Episode 22: Creating Systems for Your Finances for Tax Season
Welcome to another episode of The Systems and Workflow Magic Podcast. As all creative business owners know – it’s tax season! Today, I am interviewing my amazing CPA Jackie Easterday, and we are chatting all about taxes and how to set up your systems for an easier tax season. This is something that Jackie has helped me so much with, and I know her advice will be helpful for any creative business owner.
The Systems and Workflow Magic Podcast is brought to you by Dolly DeLong Education. This is a podcast for creative business owners who want to learn tangible steps to automate their business through workflows, systems, tools and strategy in order to go from scattered to streamlined with purpose. Because even muggles can become automated wizards.
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Review the Show Notes
Get To Know Jackie Easterday (1:37)
Why did Jackie get into taxes? (7:04)
Tips and tricks for an easier tax season (8:34)
Open a business bank account (8:40)
Tracking your income and expenses (12:27)
Track your receipts (16:50)
Understanding your quarterly taxes (21:42)
What to keep in mind annually (24:15)
How to set up your systems to pay contractors and anyone else (25:25)
Why it’s important to know your numbers (33:26)
What to do with what’s left in your tax account (36:36)
Jackie’s tips for write-offs (38:13)
Schedule a 1:1 call with Jackie! (42:05)
Mentioned in Today’s Episode
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Review the Transcript:
Dolly DeLong
Welcome to the systems and workflow magic podcast where I help entrepreneurs go from scattered to streamlined in their creative businesses. I’m your host, Dolly DeLong, a wife, a mom and a photographer turned systems educator. Join me every week as we have conversations centered around creating tactical workflows, and automations and your business. Now, let’s make some strategic workflow magic. Hi, and welcome back to the systems and workflow magic podcast. So all I can say is, if you are listening to this episode live, meaning it’s the month of April. And as many creative business owners know, all business owners know this is tax season. So I sincerely hope you are surviving tax time and it’s not wearing you out too much. And again, if you’re listening to this episode in the future, and if you’re listening to it, let’s say in December or November, then I really want you to still listen in and take notes because I am interviewing my amazing CPA, Jackie Easterday to chat all about taxes and how to set up systems for yourself and just how not to be intimidated by tax season, especially as a creative business owner. So before we dive into this not so sexy yet sexy topic, Jackie, can you please introduce yourself to everyone?
Jackie Easterday
Yes. So first, I’m super excited to be here. A dolly is one of my favorite people to follow on Instagram, honestly, like she is a dubsado Wiz, we all have our zones of genius. And I have like, honestly, some of your tips and tricks that you have posted have saved me and automations. So I’m very excited to be here and share some of my tips and tricks with all of your listeners and your followers. Because there is a lot that revolves around taxes in the numbers. So about me, so I’m first and foremost, my mom, I have three boys, I have a nine year old and twins that are seven. Coming from a family of all girls, it’s a total adjustment. And I’m sure you get that being a boy mom, like my house is loud. Everything so all the things messy, all that stuff. But honestly, and my husband is I would say almost probably even like the backbone of my business, like having a solid support system just to encourage and you get this encourage you to go out of your comfort zone and expand your business and grow. Like if it wasn’t for him, I would be right now truly sitting in an office somewhere probably on my like 80th day of my you know, 1112 hour tax season day. So that is my background. I am a CPA, which is fancy for I have a degree in accounting and I eventually took a bunch of tests to become a certified accountant. And I specifically work with female online business owners from creatives to VAs and OEMs. And website designers really to help them simplify and understand the money side of their business. I when I was in public accounting, I worked primarily with small businesses. And that’s really where I found my passion of getting to meet other small business owners and just Everybody’s got something different to offer. So it was super exciting, and kind of just transitioned me into where I’m at now. So that’s kind of where my focus is.
Dolly DeLong
I love it. I’m so I mean, I’m going to be sharing how I found you. But I’m just so happy you’re here. You really are going to help so many creative business owners, like with your words of wisdom, and I’m so excited about what you’re going to share today, Jackie. So I just wanted to share with everyone Jackie has quite literally transformed the numbers behind my business before Jackie, I was working with an accountant. She was good. She did her job. I told Jackie she did her job, but she really wasn’t as that interested in, in her clients like Jackie has invested in her clients. I feel weird saying like she I’d never want to sound like negative on this podcast. But there was a clear distinction when I hired Jackie versus in comparison to my past CPA. It was so clear like Jackie is amazing at what she does. So I told Jackie I think it was like a month ago when she was helping me out with my taxes. I was like, Jackie, if I go to prison, will you at least email me like mail me something like me she’s like, well, first of all, you’re not going to prison and then you were like I think you’re like Yeah, yeah, I’ll keep in touch with what I like still support me but she she just like held held my hand the entire time. And sometimes verbally had to walk me off the ledge because I just freak out about all things taxes. And I’m sure that there are many other creative business owners out there who feel the same way but one of our mutual friends like internet friends, Emily Conley of Emily writes well, she actually He told me about Jackie. And again, even though I was using a past CPA, once I got into Jackie’s world, she went above and beyond to serve me and Ty, which is a really, really big deal for me. And she, she’s probably gonna laugh about this. She doesn’t know I’m saying this, but she’d dumbed everything down to like, a third or fourth grade level for me, and walked me through all the steps that I needed to file for my business and for our joint family taxes, because my husband works for a company, but then I own my own business. And so in my mind, that’s like, overly complicated, but after working with Jackie, like, she really helped me out so much. So anyways, I’m just so excited to have her here, because she really did break everything down into a system for me, and that helped my brain out tremendously. And so, yeah, thank you. Just like, this is like me, thank you for the million time, Jackie. I’m so excited to share you with other people. And just like for you to, like walk other people off the ledge, get other people off the ledge and stop being so afraid of taxes and finances within your own creative business.
