Business Innovators Radio - Interview with Ethan Heisey, CEO of Exponential Freedom Discussing Tax Mitigation Strategies

Episode Date: September 16, 2025

Ethan is the CEO of Exponential Freedom, Ethan’s drive for leadership and financial freedom surpasses many other traditional approaches. He is a public speaker at many events, along with formulating a company of many employees who hold his trust. His consulting services have helped over 2,000 persons in the art of saving Tax, increasing their net worth, and driving business revenue.Learn more: https://theexponentialfreedom.com/The information provided during this appearance is for general informational purposes only and should not be considered personalized financial, tax, or investment advice. Each individual’s situation is unique, and viewers are encouraged to consult with a licensed financial professional before making any decisions. Exponential Freedom is a consulting and marketing firm—we do not offer financial advice or make recommendations. Instead, we connect clients with qualified, licensed professionals best suited to their specific needs.Influential Entrepreneurs with Mike Saundershttps://businessinnovatorsradio.com/influential-entrepreneurs-with-mike-saunders/Source: https://businessinnovatorsradio.com/interview-with-ethan-heisey-ceo-of-exponential-freedom-discussing-tax-mitigation-strategies

Welcome to influential entrepreneurs, bringing you interviews with elite business leaders and experts, sharing tips and strategies for elevating your business to the next level. Here's your host, Mike Saunders. Hello and welcome to this episode of influential entrepreneurs. This is Mike Saunders, the authority positioning coach. Today we have back with us, Ethan Heise, who's the CEO of Exponential Freedom, and we'll be talking about tax mitigation strategies. Ethan, welcome back to the program. Thank you for having me, Mike. This is a, I'm excited.

It's going to be a fun time. Yeah, you know, I like how this is phrased tax mitigation strategies because it cannot be tax elimination because you can't get out of paying taxes. But how can we lower them? How can we lessen them as much as humanly possible? Because you got to pay your taxes. We know that. So let's dive right into where you start when you're working with your clients explaining this concept. Because again, do you say, we cannot eliminate taxes, but we can reduce them?

Where is that conversation begin when you're starting to work with clients? It's a great question. We typically have a three-step process that has worked for a long time with our firm. Normally what we like to do for our clients is say, okay, let's have some damage control. Let's go back to see what you've already paid in the past few years. And are there any things that we're missing? Anything that we can do to get you money back from those prior years? We generally are able to save clients about a 25% savings on top of what their CPA is already done for those current years.

Well. Never had a client. We haven't been able to help. And that's what we stand by. The second step from there is to look at how do we save money in our credit? current tax year. Let's build a strategy so that what happened last year doesn't happen again. Let's make sure we are preemptively striking. We're not going to go back and say, oh, no, I'm in a mess. How do I fix it? It is a game plan you have to have. And that could be the

difference of you saving anywhere from 25 to 50% on taxes for it. So when we take our money in, let's say we can save the client 25% on their prior year taxes. We then, Build a strategy where we can save anywhere from 25 to 50% for their current years. We've had clients that we've saved them up to 90, 95% on their current tax year. Obviously, it's not guaranteed, but that's something we have been able to do. And then from there, because of all this money that we've freed up, the next question we get for the third step is, where do we put it? Yeah, what do we do with this? Thank you.

What do we do with that? And then that's where we look at places to grow their money tax efficiently on top of there. So that's usually the three-step process. And it's such a great time because I've never had a person tell me, no, they don't want to save tax. It's the most fun conversation when you can say, hey, I talk with my team. We're going to be able to get this for you. And they're excited. Every client we work with is a raging fan.

They go to their friends, give us referrals. It's such a good time. And I've heard it also said tongue and cheek that, you know, the government is your, you know, business partner you never wanted to have and you never interviewed and you never approved of, but there they are. So anything less that you could pay into that, that's better. And I think that's something to keep in mind too. And I like your approach. Let's look back. You know, because I know that you can go back three years.

You can't go back further than that. But in the past three years, can we recoup anything? And then where were some of those gaps that we discovered and let's plug those up so that moving forward, you know, we're not going to make that again. And then, okay, now that we found this and you're going to stop paying out that, we've got X number of dollars. We can now re-reposition and put this, you know, redeploy into something positive. So you mentioned 25 percent and sometimes more, but 25 percent can be a whole bunch of money

for people, right? you typically working when you say 25% is this for individuals or business owners or maybe maybe a mix of the two both you know we help both w2 business owners their business taxes we can we can do it all on our team and this is where we separate ourselves from our competition there's there's a lot of people out there that are CPAs or tax attorneys but the way the reason that we're able to separate ourselves is because we have a team. And we have on our team, we have an estate planner, tax attorney, CPA, financial advisor, insurance consultant, business consultant, a big team.

