Posts

Showing posts from June, 2025

Day 7 – How to Hire Your Kid Legally — And Save Taxes

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  Day 7 – How to Hire Your Kid Legally — And Save Taxes Hiring your child might sound like a sentimental idea, but it’s actually a strategic tax-saving move —if done right. The IRS allows business owners to hire their minor children under certain conditions, offering both tax deductions for your business and income tax benefits for your child . Here's how to make it work legally and efficiently. ✅ Why Hire Your Child? 1. Your Business Gets a Deduction Wages paid to your child are a legitimate business expense. That means your business income (and tax liability) goes down. 2. Your Child May Owe Zero Taxes As of 2025, a child can earn up to $14,600 (the standard deduction) without paying any federal income tax— as long as it’s earned income (i.e., wages, not gifts or allowances). 3. No Payroll Taxes for Some Businesses If your business is a sole proprietorship or a partnership where both partners are the child’s parents , and your child is under 18 , then: No Social S...
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๐Ÿ“… Day 5: How to Track Mileage Without the Stress

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  ๐Ÿ“… Day 5: How to Track Mileage Without the Stress If you drive for business — even occasionally — tracking your mileage could lead to real tax savings. But let’s be honest: nobody wants to carry around a paper logbook or guess their odometer reading every day. Good news: there are smarter (and simpler) ways to do it. ๐Ÿš— Why Mileage Matters The IRS allows you to deduct business-related driving at the standard mileage rate , which in 2025 is $0.67 per mile (subject to updates). That means: 100 miles = $67 deduction 1,000 miles = $670 deduction For many solopreneurs, that’s hundreds or even thousands of dollars in write-offs — if you track it properly. ✍️ What Trips Can You Count? Driving to meet a client Picking up business supplies Visiting a vendor or coworking space Attending a business conference or training ๐Ÿšซ Personal commutes don’t count (like from home to a regular office location). ๐Ÿ“ฑ 3 Stress-Free Ways to Track Mileage Mileage Apps (automated, low eff...
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๐Ÿ“… Day 4: Sole Prop vs. LLC vs. S-Corp – Which Saves More?

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  ๐Ÿ“… Day 4: Sole Prop vs. LLC vs. S-Corp – Which Saves More? Choosing the right business structure isn’t just a legal decision — it’s a tax-saving strategy. While all three let you run a solo business, they come with different tax treatments, paperwork, and profit potential. Here’s what you need to know: ๐Ÿงพ 1. Sole Proprietor Default status for most freelancers and small business owners. ✔ Easy to set up, no formal registration ✘ You pay self-employment tax (15.3%) on all profits ✘ No legal separation between you and the business ✅ Best for: Just getting started or low-income side hustles ๐Ÿงพ 2. LLC (Limited Liability Company) Gives you legal protection and some flexibility in taxation. ✔ Still simple to run, protects your personal assets ✔ Can choose to be taxed as a Sole Prop or an S-Corp ✘ Still pays self-employment tax unless you elect S-Corp status ✅ Best for: Growing businesses that want liability protection ๐Ÿงพ 3. S-Corporation (via LLC or Inc) Not a ...
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๐Ÿ“… Day 3: What Actually Counts as a Business Deduction?

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  ๐Ÿ“… Day 3: What Actually Counts as a Business Deduction? “Can I write this off?” As a CPA, I hear this question all the time — and honestly, it’s a good one. Business deductions aren’t just about saving money on taxes; they’re also about understanding what counts as an ordinary and necessary expense in your field. Here’s a simple breakdown to help make sense of it: ✅ The IRS Rule (in plain English) To be deductible, an expense must be: Ordinary : Common in your industry Necessary : Helpful and appropriate for your business It doesn’t have to be essential — just reasonable. ๐Ÿ’ผ Commonly Deductible Business Expenses Office Supplies & Software : Pens, printers, QuickBooks, Canva Pro Marketing Costs : Website hosting, email tools, social media ads Business Meals : 50% deductible when dining with clients or for business travel Professional Development : Courses, certifications, books related to your work Phone & Internet : Pro-rated for business use Mileage o...
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๐Ÿ“… Day 2: 3 Common Tax Myths Small Business Owners Still Believe

