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Small Business Bestie
Entrepreneurship is hard, and sometimes we could use a friend to walk a mile in our shoes. Small Business Bestie is here to provide that friendship, support, and inspiration that small business owners need from time to time.
Small Business Bestie
30: Bestie Bites- Jenny Schnurr Demystifies Small Business Accounting
Unlock the secrets to successful bookkeeping for your small business with our special guest, Jenny Schnurr, from Accounts by the Book. Jenny shares her expertise on the transformative power of collaboration over competition, urging business owners to harness the wealth of opportunities available for growth. Listen as we explore how detailed financial insights beyond tax filing can revolutionize your decision-making process and propel your business to new heights! 🔓🎉
Throughout this enlightening conversation, we unravel the complexities of accounting, making it accessible for all. Learn about how to spot accounting red flags and take control of your financial records with confidence! From negative balances to high accounts receivable, we provide practical advice for navigating these challenges. With QuickBooks and other tools at your disposal, you’ll gain the skills needed to interpret financial statements and ensure the financial health of your business amidst the changing landscape of virtual payments and paper checks. 💸✅
Lastly, we tackle the ever-important topic of business expense deductions and the nuances that come with them. Whether it’s debating the legitimacy of writing off massages or tracking business mileage, we emphasize the importance of understanding IRS guidelines to avoid costly mistakes. Discover how to optimize your deductions and appreciate the balance between tax savings and public contributions. With Jenny’s guidance and our shared passion for supporting business growth, you’ll be equipped to maintain compliance and focus on what truly matters—growing your business.📊🥳
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Small Business Bestie is edited by Bourbon Barrel Podcasting
Hey everybody and welcome to another episode of Bestie Bites. And today I'm here with my favorite bookkeeper in all of Lexington. This is Jenny Schnurr. She is accounts by the book and she has so graciously offered to come in and talk with me about all the nerdy bookkeeping stuff that we can possibly think of.
Speaker 1:Well, hopefully I don't bore everyone too much, but I think it's pretty cool that you think I'm your favorite bookkeeper when, like, that's what you do too.
Speaker 2:I know, but I don't like myself very much.
Speaker 1:It's a whole thing Okay so now we're going to go into therapy in the middle of this too, I guess. Whatever, it's cool.
Speaker 2:Yeah. So I had the idea a while back to invite Jenny on, and it was kind of a sweet thing. Whenever I invited her, she was like oh, it's so cool that, like you don't you know, see me as competition and that you want to have me on the podcast, and I think that this is like what we're trying to do, honestly is create small business besties, and I love Jenny as a human. She's like the funniest, kindest person, but also she's really good at what she does, and that is like so evident by all of the reviews and testimonials that I see online constantly, and everyone that I talk to they're like oh do you know, jenny, she's amazing. So it just makes my heart feel huge.
Speaker 1:Thank you so much, and I feel the same way about you. Like I always see really positive reviews, I see people and it's so great to see the way that you support women business owners. And one thing that it's been really cool to learn over my first year in business is how much opportunity there is out there and like defeating that scarcity mindset, and so it's really cool to see two bookkeepers who can be like technically we're competition, but if we're helping people, there's plenty of room to help people.
Speaker 2:So absolutely, and I mean I draw on Jenny's wisdom a lot. So you know, I think it's always good to have collaboration instead of competition. So with all that behind us, all the like woo, woo feeling stuff, tell me about your practice.
Speaker 1:Well, my company is Accounts by the Book and I started last September so just over a year ago and I have I don't know like 13, 14, 15 small businesses that I work with and do day-to-day accounting everything up from just coding transactions and making a P&L all the way up to full charge bookkeeping, fractional CFO services, cash flow analysis stuff. That probably seems boring to a lot of people, but you know, the cool part about it is not the numbers on the paper but what that can mean for a business owner.
Speaker 2:A hundred percent. Yes, I love it. All right, so off the top let's. First of all, I think we should start with what's the difference between accounting for tax purposes and accounting for business data information?
