💼 Save Taxes Now, Build Wealth Forever: Why Starting a Business Is the Smartest Move You Can Make

Are You Tired of Paying 30–50% in Taxes?

If you’re a high-income W-2 earner, you already know the frustration. You work hard, make good money, and still find yourself writing massive checks to the IRS. You’ve maxed out your retirement, you itemize your deductions, and you may even give generously to charity.

And yet… your tax bill keeps climbing.

What if there was a smarter, more strategic way to reduce your taxes and build long-term wealth?

Spoiler: Start a business.

Why Most High Earners Stay Stuck

You’ve probably heard about someone making millions and paying “zero in taxes.” Most of those stories are either misleading, illegal, or both. But what is true is that the U.S. tax code rewards business owners and investors — not employees.

If you're a W-2 earner with no other streams of income, your options are limited:

• Standard or itemized deductions

• Maxing out your 401(k)

• Possibly some charitable giving or mortgage interest

Those help, but they don’t change the game. Starting a business does.

Tax Advantages of Starting a Business

Starting a business opens up a whole new world of tax deductions you simply don’t get as an employee. For example:

• Cell phone + cell service

• Laptops and equipment

• Office expenses (even at home)

• Travel and meals for business

• Marketing expenses

• Professional services (including your CPA!)

Here’s the key: As long as your intent is to make money, it qualifies as a business — not a hobby — in the eyes of the IRS.

You Don’t Need to Go Big. You Just Need to Get Started.

Too many people delay because they think starting a business requires:

• A business plan

• An LLC

• A team

• A loan

None of that is required to start. You can be a sole proprietor tomorrow — no LLC, no fees, no frills. Just pick something people will pay you for. Sell goods online. Offer a service. Use a skill you already have.

“If you have a skill or product people will pay you for, and you're working toward profit, that's a business.” - Todd Frazier

What About the IRS "2 Out of 5 Years" Rule?

Here’s what you need to know:

• As a sole proprietor (Schedule C), the IRS allows you to claim losses for 2 out of every 5 years

• Those losses can reduce your taxable income — even from your W-2 job

• After two loss years, you’ll need to show a profit in year 3 to keep it classified as a business

Don’t abuse it, but use it wisely. This gives you time to build something legitimate without worrying about immediate profitability.

When to Upgrade to an LLC or S Corp

LLCs are not magic. In fact, they can cost you hundreds to thousands annually depending on your state (California, for example, has an $800 minimum franchise tax).

Here’s when Todd recommends forming an LLC and electing S Corp status:

• Your business earns $100K+ in gross revenue

• Your net income (after expenses) is $40–60K or more

At that point, the S Corp structure lets you pay yourself a reasonable salary and take the rest as distributions — avoiding self-employment tax on the profit. That’s 15.3% savings on thousands of dollars.

From Tax Savings to Wealth Building

Here’s why this strategy is so powerful:

✅ Short-term: You reduce your tax burden

✅ Mid-term: You grow income-producing assets

✅ Long-term: You build equity and optionality

Starting a business may begin as a tax move, but it becomes a wealth-building engine if you stick with it.

Why Employees Rarely Get Rich

This graphic (shared in the episode) puts it in perspective:

74% of the world’s richest people are entrepreneurs12% are investors8% are athletes4% are entertainers0% got there by just earning a salary

Owning a business gives you leverage: income potential, asset growth, and tax advantages that employees simply don’t get.

Final Encouragement from Todd

“Not everyone should run a business. But everyone can.”“You don’t need to go big — you just need to start.”“If you want to save taxes and build real wealth, starting a business is the most powerful thing you can do.”

🚀 Ready to Start?

👉 Book a 1:1 Startup Strategy Session with Todd at FrazInc.com

Now is the time to stop overthinking and start doing.

Start small. Start smart. Start your business today.