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 ๐Ÿ“… Day 2: 3 Common Tax Myths Small Business Owners Still Believe Running a business comes with more than just offering great services or products — it also comes with figuring out what’s fact and what’s fiction when it comes to taxes. And unfortunately, there’s a lot of misinformation out there. Let’s clear up three myths I hear all the time — and what the truth actually is. ๐Ÿ’ญ Myth 1: “If I use my personal credit card, I can’t deduct the expense.” Not true! You can still deduct legitimate business expenses paid with a personal card — as long as they were truly for the business . The key is documentation: save receipts and make a note of why each purchase was business-related. (Still, I always recommend separating your accounts ASAP — it makes tax time so much easier.) ๐Ÿ’ญ Myth 2: “A home office deduction increases your chance of an audit.” This one is outdated. If your home office meets the IRS rules (used regularly and exclusively for business), then you’re allowed to ...
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๐Ÿ“… Day 1: Why I Started This Blog as a CPA

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  ๐Ÿ“… Day 1: Why I Started This Blog as a CPA Hi there — and welcome! I’m a CPA with a deep love for clarity, structure, and empowering small business owners to take control of their taxes. For years, I studied, practiced, and prepared for the CPA exam, and when I finally passed, I thought the journey was over. But in truth, it had only just begun. This blog exists because I’ve seen too many creative, driven entrepreneurs feel overwhelmed or uncertain about their tax responsibilities. Not because they’re doing anything wrong — but because no one ever explained things simply, clearly, and without all the jargon. So here’s the goal: One practical, digestible tax tip each day for 30 days. Whether you're a freelancer, side hustler, online seller, or solo entrepreneur, this series will help you understand how taxes really work — and how to make smarter decisions that support your business and your peace of mind. I’ll cover deductions, business structures, recordkeeping hacks,...
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Do I Need to Pay Myself a Salary as a Business Owner?

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  ๐Ÿ’ผ Do I Need to Pay Myself a Salary as a Business Owner? One of the most common questions solo entrepreneurs ask once their business starts generating consistent income is: "Should I pay myself a salary?" The answer depends on your business structure—and choosing the right approach can impact both your tax liability and legal compliance . ๐Ÿ‘ค If You're a Sole Proprietor or Single-Member LLC Good news: You don’t need to pay yourself a formal salary. In these structures, the IRS treats you and your business as the same entity. This means: You take an owner’s draw , not a salary. All profits flow through to your personal tax return via Schedule C . You're not considered an employee, so no payroll taxes or W-2s are involved. But remember: You’re still responsible for self-employment tax (which covers Social Security and Medicare), so setting aside about 25–30% of profits for taxes is a smart move. ๐Ÿข If You're an S Corporation Here’s where thi...
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How to Set Up a PTO Plan in ADP RUN Payroll: A Step-by-Step Guide

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  ๐Ÿ› ️ How to Set Up a PTO Plan in ADP RUN Payroll: A Step-by-Step Guide Managing paid time off (PTO) is essential to keeping your team happy and compliant with labor policies. If you use ADP RUN , setting up a PTO plan is straightforward — but only if you know where to look. This guide walks you through every step, from setup to payroll integration. Let’s get started. ๐Ÿ› ️ Step 1: Access the PTO Settings Log in to your ADP RUN account. In the left-hand navigation menu, go to Settings . Scroll down and select “Paid Time Off” under the Time section. This is where you’ll manage your time-off policies, accrual rules, and employee assignments. ➕ Step 2: Create a New PTO Plan Click Add Plan . Choose your plan type: Vacation , Sick , Personal , or a Custom plan. Click Next and begin configuring the plan. Select which employees will be eligible for this plan. You can create multiple plans if different roles or employee classes require unique policies. ...
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Hiring a Remote Employee in Georgia: What You Must Know About Payroll Compliance