Speaker 1:That's a really good question. I'm really glad that we're going to talk about this because it's something I'm really recognizing when I pick up a new client is. A lot of times they've been working with a bookkeeper who maybe they create some reports every six months or just at tax time. And if you just want to file your taxes with the IRS, that's perfect because you're going to save a ton of money by working with someone who's not in your books every day and somebody who is, you know, just making sure that everything is organized to be able to file that Schedule C or that tax return.
Speaker 1:But I think as businesses grow they need to have more hands-on bookkeeping. I guess Someone who's checking on their books every month, if not more often, some of my clients. I do reporting every week for them and make sure that they're seeing things in a way that they can make business decisions on it. So, for example, if you're doing bookkeeping for taxes, revenue is revenue and it doesn't necessarily matter where it comes from. So as long as it's money in the bank from a client, it counts as revenue, because that's all the IRS really cares about.
Speaker 1:But you know as a business owner that when you're trying to figure out how to grow your business. You kind of need to know is this revenue from a monthly retainer or is it from bookkeeping services? Monthly bookkeeping services versus cleanup services? Is it CFO work? Because what parts of my business can I grow? What parts of my business are profitable? What parts of my business are not profitable? Which parts are draining me Like? If you don't have that information at your fingertips, it's really hard to make decisions about how to take your business to the next level.
Speaker 2:Absolutely. Yeah, I couldn't agree more, and I think one of my favorite books is the 80-20 rule, and that applies in most business decisions. You can apply that rule to decide if 80% of my benefit is coming from 20% of my product. I really need to put all of my effort and energy into that. If you don't have that data, you can't use those philosophies or principles. So, but yeah, you're absolutely right. There are definitely applications where you know, for whatever reason your business, you're not trying to grow it, you're just happy, like maintaining the status quo. Those types of things Like that's a perfect opportunity to save some money for your business and not really have somebody digging in the books constantly.
Speaker 1:So yeah, yeah, absolutely. Or for really simple businesses like you have one income stream and three or four regular expenses. They're always the same every month. Well, you might not need somebody who's in there all the time digging in making it work, like I mean. And that's perfect because, like we said earlier, there's different bookkeepers. There's so many businesses out there. It's not competition, but I might not be the right bookkeeper for everybody for that reason.
Speaker 2:Exactly. Well, that was a beautiful explanation and I'm glad to have that out of the way because I think now, as we move forward through the conversation, you can kind of check, like, where do I fall in this? Am I looking for a bookkeeper that is, you know, doing more tax bookkeeping I just need to talk to them once or twice a year or am I looking for somebody who's really going to help me get in there and understand what's happening? So I think the next thing that we want to talk about is one of my favorite misconceptions or misunderstandings. I talk to a lot of small business owners who don't understand the difference between I talk to a lot of small business owners who don't understand the difference between categorizing or classifying transactions and reconciling their books. So talk to me about how we can help people to understand the difference and the necessity of each of those.
Speaker 1:Yeah, that's a really, really good point, because that is one of the biggest things that I see is that people will send me their file, because I always review their file. I want to see what's going on, to understand if they're QuickBooks, if they have it or, you know, wave or whoever they're using for their software Like, is it up to date, is it current? And so a lot of times people will be like oh yeah, my accounts are good all through last month and then I go to the reconciliation screen on QuickBooks and the accounts have never been reconciled. So categorizing transactions is basically putting them into buckets about where they belong on your income statement or your balance sheet. So if you buy some Canva software because you're going to be doing marketing for your business, that might go under an advertising or a software bucket, you know, and that just depending, it's a personal feeling about where you want to see that. And so every month, or however often we're doing bookkeeping because it might not be every month we're going to categorize transactions and it's just recording. This is what happened and it puts it in the transaction register. It came out of the bank and the reason that we bought it was because it needed to be for this software expense.
Speaker 1:But reconciling is to make sure that you have an accurate record in your books of everything that happened and exactly what happened, because I don't know if you've ever seen this. I bet you have Duplicate transactions All the time, all the time. And it happens like maybe you have an invoicing software that connects with your accounting software QuickBooks. I'm just going to say QuickBooks, I'm just going to use QuickBooks, because most of us use that. So I have a client who uses Jobber, for example, and the transactions go directly from Jobber into QuickBooks.
