3 Money-Saving Tax Tips for Small Businesses

Photo: Ivan Samkov from Pexels

If you were to ask anyone who just launched a business, start-up, or product in January of 2020 where they’d be in a year, I’m sure most would have had an optimistic answer and replied with an answer along the lines of “hoping my business will take off.” Unfortunately, that was in a time before COVID. Now, an estimated 60% of small businesses have closed in the past year, and the impact the pandemic has had on small businesses is absolutely heartbreaking. I myself launched a small business right before the pandemic hit and completely understand the challenges that most founders face. I am one of the fortunate ones who has been able to maintain my business through an online presence and very dedicated clients. 

Most of my clients are also small business owners who faced the same challenges as me in 2020, and as a tax strategist and owner of Your Tax Coach, it’s my goal to help them navigate PPP loans, EIDL grants and loans, the COVID relief bill, a change of presidential administration, and now, tax season. You’re probably wondering “what is a tax strategist” and “what exactly makes you any different from an accountant?” Simple, my goal is to save business owners like you tens of thousands of dollars on your tax returns, while also relieving your tax-related stress and anxiety through consistent, easy-to-understand communication. 

An accountant will keep records of your finances throughout the year and keep your tax returns compliant. They don’t look for different strategies to apply when filing your taxes and their goal isn’t to save you money, especially if you are a small business owner. For example, did you know that you can claim your cell phone bill, internet, business coaches, courses, conferences, books, magazines, coworking spaces, website design, and even those holiday cards you sent to clients on your tax returns? Some tax strategies also include paying your children and paying yourself rent through your business. Accountants aren’t going to include claims like these because it takes time and documentation to implement. 

Now, this is how I saved my clients over $4.5 million in 2020 on their tax returns, and what I recommend you should do. Here are my top three tips for all small business owners filing their taxes this year.

1. If you profit over $40,000 a year in your business, you should probably be an S Corporation, not a sole proprietorship or LLC. 

It’s easy to assume just because you are a one-woman show running a small business that you don’t necessarily qualify to be considered an S corporation. Although S Corporations require an application and documentation, this is an easy way to save up to $22,000 in taxes each year.

2. Know your numbers, and update your bookkeeping monthly.

Track, track, track! Staying on top of your bookkeeping each month (or, better yet, each week) makes it so much easier to know how much you are profiting. Waiting for your accountant to figure it out a few weeks before taxes are due will not only be a pain but will also likely result in you overpaying in taxes. 

3. Have a tax strategy session with a tax strategist (you’ll be surprised to know that you’ve been overpaying for years). 

Again, a tax strategist is entirely different from your accountant, and meeting with me or another tax strategist, you’ll quickly realize you’ve been overpaying taxes for years. 

Bonus tip: Have a home office? Make sure you’re getting the maximum home office deduction. (There are multiple ways of calculating it.) 

Most small business owners and entrepreneurs don’t have a traditional office space that they’re renting. We all know that you're really working in some small makeshift office, which, technically speaking, is still considered a home office. If there is a desk, computer, and chair present, you got yourself an office. Make sure you know to deduct this when you are filing your taxes. 

Overall, a tax strategist is going to go above and beyond to save you as much as possible in taxes. My biggest recommendation is to invest in yourself and your business and hire someone who is going to ensure that filing your taxes is a fun and easy process, instead of dreading it. Your tax strategy should be seen as a MUST, not a plus. 

"Invest in yourself and your business and hire someone who is going to ensure that filing your taxes is a fun and easy process, instead of dreading it."

—Barbara Schreihan, Founder of Your Tax Coach

About the author: Barbara Schreihan started her career journey working at many different accounting firms, and she quickly noticed that her firms were lacking in customer service and tax strategies. She decided to take a risk of her own and start her own accounting business with the main goal of implementing strategies for clients to reduce the tax impact on themselves and their businesses. She now provides clients her services through tax strategy, tax preparation, and business intensives. Her goal is to customize either of these three services and implement strategies for clients to reduce tax impact for their business. For more information, be sure to follow her on Instagram or visit her website.

