Episode 156: Determining Business Income

income tax solo show Apr 01, 2021

On this episode I dig into quarterly taxes and how to calculate them for your business.

If you haven't already, go back and listen to yesterday's episode before diving into today's episode.

The first step is to understand what business income is. According to the IRS, self-employment income is income earned from carrying on a trade or a business as a sole proprietor, contractor, or some form of partnership.

Keeping it simple, if you're doing something that's bringing in money and you're listening to this podcast, you probably have a business.

For tax purposes, freelance/1099 income is the same as business income. Only our self-employment income is subject to self-employment tax (our share of Medicare and social security). This is a 15.3% tax on our net self-employment income (business profit, calculated after business expense deductions).

To be a deduction, the IRS says it must be an ordinary and necessary expense. An ordinary expense is one that is common and accepted in your...

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Episode 155: Finding Your Why

income tax solo show Mar 31, 2021

On this episode of the podcast I share the first of my three part series of the Unf*ck Your Biz boot camp. After this three part series you will have an idea of how our taxes are calculated. This will prepare you for paying quarterly taxes and not always leave you relying on your tax preparer.

 

As I shared on last week's episode, your tax preparer is not always going to be keeping you up to date and checking on you and your tax savings as they relate to personal life.

 

If you want to Unf*ck Your Biz you need to have a why. We need to know where we're going before we get there. You need to dig deeply into your why. A full why statement would read something like: I want to unfuck my biz because I want/need better cash flow so I'm less stressed out and have more money saved so I can pay off my loans and live financially free. Financial freedom means something different to everyone and will be your why for unfucking your finances.

 

The same goes for legal protection...

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Episode 154: Answering your DBA and Business Auditing Questions

q&a solo show Mar 30, 2021

On this episode of the podcast I discuss DBAs, tax filing, and how to audit your business.

 

This episode is brought to you by my FREE Tax Challenge. Taxes suck but we all have to file them. I'll walk you through the 5 steps you need to get your tax documents organized and ready to file. Sign up for this free challenge.

 

Here are this week's questions:

1. I am a solopreneur of a small health and wellness business and am planning to get married this year. What is the most tax advantageous way for myself and future spouse to file our taxes? Separately? Jointly? - submitted by Christiana

Generally speaking, the best way when you are married is to file - married, filing joint because you get a bit of a better tax rate. A few times you might not want to file jointly is if one person has a lot of student loans or medical bills so it's best to look into that. Note that if you are not filing quarterly taxes for your business, it can eat into your spouse's refund. I share a lot...

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Episode 153: My Beef with Tax Pros & Lawyers

other legal solo show Mar 25, 2021

On this episode of the podcast I share why going out and hiring someone is not your best first step and what to look for if you do hire someone.

 

This episode is brought to you by my FREE Tax Challenge. Taxes suck but we all have to file them. I'll walk you through the 5 steps you need to get your tax documents organized and ready to file. Sign up for this free challenge.

 

We get different answers from different people because everyone looks at something from a different lens - an accountant and a lawyer will give you two different answers to the same question, even though tax and law are so related.

 

Taxes are a function of law - tax attorneys should know the tax law. I often see bad advice from accountants and attorneys (more on that in my podcast episode "Three of the Worst Pieces of Legal Advice I Have Seen in Facebook Groups"). For example, accountants love to throw out arbitrary numbers for how much income you should have before filing for an LLC.

 

...

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Episode 152: Your Sales Tax Filing Questions Answered

q&a solo show Mar 23, 2021

On this episode of the podcast I answer, tax filing questions from my Facebook group, Braden's Besties.

 

This episode is brought to you by my FREE Tax Challenge. Taxes suck but we all have to file them. I'll walk you through the 5 steps you need to get your tax documents organized and ready to file. Sign up for this free challenge.

 

Here are this week's questions:

1. My husband and I had an LLC that we closed last year (or didn't renew, or whatever the appropriate term is) and my current CPA is asking for a final K1 for that LLC. That didn't even occur to me, and as it files as an S-Corp, I'm pretty sure we've missed the due date. My current CPA asked me to go back to my previous CPA who had provided K1s for that business in the past - but I'm not working with her anymore and it's the middle of tax season and I would feel really really bad asking. Is this something that I could maybe do myself? I'm pretty sure it would just be expenses with zero revenue. If I can do...

