E333: How Health Coaches Can Keep Taxes Simple (and Stress-Free!) with Sara Fins

Tax season's here – and if your bookkeeping looks like a crumpled pile of receipts, you’re not alone. Health coach and former CPA Sara Fins is joining us to share simple ways to clean up your business finances (even if things feel like a hot mess right now). Plus, she’ll walk you through the mindset shift that makes managing money way less stressful. Join Sara’s FREE workshop: Know Your Money, Grow Your Business at: https://HealthCoachPower.com/money

 

Mentioned in this episode:
Sara's free workshop, "Know Your Money, Grow Your Business" - https://healthcoachpower.com/money

Episode Transcript

(00:02):
Hey there, health coaches. Iam here today with Sara Fins,
the one the only to talkabout keeping tax time simple
and stress free, which is probablywhat we need to hear right now.
I'm recording this on April 1st. Some ofy'all might be feeling like a hot mess.
We want to help you make sure thatnext year is smooth sailing and

(00:24):
maybe clean up some of the edgesfor this year too if we can.
So if you're joining us liveas we record this episode,
or even if you're watching the replaylater, tell me in the comments,
how's your tax season going?
I'm super proud of myself because forthe first year ever, everything is filed.
My tax return is on its way. Anyway,

(00:45):
Sara and I go way back.She's a health coach herself,
a former CPA and financeexpert for coaches like
us. Thanks for joining us, Sara.
Happy to be here.
We are so glad you are. Everybody'slike, ah, what do I do this time of year?
So if you're listening and you'relike, this is exactly what I need,
my finances are a mess. I've gotreceipts and little balls in my purse.

(01:10):
I have no idea how to managemy money. I'm glad you're here.
And Sara has a free workshop comingup. It's called Know Your Money,
grow Your Business, whichyou can sign up for. Again,
it's [e-mail]/money.
And I'm going to put that linkin the show notes too. But again,
it's healthcoachpower.com/money.Go check that out.

(01:35):
Sara, I thought we should justjump right in. Sound good?
Yeah, sounds great. Let's go.
I know everyone has a lot of questions,
so I'm trying to encapsulatethe ones that I hear most.
But for those of you that are here liveas we record this episode, go ahead,
ask your questions as we go along.
I have my eye over here on the chatarea so that we can help you out.

(01:56):
Alright, so let's say, Sara,
let's just say that I did notalready have my taxes filed.
I'm so proud about that.
But let's say I did not and everythingwas just like a mess right now and I've
been there. I'm remembering the year thatmy second son was born and I was just
totally overwhelmed going throughmonths and months and months of bank
statements trying to figureout anything that happened.

(02:20):
What would your advice be if we'rein that hot mess state right now?
Yeah. Well first of all, if you'rein that state, you're not alone.
I see this all the time.I mean, as entrepreneurs,
we have so many things on our plate thatthis always winds up getting pushed to
the side.
But what I could recommend isgetting organized as soon as you
can. That is the mostimportant thing you can do.

(02:41):
And what I mean by that is set asidesome time on a regular basis to sort
through your financial information,organize your receipts,
look at your bankaccount, things like that.
So that way when tax does roll around,you're not scrambling at the last minute.
So getting organized ahead of can goa long way to bring that stress down

(03:02):
and just make the wholeprocess a little bit easier.
Sounds to me like when yourbest laid plans for dinner and
planning healthy meals falls throughand you're like, I don't know.
I'm just going to order pizza right nowand I'm going to sit down and make the
shopping list for next week. So shouldwe just get through it for right now,
but knowing that we could start todayto make sure we're in a better place for

(03:25):
next year?
Exactly. Exactly.
And also to make notes if there arecertain things that are tripping you up or
there are certain things that you getstuck on as you're doing your taxes this
year,
make some notes of that so that you knowwhat to focus on right away next year
to help get yourself more organized.
We're already a couplemonths into this year.
Yep.
If there have been no systems in place,let's do it now so we can get 20,

(03:50):
25 all straightened up andthat's going to feel really good.
In addition to just being less stress,
chances are you'll save money whenyou've actually recorded everything
properly.
Yeah, absolutely.
Because if you're on top of it and youhave questions about deductions you can
take or things like that, you'llbe able to research it. Also,
you can potentially makemistakes if you're rushing.

