$5,000 | Medium | HW EPIC LOC at 11.5% -- interest on business investment may be deductible. Requires proper classification. |
| Continuing Education (Already High) | Already Deducted | -- | $88K in education already flowing through. Verify all are being captured on Schedule C. |
| Health Insurance Deduction | $5,000-$12,000 | Low | Self-employed health insurance premiums. Currently $786/mo in health costs. |
| TOTAL POTENTIAL AGI REDUCTION | $60,000-$160,000 | Requires TaxAlchemy guidance for implementation |
| Year | Gross Income | Total Expenses | Net Income (AGI Component) | Effective Tax Rate |
|---|---|---|---|---|
| 2022 | $567,409 | $476,732 | $90,677 | ~24% |
| 2021 | $838,926 | $746,253 | $92,673 | ~24% |
| 2020 | $624,521 | $528,513 | $96,008 | ~24% |
| 2019 | $505,235 | $523,632 | -$18,397 | 0% |
| 2018 | $488,797 | $358,449 | $130,348 | ~28% |
| Client | Volume | GCI | Close Date | Quarter |
|---|---|---|---|---|
| LaTrelle Andrews - 1926 Wakefield | $990,000 | $30,195 | Mar 27 | Q1 |
| Fadi Daher - 756 Nicholson | $515,000 | $15,945 | Mar 27 | Q1 |
| David McMillan - 11413 Velvet Field | $318,585 | $19,115 | Jan 29 | Q1 |
| Bradley New - 802 Lehman | $533,000 | $12,488 | Feb 21 | Q1 |
| Janey-Ali Rizvi - 5203 Camarosa | $374,000 | $11,715 | Jan 17 | Q1 |
| Waseem Ansari - 3659 Main Plaza | $305,000 | $9,645 | Jan 23 | Q1 |
| Nathan Nuttall - 7518 Golden Thistle | $280,000 | $6,671 | Mar 28 | Q1 |
| Dennis Williamson - 610 Wild Wind | $200,000 | $6,495 | Mar 24 | Q1 |
| Kateryna Titenko - 11515 Endicott | $195,000 | $5,850 | Mar 20 | Q1 |
| Ozgur Altiok - 6477 Olympia | $255,000 | $6,109 | Mar 7 | Q1 |
| Client | Volume | GCI | Expected Close |
|---|---|---|---|
| Gerardo Jimenez - 1254 Lamonte | $975,000 | $29,745 | Jun 18 |
| Bryan Clegg - 14011 Boerne Country | $1,026,910 | $31,302 | Jul 2 |
| Ron Howard - 5823 Stern Springs | $760,000 | $23,295 | Jun 20 |
| Vaughn Simon - 2062 Southern Landings | $810,000 | $24,795 | Nov 20 |
| Marc Verschuren - 13815 Britoak | $592,500 | $17,805 | Jul 8 |
| Shayan Enayat - 5623 Spellman | $505,000 | $15,645 | Jun 27 |
| Jeff Winters - 2002 Walnut Green | $535,000 | $12,409 | Jun 26 |
| Jason Falk - 3003B Ventas | $390,000 | $12,195 | Jul 2 |
| David Doehring - 4132 Deerfield Village | $252,500 | $8,070 | Jun 18 |
| Tristan Pace - 19016 Pinewood Grove | $325,000 | $7,313 | Jun 16 |
| Kateryna Titenko - 1619 S Kirkwood | $100,000 | $3,000 | Jun 16 |
| Stream | Monthly | Source | Remaining |
|---|---|---|---|
| 01-01 | $502 | Shadow Loan/DTW | 18 payments |
| 02-01 | $504 | Flip 2 | 22 payments |
| 03-01 | $503 | Flip 3 | 25 payments |
| 04-01 | $504 | Flip 4 | 30 payments |
| 05-01 | $505 | Flip 5 | 33 payments |
| 06-01 | $506 | Flip 6 | 35 payments |
| TOTAL | $3,024 | 6 active streams | |
| Metric | Value |
|---|---|
| HW EPIC LOC (X1791) | $25,000 limit |
| Current Balance | -$7,059 |
| Interest Rate | 11.50% |
| Monthly Contribution | $3,000 |
| Monthly LOC Payment | $419 min |
| Elapsed Months | 18 of 36 |
| Debt | Type | Balance | Rate | Payment |
|---|---|---|---|---|
| Creek House HELOC Fixed | HELOC | -$74,143 | -- | $636/mo |
| Creek House HELOC Variable | HELOC | -$90,956 | -- | $630/mo |
| Previous BofA | Business | -$135,471 | -- | $2,800/mo (via HW HELOC) |
| BofA Corp CC (X0701) | Credit | -$8,765 | 14.49% | $4,068/mo |
| Amex/DG (X1009) | Credit | -$13,000 | 18.49% | -- |
| Discover/JRD (X6858) | Credit | -$30,000 | 12.99% | -- |
| HW HELOC (X5919) | HELOC | -$75,000 | 10.75% | $3,800/mo |
| HW EPIC LOC (X1791) | LOC | -$7,059 | 11.50% | $3,000/mo (contribution) |
| Living Spaces (x4339) | Credit | -$2,200 | 29.99% | $303/mo |
| Rooms To Go (x7174) | Credit | -$149 | 29.99% | $308/mo |
| Best Buy (x2298) | Credit | -$436 | 30.49% | $270/mo |
| Previous Amex | Credit | -$3,891 | -- | -- |