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Know Your Worth, Then Add Tax: The Multi-Hyphenate's Stress-Free Guide to Doing Your Taxes

With the current COVID-19 situation, we know these are difficult times for both self-employed individuals and small businesses. In an effort to support and empower our self-employed community, we’re sharing step-by-step guidance on how to easily and affordably file your self-employed taxes with TurboTax.

The rise of the gig economy has given us multi-hyphenates, a.k.a. people who’ve built successful careers out of juggling more than one job at a time. In fact, more than eight million people—about 5% of the workforce—have more than one job. And, fun fact, the average self-made millionaire has at least three streams of income—65% have three streams of income, 45% have four, and 29% have five or more.

Of course, being a solopreneur with multiple side hustles is exciting—after all, you’ve mastered the art of multiple streams of income!—but that means tax time can be a bit complex (hello, 1099s galore). 

In anticipation of the new extended tax deadline, July 15th (a.k.a. this year’s Tax Day), we sat down with Lindsay Luv, a multi-hyphenate DJ, influencer, sommelier, and more, to find out how TurboTax Self-Employed can help multi-hyphenate solopreneurs file their taxes with confidence. With the changing COVID-19 situation, these are unprecedented times. Find out all the new tax changes and understand what the Coronavirus relief bill means for self-employed taxpayers by visiting the TurboTax blog.

Be sure to keep reading until the end for the chance to win a FREE TurboTax Live Self-Employed product code (valued at $250, includes ad-on services).

Join the solopreneur tax conversation by using the hashtag #solopreneurtaxtips. Don’t be shy! We all have questions about taxes (especially now), share yours on social too!

CREATE & CULTIVATE: As a DJ, music supervisor, influencer, and sommelier, you're a modern multi-hyphenate with many careers intersecting at the same time. What advice do you have for those reading this who don't have their eyes on one career path and feel split into different areas? How do they go about it? 

LINDSAY LUV: I believe expanding your brand should feel natural. If you find yourself drawn to another potential career path, perhaps think about what you’re already doing and how it can lend itself to the other. I never say I am “switching gears” because that sounds like you are closing the door on what you have already done; rather I say I am “expanding my brand” because that simply opens more doors. You never lose the skills you have already built, so why not develop and share more as you go! 

Also, the difference between those who say they are going to do something and those who actually take the plunge is vast. Sometimes you need to just rip the bandaid off! When it came to getting certified as a sommelier, I simply signed up and paid for the class and then showed up: that's half the battle! Wine goes hand in hand with music and events and sharing my finds (i.e., influence) so I am always thinking of ways to overlap my skill set. There are talkers and doers, and people respect action the most.

With your many careers, it’s safe to say that you’ve mastered the art of multiple revenue streams—and we here at Create & Cultivate love a woman who isn’t afraid to shy away from wanting to build a profitable business—So, can you tell us, why is it important to diversify?

With humans living longer lives they are actually predicting many of us will indeed have multiple professions across a lifetime! Just like relationships change and grow over time so do our interests and skill sets, and it is important to check in with yourself each step of the way and reflect on how your profession is serving you and how you are serving it. 

I am someone who always loves to be steps ahead. If I see a door starting to close (whether by choice or otherwise), I am thinking of which ones I can open: which parts of my career, relationships and learnings can I utilize for a new profitable task.

Working for yourself means you have to hustle and keep up with both your own goals and the demands of the market. Since I started working for myself, so many elements keep changing from social media to client’s needs and unless you are evolving with them you are lagging behind (and losing money in doing so.)

As we’re sure you can attest, you have to fall in love with the numbers when you’re running your own business, especially when that involves managing multiple income sources—What are some of the hardest money lessons you've learned along the way? And what are some of the tools you use to stay on top of your business financials?

As my own agent, sometimes it is awkward to chase down payments due. You run that line between wanting to seem relaxed with clients, but also simply needing to be paid for work done. Sadly, sometimes clients will put you in an awkward spot with pay delays or trying to pull out of things last minute, etc. I find it is helpful to have an assistant oversee the communication about payment with clients so you don’t always have to be the face of the tedious back and forth that can occur. 

