Financial Design Co

The number of people who file an extension and then don't look at their taxes again until October 14th is waaay too high.

I'm not judging, here's what I'd recommend that everyone do between NOW and October:

Make a list of any missing tax documents. If you're a Financial Design Co client and you've already uploaded a lot, we can let you know what we're still missing.

Make sure you've paid what you owe (an extension doesn't give you more time to pay, just to file your return).

If you don't have a plan to get your return filed, reach out to Financial Design Co to schedule a new client call!

Hiring a new employee in a different state doesn't seem like that big of an issue in today's digital-first world... but it can cause a huuuuge headache for your HR department (especially if that's just you).

Before the ink dries on that offer letter, you need to know if hiring in a new state means you need to:

→ Register to do business in a new state
→ Withhold state income tax
→ Register for that state's unemployment insurance
→ Worry about state income tax nexus

Hiring out-of-state workers is totally fine (as long as you do your due diligence to stay in compliance).

The Cliff Notes version ↓

Schedule C is used for sole proprietors and single-member LLCs (treated as a disregarded entity) to report income from their trade or business.

So, if you're the only owner of your LLC, and you haven't elected to be taxed any other way, there's a good chance you're going to have this schedule on your personal tax return.

But, let's add a few more pieces to your tax return puzzle:
-Income from rental properties usually goes on Schedule E.
-Income from farming goes on Schedule F.
-Income from a hobby (gotta be very aware of the IRS rules on this one) goes on Schedule 1 (and related expenses aren't deductible).

Just because you got a 1099 doesn't automatically mean you're going to have a Schedule C; you need to understand the nature of that income to figure out the right way to report it.

Confused? Let me take over your taxes so you don't have to worry about which income goes where!

My answer to this is *almost* always yes!

I've worked with a lot of taxpayers who have fallen behind on their taxes.

We'll start by getting your past tax returns filed and addressing any notices you've received. Then, we'll set up systems to make sure you never end up behind on your taxes again.

Being just two years behind is very manageable. The best thing you can do right now is not get any further behind!

Penalties + interest can stack up until you file and pay your taxes, so the sooner we start working together, the better.

If this is you, click the link in my bio to book a call and start getting back on track with your taxes today!

Filing an extension is step one! 1️⃣

Step two is the one most people overlook...

It's NOT acting like October is way in the future and hoping your return magically gets easier to file by then.
Your tax documents aren't going to gather themselves!

If you extended your return because you didn't have everything ready to file, here's what you need to do:
→ Make a list of all of your missing tax documents. If you need to follow up with someone to get these, start doing it now!
→ If you own a business and your bookkeeping was what held up your return, make a plan to get it caught up.

Do you need to sit down over a few weekends and get it done? Or do you need to bring in a bookkeeper? 📚

Whatever you do, I'm begging you, please don't wait until October to start worrying about your taxes again!

PSA: Some businesses are leaving serious money on the table just based on how their business is structured!

When your business is set up as a single-member LLC, ALL of your income is subject to self-employment tax (which is 15.3%).

Electing to be taxed as an S corporation splits your income into two buckets:
→ A reasonable salary (subject to payroll taxes)
→ Distributions (not subject to SE taxes)

Being able to move some of your income to distributions can mean thousands of dollars back in your pocket each year! 💸

But S corporations aren't a magic tax hack for every business... they come with their own cons (like additional tax filings + payroll obligations)!

If you're ready to have a convo about whether your business structure is optimized for taxes, let's connect!

Oh boy, another tax question where the answer is "it depends!"

Your federal income tax payments are not deductible. Period.

State and local taxes (like your state income or property taxes) can be deductible if you itemize your deductions (up to the SALT cap, ask your accountant about this). If you pay a lot of these and you're a business owner, it may be worth asking your accountant about a PTET too!

If you're self-employed, half of your SE tax is deductible as an adjustment to income.

If you own a business, certain taxes, like payroll, unemployment, and business property taxes, may be deductible through your business.

Basically, even with such a simple question, there's no such thing as a simple tax answer (aka why I have a job!). 🤷

Even if you aren't planning to sell until 20 years from now, you need to save this post.

There's ONE thing every successful business sale has in common: they had their finances clean + ready to go before the buyer had to ask.

Most buyers (or their accountants) are going to want to see things like your:

→ Last several years of tax returns
→ YTD bookkeeping + prior year financials
→ Revenue breakdowns by product/service line (and potentially by client)
→ Documentation of major assets, real estate, loans, etc.
→ Client/vendor contracts
→ Payroll or contractor records
→ Sales tax filings (if applicable)

I've seen situations where businesses have strong revenue... but because they struggled to show it, buyers hesitated or offered lower than expected.

You don't need to be selling this year, but you do need to start preparing if you plan to sell someday!

Consider this unofficial permission from a bookkeeper to buy that course you've been looking at *if* it helps you maintain or improve skills for your business!

Coaching programs, industry conferences, continuing education, and professional development courses could be deductible.

Here's where I see businesses get caught up: the education has to be for your *existing* business.

If you're getting an education or learning skills for a NEW business, that's not a write-off for your current business.

Filing taxes on a year when you lost money can feel a little pointless. It is verrrry not!

If you qualify for refundable tax credits, you might get money back in your pocket (that you wouldn't otherwise get if you didn't file).

You can't claim what you don't file for!

Missing a year creates gaps that can come back to bite you if you need to set up a payment plan, waive a penalty, or when you *do* actually make a lot of money.

Plus, having a regular filing history keeps your options open with the IRS if you ever need some goodwill from them in the future!

Getting paid in crypto is cool, but there's one big thing that gets forgotten in the hype of checking your Coinbase account... TAXES!

If your business got paid in Bitcoin, Ethereum, or any other cryptocurrency last year, your tax accountant needs to know about it.

The government treats crypto kind of like property, which means when you receive it as income, trade it, or sell it, it can be a taxable event.

You (or your accountant) have to track your cost basis, calculate gains/losses, and make sure it all gets reported right on your tax return.

Fun, right?

So, if you dipped your toe into the crypto world last year, let's chat. We'll get you sorted + in compliance in no time!

If you feel like you've heard "ordinary + necessary" a billion times, it's because it comes directly from §162 of the tax code.

If you want to write off a business expense, it needs to be both:

Ordinary → commonly accepted in your industry.

Necessary → helpful and appropriate for your business.

A general contractor buying tools for s construction site? That checks out. ✔️

A general contractor buying designer shades because they sometimes work outside? Probably not gonna fly with the IRS. 🤨