Jackie Easterday
I laugh No, I honestly the amount of people that say to me, like I don’t want to go to jail. And honestly, you’re going to jail if you are not doing first of all, probably none of us are making the amount of money that the IRS is like watching us. But second of all, I mean, you have to like maliciously do something. You can get dinged with interest and penalties, which suck just as you know, as bad honestly. But I always laugh when people say that to me. So well, I have some awesome things that I want to share with you guys that I think are just like I said earlier, Dolly has she provides constant tips and tricks on automating your business in your systems. And there are some things out there that will just make tax season so much simpler for you. And this is the time to do it. Because we just got over tax season you went through it. And I bet most of you are vowing to never have to go through it in that way again. So one thing I want to back up, so why did I get into taxes. And like I said, I worked in public accounting, and I worked with all these small business owners. And I would watch these people and they make their own schedules, their own rules, their own money, and I never really thought I would be one of them. But I always kind of thought like, how awesome is that, like they’re answering to themselves, like what flexibility they have. And now here I am. And I’ve been able to do that by growing my business with a lot of the tips and tricks that I’m going to share with you guys. And that’s why I’m so passionate about working with like female small business owners, because I have found flexibility to be able to have my own business and be a mom and be a friend and do the things that I want to do. And understanding your numbers, which taxes are a huge part of that is what’s going to give you the information and the tools and the knowledge to grow and expand and gain that flexibility. And that, you know, looks different to everybody, right? Like everybody’s got different ideas of kind of what the end game looks like. But whatever that is you have to plan to get there. And taxes are a huge part of everything you can’t escape, everyone’s got to pay taxes. I mean, you could escape them, but I promise you, at some point, the IRS is gonna find you and you’re not going to like find out. And it’s a necessary evil of being a business owner and like valet said, they’re terrifying to people, because they’re super complicated, and they seem impossible to understand. And there’s people like me who went to school to understand them. So it seems almost unfair that the average person who doesn’t have that background has to do this. So I want to talk about some of these things that are going to make your life so much easier. And the very, very, very first thing that you need to do is open up a business bank account, I get this question all the time, like I’m just starting out or I’m small, do I really, really need a business bank account? And the answer is 100%. Yes. Because the sooner that you start separating your business finances, from your personal finances, your life is going to be so much easier. And I’ll give you some examples. Because if you don’t, what happens during tax time and many of you know this, you pull up your bank statements and your credit card statements from your personal accounts. And you are literally going month by month highlighting, you know that Canvas subscription, that dubsado subscription, that invoice that hit you’re gonna miss things, you’re gonna miss deductions that would have saved you money on taxes, you could potentially miss income, which could cause an issue down the road things like and so accuracy, you know, it is really there’s so much human error and just spending hours coming through statements. When it’s painful. No one has the time or wants to do that. But two very rarely is it probably accurate I promise you you miss something. So the sooner you can separate those and then look at one statement and know all of these transactions are business. This is all my business income. These are all my business expenses, whether it’s an a business, bank account, maybe it’s a credit card, maybe it’s two bank accounts, just having it separated is the very very first thing but probably the most important thing you can do for your business. And along those lines. A lot of business owners think they have to become an LLC before they get a business bank account and you don’t at all, you can get a business bank account under your social as a sole proprietor. So if you are not ready to become an LLC, or you feel like I don’t know if this is going to work, I don’t want to go down that route, like you can 100% go in as a sole proprietor with your personal information and open up a bank account. So when did you open yours? Ali? I know you’ve got a couple things open.
Dolly DeLong
Yeah, so I actually just applied for an LLC, I don’t know how to phrase that the year that I went full time in my business. So that was fascinating.
Jackie Easterday
Yep. And I think you know, and I will say, you know, I have been doing this on my own since my boys were little. And then when I first started, I just had one or two small clients, and I didn’t separate, you know, I just had one or two checks that came in and deposited them very few expenses at all. But really separating that in I honestly, just if you are going to continue your business and you know you are it’s yeah, that first and foremost is the most important thing I think you can do. Do you
Dolly DeLong
have any recommendations for banks that creative female small business owners? And I don’t even I know for sure my husband listens to this. But if you’re listening, do you recommend any specific banks? Or what are your suggestions?