I also leverage technology to remind myself of when payments are due and space out reminders to follow up. I use resources and tools such as QuickBooks Self-Employed to keep myself organized year-round, keeping track of my personal and business expenses as well as receipts. I can import all my business expenses to TurboTax Self-Employed making taxes a breeze! I like their Live product since it brings the best of both worlds, the ease of technology plus the human touch and expertise of a real tax expert. At the end of the day, you want to make sure you feel confident you are getting your self-employed taxes done right and are getting every dollar you deserve. 

You've been very smart and savvy with your business and it's been incredibly profitable—Where do you think is the most important area for a solopreneur or small business owner to focus their financial energy? Why? 

The reality is you should focus your heaviest energies on hustling and maintaining work wherever you are gaining the most momentum. For me, that has always been DJing, but now, with my social media growth, I am seeing new profitable opportunities arise in a variety of areas outside of the decks, so it has my wheels spinning on how to grow those. Keep pushing where the money already is, but reach out for everywhere it could be!

Do you think you have achieved financial freedom? If not, what is preventing you as a self-employed professional to get there? What would you need to get there?

Yes! I have been self-employed and my own agent for over ten years, which feels like freedom to me. I am able to comfortably afford a lifestyle I feel good about and contribute to my family, which is the best you can hope for. I also balance between being a full-time mom and a working mom by accepting quality over quantity job opportunities. 

With that being said, human nature is to want more, so in some ways, working for yourself is always complicated and you never can fully relax into a full feeling of freedom. It is important to never get too comfortable because being self-employed always means the onus is on you to hustle and grow. While a lot of work does come to me after having established myself over a decade, it is important for me to touch base with all my clients regularly and share my successes; plus, remind them of all we have done and what we can do going forward!

What are you most excited about for your business in 2020?

I have been putting feelers out for so many possible brand expansions and seeing which ones stick. I am never afraid to reach out to great contacts or throw out ideas and see which ones materialize, as I believe both my business acumen and skillset can lend themselves to a variety of areas, from public speaking, hosting, podcasts, music supervision, influencer collaborations, consulting, sommelier opportunities, and more. Not every one of these will become the next big (or most profitable)  part of my brand, but without opening up to a multitude of ideas and putting some muscle behind them you won’t know which one could and will! 

Our friends at TurboTax were nice enough to share a giveaway with Create & Cultivate readers so you can file your taxes for FREE this season—all from the comfort of your own home!

30 readers will receive a FREE TurboTax Live Self-Employed product code (valued at $250, includes ad-on services). Simply fill out the form below to enter to win. The winners will be chosen randomly and contacted via email. Good luck!

TurboTax Live combines the ease and technology customers know and love about TurboTax with on-demand credentialed CPAs, Enrolled Agents, or Tax Attorneys, for ultimate convenience and confidence. You can connect live to a team of real credentialed tax experts in English or Spanish, for unlimited tax advice and a final review before you file.

Giveaway now closed, thank you for entering! We will email the winners directly.

15 Headache-Preventing Tax Tips You Can Use Right Now

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Overwhelm. Cold sweats. Glazed-over eyes.

Every year, these are the emotions felt by many of us come April 15, a.k.a when it’s time to file our tax returns. It seems like tax season sneaks up on us every year, and no matter how hard we try to be proactive, to plan and prepare, most of us are left doing everything at the last minute. 

So to help you get a handle on your taxes this year—and better prepare for tax season next year—we asked Natalie Asghari, a CPA at NA Business Advisors and CPAs, Inc. (NABA), to share tax tips that we can all implement into our financial life. Whether you’re employed full-time, self-employed, or working several side hustles, scroll on to find out how to get your 2019 taxes in order.

Tips for Everyone

1. Gather all your records in advance.

Gather all documents or forms you’ll need when filing your taxes: receipts, canceled checks, and other documents that support income or deductions you’re claiming on your return.