And I always look at my business owners and I ask them the question. I say, hey, when's the last time that you've gotten all your designated people helping you in the same room? When's the last time your CPA is talk with your financial advisor? When's the last time your financial advisor talk with your estate planner? Almost always, they say they've never done it. And that's a key mistake. I'll give you an example. We were sitting down talking with a guy who did an insurance policy,

it was a whole life policy. And so I asked him, I said, great, that's awesome. What kind of policy you do? And he explained it to me. And then I asked him, then I said, after he told me a bit more, I said, great, did your insurance? agent set it up to where you can get a tax deduction for every dollar that you're contributing to it.

He then looks at me and he says, never heard of that. And I said, well, either, and then nothing to you, he probably sets you up a great policy because if you're licensed and you're in business, you probably know a little bit about something in insurance. But his mistake was his insurance agent didn't go to his CPA and just build a strategy to where it could be a deduction for what. what he puts into that. And that's where we really need to get to be is who is who is in your corner?

Who's helping you with this advice? If you're around and mediocre advisors, your portfolio will be mediocre. You want an A team. Mike, what's that you ever heard that term? Like you are who you surround yourself with or something like the top five people. Yeah. Yeah. Yeah.

Yeah. Yeah. Your level of income and intellect is predicated by the top five people you surround yourself with. I've heard that. I don't know. I'm sure that some, you know, five gurus have been annotated as saying that, but I think that's very valid. It's huge. And it's such truth. And I don't know, maybe people just don't take the time to get reach out to others. But again, there's no secrets. It's all being done. You just have to go find someone who's more successful than you. Ask what they've done. And a lot of times they're more than willing to share. And then

just apply it to your life. That's all that we do. That's how we've learned how to execute on these strategies ourselves. And now we just help guide people to do them. But the clients themselves oftentimes, they're super successful. They know how to make money. They're making great money. They don't have the time to figure all this out.

That's what we've done. That's why they come to us to learn about all of this because we've done the research. Yeah. So I know that a tax mitigation strategy can also. be looking at, we talked previously about Roth IRAs that grow tax-free, but what if you don't have a Roth right now? You can do a Roth conversion. Sometimes that's a good thing. What do you work with your clients on explaining if that's a good thing and how can a Roth conversion potentially help? Roth IRAs are a great place to put your money.

generally, for the most part, Roth IRA, you put the money in. It's going to grow tax-free. And then you can pull it out with no taxes. It's a good alternative than to a brokerage account that you can put money in, but at the same time, you're going to be taxed on the growth, and then you're going to be taxed when you pull the money out. So it really just depends on what your goals are with the money. Think through because there's pros and cons to both.

The Roth, you generally can't touch until you're going to. you're 60, 59 and a half, unless you're going to pay that penalty fee, brokerage accounts, you have the access to it. Everything has a pro and con to it. And always ask your advisor that you're going to be working with, okay, if I'm going to do this, what's the best possible scenario? Because that's the exciting part. That's what it's going to do for you.

But then ask them the hard question that they might squirm because they don't really want to tell you. They're just trying to sell you a product. You've got to ask them, what's the con to this? What's, you know, what are the limitations? What's my time horizon? How much is it going to cost me? And those are uncomfortable conversations.

A lot of advisors won't want to discuss because they're going to tell you the benefits to make their sale. Yeah. But you also want to know what truly it is doing for you and why it's going to make sense for your situation. So don't forget to ask that. What's the worst thing? What are the catches in your problem? Yeah, that's a really good, good. I like that word picture you just laid out there because it's like the,

you could just picture that advisor getting all excited like, oh, well, this is going to whatever good, right? But then you're like, okay, well, if all that goes like you just laid out, that's wonderful. But what if it doesn't? What if the bottom falls out and all of those things don't happen? What would happen? And I think the same thing could be said for when you think of a Roth conversion. And I don't think we need to get into the weeds of what a Roth conversion. is, but basically you go, hey, I've got money in a non-taxed account, IRA 4-week-K, and I'm going to

pull it out, put it in a roster so it could grow tax-free. Yay, I like the tax-free aspect, but you are triggering taxes now. Is that a good thing? And there's nobody that can tell you yes or no, because it's based on your situation, but there could be some downsides to that. And maybe if you're younger, 40s, 50s, maybe you've got plenty of time to take the tax hit on the chin and for it to then grow. But maybe if you're looking at a rough conversion at a later age, boy, you just incurred all these taxes and now the money doesn't have a time to grow enough to recoup. So where do you, where do you go in that scenario and giving advice to your clients? You're so right, Mike. There's no absolute statements. There's not

this is better than that because it everyone's situation's different. you're asking your question, what is your time horizon? How much are you looking to put away? What is your optimum risk level that you want to incur? There's all these questions that you have to go over with someone to be a, you know, what fiduciary, which is the big thing everyone's talking about now, is it your advisor of fiduciary?

