October 9, 2024 • 17 mins
Are you using QuickBooks or another accounting software? Are you using it correctly?
In this episode we discuss the big issues we see with Quickbooks (mainly user errors) and the biggest bookkeeping mistakes we see often.
With QuickBooks subscription costs on the rise and many client complaints, we have a new tool in the works!
Get excited about our new bookkeeping tool set to launch in early 2025, to simplify tax estimation and expense tracking. The tool will offer more than just basic tracking; it aims to revolutionize how you handle mileage, assets, loans, and home office deductions. Let us know what else you'd like to see included!
Join the waitlist so you can be notified when it is ready HERE
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
In QuickBooks you can do a setting that's going to
cause the whole software to dosomething automatically.
That's wrong, and then you'renot even really the one doing it
, except you sort of did.
But with the spreadsheet youcan't really do anything.
That's that irrevocable.
You type the number into theblank and it's pretty simple.
Welcome to what your CPA Wantsyou To Know.
Speaker 2 (00:26):
Tax and accounting help can be expensive, so we've
created this podcast to helpguide you through it all and
make you feel like you have aCPA in your back pocket.
Speaker 1 (00:36):
I'm Carson Sands.
Speaker 2 (00:38):
And I'm Taryn Sands.
Speaker 1 (00:39):
I'm a CPA with over 10 years of experience helping
people start and grow theirbusinesses.
Speaker 2 (00:45):
And I'm an MBA with a specialization in marketing and
entrepreneurship.
Taxes suck and we want to makesure you don't pay more than
your fair share.
Speaker 1 (00:55):
We're here to share everything your CPA wants you to
know in a fun and easy tounderstand way.
Let's get started.
Speaker 2 (01:03):
Let's do it.
And easy to understand way.
Let's get started, let's do it.
So we have something reallyexciting to share today.
It's something that we've beenworking on.
It's for business owners, andtoday's episode is all about
that, and it has to do withbeing able to keep the books for
(01:23):
your business.
So we're going to talk a littlebit about the problems that
we're seeing in our firm, whichis why we've been working on
this new tool for businessowners, which will just be an
income and expense tracker, andwhy we think it's really
important.
So we just wrapped up fall busyseason, which is where we're
working with a lot of businessowners on business tax returns
(01:44):
and these problems.
We've seen them for years, butwe see them a lot in the fall
because they're business ownersthat have delayed filing their
tax return, usually becausethey're not organized and
they're not ready to file.
So some of the things thatwe've seen this year and every
single year are bookkeepingissues, and we'll talk about a
(02:06):
few of those, but the first oneis just not having the right
numbers.
So many people are usingQuickBooks, but they're not
using it correctly, so then it'snot even usable.
So they're giving us numbersand Carson's reviewing them and
going, okay, well, it shows thatyour profit was this and these
are your expenses.
(02:27):
Does that sound right?
And they're like, oh, no, no,no, that's not right at all.
And so we're like, okay, that'sproblem number one.
So problem number two is peopleare giving us their numbers,
saying, okay, I have everythingready to go and the tax return
is prepared, and then thenumbers are not even correct.
So once they're reviewingeverything, then they're like
(02:48):
wait a second.
That doesn't look right and itis exactly what they provided.
Well, the problem is that theyjust didn't do their bookkeeping
correctly in QuickBooks and thenumbers aren't right at all.
Speaker 1 (03:00):
Right, Then we have to redo the tax return
completely, which puts us in aweird situation.
Do we charge twice for the taxreturn completely?
Which puts us in a weirdsituation.
Do we charge twice for the taxreturn?
Because we did the tax returntwice?
And so all of that is just tosay that using QuickBooks or any
accounting software is kind oflike using a defibrillator Used
correctly, it can be very useful, but if you use it incorrectly
(03:20):
it's very dangerous.
It's worse than not using it atall.