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  ๐Ÿ“Œ Hiring a Remote Employee in Georgia: What You Must Know About Payroll Compliance As remote work becomes more common, many small business owners find themselves navigating complex payroll requirements across state lines. If you hire a remote employee who lives and works in Georgia , there are critical compliance steps you must take — even if your business is located in another state. In this post, we'll walk through exactly what you need to do — and when foreign business registration might be required. ๐Ÿ“ The Scenario You’ve just hired your first remote employee who lives in Georgia . What does that mean for payroll taxes? ✅ Step 1: Register for Georgia State Payroll Taxes Even though your business is not located in Georgia, you are still responsible for complying with Georgia’s tax laws if your employee performs work there . That means: 1. Georgia Income Tax Withholding You must: Register for a Georgia Withholding Tax Account through the Georgia Tax Center Wit...
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What Is Bank Reconciliation? A Must-Know Guide for Every Business

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  ๐Ÿฆ What Is Bank Reconciliation? A Must-Know Guide for Every Business Keeping your business finances in order is more than just tracking income and expenses—it’s also about making sure your records match reality. That’s where bank reconciliation comes in. Whether you're a small business owner, a bookkeeper, or just trying to better understand your financials, bank reconciliation is a powerful process to stay on top of your cash flow and prevent costly errors. ✅ What Is Bank Reconciliation? Bank reconciliation is the process of comparing your company’s internal financial records (usually from your accounting software or general ledger) with the records provided by your bank statement. The goal is simple: ensure that the balance in your books matches the actual balance in your bank account at a specific point in time. If there are differences, you investigate and resolve them. ๐Ÿ” Why Is Bank Reconciliation Important? Here are a few critical reasons why this process matter...
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The Power of Early Investing: Why I Wish I Had Started Sooner

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  The Power of Early Investing: Why I Wish I Had Started Sooner If I could turn back time, there’s one financial decision I would make without hesitation: investing early and consistently in a diversified portfolio, particularly the S&P 500. The regret of not taking action sooner weighs on me, and if you're on the fence about investing, let my experience be your wake-up call. Time Is the Greatest Asset The magic of investing isn’t in timing the market—it's in time in the market. Compounding, the ability for investments to grow exponentially as gains generate more gains, is a force so powerful that even modest contributions can turn into substantial wealth given enough years. Had I started investing in my early twenties, even with small amounts, I could have built a significant financial cushion without needing to chase high-risk trades or speculative assets. The Strength of Diversification A diversified investment strategy—especially in index funds tracking the S&...
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10 Tax Deductions Every Small Business Owner Should Know_Examples

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 Here are detailed examples of tax-saving strategies tailored for small business owners, categorized by entity type and tax approach. These strategies are useful for both maximizing deductions and reducing taxable income legally and effectively. ๐Ÿงพ 1. Deductible Business Expenses ✅ Examples Home Office Deduction : If you use a portion of your home exclusively for business, deduct a proportion of rent, mortgage interest, utilities, and property taxes. Simplified Method : $5/sq ft up to 300 sq ft = up to $1,500 deduction. Vehicle Expenses : Use mileage deduction (67 cents/mile for 2024) or actual expense method (gas, insurance, maintenance). Office Supplies and Equipment : Deduct everything from computers and printers to pens and paper. Business Travel : Airfare, hotel, 50% of meals, and even ride-shares while on business trips are deductible. ๐Ÿ’ณ 2. Retirement Plan Contributions ✅ Examples Solo 401(k) : Contribute up to $23,000 (202...
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10 Tax Deductions Every Small Business Owner Should Know

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Running a small business isn’t easy—but saving on taxes can be. If you’re a freelancer, side hustler, or running your own shop, you’ve got more ways to cut your tax bill than you might think. Let’s break down 10 common tax deductions that could save you serious cash. 1. Home Office Deduction Working from home? If there’s a space you use just for work (like that corner in your guest room), you could qualify for a home office deduction. There’s a simple method based on square footage or a more detailed one where you track your actual expenses. 2. Business Use of Your Car Using your car for work errands or meetings? You can deduct either your mileage or actual costs like gas and maintenance. Pro tip: Apps like MileIQ make tracking a breeze. 3. Office Supplies & Gear Buying pens, notebooks, or even a new laptop? If it’s for your business, it likely counts. Bigger items might qualify for a full write-off in the year you buy them. 4. Internet and Phone Bills If you use your phone or ...
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How to Change Your Corporation’s Business Address in California