Jackie Easterday
Honestly, I think that I tell people kind of off the bat, go for ease. Like what you know, every bank has a different platform and different options. And all of our minds work differently. So research, some banks are more online driven. And people love that some people want to have the option to be able to go in person. So it’s kind of preferential. But honestly, I tell people, like I said go for ease, like I bank at the same bank, like I have my business accounts at the same bank that I have my personal accounts. And for me, that’s easy, because part of my process, which we’ll talk about is transferring money monthly to taxes to myself, things like that. And it’s really easy to do that when everything is you know, connected and linked in at the same bank. But some people don’t they want to have things separate. So it’s really preferential but honestly, Chase Bank of America have fantastic business credit cards. So that’s a great option with you know, solid rewards. So maybe you want to find somewhere back into it looking at credit cards, and a you bank with Ally and you love them. And so I mean, it’s just it’s really preferential but I think figuring out what’s important to you and your business, and then kind of backing into it from there, but there’s not a right or wrong answer just open. Alright, and then the next thing and honestly, this is the most important is monthly, monthly monthly, track your income and track your expenses. So many people put this off, let the money roll in, let the money roll out and don’t look at anything and they just pay attention to their bank account balance and figure Okay, well, I’ve got this much in here, this is probably what I made, you need to be tracking all of your transactions. So whether you want to track it in Excel or Google Sheet, because you’re just starting out and you don’t really feel like you’re ready to invest in QuickBooks or a software, that’s completely fine. You just have to do it. So you know, what I recommend for everybody is at the, you know, wait for the month to close and the very beginning of the next month, sit down whether you’re in QuickBooks, and you’re going to be classifying and categorizing all your transactions, or you are opening a spreadsheet and go have your bank account open and list all of your income, list all of your expenses that come out and then figure out what your profit is. So obviously, there’s more menial work to do if you’re doing it in Excel or Google Sheets, and again, possibilities for human error, just missing something. But if you use an accounting platform like QuickBooks, it pulls in all your transactions for you. It’s just a matter of getting things classified in inappropriately and then look at your monthly profit. Because this is important for two reasons. One, if you are tracking this stuff monthly, when it comes down for tax season in January, you do your December, bookkeeping, and then boom, you’re done. You know, a day you’ve got your books and your profit and loss already for your CPA or for TurboTax. Or whoever you’re filing, there is no scrambling to try and figure out what this expense that you paid last February was for because that’s really, really hard to do when you’re running a business to go back and try and remember. Yeah, what was this for? You know what I mean? So staying on top of it is super important.
Dolly DeLong
So would you recommend like having a, like a CEO, financial date or like, just like a financial day for several hours at the end of the month? Or at the beginning of the month?
Jackie Easterday
Yes, I absolutely. So honestly, that’s what I do for myself, I figure out a day. Ideally, it would be early in the month because then you can start to look at your numbers and have something to kind of make you know, maybe you’re spending too much and you want to course correct really quickly. It’s hard to do that when you’re three weeks into the next month. But Sometimes life happens and it happens later. But that’s what I do is go in and focus on your numbers, call have a CFO day, pull up QuickBooks, pull up your bank statements, review everything, look at your profit. So what I do personally is I open up QuickBooks I go through I classify all of my trade reductions in QuickBooks. I tie everything out to my bank and credit card statements to make sure it’s accurate. And then I look at my numbers I have custom reports created. So I can look at my profit, I compare it to previous months, I compare it to this time last year, and then from there, I look at my profit. And I know okay, I need to be earmarking money for taxes. 30% is usually the rule of thumb, some people more some people less just kind of depending on your other income thresholds. So if I, my monthly profit, say was $10,000, I’m going to immediately I’m going to look $3,000 of that 30%, I’m going to transfer to a business savings account. That’s called my tax savings. Now I have checked the box I have saved for taxes, that’s earmarked I’m good to go, then that remaining $7,000 left of my profit. That’s what you start to think do, how much of that what do I want to pay myself? What do I want to leave in my business, and then I also so during that time, then I’ll figure out how much I want to pay myself, I’ll transfer that amount. And then I will also you can open up a business savings transfer the remainder if you want to leave it in your checking kind of whatever you want to do. And then the final thing I do is I always at that point in time, I go ahead and pay my credit card bill for the month, everyone has different due dates, mine isn’t until the 15th. But I go ahead and schedule it that day, it doesn’t come out until the 15th. But then I’m done. Like all of my accounting for the month, I’ve looked at everything I saved for taxes, I’ve paid myself, I’ve scheduled my credit card payment, and then you can just push the rest, you know, you don’t have to be paying attention to your numbers like that for the rest of the month. So I honestly think one day dedicated to diving into everything, is you’re gonna get it all done. And it’s honestly the most efficient way to kind of have things going.