Speaker 2 (03:23):
Exactly, and that's what we have told a lot of
people over and over again,because this is another problem
that we're seeing is thatQuickBooks, subscription
payments and the software,whatever type of QuickBooks you
use it keeps going up, and we'veheard this from a lot of our
clients.
We see this all the time,people complaining about it.
It is a big expense, so ifyou're not utilizing it, there's
(03:46):
no reason to have it.
Speaker 1 (03:47):
Now, the expense isn't so crazy yet that if it's
saving you time and you're usingit correctly and you're
reconciling your bank statementsand doing all the things you're
supposed to do, I don't thinkyou should cancel.
But it is something you shouldconsider.
If you're trying to decide ifyou're going to get QuickBooks
or not, well, the fact that theykeep increasing the price
should weigh into that decision,and if you have a pretty simple
(04:10):
business, then it's somethingyou should think about when
you're deciding.
Should I just go with a simplerapproach?
Speaker 2 (04:17):
So Carson brought up reconciling, and that's another
issue that we see is that peoplehave QuickBooks and they are
going in there and categorizingthings, saying, okay, this was
for my supplies, this was forthis, all of that, but they're
not reconciling every month.
So we also get in thatsituation where they tell us
everything's ready to file thetax return and we go in there
(04:39):
and it's not reconciled.
And in QuickBooks that's thereally big deal if you haven't,
because we can't rely on thosenumbers.
Speaker 1 (04:47):
That's right, because things do not always import
over.
Sometimes there will just bedays missing for no reason at
all.
Maybe your bank did a softwareupdate and so for a couple of
days the data didn't transferover to QuickBooks.
If you're reconciling your bankstatements, you'll see that
really quickly and you'll knowthat you need to go import a few
days worth of transactions oryou just need to manually add a
(05:08):
few things.
But also people make their ownpersonal mistakes and double
count things.
Maybe they've linked a payrollprocessor outside of QuickBooks
to QuickBooks and now they'redouble counting the checks.
That happens all the time.
Or they have linked Square ortheir other payment processor to
QuickBooks and you know, inthat case people oftentimes
(05:30):
they're double counting theirincome.
So that's something that isvery fixable as long as you're
reconciling your bank statements.
Speaker 2 (05:37):
Yeah.
So we see people notreconciling all the time.
So that is a very importantstep.
And then, like you said, we'veseen some very big issues
created from people just reallynot knowing how to use the
software correctly, and then thebooks are all a mess.
And then, once you haveQuickBooks and you want them to
be usable, it costs a lot ofmoney to get them straightened
(06:00):
out, and that happens all thetime here too.
So on the flip side, if you arenot using QuickBooks and you
don't have to, I think sometimespeople feel like they have to
use QuickBooks if their businessis getting more established and
they're growing, and that isjust not true.
You do not have to useQuickBooks.
(06:20):
It's much simpler to usesomething that you actually
understand, that you would knowyour numbers are correct and
your CPA can use anything.
It does not have to beQuickBooks.
So the flip side of that isthat we have clients who are
using maybe a spreadsheet oreven just a piece of paper or
something, which is completelyfine, but they're not doing it
(06:41):
all year, they're not splittingtheir finances.
So when they're turning thingsin, they're kind of just last
minute trying to organizeeverything, and the problem with
that is that they're missing somany expenses and they're
paying too much in taxes.
All of that leading into this issomething that we saw that we
could create that would behelpful for not only our clients
(07:04):
but lots of business owners.
So if you are a small businessowner and you're using
QuickBooks and not loving ityou're thinking all of these
things that we just said, yes,like I'm messing it up, I don't
like it, it's not very intuitiveto me, or the price is just
keeps increasing, increasingthen maybe a simpler option
would be better for you, and wethink a simple option is great
(07:26):
for lots of our clients.
Now, this is not going to be agood option for, like, really
big companies who have a lotgoing on a giant payroll, but
for a lot of our companies, thiswould work just fine giant
payroll, but for a lot of ourcompanies, this would work just
fine.