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Episode 151: Building a Business That Can Sustain You

Uncategorized Mar 18, 2021

On this episode of the podcast I discuss what you need to take your business from hobby to something that can financially sustain you.

 

This episode is brought to you by my FREE Tax Challenge. Taxes suck but we all have to file them. I'll walk you through the 5 steps you need to get your tax documents organized and ready to file. Sign up for this free challenge.

 

Building a business that can sustain you. What does that mean exactly? We could definitely talk about sustaining your physical, mental, and emotional health, and we will for sure.

But what I mostly mean is that we need to build a business that can sustain us financially. I would argue that the key difference between playing business and running a business is whether you're committed to whether it can financially sustain you.

 

That means

  1. paying bills

  2. paying debt

  3. saving for emergencies, etc.

 

How much do we need to make for our business to sustain us and how do we get there?

Let's start with...

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Episode 150: Home Office Deductions

q&a solo show Mar 16, 2021

On this episode of the podcast I answer your home office deduction and other small business entity questions from my Friday Facebook Live.

 

This episode is brought to you by my FREE Tax Challenge. Taxes suck but we all have to file them. I'll walk you through the 5 steps you need to get your tax documents organized and ready to file. Sign up for this free challenge.

 

Here are this week's questions:

 

1. What's the biggest financial mistake you see sole proprietorships make in their first year? - submitted by Annika P

Short answer: not paying quarterly taxes. People get in the "oh shit" cycle of not saving for quarterly taxes, getting caught off guard, then getting behind on paying them.

 

2. When I created my LLC  I set it up as a partner LLC with my husband and me. Was that a mistake? He's going to help me with things once I get everything up and running. You mentioned something about a single-member LLC and now I'm wondering if I messed up. We haven't...

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Episode 149: Sales & Use Tax Q&A Roundup

interview sales tax Mar 12, 2021

On this episode of the podcast my guest, Amy Monroe, answers small business owners' sales and use tax questions.

 

This episode is brought to you by my FREE Tax Challenge. Taxes suck but we all have to file them. I'll walk you through the 5 steps you need to get your tax documents organized and ready to file. Sign up for this free challenge.

 

1. How to calculate sales and use tax for something that has a service and product component to it. - submitted by Reena Borwankar

For the answer to this, and other sales tax questions, check out Amy on episode 21 of the podcast.

 

2. What if you have your sales tax ID but have not made any sales? Do you truly submit $0? - submitted by Jamie

Yes, it’s called a zero return. You may get asked to file if a lot of time goes by and you have not filed anything. If you do get one of these letters you will need to file the past returns. Some states will charge you late fees for not filing. If you are filing those zero returns...

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Episode 148: The 101 on Use Tax

income tax interview Mar 11, 2021

On this episode of the podcast my guest, Amy Monroe, talks about use tax and the difference between income tax and sales tax.

This episode is brought to you by my FREE Tax Challenge. Taxes suck but we all have to file them. I'll walk you through the 5 steps you need to get your tax documents organized and ready to file. Sign up for this free challenge.

Income taxes impact a business's bottom line. These are what income tax brackets are based off.

 

Sales tax is subject to sales of physical goods and products. Learn more about the exceptions to this on episode 21 of the podcast.

Use tax is sometimes referred to as the other side of the same coin as sales tax. You can look at use tax from the point of view of a consumer and the point of view of a business owner.

If you bought something from an online retailer that didn't collect sales tax from you, technically at the end of the year you would self-report the use tax (the sales tax that should have been collected) because you are...

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Episode 147: Answering your tax and business classification questions

biz entities solo show Mar 09, 2021

On this episode of the podcast I share the answers to the questions asked on the Friday Live in my Facebook group Braden's Besties

 

This episode is brought to you by my FREE Tax Challenge. Taxes suck but we all have to file them. I'll walk you through the 5 steps you need to get your tax documents organized and ready to file. Sign up for this free challenge.

 

Today on the podcast I'm mixing it up. Instead of our usual Tuesday podcast where I answer only one question from my Facebook group, I'm going to be sharing an audio version of my Friday Facebook Live where I answer several questions from Facebook group members like you on anything from specific contract questions to questions about my programs.

 

Here are this week's questions:

 

  1. If my business was formed as an S Corp but I want to change it to an LLC, what do I need to do? - submitted by Jenny You will need to send in a statement of revocation and also an entity classification election form (IRS form...

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