Dolly DeLong
I love that so much. And you’re probably gonna go into this like another point that I just thought of this question. What do you do when I know we like are like, mostly digital? What about the business owners, they get like a physical receipt, like they make a purchase? And like, how do you recommend tracking the receipts? Because I know, for me, I’m weird, like I’m organized, but then I’m, like very scattered at the same time. Like it’s very, it’s confusing. I’m very confusing everyone. What do you recommend with like, a receipt process?
Jackie Easterday
So this was my next thing is you’ve done all of this now. So I’ll kind of back up a step why you need to track receipts people are like, I don’t want to hold on to this $7, Starbucks, you know, charge or whatever. What can happen is if you were ever get audited, and you can get audited for two reasons, they could look at your return and say something looks off. I want to audit you or you were all subject to random audits. Yeah, if the IRS were to audit you, they might they would look, you know, we’ll just talk about the business side, they’ll look at your your business, profit and loss. And they’ll say okay, well, you said you had $1,500 in meals in 2021. Show me receipts that total $1,500. So if you are tracking every month, you have your transactions, and you can verify that you have a receipt for every transaction, yours, you’re golden, because you can keep you know, when they need that you just know you can pull up that file, and you have it all documented. And you’re not like going back, you know, five years ago and trying to find receipts or things like that, because I’ve helped some small business owners through random audits. And they’re just stressful because we don’t maintain receipts like that. So adding that piece to your monthly process is so huge, because it’s going to give you complete and total peace of mind around your taxes because you’ve got documentation to support and the IRS will not allow like a bank statement or a credit card statement. That’s not a receipt, a receipt is the actual, you know, transaction Exactly. And so what I do is, for me, like 90% of my receipts come through my email, you know, your monthly subscriptions that you ignore, like, Hey, thank you for your payment of 1299 or whatnot, or I pay contractors, those are all those receipts are going to come through email, I save all of those to a folder on my Google like in my Gmail, and I have to. And then what I’ll do is typically on a monthly basis, and I’ll be truthful, sometimes this happens quarterly, I’ll download all of those and put them in Google Drive and just make sure I’ve checked all my boxes, then what I also do is if I ever have like a physical receipt, like you said, like, typically it’s going to be meals, if you’re meeting anybody in person, then I will honestly take a picture and email it to myself and put it in that file too. Just because it’s
Dolly DeLong
I do that. That makes me feel so much better about myself. And
Jackie Easterday
there’s so many apps out there for receipt maintenance QuickBooks, you can actually add a receipt to every transaction in QuickBooks, so you can upload receipts, you can scan pictures, you know, with the QuickBooks app and send them to yourself things like that. So everything is appropriately you know, we’re gonna stick classified and has the documentation behind it. And on top of that, there’s just a million other apps out there. I keep it simple just because for me Simplicity is the easiest thing, otherwise I’m not going to keep up with it. There’s some people that are way more techy, and they want all the, you know, widgets and apps and things like that. But as long as you’re tracking them, that’s what matters.
Dolly DeLong
I always feel like a 90 year old woman at like, I don’t know, like Starbucks, whenever I go out, like in between either sessions like me, like, get a meal before my photography session, or I’m like doing a VIP Experience Day for someone. And I’m grabbing them a meal or whatever. And I asked for a receipt and like, people’s looks at me, you want a receipt, and I just want to be like, I’m so sad. Like, I am sorry, this is for my business. But it’s just like that look for me. I’m like, please just, I just need this for business. I
Jackie Easterday
know. I know. I know. And I don’t ever get receipts personally. So it’s not like I have to remind myself, you know, like, oh, no, I need to track this. And that’s why I love like, you know, Square app has so many of the options just like text your receipt or email it to you or whatever. But yeah, for me, keeping it all in my Gmail is the easiest thing because I know I’m not no one has time to like scan a receipt on a Tuesday from a meal, get it into Google Drive that day, you’re gonna forget about it. And then no one wants to scan 40 receipts at the end of the year. So for me, that’s the easiest way to at least know it’s somewhere. And then when I have time, I can kind of pull it all together.