(04:13):
And so if you're looking at it overtime and taking your time with it,
you'll make less mistakes and that canmake sure you're maximizing the amount of
money that you're savingon your taxes. So yeah,
there's no wrong reasonfor getting ahead of it.
And guys,
that's just another way to make moneyis to keep the money that you already
made. I know there are years thatI paid way too much in taxes.

(04:37):
I just didn't know what I didn't know,
and I was in just crazy town with havingbabies and not paying attention to
anything. So I'm sure I lostthousands to the IRS. Now,
that being said, I think weshould all just pause and breathe.
It's hard when you're in the middle ofit or maybe you're listening to this
episode at a different timeof year, whatever. It's a lot.

(04:59):
And money can be triggering,money can be emotional.
So Sara, I know when youwork with your clients,
I mean some of them must bejust very boom, boom, boom,
I'm just going to do the thing.
Others must have some sort ofemotional response to all this.
How do we move through that?
Yeah, it's super common. I mean,
we've been taught as women in a lot ofcases that money is not something we can

(05:24):
learn or can know,
but I believe that everyone could learnwhat they need to know when it comes to
their finances. You don'tneed to know everything.
You just need to know certainthings to get you through.
And if it's something that's triggeringto you or makes you feel nervous,
I recommend a few thingsstarting with baby steps.
So you don't all of a sudden need tobe able to put a whole set of financial

(05:47):
statements together andall of that by yourself.
Start with maybe looking at yourbank accounts on a regular basis.
Put some things in place that makethat feel more comfortable for you.
Maybe you want to work with a buddy,
one of your business besties or somethinglike that, or put on some music,
have some tea,
whatever it is that makes you feel morecomfortable and make it kind of a habit

(06:09):
that can really help push through.And then the other thing is too,
if there are things thatyou're feeling uncertain about,
find someone that you trust to helpyou learn what it is you need to
know.
And what I mean by someone you trust isthat somebody that you feel comfortable
with and you feel like is not glossingover the answers or looking down on

(06:31):
you or whatever it happens to be.
So you want to find someonethat's teaching in a way that you can understand and
that you like their vibe.
So I think that those are somethings that you can start with,
but making the time commitment to takethose baby steps to work through it will
really serve you well in the long run.
And you're right,
A lot of times when I would ask forhelp with this stuff in my business,

(06:53):
the answers were either condescending or
not actually applicableto me in this type of
business.
A lot of accountants that I would speakto if I had a brick and mortar shop on
Main Street, they totally understoodthat and their questions and answers,
everything made sense for that kind ofbusiness. But in my kind of business,

(07:17):
they were like, what do you do?
Exactly.
I find that's really common. Solook for someone who gets this,
and that's why I try to bringSara to you about finances.
And Lisa Fraley comes totalk about legal issues,
people who really understand healthcoaching because it's different.

(07:38):
It's not a super common thing thatevery professional knows about.
So that being said,
let's just start with some basic stuffbecause I know when I first started out,
I was like, I had alwaysdone my taxes myself.
And as it got a little morecomplicated adding on a business or you
own a home or you have investments, Ifound it harder and harder to do myself.

(08:02):
So I just want to start with the basics.
So if we're making money inour health coaching business,
let's say we graduatedin the last year or so,
we've worked with a couple clients,
do we put that money on ourpersonal tax return or what?
Yeah, so if you're a sole proprietoror an LLC, a single member LLC,
which most of us are coming out of school,
you file schedule C onyour personal tax return.

(08:26):
So basically it's a supplemental schedulethat you file with your personal tax
return and you report on that income youearn from your business in all areas,
if you have affiliate sales, if youhave client sales, if you have courses,
things like that. And then youhave what's called deductions,
which are business expensesthat you can claim to offset the

(08:47):
revenue that you earned.
So those are the things that you puton this Schedule C and it gets kind of
rolled into your personal taxreturn and the end of the day,
that's your refund orthe amount that you owe.
Okay, so I know someone out there is like,
I don't know if I have an LLCor am I a sole proprietor?
So I just want to be clear, if youhaven't done anything by default,

(09:07):
your sole proprietor, congratulations.
Correct and that'sgreat. That's say, okay,
and having an LLC is just thatkind of extra step to formalize
things.
And also correct me if I'm wrong,
but there's no difference in termsof your taxes or how much you'll
save or anything Sara just explained.