And it is just a simple incomeand expense tracker that you can
use in your business and thenyou can use during tax time to
give to your CPA, and he or shewould be happy to have it all
(07:50):
nice and organized how we haveit.
It also has a lot of otherbuilt in things in it that we're
going to talk about.
That, I think, would make a lotof business owners' lives very
simple, because not only does itremind you to keep track of
these things, it also kind ofteaches you along the way.
Speaker 1 (08:08):
Yes, and to be more specific on who exactly this is
for, this would be people thathave your total revenue is below
$250,000 a year and your totalassets that you own in your
company are under $500,000 peryear.
So the reason for those limitsand, by the way, that doesn't
apply if you have a Schedule Cbusiness If you have a Schedule
C business, you can use theincome expense tracker no matter
(08:31):
what.
But if you have a partnershipor an S-corp, if you have your
revenue over $250,000 for theyear or your total assets over
$500,000, then you're requiredto do a balance sheet on your
tax return and the income andexpense tracker won't keep track
of those items.
And the balance sheet is whereyou report the total value of
(08:53):
your cash assets, your inventoryfixed assets like equipment,
things like that, along withyour liabilities, like your
credit card balances, your loanbalances and the money that the
owners put in or take out of thebusiness.
So those items are required tobe reported on the tax return
when you go over thosethresholds.
So, for those individuals, youneed something a little bit more
(09:15):
sophisticated that will keeptrack of the balance sheet and
all the items that go on there.
Speaker 2 (09:20):
So Carson's at a Schedule C business, but he's
talking about a soleproprietorship that is filed on
your tax return.
This would be perfect foranyone with that type of
business.
So it will obviously track allof your income and expenses each
month and will give you someinstructions on the processes
and workflows you should andexpenses each month and we'll
give you some instructions onthe processes and workflows you
(09:41):
should be doing each month.
So it gives you a little bit oftraining with each one.
So we're not just saying dothis without saying why.
So each month you know you'llput in your income and then put
what expenses you had in eachcategory and then it will total
everything for you for the year,for each month and all of that.
So that's what you're going toneed for your tax return, but
(10:02):
also super useful month to monthjust to see did something
increase too much?
How is your profit looking?
All of that, so it will alsohave a profit and loss for you.
Another thing we thought wouldbe really important is to put
estimated taxes in there.
So, based on what you'reputting in, it will calculate
(10:22):
what your taxes would be lookingat and what we would recommend
you be paying in.
So that really trips a lot ofpeople up.
Now, this isn't going to belike a firm number, but it will
be good at estimating how muchyou should be setting aside.
Speaker 1 (10:35):
And this will be specific to the amount you would
owe for that business income.
If you have multiple businessesor if you have a spouse that
has a regular W-2 job, it won'tbe factoring in any taxes that
you would owe on otherbusinesses sources of income.
Speaker 2 (10:52):
Right, so just from this business.
If you had a different businessyou would obviously need that
to calculate the income andtaxes from that business.
Another thing that we see comeup all the time that we wanted
to include was to trackcontractors.
So there will be a part inthere where you can put in your
contractor.
So anytime you hire acontractor, put in their name
(11:13):
and information, check off thatyou've got their W-9 form filled
out and you can track how muchyou paid them through the year.
It gives you also instructions,because sometimes people don't
know when you should send them a1099 at the end of the year and
when you shouldn't so anyonethat you paid over $600,.
It will have all of thatinformation to kind of guide you
(11:35):
along the way.
But it will include a sectionwhere you can put in your
contractors and track how muchyou've paid them, and we think
that's super important becausepeople forget to do that all the
time.
Speaker 1 (11:45):
Yes, and you definitely need to send your
1099s or you will get in bigtrouble.
Speaker 2 (11:49):
And that's one thing.
On the tax return that your CPAwill be asking you did you send
out 1099s to any contractorspaid over $600 in the year?
And that's information thatthey need.