Speaker 1:Then you get that bank deposit and a lot of times people will record that bank deposit as sales because it is to you right, like I get it because, hey, that money went in the bank because it was sales, but because Jobber has created an invoice, that sales is in there twice, right. And so now we might have a profit and loss statement. I always say income statement, but I'll say profit and loss. Either one, they're interchangeable. The profit and loss statement might say that we did $200,000 in revenue but really we did $100,000 because we duplicated everything. So when you reconcile you check off all of those transactions from the list to make sure that what the bank statement or the credit card statement said, that every single transaction is in there one time. The beginning balance, the ending balance line up and then you know that your books are accurate for that month.
Speaker 2:Absolutely yeah, I think that that's one of the most common ways that you mentioned is having an outside software that's creating invoices or payments for you. But another way that it happens and that I've seen is overzealous business owners who want to be on top of things and they're trying to do their best, and so they make a $3,000 credit card payment and then they go oh, I made a credit card payment, I'm going to go tell QuickBooks that I made a credit card payment, and they create a credit card payment in QuickBooks and then when the transaction actually hits the bank, it's now duplicated. So, yeah, duplicated.
Speaker 1:So yeah, and you know, I just want to say I think there's nothing wrong with creating that credit card payment, but we've got to learn add versus match. So QuickBooks loves to add things, but if you've added that transaction, that's cool, you can add it. And then, when it comes to the bank feed, you can click match and then it knows that that's that one you've already added.
Speaker 2:Absolutely.
Speaker 1:So that's like. I love my business owners who give me some of that information because, it you know, maybe there's five $500 transactions in a month. I might not really know which one's going to where.
Speaker 2:Right. So it can be helpful. It's absolutely helpful as long as there's communication and we know what's happening. And I think I don't mean to disparage in any way business owners who are active in their bookkeeping, because I say a lot of times bookkeeping is not rocket science, but if you don't know anything about it it can feel like rocket science. So long as you're educating yourself and you have an understanding of what's going on, then I encourage people to be in their books and looking at it and helping when they can.
Speaker 1:Yeah, I think there's certain transactions that it's easier for business owners to just naturally intuitively wrap their head around, right, and then some things are a little bit more complicated. And it's a really good thing about QuickBooks is that it's so user-friendly. But most business owners I know didn't other than, like me, we didn't get into the business to be an accountant, right right. Like you and I were like, okay, we can do. Well, I don't know you like the bookkeeping. No, I don't. I like try to give you all the credit. But like I got into it because I love it, like I just find some joy in seeing everything balance out the debit, the credit, they're equal, they're good.
Speaker 2:You know what I love about book bookkeeping is, after someone else has done it, I love looking at the income statement or the profit and loss statement and saying, oh, what does this tell me about the business and how can I help the business make different choices, or maybe make the same choices, you know. So that's what I get a pat on the back like hey.
Speaker 2:I made a good decision even without the data Exactly, exactly. Yeah, I agree with you. It's at in their own bookkeeping software, whether they're doing their own bookkeeping right now or someone else is doing it, just to kind of check in and get a pulse and say are there any red flags that maybe things aren't happening properly.
Speaker 1:Yeah, I thought about a few of those. I was going to write them down but I'm just going to pull them off off the top of my head. So I think the best place to start is probably the balance sheet, because the balance sheet is going to have something that you can actually compare to Right. Because you can compare the bank balance on your balance sheet versus the bank balance in the bank or your bank statement, and is that right or not? Like anyone can do that. So you don't have to be an accountant to know that. Like anyone can do that.
Speaker 2:So you don't have to be an accountant to know that. So I, with the caveat that sometimes there are some discrepancies if you have outstanding transactions.
Speaker 1:Right, absolutely Like. Things have to make sense, though. I looked at one recently that had like a balance of negative one hundred thousand in a checking account. That doesn't make sense and, like I worked in banking for a long time before I became an accountant, I don't know many banks that are going to let you go $100,000 to the negative.