(09:29):
You do the exact same thing whetheryou're a single member LLC or a sole
proprietor.
So it doesn't really matter interms of your money or your taxes.
Correct. That's right. Okay.
So if you're freaking out, you have tobecome an LLC right now. You can do that,
but it has no bearing onwhat we're talking about.
And you can still have your businessand you can still make money,
and you can still do all of thosethings without having that LLC.

(09:53):
Yeah, I didn't have an LLC for many,
many years just because itwas so overwhelming for me to even think about when I
started my business anyway.The IRS doesn't care.
They want your money and they don'treally give a damn what your business is
structured.
As. Yeah, and I know thisis something you say a lot,
but just get out there and do the thingso that you can start making money and

(10:15):
get your business off the ground.That's the most important really.
Yeah, I mean for paying taxes, that'sgreat. That means we made money.
Which brings me to my next question.
I know a lot of healthcoaches are in this boat.
What if I haven't actuallyearned anything yet?
Or maybe I spent more than I earned.
So if you haven't spent anything andhaven't earned anything and you've started

(10:37):
your business, but it'snot really gotten going,
you don't have to filea Schedule C that year.
Once you start filing though, theIRS will let you claim a loss,
which means you spent more than youearned only three out of five years.
So if you have just a little bit of income
or you have zero income,but you have expenses,

(10:58):
you may not want to claim that in thefirst year because the point of claiming
those expenses is to offsetthe revenue that you're making.
So just to keep that in mind,
but if you don't have any money comingin yet and you're not really spending
anything yet,
you can hold off until you are to thenfile the schedule C for the first time.
And I guess to piggyback on that, whatI hear from a lot of coaches is like,

(11:21):
I'm still paying back my tuitionfrom getting my certification.
So even if you maybe worked with aclient or two and made some money,
you're still paying backthousands and thousands.
But does that count as a deduction oras an expense against your business if
you're paying back foryour initial health coach.
Certification? It does. Yes.
Paying back for your health coachcertification is a qualified deduction,

(11:46):
but you really need to have moneyto be offsetting against that
because again, then you'rejust claiming expense,
but you don't have any moneycoming in to use against that.
But yes, it does.
If you're making more money thanit is that you're paying back,
absolutely you can take that as deduction.
Alright, Hey,
to hear that everybody you think aboutthat you still spending money down your

(12:09):
certification,
think about the various ways that you'respending and we want to make sure that
you're not paying taxeswhere you don't need to.
Exactly.
Alright, so you talkedabout getting organized.
A lot of people don't like that. Whatwould that actually look like for a coach?
Do we have to get QuickBooks?What step do we take?

(12:32):
No. Yeah. So the first thing that'sthe most important is really to,
in my mind, separate yourbusiness and personal expenses.
So that can look like creating abusiness bank account or just opening a
separate bank account that you use,
checking account that you usesolely for business expenses.
If you're using a credit card, same thing.
And the reason why I say that isbecause it's so much easier when you are

(12:55):
tracking and getting everythingtogether not to have to sort through
all of your personal finances topull out the business expenses.
It will save you a lot of time. So assoon as you can do that, the better.
And then in terms ofa system for tracking,
the most important thing is to havesomething that you feel comfortable using.
So I know everybody runs out, they wantto buy QuickBooks. QuickBooks is very,

(13:19):
it's built for accountants really.And so if you don't have an accounting
background, it can be tricky to use.
And so what that means is either you'regoing to have to hire someone to help
you or you're going to start using it,
but you won't know how topull what you need out of it.
I've had many clients come tome using QuickBooks and saying,
I don't even know how to take thisinformation and file my taxes with it.