So this will be included whenyou send them all of your
information for the year.
There's also going to be asection in there for mileage to
make sure that you send themover business miles put on your
(12:11):
personal vehicle and it will gointo some more detail about what
you can and cannot include forauto.
On that part, once again, alittle bit more teaching,
because I would say that's oneof the top questions we get when
people are sending over taxstuff to us, don't you think?
Speaker 1 (12:26):
Yes definitely.
Speaker 2 (12:27):
It's always like what can I include in my mileage?
Can I do gas?
So it will give youinstructions on that so you know
what to send over to your CPAto do your tax return.
And then it will also give youguidance on those really tricky
items like assets and loans.
So there will be a spot to putthat in there.
Anything out of the ordinary ifyou got a loan that year or if
(12:48):
you bought a big asset that canbe depreciated a certain way, it
will give you some guidance onthat to make sure that you're
letting your CPA know all ofthose big things that happen
throughout the year.
Speaker 1 (13:01):
We'll also have a section on there for home office
deduction so that you can putin your square footage of your
office and it will calculatewhat that deduction is.
And that will be important bothto help your tax preparer get
your tax return done and also tohelp you know exactly how much
profit you're going to have,because that's one of the
factors that will affect that.
Speaker 2 (13:20):
And it will also include some guidance on what is
deductible and what's notdeductible.
It will be customizable, so,you know, not all businesses
will have the exact same things.
There are some that everyonewill have, like marketing and
supplies and things like that,but we'll give you examples and
a list of what you can deductand what you can't, and then
(13:42):
some guidance on marking thingsthat may or may not be
deductible, that you can, youknow, ask your CPA about when
you're filing your tax return.
I think that's pretty much itright now, what it has in it.
But we wanted to do thisepisode because if there's
anything that you guys wouldlike or be able to use, we could
add to that.
(14:02):
Now's the time to let us know,because we're still finishing up
and getting it ready forlaunching, probably the 1st of
2025.
Speaker 1 (14:11):
So if there's anything else you'd like to see
in there, make sure you let usknow.
Speaker 2 (14:14):
So, just to recap, the pros of this would be that
it is very simple and easy to do.
We're going to give youinstructions on how to use it
and what your workflow should beevery single month, so that
you're doing bookkeeping foryour business, and this should
take less than 15 minutes.
This is going to be very quick,but it's something that you
really should be keeping trackof.
(14:36):
It's also going to be veryinexpensive.
We haven't set the price yet,but it's going to be a one-time
fee.
So, unlike paying a softwareexpense every single month, even
if it's low like $10 or $15,this is going to be a one-time
purchase and you can use it overand over every year, and the
beauty is that you're going tokeep customizing it for your
business and it'll just getbetter over time.
(14:58):
And then it's really easy to do.
It's realistic.
A lot of people just don't clickwith QuickBooks or accounting
software, and that's okay.
I think that there's a stigmathat it's not you have to use
something that is on thecomputer or online that you have
to use some sort of accountingsoftware and you don't, because
we've seen it time and timeagain that if people aren't
(15:20):
teaching themselves how to useit and putting the work in, then
it actually creates more workbecause they're not using it
correctly and it can reallycreate a big problem.
So using something simple likethis works for a lot more people
and that's okay too.
So we just want to provide anoption that is simple and
expensive and that your CPAwould love to see if they're
(15:42):
preparing your tax return.
Speaker 1 (15:43):
Yeah, that's true.
It's very difficult to make bigmistakes when you're just
entering numbers into aspreadsheet, you know.
I mean, it's possible to typein the wrong number, but it's
easy to go back and check thattoo.
Whereas in QuickBooks, you know, you can do a setting that's
going to cause the wholesoftware to do something
automatically.
That's wrong, and then you'renot even really the one doing it
(16:04):
, except you sort of did.
But with the spreadsheet youcan't really do anything.
That's that irrevocable.