Speaker 2:No, no. I had someone ask me questions recently and his credit card balance was showing negative $3,000 in QuickBooks, but he had an actual balance that he was carrying $8,000. So it was like an eleven thousand dollar difference and he's like I don't know what happened and you would see that on the balance sheet immediately. You would go oh, there's something wrong. Why is your credit card negative three thousand?
Speaker 1:dollars Exactly. I think anything negative on the balance sheet should be something that should make you say hold up, what's really going on here. It's definitely possible, like some of us have been there, where we've overdrawn our bank account, like so, if your bank account's a hundred dollars overdrawn, it's going to show that. It's going to show that well, if we're keeping up with our books maybe you don't want to, maybe you're ignoring your books if you're a hundred dollars overdrawn because maybe you need to go run up some more revenue or something, but yeah, yeah, it would show that. So negative accounts on a balance sheet for me would be a huge red flag that we need to dig in and see what else is going on.
Speaker 1:Another one that I see is super common is really high balances in either accounts receivable or undeposited funds. So accounts receivable is money that you've invoiced for that you haven't brought in yet You're waiting for that revenue to come in and undeposited funds we use that when we've received the money but we haven't taken it to the bank yet. You went to the mailbox, you grabbed a whole stack of checks, you put them in there and then you take the bank deposit in.
Speaker 2:And I'm not going to say that that's completely like an archaic thing that nobody uses anymore. But it's becoming more and more rare for businesses to actually have an undeposited funds because so much of what we do now is virtual payments, electronic payments, etc. So unless you are actually receiving paper checks and holding them in a safe or a drop box or something like that until you go to the bank, then really that undeposited funds shouldn't get used.
Speaker 1:It shouldn't get used that much but I think a lot of those third-party softwares, your invoicing softwares they're set up for the old school way to do it and if you receive checks they should go that way, because you might like maybe we snap the picture right away on the phone. I do, but maybe if they're bigger checks they're too big for your deposit limit. Hopefully you're getting big checks, so they're too big for your deposit limit.
Speaker 2:Hopefully you're getting big checks, so we're going to take those $1,000 that have popped yeah yeah, well, and every business is different, right?
Speaker 1:You know that. So some of our clients and some of our besties have those. So does that undeposited funds balance or that AR balance make sense for your business? Like, if you look at that and you see that there's $800,000 in undeposited funds and you don't have $800,000 in checks red flag, red flag. We need to take a look at that, yeah. And then another one that I see is like payables that have really high balances sales tax payable, payroll tax payable, direct deposit payable. Sometimes that's because, again, the accounting software set it up to do it a certain way. Maybe the payroll software is connected to QuickBooks, it sets up a payable for payroll tax withholding due, and then that doesn't get paid until next month. And then we see the payment to the IRS and we say, well, that's a tax, I'll code it to taxes expense, but in that case it was actually sitting in that liability account waiting to be held. So we need to make sure to reduce that. So those are some of the big ones that I see. Do you have any others I missed?
Speaker 2:No, I think you covered them all. Those are really the ones that are just giant red flags of like there's something not happening appropriately. And on the AR side. I'll just add that you know, if you do have a ton of money hanging out in AR and it is like legitimate, then it might be time to find somebody to help you recover that money because, your business would be much better off with a little cash flow.
Speaker 1:Yeah, yeah. I mean I run into that with a lot of my clients because we're so busy. We're doing all of the things. We're doing the job, we're invoicing, we're doing the bank, we're doing the admin, we're doing the social marketing Like how many of our besties are solopreneurs and we're just out there doing everything. Wouldn't life be a whole lot easier if the money was in the bank and we weren't worried so much about collecting?
Speaker 2:Yeah, yeah, who, not how? Who can help me with this problem? Not how can I fix the problem.
Speaker 1:Yeah, absolutely, and that's one of the things that I've gotten a lot of joy of helping some of my clients with. When you know they've been dealing face to face with the owner of the company or the people who've been doing the work, get the call from the accountant who says we noticed that you have an overdue balance and it's over 60 days past due. Now we need to set up a plan to get these payments in. Yeah, and it's really, really fun when I'm able to help my clients to collect on something that they've been sitting on and worrying about.