Always keep originals. Make copies of all valid documents that you will provide for filing.

Group together documents regarding mortgage interest payments, property taxes, charitable gifts, medical bills, and any other items that may count as deductions.

2. Keep track of important records.

The best way to do this is by staying organized throughout the year. Don’t wait until the end of the year to consolidate your documents. Gathering information at the beginning of the year will save you time and reduce the chance of omitting information and amending tax returns when it actually comes time to file.

Keep track of your expenses on a quarterly or monthly basis by record keeping, especially if you are self-employed.

Keep a record of tuition, books, computers, and fees that you pay because you may be able to claim an education credit or deduction for the amounts you pay.

Records need to be kept for at least three years (four for state of CA) from the date you filed the related income tax return. You should keep a copy of your actual tax returns, W-2s, 1099s, etc.

3. Decide how you’re going to file.

Be sure to consider different tax statuses if you are eligible for more than one. For example, if you’re married and can file either jointly with your spouse or separately, be sure to consider both options. This might be something for you to investigate throughout the year, especially if your circumstances change.

4. Review! Review! Review!

Don’t rush. We all make mistakes when we rush. Mistakes will slow down the processing of your return. Be sure to double-check all Social Security numbers and other personal information on your return. Remember, you are the taxpayer signing the return and you are responsible for any missed information.

5. Keep up-to-date on tax laws.

While it might be a good idea to get expert advice regarding tax law, you should also keep an eye on the news for anything that might affect you or your business. A well-informed client can often help an accountant give the best advice, so make sure you know about any changes in tax provisions that could apply to you. Ask questions if you believe something you read or heard may affect you.

6. Hire an accountant or professional tax preparer to do your taxes.

Because constant changes make the tax code more complex each year, you may be more comfortable–and able to use tax savings strategies, pay fewer taxes or receive a bigger refund–if you have a professional prepare your returns.

Tips for the Self-Employed

7. If you are self-employed, you may have to make estimated tax payments.

This applies even if you also have a full-time or part-time job and your employer withholds taxes from your wages. Estimated tax is the method used to pay tax on income that is not subject to withholding. If you fail to make quarterly payments, you may be penalized for underpayment at the end of the tax year.

8. Keep a good record of income and expense for your business.

To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your field of business. A necessary expense is one that is helpful and appropriate for your business.

9. Set up a retirement plan.    

A retirement plan not only benefits you later in life, but it is also a method of reducing your current tax liability, and often reducing taxable payment on a set amount of money at any point in time. Your taxable income at retirement will most likely be a lower bracket than your working income.

10. Don’t miss the health insurance deduction.

The deduction is for medical, dental or long-term care insurance premiums that self-employed people often pay for themselves, their spouse and their dependents.

11. Deduct transportation costs.

You should be able to fully deduct any transportation costs (plane tickets, taxis, airport parking, etc.).

If you’re driving to meet a customer or conducting business travel, you will need to keep a schedule/log with dates, mileage, etc. If your trip was primarily for business purposes, you can deduct certain expenses, such as hotel costs for any business days; if you combine work and play, you can’t deduct lodging and meals for your personal days.

12. Deduct meals and entertainment for clients.

Paying for meals and entertainment for current or potential clients can be deductible, as long as the meals or entertainment was directly related to and associated with the business. Be sure to keep records such as the date, the purpose of the meeting, and the parties involved.

Tips for Employees/Employed Individuals

13. Collect all your W-2s and 1099s.

You’ll need these to file your tax return. Check and make sure your withholdings from paychecks are correct based on your situation–especially if you had life changes such as purchasing a primary residence, getting married or having a child.

14. Pay estimated taxes.

If you do not pay your tax through withholdings or do not pay enough tax that way, you might have to pay estimated taxes or you may have additional tax liabilities when it comes time to file your tax returns. You may have to pay estimated tax if you receive income such as dividends, interest, capital gains, rent, and royalties.