You type the number into theblank and it's pretty simple.
Speaker 2 (16:15):
Yes, and that happens a lot.
No one is intentionally goingin there and screwing up their
QuickBooks.
It's just they know enough, butnot enough, right?
So that's what we have so far.
We're really excited to getthis out, but we are still
working on it and we did want toget input from you guys.
If you listen to this and youare really excited about it, you
think it's something you coulduse in your business or maybe
(16:37):
you're starting a business soon.
We are doing a wait list and itwill notify you when it's
available, so you don't have tokeep checking back in.
If you'll just check the shownotes, you can put your email in
there and you'll get an emailas soon as it's available.
Speaker 1 (16:52):
So that's all we have for today.
So until next time.
Thank you so much for listeningto.
Speaker 2 (16:57):
What your CPA Wants you to Know.
Speaker 1 (16:59):
Podcast.
This podcast is intended toprovide accounting and tax
information for educationalpurposes only.
All tax situations are uniqueand should be handled with the
assistance of a tax professional.
In QuickBooks you can do a setting that's going to
cause the whole software to dosomething automatically.
That's wrong, and then you'renot even really the one doing it
, except you sort of did.
But with the spreadsheet youcan't really do anything.
That's that irrevocable.
You type the number into theblank and it's pretty simple.
Welcome to what your CPA Wantsyou To Know.
Speaker 2 (00:26):
Tax and accounting help can be expensive, so we've
created this podcast to helpguide you through it all and
make you feel like you have aCPA in your back pocket.
Speaker 1 (00:36):
I'm Carson Sands.
Speaker 2 (00:38):
And I'm Taryn Sands.
Speaker 1 (00:39):
I'm a CPA with over 10 years of experience helping
people start and grow theirbusinesses.
Speaker 2 (00:45):
And I'm an MBA with a specialization in marketing and
entrepreneurship.
Taxes suck and we want to makesure you don't pay more than
your fair share.
Speaker 1 (00:55):
We're here to share everything your CPA wants you to
know in a fun and easy tounderstand way.
Let's get started.
Speaker 2 (01:03):
Let's do it.
And easy to understand way.
Let's get started, let's do it.
So we have something reallyexciting to share today.
It's something that we've beenworking on.
It's for business owners, andtoday's episode is all about
that, and it has to do withbeing able to keep the books for
(01:23):
your business.
So we're going to talk a littlebit about the problems that
we're seeing in our firm, whichis why we've been working on
this new tool for businessowners, which will just be an
income and expense tracker, andwhy we think it's really
important.
So we just wrapped up fall busyseason, which is where we're
working with a lot of businessowners on business tax returns
(01:44):
and these problems.
We've seen them for years, butwe see them a lot in the fall
because they're business ownersthat have delayed filing their
tax return, usually becausethey're not organized and
they're not ready to file.
So some of the things thatwe've seen this year and every
single year are bookkeepingissues, and we'll talk about a
(02:06):
few of those, but the first oneis just not having the right
numbers.
So many people are usingQuickBooks, but they're not
using it correctly, so then it'snot even usable.
So they're giving us numbersand Carson's reviewing them and
going, okay, well, it shows thatyour profit was this and these
are your expenses.
(02:27):
Does that sound right?
And they're like, oh, no, no,no, that's not right at all.
And so we're like, okay, that'sproblem number one.
So problem number two is peopleare giving us their numbers,
saying, okay, I have everythingready to go and the tax return
is prepared, and then thenumbers are not even correct.
So once they're reviewingeverything, then they're like
(02:48):
wait a second.
That doesn't look right and itis exactly what they provided.
Well, the problem is that theyjust didn't do their bookkeeping
correctly in QuickBooks and thenumbers aren't right at all.
Speaker 1 (03:00):
Right, Then we have to redo the tax return
completely, which puts us in aweird situation.
Do we charge twice for the taxreturn completely?
Which puts us in a weirdsituation.
Do we charge twice for the taxreturn?
