Consistent CPA Jo

 📆 Day 9: Common Mistakes First-Time Filers Make Avoid These Tax Pitfalls & File with Confidence Filing your taxes as a first-time business owner feels like stepping into a maze of deadlines, forms, and deductions. But don’t worry—many of the mistakes new filers make are easy to avoid once you know what to look out for. Here’s a breakdown of the most common missteps and how to sidestep them. ❌ Mistake #1: Mixing Business & Personal Expenses It’s tempting to swipe one card for everything—but it clouds your financials. ✅ Solution : Open a dedicated business bank account and only use it for business transactions. Clean books mean easier deductions and fewer audit risks. ❌ Mistake #2: Forgetting Quarterly Estimated Taxes Waiting until April can cause sticker shock—and penalties. ✅ Solution : If you expect to owe more than $1,000 in taxes, mark your calendar for quarterly payments (April, June, September, January). Use IRS Form 1040-ES or talk to a CPA to set your ta...

 💼 Should You Pay Yourself a Salary? (For LLC/S-Corp Owners) Navigating how to compensate yourself as a business owner isn’t just about getting paid—it’s about staying compliant, managing taxes, and protecting your financial future. If you’re an LLC taxed as an S-Corporation, paying yourself a reasonable salary isn’t optional—it’s required. Let’s unpack why, when, and how to pay yourself a salary the right way. 🧐 What Does "Reasonable Salary" Mean? The IRS expects S-Corp owners who perform substantial work for the business to pay themselves a “reasonable” wage. That means: Comparable Pay : Your compensation should be similar to what someone else would earn doing your job. Fair for Workload : Consider the time, effort, and responsibilities you take on. Backed by Evidence : You may need to support your salary with industry data or job listings. 💡 Pro tip: Documenting your rationale—like hours worked, roles performed, and industry benchmarks—can save you trouble du...

  📅 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. 💼 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...

 📅 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. 💭 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.) 💭 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 ...

 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. 🧾 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. 💳 2. Retirement Plan Contributions ✅ Examples Solo 401(k) : Contribute up to $23,000 (202...

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 ...

  💰6 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. 💼 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. 🧾 Deduct Business Expenses (Freelancers & Side Hustlers) If you freelance, run a b...

Mastering  Bookkeeping Categorization : The Foundation of Financial Clarity Whether you're running a startup, managing freelance income, or just trying to keep your side hustle organized, one of the most overlooked—but absolutely critical—parts of financial management is bookkeeping categorization . Properly categorizing your financial transactions is more than a clerical task—it's the key to informed decision-making, tax compliance, and business growth. What Is Bookkeeping Categorization? At its core, bookkeeping categorization involves labeling each transaction (income, expense, asset, liability, or equity) so it fits into a well-defined chart of accounts. These categories help paint a clear picture of your financial health, ensure accurate reporting, and simplify tax time. Example: Date Description Amount Category 2025-05-03 Shopify Sales $1,200 Income 2025-05-05 Google Ads $300 Advertising 2025-05-07 MacBook Purchase $2,000 Equipment Why Is It Important? 1. Tax Deduc...