Maximum Lawyer Podcast Episode Summary

Episode Title: Proactive Tax Planning: Essential Strategies for Law Firms to Thrive Year Round
Host: Tyson Mutrux
Guests: Jacqueline (CPA) and Adam (Attorney), Pennywise Tax Strategies
Date: September 16, 2025

Episode Overview

This episode centers on the importance of year-round, proactive tax planning for law firms, featuring Jacqueline and Adam, a CPA-attorney power couple and founders of Pennywise Tax Strategies. They share their firm’s origin story, discuss common pitfalls law firm owners face, and provide practical advice on building tax strategy into business operations—regardless of firm size or growth stage. The conversation blends personal anecdotes, actionable insights, and memorable banter, making tax strategy accessible and urgent for entrepreneurial lawyers.

Key Discussion Points and Insights

1. The Pennywise Origin Story & the Gap in Small Business Tax Planning

• Origin & Motivation:
  • Jackie joined Adam’s law firm in 2019, at which point they recognized a lack of proactive tax support for small and solo law firms ([01:17]).
  • They leveraged their big-firm skills to help other businesses and themselves—saving over $250,000 in taxes the first year by testing their strategies on their own firm ([00:11]).
• The Shift to Proactive Planning:
  • Adam: "We were really sick and tired of that same conversation once a year of 'Congratulations, you made a bunch of money. So here's what you owe.' Like any true entrepreneurs, we looked at a problem, said there's gotta be a better way." ([02:07])
  • Both observed that while large corporations get sophisticated tax planning, small businesses are often left with merely compliance ([03:21]).

2. The “Pennywise” Name—More Than a Clown

• The name is a play on their daughter's name, the band Pennywise, and the idea of being "wise" about every penny.
• Chosen for convenience—“Done is better than perfect”—and often misinterpreted, but fitting for their approach ([04:45]-[05:19]).

3. Proactive, Year-Round Advising vs. Annual Tax Prep

• Trusted Advisor Model:
  • Tax planning is integrated into regular business check-ins, not a once-a-year panic: “We are stepping on the scale with the numbers...having that conversation more than at the end of the year" (Jackie) ([07:34]).
  • Adam compares their process to planning for big purchases (like a vacation home) with a tax-efficient mindset ([06:08]).
• Accountability & Transparency:
  • Frequent communication increases accountability and allows for nimble strategy adjustments. Jackie: "The biggest mistake I see is just a lack of communication between your tax preparer and the business owner." ([08:44])

4. Common Tax Mistakes Law Firms Should Avoid

• Hiding from the Numbers:
  • Many lawyers—especially solos—avoid facing their financials due to embarrassment or lack of clarity, which stifles strategic opportunities ([09:36]).
• Limited View of 'Tax Season':
  • Adam: "Tax season is not January to April, tax season is year round... There’s things we should be doing now if we want to reduce your tax bill." ([10:27])

5. Key Activities for Proactive Tax Planning

• Regular Financial Reviews:
  • Understanding your real tax liability motivates other financially strategic decisions, like accelerating or delaying investments ([11:37]–[12:23]).
• Specific Strategies—Examples:
  • Use "Profit First" or similar systems with intentional tax set-asides.
  • Implement strategies such as the Augusta Rule or S-corp salary reviews.
  • Adam: "It’s keeping an eye on what you have going on in your business, in your life, and making sure that your tax strategy aligns with that." ([13:41])

6. The “Reasonable Compensation” Debate

• No Simple Rule:
  • Jackie (former auditor): "There are a couple different schools of thought... The easiest way is: look at the amount of time you're spending in the business and how much you would pay someone to replace you." ([14:25])
  • Adam: "Lawyers love the word 'reasonable.' That's really what it comes down to." ([15:26])
  • Salaries should be benchmarked to roles and responsibilities; context and documentation are crucial.

7. Putting Your Kids on Payroll—Best Practices & Pitfalls

• Execution Matters:
  • Kids need real roles, with real work, reasonable pay, and appropriate documentation ([16:42]).
  • Benefits include shifting income to lower brackets and funding Roth IRAs for long-term wealth ([17:44]).
  • Adam warns: "People get stupid and aggressive... like, they think they have to be cute... In most cases, that's not going to hold up." ([17:44])
  • Personal anecdote: only one of their two kids is actually on payroll, emphasizing practicality over loophole chasing.

8. Tax Planning for High-Growth Firms

• Accounting Lags Behind Growth:
  • Adam: "The accounting industry is completely broken for high growth businesses... the speed at which we need to implement strategies is so much faster" ([19:39]).
  • Growth drives new opportunities—and challenges—for tax savings, especially with multi-state expansion and new ventures.
• Entity Choice Considerations:
  • Jackie recommends evaluating if a C-corp might eventually fit, especially if the owner isn’t taking much out and is building for sale ([21:37]).
  • State expansion adds complexity but also opportunity ([22:26]).

9. Advice for Couples in Business Together

• Make It Work and Have Fun:
  • Jackie: "Make sure that you work hard and you play hard and there's opportunities in the tax code to do that." ([23:54])
• Set Boundaries:
  • Adam: "We are very intentional about those times... there’s family time, couple time, business time." ([24:30])

Notable Quotes and Memorable Moments

• On Proactive Planning:
  "The reason why everyone paying taxes so much in taxes and so seemingly last minute... is because you’re not thinking ahead of time of what you can be doing to save on your taxes." — Jackie ([02:51])

• On Gaps in Tax Services:
  "Nobody teaches small business tax... there was this apparent gap in the market of like—well, who helps the small businesses?" — Adam ([03:21])

• On High-Growth Firms & Tax:
  "Most small businesses are growing at 2, 3, 4, 5% per year... the speed at which we need to implement these strategies is so much faster than what most accountants are used to." — Adam ([19:39])

• On Involving Children:
  "Putting your kids to work in your business can be a great tax strategy... But you need to employ them and they need to provide value to your business." — Adam ([17:44])

• On Couples Working Together:
  "Make sure that you work hard and you play hard and there’s opportunities in the tax code to do that." — Jackie ([23:54])
  "We are very intentional about those times... there’s family time, couple time, business time." — Adam ([24:30])

Timestamps for Important Segments

• Origin story & business pivot: [00:11]–[02:07]
• Gap in small business tax and proactive planning: [03:21]–[04:18]
• Trusted advisor model in practice: [06:06]–[08:16]
• Common mistakes in law firm tax: [08:44]–[10:27]
• Year-round tax activities: [11:37]–[13:57]
• How much to pay yourself? [14:14]–[15:26]
• Kids on payroll: [16:28]–[19:02]
• Tax strategy for high-growth phases: [19:39]–[22:59]
• Advice for couples in business: [23:54]–[24:58]

Final Thoughts

This episode offers an actionable blend of tax strategy, business planning, and real-world examples—all aimed at empowering law firm owners to foster year-round, strategic tax conversations. Jacqueline and Adam’s approach is practical, candid, and tailored to the realities of entrepreneurial law.

Contact & Resources:

• Website: Pennywise Tax
• Social: LinkedIn, Facebook (Pennywise Tax Strategies), Instagram (@pennywise)
• For working with Adam and Jackie, use the contact form on their site or message them directly for a more personal (and entertaining) interaction.

For tickets to MaxLawCon and additional resources: maxlawcon.com