Dolly DeLong
Okay, I love that so much. Oh, man, this is also helpful. I’m writing notes to so
Jackie Easterday
so that is sort of what the monthly process looks like. Like I said, block off the day, track everything, review everything, save for taxes, pay yourself, pay your credit card, check your receipts. The other piece that you really need to focus on for accounting and for taxes is quarterly. So quarterly, you have estimated taxes, not everyone has to pay them. They are confusing, but the gist of it is the IRS wants you to they want you to prepay your money that you’re going to owe them that’s what it boils down to is they don’t want to wait until tax day to get what you owe them. And so when you were an employee and you worked for you know a business, you have wages, they took out your withholdings, your your taxes, and they went ahead and on your behalf pay those into the IRS. So the IRS was getting their money ahead of time we just out of sight out of mind. We don’t know what’s happening. But now as a business owner, we’re not paid that way. And so we have to pay that money in and so the IRS says okay, if you’re don’t have withholdings, you need to pre pay us your taxes quarterly. And the long and short of it is they base that off of your prior year taxes because you don’t know what you’re going to make you there’s all these complicated calculations on penalties and interest. But the the safe rule is to pay in 100% of your taxes for the prior year throughout the year. So like you, for example, y’all have tie has some withholdings and so that’s going to cover some of that. But then if not, you need to pay in different you know the difference on a quarterly basis. So typically, when you do tax prep with a CPA, they will look at those numbers for you and provide you the upcoming year what your quarterly payments need to be. And so I add this into your quarterly, you know, kind of checklist or responsibilities is to figure out what that quarterly payment is, like I said, if you worked with a CPA, you’re going to know that number, and then schedule those payments the IRS into your state. And if you’re saving monthly and putting that money into a tax savings account, those payments can come right out of there. So it’s very, very streamlined and simple. But that is a piece of the process that you want to stay on top of. And it is very important for tax time because you can get dinged if you have not paid in.
Dolly DeLong
Well, I’m so glad and just like again, affirming, just like how organized you are you’ve you even send out reminders to all your clients like hey, your quarterly, estimated tax payment is due around like on this date. And so that’s very helpful for me.
Jackie Easterday
Yeah, and I think it’s so important to find somebody who is going to like jive with the way you’re thinking and give you the reminders you need. And just you know, taxes aren’t necessarily a one and done process. They are it’s a it’s a project, but there’s stuff that you need to be doing throughout the year to kind of stay successful and set yourself up for an easy tax season. And so that’s very important. And that’s really the main quarterly piece and then annually, then I’m kind of talking generalities for small business owners, but annually, obviously you need to file your taxes. But then if you it’s the whole 1099 for contractors, so part of my annual checklist that I typically give people is if you have contractors that need to 90 nines, those need to go out annually as well. And if you’re kind of checking all of those boxes in the monthly quarterly and annual peace, you’re totally set you’re not scrambling on in April to pull together receipts and things for your CPA. You’re not realizing that you should have sent a contractor at 299 for $1,100. And that was due in January. You’ve already been staying on top of all of this. And it’s just going to streamline and give every you know knowing what to expect I think is the most One thing to not be fearful, and when we’re unsure of the unknown, whether that is taxes or anything, health related things, anything, that’s where we, you know, anxiety can kind of creep in. And you know, and so, to me, knowing you’re checking the boxes and you’re saving, and you have an idea of what’s to come, it’s going to alleviate so much anxiety because you don’t, there isn’t as much unknown anymore.
Dolly DeLong
I do have a question about the 1099. For contractors, what like is there like a minimum amount per per week or per month that relates to the 1099 cars, let’s say like, you are starting out with like hiring somebody for two hours a week versus hiring somebody out for 10 hours, we is there like a minimum hour or it just doesn’t matter,
Jackie Easterday
it is $600 for the year. So if for you for the whole year. So if you’ve paid somebody less than 600, you don’t need to issue them at 299. So you have to pay them over $600. And if you pay them through, they invoice you through dubsado through HoneyBook through QuickBooks through wave, they send you in through PayPal, if they send you an invoicing you pay through their payment processor, you don’t need to send them a 1099 Because those payment processors are the ones that have to send that to 99. Because the 1099 is basically a way to let the IRS know these people made money so they can get taxed on it. The only way you need to tell that all the payment processor, Stripe HoneyBook wave are going to take care of that. But if you paid somebody through Venmo Zelle wrote him a check ways that there would be no system for the IRS to know that’s when they want to know that’s kind of the way to think about it.