15. Deduct job-related expenses.

If you paid for expenses related to your job during the tax year, many of these expenses may be eligible to be deducted on your return if they are unreimbursed by your employer. Deductible unreimbursed employee expenses generally fall into one of two categories: job-specific expenses and travel-related expenses. Some examples of job-specific expenses are protective clothing required in your work, such as hard hats, safety shoes, and glasses; physical examinations required by your employer; dues to professional organizations and chambers of commerce; licenses; and regulatory fees, to name a few.

Don’t let tax season scare you into an anxious state this year. Instead, spend some time, plan ahead and follow the tips outlined in this article. I believe you can make it through tax season without pulling out your hair. Now, I ask you, what tip will you be following this tax season?

This story was originally published on February 12, 2016, and has since been updated.

Brittney Castro is the Founder & CEO of Financially Wise Women, an LA-based financial planning firm for women. She specializes in working with busy, established professional and entrepreneurial women who are passionate about life and want to finally understand money—how to manage it, save it, invest it, and protect it—in a fun and simple way.

Brittney has been featured in the Wall Street Journal, New York Times, CNBC, Glamour.com, Entrepreneur.com, KTLA, CBS, and more. Away from the office, you can find Brittney working out, drinking coffee with steamed almond milk, reading, playing with her fur baby Arya, and of course dancing!

Sign up to receive your Financially Wise Toolkit jam-packed with great tools and resources to help you on your financial journey at financiallywisewomen.com. Follow Brittney @brittneycastro.

Solopreneur Tax Tips: The C Corp Entrepreneur

Filing taxes when you’re an employee is hard enough. But what happens when you strike out on your own? There’s a big difference between business structures—whether you’re operating as a sole proprietorship, LLC, or S corp, there are different planning and filing processes for each. Today, we’re diving into how to handle taxes when you’ve chosen one of the lesser-known structures: a C corporation.

Above, entrepreneur Natalie Elizabeth Ellis, founder of BossBabe—sits down with Lisa Greene-Lewis, TurboTax CPA, to learn how TurboTax Self-Employed can help her stay on top of her C-corp tax obligations throughout the year. Read on to learn a little more about Natalie and see how TurboTax can help you prepare and file taxes confidently. Plus, we're gifting 30 readers with a FREE TurboTax Live Self-Employed product code (valued at $169.99) below—so you can file for free this season!

Tell us a little about your company, BossBabe.

BossBabe is one of the largest and fastest growing online communities of ambitious women in the world. Our mission is to connect, inspire and teach ambitious women how to create their own versions of success. We aim to help 1 million women create $1billion in revenue.

What’s been your biggest challenge in getting BossBabe off the ground? What’s been your proudest moment?

I feel like my proudest moments come in waves every day - whether that's seeing that we've been able to help a woman generate over $500,000, or quit their full-time job to work on their business, or even crack 10K followers on Instagram. I see all those wins as big wins and the real "why" behind what we do. It's also been incredible to be featured in Forbes, Entrepreneur and Business Insider alongside other incredible entrepreneurs who are driven by big missions.

I'd say my biggest challenge with BossBabe was being able to respond to how quickly we scaled. From finding team, to setting up the right systems, it was such a struggle to do it as quickly as we needed to.

Our C&C readers agree—scaling up can be scary! Thankfully for Natalie and the rest of our community, TurboTax Self-Employed comes with a free year of of QuickBooks, so you can spend less time on the logistics of tracking expenses and more time focusing on the growth of your booming business.

What advice would you give to would-be side hustlers who don’t know where to start in getting their business off the ground?

Stop thinking, start doing. Make sure that you're setting aside time every single day to DO something and are actively moving the needle towards where you want to go. Too often we can be paralyzed by decisions, fear and unknown. I believe that clarity often comes from doing and learning, so I always push my clients to DO very quickly.

What are you most excited about for your business in 2019?

In 2019, I'm so excited for all of the new products we're launching. We'll soon have a podcast and we're also creating a product to help other entrepreneurs grow their community online in the way we did (we have over 1M women in our community!). I'm also just really excited to continue supporting the women inside our membership and mastermind products grow their own businesses so that they can inspire and support people in THEIR audiences. We really value the idea of being multiplyers.