Because we did the tax returntwice?
And so all of that is just tosay that using QuickBooks or any
accounting software is kind oflike using a defibrillator Used
correctly, it can be very useful, but if you use it incorrectly
(03:20):
it's very dangerous.
It's worse than not using it atall.
Speaker 2 (03:23):
Exactly, and that's what we have told a lot of
people over and over again,because this is another problem
that we're seeing is thatQuickBooks, subscription
payments and the software,whatever type of QuickBooks you
use it keeps going up, and we'veheard this from a lot of our
clients.
We see this all the time,people complaining about it.
It is a big expense, so ifyou're not utilizing it, there's
(03:46):
no reason to have it.
Speaker 1 (03:47):
Now, the expense isn't so crazy yet that if it's
saving you time and you're usingit correctly and you're
reconciling your bank statementsand doing all the things you're
supposed to do, I don't thinkyou should cancel.
But it is something you shouldconsider.
If you're trying to decide ifyou're going to get QuickBooks
or not, well, the fact that theykeep increasing the price
should weigh into that decision,and if you have a pretty simple
(04:10):
business, then it's somethingyou should think about when
you're deciding.
Should I just go with a simplerapproach?
Speaker 2 (04:17):
So Carson brought up reconciling, and that's another
issue that we see is that peoplehave QuickBooks and they are
going in there and categorizingthings, saying, okay, this was
for my supplies, this was forthis, all of that, but they're
not reconciling every month.
So we also get in thatsituation where they tell us
everything's ready to file thetax return and we go in there
(04:39):
and it's not reconciled.
And in QuickBooks that's thereally big deal if you haven't,
because we can't rely on thosenumbers.
Speaker 1 (04:47):
That's right, because things do not always import
over.
Sometimes there will just bedays missing for no reason at
all.
Maybe your bank did a softwareupdate and so for a couple of
days the data didn't transferover to QuickBooks.
If you're reconciling your bankstatements, you'll see that
really quickly and you'll knowthat you need to go import a few
days worth of transactions oryou just need to manually add a
(05:08):
few things.
But also people make their ownpersonal mistakes and double
count things.
Maybe they've linked a payrollprocessor outside of QuickBooks
to QuickBooks and now they'redouble counting the checks.
That happens all the time.
Or they have linked Square ortheir other payment processor to
QuickBooks and you know, inthat case people oftentimes
(05:30):
they're double counting theirincome.
So that's something that isvery fixable as long as you're
reconciling your bank statements.
Speaker 2 (05:37):
Yeah.
So we see people notreconciling all the time.
So that is a very importantstep.
And then, like you said, we'veseen some very big issues
created from people just reallynot knowing how to use the
software correctly, and then thebooks are all a mess.
And then, once you haveQuickBooks and you want them to
be usable, it costs a lot ofmoney to get them straightened
(06:00):
out, and that happens all thetime here too.
So on the flip side, if you arenot using QuickBooks and you
don't have to, I think sometimespeople feel like they have to
use QuickBooks if their businessis getting more established and
they're growing, and that isjust not true.
You do not have to useQuickBooks.
(06:20):
It's much simpler to usesomething that you actually
understand, that you would knowyour numbers are correct and
your CPA can use anything.
It does not have to beQuickBooks.
So the flip side of that isthat we have clients who are
using maybe a spreadsheet oreven just a piece of paper or
something, which is completelyfine, but they're not doing it
(06:41):
all year, they're not splittingtheir finances.
So when they're turning thingsin, they're kind of just last
minute trying to organizeeverything, and the problem with
that is that they're missing somany expenses and they're
paying too much in taxes.
All of that leading into this issomething that we saw that we
could create that would behelpful for not only our clients
(07:04):
but lots of business owners.
So if you are a small businessowner and you're using
QuickBooks and not loving ityou're thinking all of these
things that we just said, yes,like I'm messing it up, I don't
like it, it's not very intuitiveto me, or the price is just
keeps increasing, increasingthen maybe a simpler option
would be better for you, and wethink a simple option is great
(07:26):
for lots of our clients.