Dolly DeLong
Oh, that’s so good. Okay, everybody rewind and listen, wait five, that’s really good. Because this is something that I’m sure it frustrates you since you work specifically in numbers and taxes. But it frustrates me This is might be an unpopular opinion. But around tax time, like you get on in Facebook groups, and everybody has an opinion about numbers. And they’re not even, like qualified to talk about numbers. It’s just like, well, this is what my cousins, brothers sisters aunt said, or this is what I feel. And I’m like, Are you qualified? Like I don’t ask them. But in my mind, I’m like, Are you qualified to share this opinion? But
Jackie Easterday
no, I agree. I think every year the IRS is actually trying to simplify the 299 process. But from what I see is it feels more complicated because people are giving their opinions or reading on credible sources online and telling you what needs to happen. And so and there they are, they’re cracking down even more like next year. Like for example, this year, if you work with a payment processor, like Stripe, Stripe doesn’t have to send you a 299 until you’ve had like over 40 transactions and totaling over 20 grand. So if you just had a couple transactions, or you moved over to stripe or HoneyBook, or some one of those like mid year, you won’t get it to 99. Next year, that number drops to $600 to so everyone’s going to start getting more and like Zell Pay Pal, they’re going to start cracking down on sending those. And so the other thing that’s really important here is if you are paying people via Zell set up a Zell nado Venmo, or PayPal, like set up business accounts, because Venmo has Venmo business and then all of a sudden Venmo is going to start tracking those 299. And so it just make your life easier if you can, and that like that kind of goes back to the very beginning, I see so many small business owners who have separated their business, finances, but still are utilizing like a personal paypal account or a personal Venmo account. And it’s so easy to do. But like break that apart. And all those all of those platforms have business options. Now, I don’t
Dolly DeLong
use Venmo or to pay anybody but is there for their business platform is there you know, like with stripe and square, there’s always a transaction fee, like just the cost of doing business? Is there a fee associated with Venmo? Or I don’t
Jackie Easterday
even know to be honest with you, because most of my clients, I don’t use Venmo for business at all. But I think it depends how you’re paying them. So I think the bank to bank transfers similar to Venmo personally or not, but like if you’re utilizing credit cards or things like that, then they will good just and that kind of all of that kind of goes back to just adding another system when you’re paying people outside of you know, a contractor who’s invoicing you or something like that tracking those things. And getting so a W nine is a form you can google it that is if you have to pay a vendor, you hire a VA or somebody that you’re paying, you know writing a check or something like that. The W nine is where they input all their information, their social security number, their address, that’s information you need to issue them a 1099 I absolutely recommend before you send that payment, ask them for their W nine because it might be somebody that you work with in February, and maybe you pay them two grand but then you don’t worked with them again for the rest of the year, maybe it’s just for whatever reason, good or bad. And then now you are almost 12 months later asking them for a W nine, they’re not, they have no incentive to give it to you, and it just makes your life harder. So kind of staying on top of those things will absolutely make things easier for you.
Dolly DeLong
Okay, gotcha. No, this is also really good to have a system for paying people What if you are working with like, you have a system for paying people, but what if you’re working with people who don’t have a clear way of being paid? Like, yeah, how do you handle that?
Jackie Easterday
So I think if you work with somebody who is not, they don’t have a system for how to get paid, like they don’t have solid invoicing or something like that, I one, you should absolutely ask for an invoice, not email, I don’t care. I mean, if I have, you know, I recommend some people, even if somebody won’t give you an invoice, draft one and excel, send it to them to send to you, because you want that invoice for your purposes, that’s your receipt, you know what I mean? What I was talking about earlier, so one get an invoice and to then that’s where you set up your system. So if they don’t have a system for how to pay them, then you say, I pay my contractors, you know, via whatever you however, you know, I pay my I write you an ECheck or Zelle. Or, you know, there’s awesome like payment platforms like gussto, or things like that, that you can set up contractors with. So if they don’t have a system, you that’s where you need to have a system that comes right into play that way, you’re not paying some people through Zell, some people through Venmo, some people with a cheque you’ve got if they don’t send you an invoice, you have a system in place for how to pay them. And you tell them kind of like that’s the way it’s going to be
Dolly DeLong
because I like for my photography business. I do work with other contractors, and there’s no clear cut system. And it’s not because they’re difficult. They’re wonderful. It’s just like, they haven’t thought that through. And so I was curious as to what your what your opinion was on that. Okay.
Jackie Easterday
Yeah, and a lot of times when it’s just people that are just starting out, you know, they don’t have a system yet. And so I think even your guidance can kind of help them to develop something but they’re maybe they’re not ready for, you know, a CRM or something like that for invoicing.
Dolly DeLong
Nervous about where to begin with tracking the expenses and income of your creative business or side hustle. It’s time to stop being intimidated by the numbers of your business, and it’s time to take control of your finances. With my free income and expenses report template, you can have a simple system in solution and tracking the expenses and income of your business. This template comes with an easy to follow tutorial video, just in case you’re new using a Google Excel spreadsheet. And this is the same spreadsheet I used to use when I first started tracking my own income and expenses as an early business owner before I hired at my first accountant. So your AC T News expense and income tracking template can be found in the show notes of today’s episode. It’s time to step into the CEO role of your business by learning how to better streamline and automate the numbers behind your business. Because knowing the numbers behind your business, that’s actually fun. Okay, so I have like I’ve been taking notes, I have six points for you that repeat but is there any other nuggets of wisdom you want to add to the system?