Speaker 2:Absolutely, yeah. Okay, we are now to my favorite part of the discussion. This is about to get real lively, so I'm going to put down my champagne so I don't spill it myself, because I know I'm about to start jumping out of my seat. Jenny, I want to talk about shady deductions. Oh, I wish we had like an Eminem song to play right now. Shady's back.
Speaker 1:Doom doom, doom, doom. I didn't get it. Doom doom.
Speaker 2:Doom, doom, oh, oh, I can put it up. All right, we got it. We got it, oh, all right. So let's talk shady deductions. And we're not talking Eminem. We are talking things that people may or may not know are not congruent with IRS guidelines, and I like to tell people, when they do a consultation for Cultivate Accounting, I tell them right off the bat, like there's a couple of things you need to know about us. We're not going to be the cheapest option because we like to do the high level bookkeeping and we also are going to challenge our clients to be ethical, and for us, ethical is be good to each other and be good to the rules that are established. Yeah, so I'm not always the most popular bookkeeper.
Speaker 1:Yeah, I mean it's hard, and I think it's really hard because there definitely are bookkeepers out there that will give advice. That I think is really poor. Like hey, if you go out to dinner and you're having dinner with your spouse and you all talk business for part of dinner, then it's a write-off. Have you heard that one? I've heard it. You've heard that one. Like, that's not what the IRS says and it's you know, a lot of people do it. A lot of people do it. A lot of people do it. And so it's really hard to and it's hard for me to put my foot down. At the end of the day, I am not the one who has to stand up in front of the IRS if they deduct something they shouldn't. Absolutely. So if you tell me that it's a business expense, I'm going to tend to believe you and I'm going to recommend that we only do business expenses. But dinner with your spouse is not usually, ever, ever going to be a business expense.
Speaker 2:I'm gonna ask about one that I heard recently and it sparked something in me that was so severe that I had to do a reel to explain my distaste for this sentiment. But recently there was someone on social media who posted that if you purchase clothing that is the same color as your logo schematic color scheme then it can be considered a uniform and you can write it off.
Speaker 1:That's. Yeah, I didn't see that post. I'm on social media too much, but I missed that one. No, that would not probably be something that you should write off, like the IRS would say. I think, and I get, I try to be really careful. I'm not an EA, I'm not a CPA. Maybe we need to talk about that too, but, like I know some things about tax law, no, there's not gonna be situations where, just because it's the same color, like a uniform should have your company logo. It should be only used. I mean Would you wear it to the store on your way home from work? Sure, but like it's used for work, it's not like.
Speaker 2:You wouldn't be getting dressed for a concert and say, gee, I can't wait to put on my accounts by the book Bolo. I mean, I see Pretty good colors. Yeah Well, that was my reaction when I heard that. I was like, well, man, I have a lot of doubt because my logo has like every color of the rainbow in it. So anything I buy is a uniform.
Speaker 1:Which, okay, that was not true. Do not take that one sound. That is not the advice. Put it in context.
Speaker 2:I mean there's a lot of fake news out there, but that's not it. Michelle and Jenny said I can wear anything as a uniform.
Speaker 1:That is a fact-checked pants on fire.
Speaker 2:Okay, so uniforms, that's a very common one and you pointed out logos have to be on the clothes. It has to be worn specifically for the job.
Speaker 1:Right. Or if it was like protective gear, exactly Like steel-toed boots that you're wearing on the job. If it's a hard well hard hat, I suppose we would know that that was a you have to play business expense. If You're wearing your hard hat out other places, village people out there Like I want to see it, come on, let's go out later. Say bye to us, say bye, we're going out.
Speaker 2:Yeah, I think also, like you know, scrubs. If you're a medical professional, that can be a uniform, even if it isn't logoed.
Speaker 1:Yeah absolutely, because it serves a specific purpose for the job, although I've seen some scrubs that are quite fashionable. Well, but then like, cool, yeah, like, why not wear?