Now, this is not going to be agood option for, like, really
big companies who have a lotgoing on a giant payroll, but
for a lot of our companies, thiswould work just fine giant
payroll, but for a lot of ourcompanies, this would work just
fine.
And it is just a simple incomeand expense tracker that you can
use in your business and thenyou can use during tax time to
give to your CPA, and he or shewould be happy to have it all
(07:50):
nice and organized how we haveit.
It also has a lot of otherbuilt in things in it that we're
going to talk about.
That, I think, would make a lotof business owners' lives very
simple, because not only does itremind you to keep track of
these things, it also kind ofteaches you along the way.
Speaker 1 (08:08):
Yes, and to be more specific on who exactly this is
for, this would be people thathave your total revenue is below
$250,000 a year and your totalassets that you own in your
company are under $500,000 peryear.
So the reason for those limitsand, by the way, that doesn't
apply if you have a Schedule Cbusiness If you have a Schedule
C business, you can use theincome expense tracker no matter
(08:31):
what.
But if you have a partnershipor an S-corp, if you have your
revenue over $250,000 for theyear or your total assets over
$500,000, then you're requiredto do a balance sheet on your
tax return and the income andexpense tracker won't keep track
of those items.
And the balance sheet is whereyou report the total value of
(08:53):
your cash assets, your inventoryfixed assets like equipment,
things like that, along withyour liabilities, like your
credit card balances, your loanbalances and the money that the
owners put in or take out of thebusiness.
So those items are required tobe reported on the tax return
when you go over thosethresholds.
So, for those individuals, youneed something a little bit more
(09:15):
sophisticated that will keeptrack of the balance sheet and
all the items that go on there.
Speaker 2 (09:20):
So Carson's at a Schedule C business, but he's
talking about a soleproprietorship that is filed on
your tax return.
This would be perfect foranyone with that type of
business.
So it will obviously track allof your income and expenses each
month and will give you someinstructions on the processes
and workflows you should andexpenses each month and we'll
give you some instructions onthe processes and workflows you
(09:41):
should be doing each month.
So it gives you a little bit oftraining with each one.
So we're not just saying dothis without saying why.
So each month you know you'llput in your income and then put
what expenses you had in eachcategory and then it will total
everything for you for the year,for each month and all of that.
So that's what you're going toneed for your tax return, but
(10:02):
also super useful month to monthjust to see did something
increase too much?
How is your profit looking?
All of that, so it will alsohave a profit and loss for you.
Another thing we thought wouldbe really important is to put
estimated taxes in there.
So, based on what you'reputting in, it will calculate
(10:22):
what your taxes would be lookingat and what we would recommend
you be paying in.
So that really trips a lot ofpeople up.
Now, this isn't going to belike a firm number, but it will
be good at estimating how muchyou should be setting aside.
Speaker 1 (10:35):
And this will be specific to the amount you would
owe for that business income.
If you have multiple businessesor if you have a spouse that
has a regular W-2 job, it won'tbe factoring in any taxes that
you would owe on otherbusinesses sources of income.
Speaker 2 (10:52):
Right, so just from this business.
If you had a different businessyou would obviously need that
to calculate the income andtaxes from that business.
Another thing that we see comeup all the time that we wanted
to include was to trackcontractors.
So there will be a part inthere where you can put in your
contractor.
So anytime you hire acontractor, put in their name
(11:13):
and information, check off thatyou've got their W-9 form filled
out and you can track how muchyou paid them through the year.
It gives you also instructions,because sometimes people don't
know when you should send them a1099 at the end of the year and
when you shouldn't so anyonethat you paid over $600,.
It will have all of thatinformation to kind of guide you
(11:35):
along the way.
But it will include a sectionwhere you can put in your
contractors and track how muchyou've paid them, and we think
that's super important becausepeople forget to do that all the
time.