Jackie Easterday
Honestly, I think it is so important for business owners to know their numbers and you don’t need to know every single detail if you’re at a point in your career and your business is growing where you can hire out your monthly work or your taxes or something to a professional who knows the nitty gritty and the details, it’s still important for you to understand the generalities and the big picture. I think that that is how you are I really believe that’s how business owners are distinguished you might not you might not understand how taxes are calculated but you understand that your business you know taxes are calculated in this way or just the generalities are super important. And I just I know not everybody is a numbers person I hear all the time I’m not a numbers person. I don’t care I don’t know but like you can be and you don’t have to be an accountant you don’t have to be a financial analyst or anything like that. But you should know the overall numbers you should have an idea of how much money your business is making and what you can pay yourself and prepare yourself for taxes and you absolutely can’t do it. So I think that is so important is to kind of get rid of that stigma that you’re not a numbers person or it’s not your forte you can obviously outsource and hire out but you still need to have an idea of what’s going on on the number side of your business.
Dolly DeLong
I just want to piggyback on that like yes even though you like or may not be a numbers person like find somebody like Jackie who is going to help you navigate it and seriously like dumb it down for you. I don’t mean that phrase sounds negative but like literally help you You understand about all the intricacies of like, the taxes that you owe or what quarterly taxes are, and they won’t make you feel dumb because this whole time honestly, before you Jackie, like, the other person I was working with kind of made me feel like an idiot. And I was like, Oh, I’m still gonna work with you. Because I don’t know. I don’t know who else to hire. And so I’m just so grateful that like, you did not make me feel like an idiot. Because honestly, there were some times I would text you or I would send you a loom video, I’d be like, Jackie, I am an idiot. Like, you’re not in any adult Lee, you’re fine. You’re Yeah,
Jackie Easterday
we all have our zones of genius. And I think that’s a big thing is knowing where we’re strong and where we’re not, and then filling in those gaps with outsourcing. But I do I think there is such a stigma with accountants and CPAs. And bookkeepers. Similarly, with, like attorneys, you know, and it doesn’t, they aren’t all buttoned up straight, you know, intimidating. And that’s one of my biggest goals is to kind of break down that stigma and that fear of chatting with somebody about your numbers, because that’s how you’re going to learn is finding somebody comfortable to talk with, and, and we all deserve to know that and have that access. So I’m glad to hear that because that is one of my biggest goals.
Dolly DeLong
You’re awesome. And also I love that you aren’t just like your mom, a wife, like you are very cute. Like you humanize yourself and also you all Jackie loves a good Margarita. So like, get to know her. Her like, treat her to a good Margarita. I do have a question. Okay. So you set aside, say a business owner decides, Okay, I am going to set aside 30% every month from my profit. And then at the end of the year, like when I file my taxes, and then I find out I owe this amount, like what what would you, I guess, advise a person to do with the leftover amount that’s left in their tax account.
Jackie Easterday
So typically, you will have a leftover if income stays relatively normal. And you you know, unless your business spikes, you know, to the point that it really pushes you up a tax level or two. And so if you do have money leftover, what I usually recommend people do is, honestly transfer it to a business savings account, pay yourself a bonus, you will when tax time comes, unfortunately, on April 8, you know 18th This year, but typically the 15th your bet your balance due, but then you also your q1 payment for the first quarter is due. So some people will use that for q1 for their payment, and then whatever they’ve been saving throughout the year, you know, pay that to themselves. But honestly, I think give yourself a bonus, save some in your business, pay yourself a bonus, anything, because that’s your money. And that’s why I really advocate earmarking the money and putting it aside because it’s very out of sight out of mind. But it’s still your money. And so at the end, we’ve worked hard for our money you’ve gotten through tax season. So if you get to that point, and you’ve got a couple $1,000 leftover, if you want to put a little bit in your business savings and pay yourself a bonus, I would absolutely do it because that’s what you would be doing anyways, kind of using those funds to pay yourself. Okay, can
Dolly DeLong
I ask you another question? Yeah. What is your opinion about when people say, Well, this is a write off.
Jackie Easterday
So there are I view write offs or deductions. Like when somebody says, Oh, my gosh, I got this amazing deal on something, I saved so much money. And I’m like, would you have really? Did you really save money? Because would you have bought that if it wasn’t on sale, you know, that whole concept. And so some people just view like the business expense, the business expense, and they don’t, they it’s going to reduce their income, reduce their tax liability, and they just kind of spend willy nilly, I 100% think that you should be deducting anything that is a business expense. But you should also do that in moderation, don’t spend more than you know, don’t buy things that you wouldn’t feel are necessary anyways. Because then you just get into this habit of, you know, spending crazy like I hear a lot of times at the end of the year, people are like I’m trying to you know, I need to spend my money, I need to spend my money before year end so I can get a deduction. But for example, say you bought a $2,000 computer because it’s the end of the year and you’re trying to reduce your income. You didn’t save $2,000 You still spent $2,000 And your taxes on that are only about 30%. So you really saved yourself $600 Maybe that’s fantastic or beneficial, but just thinking about it in that sense of like, do I really need this because it’s steal money out the door? Yeah, honestly, taxes, no one loves them. But if you’re paying a lot in taxes, it’s because you’re killing your business. And I think shifting your mindset, it’s very hard to do that way but shifting your mindset to realize like, hey, my big tax bill is kind of a flex I think will help to sort of get you spending appropriately.