Speaker 2:the cute ones. Okay, so what are some other common ones that you see?
Speaker 1:Have you seen I know you like massages have you seen massages as a business expense All the time? Okay, now, if you like, if your body is part of your job and you have to be constantly moving. There might be situations. Might be situations, but my massage therapist actually tried to convince me that my massages could be a business expense and I couldn't justify writing it out. Yeah, and I couldn't justify writing it out.
Speaker 2:Yeah, and I think this is a good place to basically say at the end of the day, as a business owner, you are the final say in what you put as a deduction or not. I can't gatekeep you from putting something in there, jenny, can't. We can give you guidance and say this may not be in accordance with IRS guidelines. Here's what the guideline says. You make that determination for yourself Because, at the end of the day, if you were ever to be faced with an IRS audit and they were digging through and they were like, hey, why did you spend $5,000 on self-care in 2024?
Speaker 2:And you say, oh well, I'm a hairstylist and my back hurts because I'm on my feet all day and I'm in a stagnant position, so my shoulders and my neck hurt so I have to get massages. It's really up to that IRS agent of how he's going to interpret the regulation, to determine whether or not he or she I'm sorry, I don't mean, I just think like. I think of an IRS agent as like a mean old man that's like going to come like smack me with a ruler or something you know. But it's up to that individual IRS auditor to make a determination, if your plea of what, the purpose of that transaction was is legitimate or not? And so if you like to live life on the edge, by all means live life on the edge.
Speaker 1:I'm not going to stop you. Like I said, I'm going to take my client's word about whether something's a business expense, right. But I think what you have to realize is, if you do get audited, if that auditor that mean old man with the glasses and the ruler that he has smacking your wrist if he decides it's not a business expense, then you're going to have to pay the back taxes on that, but then you're also going to have to pay interest and penalties. So I think life is about balance. So where's the balance and where do you feel good about that? And what dollar amount do you want to be on the hook for? If in seven years that comes up with seven years of interest and penalties, yeah, and I don't know. For me it hasn't been worth it. Like I would rather do it the right way, and sometimes that might mean paying a little bit more in taxes.
Speaker 2:Right.
Speaker 1:And nobody likes paying taxes, I get it.
Speaker 2:No, I hate paying taxes. But you know what I don't hate?
Speaker 1:What don't you?
Speaker 2:hate. I don't hate the national parks. I don't hate schools. I don't hate schools. I don't hate water. I don't hate water Coming out of my faucet. I don Don't hate that. You know, I really like running water, A lot of the infrastructure, a lot of the things that we kind of take for granted. You know that's tax, yeah, you know, and so I'm not saying that I hope all of you have ginormous tax bills and you can't alleviate any of that. But what I am saying is that tax is necessary, but also for me I'm a highly anxious human Right, Like that's just my life. But also for me, I'm a highly anxious human right, Like that's just my life. I'm a highly anxious human. So if I can say, you know what I'm going to do my books, buy the book like, buy the IRS book and follow the rules to the best of my ability and alleviate that anxiety and that stress and that burden of like, what if To me like?
Speaker 1:what's a couple I mean A couple hundred dollars a year extra in taxes. It's not that big of a deal. But what about this? What are some business deductions that maybe clients are missing? Do you have any of those on mind? Because maybe we just ruined your day by telling you you can't write off dinner with your husband, but maybe there's things that some of our clients are missing that we could help them with.
Speaker 2:I think some of the common ones that I've been able to identify for people is number one, and I'll shout it from the rooftops forever but track your mileage. Oh my wait, are you a MileIQ fan? I like MileIQ. I'm going to, I'm going to break your heart right now, like I use the QBO tracker because it's already built in, it's already on my phone, yeah, and I haven't had any trouble with it. I know there are some people who, you know, swear that it's the worst thing ever and that's cool, but I haven't had any trouble yet.
Speaker 1:I just like to call MileIQ Tinder for mileage, because you get to swipe right. You know you do the business. Oh, is it the same thing? Okay, I guess I just haven't.