(13:40):
The other thing is it could be verycost prohibitive, especially at first,
it's expensive.
And the reason why I actually created mybusiness in the first place is because
I felt like I saw so many people spendingmore money on things like that than
they needed to. And I knew therecould be a simpler solution.
So something like my system,
which is made up of somespreadsheets and things like that,

(14:03):
you can design your own if you're good,
that the most important thingis to just get all the revenue,
all the expenses organized ina way that feels comfortable to
you and that you'll actually use. Becausegoing back to the question before,
if you're feeling overwhelmed and it'skind of like an emotional thing for you
and the thought of sitting down and doingthat is overwhelming and off-putting,

(14:26):
you're just not going to do it.
So finding a system that is affordableand that you feel comfortable using is
really important. Whenit comes to tracking.
It reminds me of so many ways that healthcoaches spend money where you don't
really need to,
especially if you're only workingwith a couple clients here and there,
you don't actually havethat many transactions that you have to record. I mean,

(14:49):
at some point, bless,
I want everybody selling yourcourses and your group programs.
You should have tens of thousandsof transactions every year.
But it was not that wayin the beginning for me.
And I know a very simple spreadsheetcan do the job and spreadsheets are
free. I mean break open a Googlespreadsheet, boom, boom, boom,
you're rocking and rolling.

(15:09):
There's no reason to pay thatmonthly fee of QuickBooks,
especially then you haveanother learning curve.
How do I even begin to use this.
Right, And it's more timeconsuming in the long run.
And so I do believe that there's atime and a place to start outsourcing,
but at the very beginning,
I really don't think it'snecessary for most health coaches.
And no one's lookinginto your office or your

(15:33):
kitchen table where you're doing work andgoing, oh, she's not using QuickBooks,
she's not a real health coach.
I think sometimes we just want all thebells and whistles that make us feel
official. What will make you officialwhen you have money in your bank account?
So skip all the costlystuff. Jenny's saying,
I have a separate bank account,
but the expenses arecoming through my card.

(15:54):
Should I have a businesscard to keep it separate?
I do recommend having a separatecard. You don't have to,
if it's something that'sgoing to hold you back,
you can still continue touse your personal card,
but it will make your life a loteasier if you have a business card.
And if you don't want toopen another credit card,
you can get a debit card associatedwith your business account typically and

(16:17):
just use that for transactionsthat require a card.
So that's a good way to go if youdon't want to open another credit card.
I don't know why I waitedso long to do this.
I remember the day that it was not abusiness credit card either because I
thought, oh, I had to have a businesscredit card and how do I do that?
And I need my EIN number.It just felt complicated.
You could just open up another creditcard just like exactly you would for

(16:39):
yourself except this one, you know,
only use for business or just get thedebit card associated with your business
checking account, which could justbe another personal checking account,
just a second checking account.
And if you already have two credit cards,
just decide from whatever point forwardyou're going to use one only for
business. You can do it that way too.
It's really just for record keepingpurposes to make your life easier when

(17:02):
you're looking througheverything at the end of the day.
That's it. Just got to keep'em separated. All right.
What about Wave? I hearpeople talking about Wave.
Jenny was just asking of any thoughtson Wave software? I've never used it.
Yeah, I mean I haven't used Wave either.I hear some good things about it,
but again, to me it's anothersystem you have to learn how to use.

(17:24):
So if you are into tech things andsomething that sounds interesting to you,
you could give it a try. But again,
the most important thing is somethingthat you like and you feel comfortable
using that you're actually going to use.
Perfect. All right. So here arethe Cliff notes. Get a spreadsheet.
A spreadsheet, make a list.I mean that's really it.

(17:46):
Even if you're not doing any fancymath or formulas in that spreadsheet,
just having a record of everything thathappened in your business is going to be
advantageous. And so here's whathappens. We don't look at it,
we don't look at it. It'salready April of 2025 right now.
Maybe you haven't looked at anythingthat's happened so far this year.
Before you know it, it'sgoing to be next tax season.

(18:08):
And that's where I think itreally becomes overwhelming.
You got to look through months and monthsof stuff and try to figure out, oh,
when did I get paid for that?How much, when did I buy this?
So is there a schedule that yourecommend for sitting down and.
Yeah, I mean it really dependson the volume in your business.