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  ๐Ÿข How to Change Your Corporation’s Business Address in California Changing your business address as a California corporation? Great! Just don’t forget: you’ll need to update it with multiple government agencies to stay compliant — not just one. Here’s a step-by-step guide to make sure your new address is properly recorded with the California Secretary of State , the IRS , and other important state and local agencies. Let’s break it down ๐Ÿ‘‡ ๐Ÿ›️ Step 1: Update Your Address with the California Secretary of State Every California corporation is required to file a Statement of Information (SOI) — and that’s the easiest place to update your business address. ✅ File Form SI-550 (or SI-CID, if applicable) Domestic stock corporations should file Form SI-550 Common Interest Developments (like HOAs) should use Form SI-CID You can update: Your principal business address Your mailing address Your officer/director addresses Your agent for service of process (o...
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6 Tax-Saving Tips You Might Be Missing

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  ๐Ÿ’ฐ6 Tax-Saving Tips You Might Be Missing (Excluding 401(k) & IRA!) When tax season rolls around, everyone’s looking for ways to save a bit more. While most people are familiar with saving through 401(k) or IRA contributions, there are plenty of other tax-saving strategies worth exploring. Here are 6 practical tax-saving tips that don’t involve a 401(k) or IRA —perfect for employees, freelancers, or anyone looking to lower their tax bill smartly. 1. ๐Ÿ’ผ Use a Flexible Spending Account (FSA) An FSA lets you set aside pre-tax income for medical or dependent care expenses . Healthcare FSA : Covers out-of-pocket medical costs like copays, prescriptions, or medical devices. Dependent Care FSA : Helps with childcare expenses, including daycare or after-school care. Why it matters : The amount you contribute reduces your taxable income, which can lower your total tax liability. 2. ๐Ÿงพ Deduct Business Expenses (Freelancers & Side Hustlers) If you freelance, run a b...
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What to Do If You Applied a Corporate Tax Payment to the Wrong Year in EFTPS

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๐Ÿ’ผ What to Do If You Applied a Corporate Tax Payment to the Wrong Year in EFTPS Mistakes happen — even when you’re doing everything right. If your corporation made an estimated tax payment via EFTPS and accidentally applied it to the wrong tax year (say, you meant 2025 but selected 2024), don’t worry — the IRS can correct it. Here’s what happens, how long it takes, and what you can do to stay on top of it ๐Ÿ‘‡ ๐Ÿข You Paid for 2025… But Labeled It 2024 When you make an estimated tax payment through EFTPS and choose the wrong tax year — like selecting 2024 instead of 2025 — the payment gets posted to the wrong period . While it may seem like a small clerical error, this misapplied payment can: Affect your Form 1120 filing accuracy Throw off future quarterly estimates Potentially lead to underpayment or overpayment notices But good news: it can be fixed — and here’s how. ✅ What Happens When You Call the IRS If you’ve already called the IRS Business & Specialty ...
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๐Ÿ“Œ When You Can’t Deduct Both 401(k) and Traditional IRA Contributions

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 Many people wonder: ๐Ÿ’ญ “Can I contribute to both a 401(k) and a Traditional IRA and get a tax break for both?” Short answer: You can contribute to both—but you might not get a tax deduction for both. Let’s break it down: ✅ You CAN contribute to both accounts in the same year. That’s perfectly allowed under IRS rules. But... ⚠️ Whether your Traditional IRA contribution is tax-deductible depends on two things: Whether you (or your spouse) are covered by a workplace retirement plan like a 401(k) Your modified adjusted gross income (MAGI) ๐Ÿงพ If You Are Covered by a 401(k) Then your ability to deduct your Traditional IRA contribution depends on your income. For 2025, here are the deduction phase-out ranges if you’re covered by a workplace plan: Filing Status Full Deduction If MAGI ≤ Partial Deduction No Deduction If MAGI ≥ Single or Head of Household $77,000 $77,000–$87,000       $87,000+ Married Filing Jointly (you’re covered) $123,000 $123,000–...
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