Dolly DeLong
Yeah, I love that so much and that’s something that It’s so weird in the last two years, my profit has been slowly increasing. So I love that you said it’s like a mindset shift. And like, it is a flex like, Hey, I’m making more money. Yeah, I’ll Oh, much more taxes, but I’m making more money.
Jackie Easterday
And at the end of the day, we all have to pay taxes, and we can complain about them all we want, but they’re not going anywhere. So shifting your mindset and also just it is what it is like, save for it, prepare for it, give yourself peace of mind and focus on the positivity. We could complain about taxes 12 months a year, but it’s not going to make anyone’s lives better, we still have to do it. So the best thing you can do is just to plan and prepare and set yourself up for success. And I think that that is a huge way to kind of shift the mindset around taxes.
Dolly DeLong
And then of course, hire somebody like you to help with like the teens and remember members. And I will like I’m not trying to embarrass you, Jackie, but like really, I’m like trying to like, let people know like, this is what Jackie does, and she will help you out with your taxes. She’ll help you up with quick she just like we’re about to do a QuickBooks setup for me because I’ve never used QuickBooks or I might have like five years ago, and it was too overwhelming for me. So I’ve been manually tracking everything. And so now I’m at the point where I need I need QuickBooks Jack even told me you need quick when you help me yeah,
Jackie Easterday
when you’re ready to grow in scale setting yourself up for the foundations in QuickBooks is it is intimidating in the same way that dubsado is super intimidating to me. That’s why you hire somebody to set you up with like, you know, steps and tools and things to maintain this system that’s going to save you time and help scale your business. So it’s it’s another you know, business investment that we make but long term when you’re growing and scaling it’s not too soon to kind of jump into that and get things organized there.
Dolly DeLong
I 100% agree with you. All right, so I want to know can you share with everyone your free gift that you have for everyone?
Jackie Easterday
Yeah, so I um you guys can all find me on Instagram right now I have a you can find me on Instagram download my service guide find all my information but right now I’m actually offering a promo I offer one on 130 Minute Calls. Just pick my brain. Do you have questions over taxes? You know, anything business think accounts, saving for taxes, tracking your profit? Like all those questions. Like I said, I really want to break down the stigma that accountants are intimidating and scary and unapproachable play offer one on 130 Minute Calls. And I am actually offering in the middle of offering a promo right now. My birthday is on April 15. It’s tax day. So I know that is like sick, right?
Dolly DeLong
You are born to be a CPA.
Jackie Easterday
So for the next couple of weeks, I’m offering a promo off my calls, it’s tax bday is the call you can find all the information on Instagram if you find me on Instagram to get a discount off of those calls. Because again, I know that so many people have questions. And honestly, this is it’s fun, because it’s my birthday is end of tax season and a little celebration. But I’m also hoping it just kind of gives people that nudge who have been like I have questions I want to ask to reach out and realize, you know, it doesn’t have to be like terrifying or scary because sharing that side of our business is very vulnerable. And so I have this kind of gives those people that are on the fence a little nudge to kind of move forward.
Dolly DeLong
Yeah, it is very vulnerable. But it’s also very encouraging to have like somebody just like still like walk alongside you in a very non judgmental way. So I love it and so can you share your your Instagram handle with everyone? That’s amazing. You’re you’re on Instagram and I love following you on Instagram.
Jackie Easterday
It’s Jackie dot Easterday dot CPA and I love like, send me a message. I love to chat with new small business owners and hear about you know, just learning about I don’t know, I think it’s super fascinating to see how people have structured different businesses and what they’re doing
Dolly DeLong
awesome. And Jackie’s really good about voice texting, or at least she’s really good about voice. I don’t know if she likes voice texting. I’m just like, right out there. If you’d want to hear her voice. But Jackie, I just want to say thank you so much for coming on today. This episode is going to help out a lot of creative business owners just know. Because like, you’re right, like it is important to, to just develop some sort of system with the finances of your creative business and to be proud of yourself like this. You learn how to scale your business like, yes, you’ll have to pay taxes, but you’re growing so there’s no shame in that. So thank you so much.
Jackie Easterday
Thank you for having me. This was so fun. Of course, of course.
Dolly DeLong
Everyone, I hope you all have a wonderful rest of your April and feel free to like DM me and DM J Aki I know how you like are putting like systems for your business in place for tax season so especially for as you look to next year so until then, I hope you all have a wonderful week. Bye. Thank you so much for listening to the systems and workflow magic podcast. You can find full show notes from today’s episode at dolly DeLonge photography.com forward slash podcast. If you’re loving the podcast, I’d be so honored if you’d subscribe and leave a review on your favorite podcast player. Be sure to screenshot this episode, share it to your stories and tag me at dolly DeLong education over on Instagram. Until next time, go make some strategic workflow magic.
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