(18:28):
I would say monthly at the very least.
So in my program I have monthlymoney days with my clients once a
month. It feels doable formost of them to do that.
I like to look at my finances every week.
It takes me less time when I sitdown to do it at that moment.
And I just find it easier tokeep on top of things. Plus,
if you're looking at yourfinances that regularly,

(18:52):
if there's an error or if there'sa subscription you meant to cancel
that you're still gettingcharged for or whatnot,
you're going to find that out more inreal time than you would if you waited
three months to do it quarterly and thenit's three months have already passed
and now you have to go back. So
as often as you feel comfortable,once a month at least,

(19:15):
and I like weekly at leastto review your bank accounts,
if not to enter your informationthat you're tracking system.
Could, you know what you'll find too?
You'll find those chargesthat come through with some cockamamie name and you're
like, what is this? And if you'rethinking about it six months later,
you're not going to remember what thatwas. Or if it's not supposed to be there,
that's a bad charge, who knows?But if you just did it last week,

(19:38):
you're going to remember that that'sthat thing you ordered off Instagram or
whatever.
Right. Right. Exactly. And everything issubscription based now it seems, right?
So if you don't remember something'sgoing to renew, the more on top of it you,
you can kind of get ahead of that andnot have something renew that you didn't
intend to continue with or whatever.
Yes to be.
PS the more often this comes justfrom years and years of running my own

(20:00):
business, the more often youlook at your bank account,
the more money I think you're goingto earn just kind of automatically.
Energetically. Energetically becauseyou're just going to be like, oh,
here are dollars or here arenot so many dollars or whatever.
And it's just going to be on your mindthat you're in business presumably
to earn a profit, right?

(20:23):
Yes.
So when you're looking at the numbers,
I feel like it just puts you inthat state of remembering that.
It does. It puts your energy there.
And also the other thing too iswhen you're looking at it regularly,
then you can analyze too,
what programs are you running that aremaking you more money and which ones
maybe are not?
And you're spending a lot of time andit's easier to stay on top of those things

(20:44):
and evaluate those things when you'relooking at it more regularly and doing it
in real time.
Awesome. Alright. So I'malways talent health coaches,
like we just said, don't spendthe extra money on QuickBooks. No,
you don't have to pay touse even an email service.
You can get startedwith something for free.
If anyone who's done any ofmy programs, I'm always like,

(21:05):
here's the free way to do it.Do it with a Google form, do it.
You can do most things with free tools,
so you shouldn't have a tonof expenses. But that said,
I think that there are a lot of expensesthat health coaches could be writing
off that we usually don't think aboutor you may not have considered up until
now. You want to just rattleoff a few common ones.

(21:27):
Yeah, sure.
So overall general rule is any expensesthat relate to the running of your
business. And so for health coaches,
it's things like any professionalservices that you have, trainings,
continuing education,professional memberships.
If you have a dedicatedoffice space for example,
you can typically take aportion of that as a deduction.

(21:50):
Office supplies your computer and ifyou hire someone to help you for your
website, things like that.
So anything that you can reallythink of that is a legit business
expense is typically okayto take as a deduction.
So like yesterday,
the cord that connects that monitorto this monitor in my office broke.

(22:13):
And so I just quick went on Amazon andI made sure to buy it with my business
card. So it's automaticallytracked as a business expense.
Obviously it has to do with running mybusiness and I'm so glad I got it Now
it's plugged in and we're working.So that's like a very clear cut one.
I think the office expenseI avoided for years,
I just didn't know how to do it.