Want more tips for tax time? Check out our guides for side hustlers and freelancers! or Or you can dive into TurboTax Self-Employed here—and enter to win a free TurboTax Live Self-Employed code below!

Our friends at TurboTax were nice enough to share a giveaway with Create & Cultivate readers so you can file your taxes for FREE this season!

30 readers will receive a FREE TurboTax Live Self-Employed product code (valued at $169.99). Simply fill out the form below to enter to win. The winner will be chosen randomly and contacted via email. Good luck!

This post is sponsored by TurboTax.

Solopreneur Tax Tips: The Side Hustler

The side hustle economy is real—37 percent of the workforce has a side hustle (and more than half of the Create & Cultivate staff has one!).

Having a side gig is exciting—you’re about to make more money, after all! But what you might not be prepared for is tax time. Above, our very own C&C employee Tyeal Howell—who moonlights as a podcast host at Bosshood—sits down with Lisa Greene-Lewis, TurboTax CPA, to learn how TurboTax Self-Employed can help side hustlers run their business more efficiently in preparation for April 15. Read on to learn a little more about Tyeal and see how you, too, can use TurboTax to file with confidence. Plus, we're gifting 30 readers with a FREE TurboTax Live Self-Employed product code (valued at $169.99) below—so you can file for free this season!

Tell us a little about your podcast, Bosshood. What inspired you to start the pod?

My best friend Ryan and I launched our podcast Bosshood to give young professionals and aspiring entrepreneurs access to people, resources, and information on accomplishing their career goals and working their way into the positions they aspire to be in. When we were graduating from college back in Ohio, we didn’t have the connections or resources we really needed to launch our careers in New York City and Los Angeles, so we created them ourselves and finessed the glow up. Bosshood is a fresh spin on adulting for millennials who obsess over professional development books, love coffee, and hangout at rooftop parties in cool cities.

What’s your biggest challenge in having a side hustle? The biggest reward?

The biggest challenge is definitely time management. After spending Monday through Friday 9-6 looking at my phone and my computer while sitting at my desk for my day job, the very last thing I want to do is more work. The biggest reward comes after that extra work is done for Bosshood and people text and DM us about how inspiring and encouraging it was for them to hear our stories. It’s even cooler when we travel and people come up to us like, “I loved your podcast interview with Johnathan Jackson on Bosshood! I was inspired and encouraged."

Tyeal’s not alone—we’ve heard from our C&C community that time management is a common problem for many side hustlers. The great thing about TurboTax Self-Employed is that it uncovers industry-specific deductions personalized to your line of work, so come tax time you won’t be racking your brain to think them up yourself. Your purchase also comes with a free year of of QuickBooks, which makes expense tracking effortless—so you have more time to focus on actually building and growing your business.

What advice would you give to would-be side hustlers who don’t know where to start in getting their business off the ground while working at a 9-to-5?

I’d say dedicate one of your weekend days where you’re completely free of work obligations to just brainstorm. Sit at a cafe, write out all of your ideas, and just envision what you want those side hustle dreams to manifest into. Then find someone to hold you accountable for the next steps. Start by starting! And read WorkParty the book!

What are you most excited about for your business in 2019?

I’m most excited to continue learning new things, failing at things, adjusting my strategies, and producing the content. Season 2 of Bosshood will be coming soon and you can subscribe now on iTunes or listen on Soundcloud! Boss up!

Want more tips for tax time? Check out our guides for full-time freelancers and C corp entrepreneurs! or Or you can dive into TurboTax Self-Employed here—and enter to win a free TurboTax Live Self-Employed code below!

Our friends at TurboTax were nice enough to share a giveaway with Create & Cultivate readers so you can file your taxes for FREE this season!

30 readers will receive a FREE TurboTax Live Self-Employed product code (valued at $169.99). Simply fill out the form below to enter to win. The winner will be chosen randomly and contacted via email. Good luck!

This post is sponsored by TurboTax.