Speaker 2:Okay. So that all Okay. I'm like it's like a dating app you just go through and you swipe your miles.
Speaker 1:So definitely get a mileage tracker, because that's a huge one 67 cents per mile for business miles, yes, yes.
Speaker 2:And you corrected me the other day, thank you, because I still had 65.5 and I was like, oh my God, it did change and I'm like stuck in the archaic days.
Speaker 1:In the archaic age of the first half of 2024. Right, exactly, yeah, so definitely mileage. I would say home office too. If you're working out of your home, have a dedicated space. You all can't see much of our space right now, but we have a space and so we can look at the total square footage of the home, look at how much of that is that dedicated workspace, and so maybe it's 10% of our home. Then we can write off some of the utilities, maybe mortgage interest. I mean, it's really going to depend on your specific situation. So you might be able to speak more, but like, talk to your tax preparer, but have a dedicated space in your house and get that home office deduction.
Speaker 2:Absolutely. The home office deduction is huge and I think the standard home office deduction is $1,500. Or you can itemize your home office deduction if 10% or you know whatever your square footage ratio is of the office versus the entire home. If you do the math and it's more than $1,500, then for sure you can use that number, but if it's less than you can just claim the standard home office deduction which you know, depending on how big your office is or how big your home is and all of that like that can really add up for you.
Speaker 1:Yeah, absolutely. I mean that's $1,500 is probably what? At least a third of your electric bill every month. I don't know something, I don't know. I'm just I'm just throwing out numbers. I mean it's just, it's money, it's just money right, it's right.
Speaker 2:These are the things where you get the tax savings that you're looking for. Instead of trying to slide a massage in as a deduction, let's just take advantage of the deductions that are actually there for us.
Speaker 1:That are actually, yeah, that are actually real. And then to sleep better at night.
Speaker 2:Right, exactly.
Speaker 1:That's the way that I see it anyway.
Speaker 2:For sure. Another one that gets missed sometimes is your tax prep. You know, yeah, but here's the caveat If you have a business return, that is deductible. If you have only a personal return with a Schedule C, only the amount they charge you for the Schedule C is deductible. So but just make sure that, like when you pay your tax preparer at the end of the year, that you are deducting those expenses as well.
Speaker 1:Yeah, absolutely those professional fees.
Speaker 2:Yeah.
Speaker 1:Oh wait, I just remembered another one. We've talked about the coaching and the. Was it therapy as a business deduction? Yes, now, I'm 100% on board with therapy. Anybody who knows me Right, anybody who knows that I'm like shouting from the rooftops, like go talk to somebody. We all need a little bit of help out there. But that was one I've seen online. You saw online that we could just write off all of our therapy.
Speaker 2:Yeah, we could write off our therapy, and I think the IRS guideline would be something a little more along the lines of if you are receiving coaching for business-specific purposes, yes, it's deductible, but if it's life coaching, because you don't know what direction you want to go in your life, or if it's therapy, Do you just go and complain about your husband or something?
Speaker 1:You can't write that off? Never do that.
Speaker 2:What.
Speaker 1:No, okay, I guess Never mind.
Speaker 2:It's fine. It's fine. They're not going to listen to this right.
Speaker 1:Oh, Mike is definitely going to listen to this. My husband is like a podcast junkie and he always. One of the most commonly used phrases in our household is so I was listening to a podcast today, yes, and I'm like, oh wait, were you listening to a podcast? So he probably hasn't listened to Small Business Bestie yet, Yet, Yet, Yet. But when I told him that I was doing this, I'm like are you going to listen? He's like you just have to let me know when the episode he wanted to tell me it's not going to drop right away, it's going to take a little bit.
Speaker 2:Oh, he's in the know.
Speaker 1:He's in the know.
Speaker 2:He's in the know Well, any other, like commonly missed deductions that you can think of.
Speaker 1:I think those are the ones that come off to the top of my head. Yeah, I'm thinking about.
Speaker 2:What about can you talk to me about if I'm a business owner and I go to fill up my car? I've been running errands for the business all day and I want to fill up my car with gas. Do I get out my personal card or my business card?