(22:34):
She has to take a tape measure and goaround measuring our room and figuring out
what percentage of our houseis actually our office.
I mean,
it can be a little tricky because theIRS says that it needs to be a dedicated
workspace. So if you're using yourdining room table for example,
it's not really going to count becauseeven though you're using it for business,
you're also having dinner there and maybeyour kids are doing their homework or

(22:57):
whatever, but if you have whereI'm sitting now, this is my office,
and you can take, so the percentageof whatever the office is,
of the whole house,
so say it's 10% and thenapply that to things like your
electric bill. So 10% of yourelectric bill, 10% of your mortgage,
or 10% of, even if you have acleaning person, for example,

(23:19):
10% because they're cleaning theoffice, that's 10% of the fee.
So you can take all of those expenses.
It's different if you havean office that you rent.
In that case it would just be the feefor the office space that you rent.
So it's kind of one or the other. Again,
you don't want to take this though if youhave minimal income coming in just yet

(23:41):
because you want to make sure that you'reoffsetting that you have coming in.
So just a good rule of thumb. But yeah,
it's a good one to be aware ofbecause it can help you out for sure.
Alright, so remind us again,
the reason we wouldn't want to just writeoff every expense and show a loss is
because it's a red flag overtoo many years to the IRS.
Exactly. You can only claim a loss. Ibelieve it's three out of five years.

(24:06):
And also like you just said, itcould be a red flag for an audit.
And so I don't say that to scare anyone,
but what would happen in anaudit is the IRS would say,
you put this on your Schedule C, showme how you came to those numbers.
And then they would look at them,
which is another reason why you reallywant to have your organization kind of
buttoned up because if they cometo you, you can just say, oh yeah,

(24:26):
that was these receipts from thiscompany and this is what I spent.
So they're not really out to get you,
but they want to be sure that whatyou're putting on that Schedule C is an
actual expense. Yeah.
Okay. So let's do a quick checkhere in the comments Zoom,
if you're paying for Zoom.
Mhmm.
That'd be a business expense.
Yes.

(24:47):
If you signed up forFast Track this spring.
Yes.
A business expense 1000%.If you're paying for Canva,
which you don't have to becauseyou can use Canva free version.
But if you're paying for Canva,
that's a business expense and anythingrelated to your website, definitely.
Correct.
Okay, cool.
All those things count.
I like to say that my hair productsare a business expense because you all

(25:10):
better believe I'm not doing my hairnearly this often if I wasn't on video as
much as I am my accountantand I disagree on this one.
Now, maybe along those lines,
or maybe just in termsof this whole topic,
what are some common mistakes that yousee health coaches making when it comes

(25:31):
to their taxes and their finances?
Yeah, so I mean overall it's waitinguntil the last minute really.
It's not even necessarily so much aboutthe deductions. And there are a few,
like you said, a lot of people ask,
can I deduct my clothing ifI'm wearing certain clothing?
Only if it's a uniform. So no,you can't only if it's uniform.

(25:52):
And then also meals.
If you're meal testing andmeal prepping for recipes,
you actually can't takethose as a deduction either.
So those are some deductions.
But in terms of overallmistakes I see are really not
getting organized until the last minute.
Not making a regular time tolook at your finances and not

(26:15):
learning the things that youneed to know, which again,
doesn't have to be everything. Youdon't need an accounting degree,
but you need to learn howto keep track of your money.
All right, well there you go.
I'm sure a lot of us listeningor listeners are like, that was me. That was me.
So if you have listened to this episodeand you've taken in everything we've

(26:36):
talked about and you're still havinga minor panic attack like Sara,
who should attend your YourMoney Grow Business workshop,
how can they tell theyreally need the help?
Yeah, I mean, this workshop is designedfor coaches and wellness professionals,
health coaches who arelooking to get organized.
So maybe you're in the firstfew years of your business,
you're not exactly sure what to track,you don't know where to get started,

(26:59):
you don't really know how to getyourself to keep that momentum.
So if that's you and you feeloverwhelmed and you don't have a plan,
I would love for you to attend.
And that's the kind of thingswe'll talk about in that workshop.
So if that's you, go sign up forSara's free workshop right now. Go, go.
Don't even think about it.You need this, you know, do.
It's at healthcoachpower.com/money.And again,

(27:22):
Sara's not going to look at you cross-eyedwhen you tell her that most of your
income is coming through PayPal orStripe or that you use Zoom or whatever.
She's going to totally understandwhat a health coach does. Sara,
we are grateful for you.Thank you for being here.
Thank you everyone for joining us,and I'll be back next week. Take care.