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Tax Trend Analysis — CFO Framework

Pathway 3 of 6 | Priority #3 — All years, "where did the money go" | April 12, 2026

6-Year Income Trend (2017-2022 from 1040 Data)

Peak Revenue
$838,926
2021
Peak Net Income
$127,552
2017
Avg Net Income
$80,271
6-year average
2025 AGI
~$390K
Per TaxAlchemy
2025 Projected Refund
$40-50K
After all strategies

"Where Did the Money Go?" — Complete Breakdown

Multi-Year Income Statement

YearTotal IncomeCOGSGross ProfitExpensesNet IncomeMargin %
2017$437,179$93,214$343,965$219,292$127,55229.2%
2018$488,797$161,502$327,295$196,947$115,03123.5%
2019$505,235$161,099$344,136$362,533-$18,397-3.6%
2020$624,521$207,032$419,329$323,321$80,96113.0%
2021$838,926$267,166$571,759$470,086$85,82210.2%
2022$567,409$229,008$338,401$247,724$90,65516.0%
2025 (proj)~$797,000~$239,100~$557,900~$350,000~$207,90026.1%

Expense Category Trends (Where Money Actually Went)

2022 Expense Breakdown (Latest Full-Year 1040 Data)

QBO CodeCategoryAmount% of ExpensesTrend
61000Labor (team wages, VA)$104,70542.3%Largest line item
68000Supplies/Office$42,20117.0%Stable
65000Continuing Education/Coaching$35,45914.3%High — includes Buffini
62000Lead Generation$27,90711.3%Variable
64000Communication/Tech$15,8696.4%Stable
66000Automobile$13,4005.4%Stable
69500Professional Services$3,5961.5%Low
69000Insurance$2,8141.1%Stable
TOTAL EXPENSES$247,724100%

CFO Analysis: Where the Money Went

Labor + Education = 56.6% of all expenses. Joe invests heavily in his team and his own development. Labor costs correlate with team size growth (DLO, SMT, GAV, EDE). Education includes Buffini coaching ($2,240/mo = ~$27K/yr), TaxAlchemy ($50K in 2025), and Decentralized Masters ($25K in 2025).

COGS tracks at ~30-40% of revenue consistently. This is the KW split, referrAL payouts, and E&O costs. As JRD stays capped, the effective COGS drops (royalty OFF, company split OFF).

2019 was the anomaly year — expenses exceeded gross profit by $18K. This was the only loss year in the 6-year period. Since then, expenses have been disciplined relative to revenue growth.

2025 projection shows the S-Corp working — ~$797K gross income per TaxAlchemy (Feb 2026 meeting), with optimized deductions reducing AGI from ~$390K to potentially ~$190K after film ($214K deduction), cost seg ($67K), SEP IRA ($50K), and crypto education ($25K).

Current Monthly Burn Rate (2026)

CategoryBusiness/moPersonal/moCombined
Fixed Costs (rent, insurance, dues)$5,557$1,250$6,807
Wages (VA + Labor)$6,379$6,379
Software + Tech$1,180$1,180
Channel/Marketing$1,453$1,453
Living (needs + wants)$2,450$2,450
Savings/Investment$5,000$5,000
Debt Minimums$2,850$4,703$7,553
TOTAL$12,804$10,168$22,972

Breakeven: 1.47 transactions/month at avg commission $13,500 and 76.6% net after splits. Target: 3 transactions/month.

Tax Trend Analysis Pathway

1
Ingest Historical Returns

1040 data (2017-2022 from Spending Plan) + 2023-2024 from personal GDrive + 2025 from TaxAlchemy

2
Normalize by Category

Map all expenses to QBO codes: 51900 Marketing, 61000 Labor, 64000 Tech, 65000 Education, 66000 Auto, 68000 Office, 69000 Insurance

3
Calculate Year-over-Year Trends

Revenue growth rate, expense growth rate, margin expansion/compression, COGS ratio changes

4
Identify Anomalies

Flag years with unusual ratios: 2019 loss year, 2021 peak revenue with low margin, 2025 new S-Corp strategies

5
Project Forward

Using 2025 TaxAlchemy projections + Profit First targets, model 2026-2028 with current growth trajectory

CFO Report Delivered

Complete multi-year analysis with charts, anomaly flags, and forward projections

Cross-Analysis Results (3 Loops)

Loop 1 — Data Gaps

  • 1040 sheet has 2017-2022 only — 2023 and 2024 returns not yet ingested from personal GDrive
  • 2025 AGI (~$390K) from TaxAlchemy meeting notes but finalized 1040 not yet filed (extension required for Immortals K-1)
  • CreekHouse AirBNB income not captured in QBO — missing from P&L trend

Loop 2 — Analysis Gaps

  • No effective tax rate calculation per year (need actual tax paid vs income to determine efficiency)
  • S-Corp vs Schedule C transition year not clear in data — changes how COGS and salary are treated
  • EFTPS payments ($14,363 to date) not correlated to which tax years they cover

Loop 3 — Corrections Applied

  • FIX 1: Added 2025 projection row using TaxAlchemy data (~$797K gross, ~$390K AGI)
  • FIX 2: Added monthly burn rate section to connect historical trends to current operations
  • FIX 3: CFO insight box explains the "where did the money go" narrative Joe requested
  • FIX 4: Flagged 2023-2024 returns as needing ingestion from personal GDrive for complete trend
  • NEXT: Scan personal GDrive (joseph.diosana@gmail.com) for 2023-2024 1040 PDFs to complete the trend