And, I mean, you would think that, I mean, the definition of fiduciary is putting up, putting your client's best interest first in it. You would think anyone should be doing it in the first place. Right. If you go ask you by you, are you going to put my interest first? I hope they would say yes. Yeah. But you should.

I mean, it's a case-by-case study and that's why I think you shouldn't just go online, fill out a survey and get a cookie cutter answered. You do need to speak with someone who has credibility and good track. record of success and then you can trust what they're saying. So when you're sitting down with clients and you're talking about lessening taxes, so your tax mitigation strategies. And like we've said, there's not one, there's never anything guaranteed. It's different for everyone.

What do you find are some of the biggest mistakes that retirees have made, maybe even before coming to you when it comes to tax planning or tax mitigations or maybe misconceptions that you're having to then, you know, polish up and go, okay, now here's what we need to look at. You know, it's interesting. Even tax strategies have risk levels to them. Because, you know, you never know if they're going to be voted out at some point. There's a lot more than just, let's say, a Roth IRA that can grow tax-free for you.

If you're, I mean, maybe you're trying to save taxes in this current year. There's things that you can do to mitigate your taxes in the current year. So I think there's lots of different strategies out there that people may have heard of that are, I would say, popular. They're talking about these days, solar credits, tribal credits. They're talking about convertible tax bonds. They're talking about trust. So there's all these different vehicles that you can partake in that even would give you tax deductions or tax credits. to lower your taxes as well.

So it doesn't all just have to be an instrument I put it into. It can also be, how do I save money by utilizing these other strategies into my portfolio? And that's by definition the word strategy. You know, like strategy doesn't mean one thing. A strategy could be a whole, you know, interwoven this leads to that, which then means we need to put this in place, which then means, and it could be a whole. whole synergy together. Mm-hmm.

Yeah. So do you have any unique approaches that you take? You mentioned you rattled off a few there, but what are some of the unique ways that you're able to present as options to clients? You know, it all comes down with the clients and goals are how they set it up. And a lot of times comes down to order of operations and what strategy you have to implement first because if you do one, that might wipe out everything else. Yeah.

Because if you're going to wipe out someone's, there's, there's a lot of, some strategies out there that can literally wipe out all you can be a deduction and wipe out everything but they might have a cost to it that you may it may not be worth it as much to do so but if you wipe out all of your income by deducting then you may not be able to do the other strategies and save as much because net net the costs of them so yeah maybe not the fee cost maybe the cost of, oh, well, I remember way back in the day when I was in the mortgage industry and I would see business owners that proudly walked in and showed their tax returns and go, look at all these, you know, huge income I brought in, but then I wrote it all off and I paid

little and that's wonderful for taxes, but then you can't qualify for it harder to qualify for a loan. So to your point, you need to keep the finger on that chest piece and go, okay, if we do this move, what's it going to cost? And if we eliminate or deduct or have all this, would that then cause some problems down the road on another strategy? Question mark, we just need to look at it. I like how you said it was a chess piece. It really is. You do this. It's going to affect another part of your plan, not just taxes, but also, yeah, maybe if you show zero income, can you get a loan for that house that you wanted? You know, maybe, maybe some, maybe some, maybe some lenders won't. But if you're working with an astute, someone who understands what your purpose of

those deductions were, you can oftentimes get the loans. You just need to be working with the right banker. The right team. And like you mentioned, how many times have you, you know, all of your financial team gotten in the same room to look at your situation, you know, from CPA to financial advisor to insurance to legal, and it's rare. So if you are doing that, then the mortgage lender could go, okay, well, if you guys are going to do this, then that means we're going to need to do it this way, but thanks for keeping me in the loop. So I think that's a big piece that you keep bringing up, which is so powerful. You know, if you go out and operate and do one thing, without thinking of everything else, you could have a negative domino effect. It's huge. I mean, we're so good of what we do because we have

highest quality of individuals on our team. And one of our tax attorneys on our team was voted one of the top ones in the entire country just last year. One of our CPAs is in his late 70s. He's been in business for 50 years. He's never had one transaction with the IRS or write-off for deduction for clients that has been declined. So our team is all full of very successful, smart, well-educated individuals, not only does it provide trust, but it provides the confidence. They are, clients are getting, they're maximizing the tax code to a T for themselves. And you are allowed to maximize the tax code to the T.