Speaker 1:I've heard so much different advice about this one. So I'm going to say what I do and what I think and then I'm going to. I'm going to ask you also, like how you do it so personally. I'm going to ask you also, like how you do it so personally.
Speaker 1:I take the mileage deduction, so I put all of my. The way I have been doing it is I've been putting everything on my personal card and then I calculate that how much of that use is for my vehicle, and so I'm looking at the mileage and so if I drove 500 and I'm not going to do the math in my head, I can't do 67 cents per mile off of that in my head, but I'm just writing off the mileage deduction. You either do mileage or actual expenses. So now if the vehicle is in the business's name, then we're looking at it from a whole different direction and you're going to want to use the actual expenses for the most part. But for those of us who are using the same vehicle for business and personal, I generally recommend that we put all of those expenses on the personal card and then get that mileage deduction and pay ourselves back for the business mileage. What do you do?
Speaker 2:Well, I think that that's the easiest way to do it, right? Yes, otherwise you get really in the weeds trying to keep track of how much fuel was purchased over the year and you still have to track your mileage to do actual expense. Yeah, so that's where I think a lot of people think well, I'm just going to. If I use the car for business today, I'll use the business card, and if I use the vehicle for personal use, I'll use the personal card, and if I use the vehicle for personal use, I'll use the personal card. But that's not actually how it has to happen. You track all of the expenses all year long, you track all of the mileage all year long, and then you still have to say this amount was personal and this amount was business. So for me it's just easier. The rate that they give us, that 67 cents, if you think about it, like, unless you just drive a car that's getting like eight miles to the gallon, you know, yeah, yeah, absolutely, and I think you're coming out ahead with the mileage.
Speaker 1:Yeah, and it's totally different. I work with a lot of businesses that have fleet vehicles and different things like that. So those businesses that might be, I mean for some of my business owners, that's cost of goods sold, because if you're a moving company that fuel you have to. You can't do the job without it. Cost of goods sold, let's get that right on the top line. But for you know, for those of us who are in professional services, that to me just so much easier to do it with the mileage.
Speaker 2:Wow, a wealth of knowledge and a lot of laughs too. So is there anything else that you feel like you would want to tell the besties about who you are, what you do, what you love, anything like that?
Speaker 1:I want to help businesses to grow, and so the people that I really love to work with are people that are just maybe frustrated with the financial side of their business. They don't want to spend their time digging into that and want to spend more time focusing on the actual work of the business, and so I just get a lot of joy in being able to say just leave it alone, leave it to me. Tell me what you need me to take care of. Call me when you have questions with dollar signs in front of them. So that's what I like to say. If it has a dollar sign in front of it, I need to hear about it, and then that way I can help, give you guidance and make sure that we're doing it in the best way, sometimes the easiest way, sometimes the cleanest way, but also the way to maximize your savings, to do it the right way to track it and the right way.
Speaker 2:Amazing by the book. By the book. Oh my gosh. All right, so we will make sure to link out to all of your socials and things like that, but just shout them out for us really quick so that everybody can hear them.
Speaker 1:Oh boy, my socials are a mess. Okay, so my website is accountbythebookcom. I know, I know I needed a coach. When I started, the domain wasn't available. I love the business name, so here we are. So, yes, the business is accountsbythebook, the webpage is accountbythebook, and then on Facebook it's accountsbythebook, and then, I think, on Instagram, it's accountsbythebooks with two S's. It's a mess. I'm going to figure it out one day. Does anyone have any help?
Speaker 2:Besties, I think there's some besties that can help you. You need some help. Yeah, y'all listening, pair up, give her some advice and help her get that straightened out to make it easier. But in the meantime I will make sure that we link to all of the messed up. Hey, we're all doing our best. We are doing our best and your best is killing it, because you're just everywhere and everybody loves you and you're doing a great job, thanks.
Speaker 1:I always am glad to see your name everywhere. So we got besties we can trust who are out in the world doing bookkeeping, helping keep your finances in order.
Speaker 2:That's right. Yeah, All right. Well, until the next time. We will talk to you guys later. Bye.