In fact, it's encouraged. You just can't avoid, you can't evade taxes. Don't do that. Yep. Yeah, there's a, what? But the number changes every other time I think about it. But how big is the tax code? How many pages?

Thousands and thousands and thousands. And so there's no way that any business owner can go, oh, well, here's a strategy. You know, so you need to have those people on your team. And I know that the only thing constant in life is change. So tax laws and taxes and tax brackets will change. But there can always be changes to tax laws coming up. How do you make sure that your strategies are made? remaining effective with your clients and how do you help them to adapt if and when change comes?

Because, you know, you can say, oh, if this change happens, we're going to do this. But how do you keep them, you know, like on the same page? Yeah, you know, it's even, even tax mitigation strategies have risk to them. Because you're right. What if a law changes? What if they take something to vote and they say, you know, all the people who did this last year, we don't allow it. We only use strategies that have been tested and gone through some sort of, they've been regulated

by the SEC or FINRA or they might have already had a court decision on it that have upheld. We like tax mitigation strategies that have opinion letters with them that also proves validity, that not just that one place you're working with says it's true, but also other law firms. Some strategies have been around for 50 plus years, and if it's been around that long of a time, it would be very rare that they would ever change a law, and then you have to pay back your deduction or credit that you got. So you want to have things that are most likely not going to be overturned, nothing contra, nothing with major controversy that's in the news.

I'm trying to stay away from all that, but just do what's been tried and true for a long time. And there's quite many things that have stood the test of time that most, that has a higher chance of that they're not going away. Yeah. So let's wrap up with kind of what we, what I like to do here so often, which is, you know, given all of these tax mitigation strategies, can you think of an example of a client that you've worked with without giving details or names or anything? but where some of these have kind of created a good scenario for peace of mind and some savings.

Absolutely. I'm thinking about a client now. We work with him probably last month. He's just on top of my head because we spoke with him today. What we were able to do with him is we were able to set up a nice trust structure and use some convertible bonds that he was able to spend money on and then he was able to use the

the money he spent as a deduction as a line item deduction is taxed therefore wiping out his income and he got a really nice tax refund because he already paid in the money for that year

and then we got him 25% back but think about this this is really cool so if we can save that client 25% on its taxes then we take that 25% that we saved him and moved that into some sort of location that grows his money tax free? Well, now we've just avoided another 20% capital gains.

Let's assume his state tax, capital gains is 5% and his federal capital gains tax is 15. So now we're avoiding 20% capital gains tax on top of that. So if we can get this client to save 25% of taxes and then go avoid another 20% of capital gains, essentially he's just made a, what, a 25 plus 20. That's a 45% return. So tax savings have an ROI to it. And the interesting thing when you make statements like that is that is found money.

That's money that is already come in. You've paid your expenses. You paid your employees. You've done all that. And then you are getting ready to send it off to taxes. So when you can save that, it's found money. But also, it's not the same as making that same amount of money. Because let's just use $20,000 as an example.

If you saved $20,000, that's after all of the expenses. So how much would you have to bring in to net? 20,000, question mark, but probably more like 30 to 35 because you bring in that much in revenue, you got to pay your employees and then taxes and then all of these things. So I think that when you are presenting these ideas to your clients, it is, it's really eye-opening to go, look, we're going to, yeah, we can show you how to increase revenues. That's fine. But if we can plug up some of these holes, that's massive.

And these are all strategies that we're doing after the normal tax write-off. You know, all these people doing right off the gas you put in your car, the square footage of your home office, or the Augusta rule. You know, we've already done all that stuff. Yeah. This is now taking it to the next level that your normal CPA is not going to do it for you. And most of the time you're going to your CPA and your CPA is just an order taker. You're going on the internet to find all these strategies, taking them to him.

Yeah. But again, going back to that statement, 25% back and then growing your money, to avoid capital gains for another 20%. That's huge. I mean, where else are you going to go make a 45% return without taking on? I mean, you'd have to take on substantial risk to make that type of a return.

Here is a legal and quick way to do it without having to go bet the farm, go gamble your money in a Bitcoin or a penny stock or something. I love it. Well, if someone is interested in having you, and your team look at what potential they would have in getting some of these tax mitigation savings. What's the best way they can learn more and reach out and connect with you? Yeah, we'd love to help as many as we can. The best way to reach us is just look at it on our website. Our website's name is www.The exponential freedom.com. Excellent. Well, Ethan, thank you so much

for coming back on today. It's been a real pleasure chatting with you. Thank you, Mike. You've been listening to Influential Entrepreneurs with Mike Saunders. To learn more about the resources mentioned on today's show or listen to past episodes, visit www. www.Influentialentrepreneursradio.com.