Speaker 1 (11:45):
Yes, and you definitely need to send your
1099s or you will get in bigtrouble.
Speaker 2 (11:49):
And that's one thing.
On the tax return that your CPAwill be asking you did you send
out 1099s to any contractorspaid over $600 in the year?
And that's information thatthey need.
So this will be included whenyou send them all of your
information for the year.
There's also going to be asection in there for mileage to
make sure that you send themover business miles put on your
(12:11):
personal vehicle and it will gointo some more detail about what
you can and cannot include forauto.
On that part, once again, alittle bit more teaching,
because I would say that's oneof the top questions we get when
people are sending over taxstuff to us, don't you think?
Speaker 1 (12:26):
Yes definitely.
Speaker 2 (12:27):
It's always like what can I include in my mileage?
Can I do gas?
So it will give youinstructions on that so you know
what to send over to your CPAto do your tax return.
And then it will also give youguidance on those really tricky
items like assets and loans.
So there will be a spot to putthat in there.
Anything out of the ordinary ifyou got a loan that year or if
(12:48):
you bought a big asset that canbe depreciated a certain way, it
will give you some guidance onthat to make sure that you're
letting your CPA know all ofthose big things that happen
throughout the year.
Speaker 1 (13:01):
We'll also have a section on there for home office
deduction so that you can putin your square footage of your
office and it will calculatewhat that deduction is.
And that will be important bothto help your tax preparer get
your tax return done and also tohelp you know exactly how much
profit you're going to have,because that's one of the
factors that will affect that.
Speaker 2 (13:20):
And it will also include some guidance on what is
deductible and what's notdeductible.
It will be customizable, so,you know, not all businesses
will have the exact same things.
There are some that everyonewill have, like marketing and
supplies and things like that,but we'll give you examples and
a list of what you can deductand what you can't, and then
(13:42):
some guidance on marking thingsthat may or may not be
deductible, that you can, youknow, ask your CPA about when
you're filing your tax return.
I think that's pretty much itright now, what it has in it.
But we wanted to do thisepisode because if there's
anything that you guys wouldlike or be able to use, we could
add to that.
(14:02):
Now's the time to let us know,because we're still finishing up
and getting it ready forlaunching, probably the 1st of
2025.
Speaker 1 (14:11):
So if there's anything else you'd like to see
in there, make sure you let usknow.
Speaker 2 (14:14):
So, just to recap, the pros of this would be that
it is very simple and easy to do.
We're going to give youinstructions on how to use it
and what your workflow should beevery single month, so that
you're doing bookkeeping foryour business, and this should
take less than 15 minutes.
This is going to be very quick,but it's something that you
really should be keeping trackof.
(14:36):
It's also going to be veryinexpensive.
We haven't set the price yet,but it's going to be a one-time
fee.
So, unlike paying a softwareexpense every single month, even
if it's low like $10 or $15,this is going to be a one-time
purchase and you can use it overand over every year, and the
beauty is that you're going tokeep customizing it for your
business and it'll just getbetter over time.
(14:58):
And then it's really easy to do.
It's realistic.
A lot of people just don't clickwith QuickBooks or accounting
software, and that's okay.
I think that there's a stigmathat it's not you have to use
something that is on thecomputer or online that you have
to use some sort of accountingsoftware and you don't, because
we've seen it time and timeagain that if people aren't
(15:20):
teaching themselves how to useit and putting the work in, then
it actually creates more workbecause they're not using it
correctly and it can reallycreate a big problem.
So using something simple likethis works for a lot more people
and that's okay too.
So we just want to provide anoption that is simple and
expensive and that your CPAwould love to see if they're
(15:42):
preparing your tax return.
Speaker 1 (15:43):
Yeah, that's true.
It's very difficult to make bigmistakes when you're just
entering numbers into aspreadsheet, you know.
I mean, it's possible to typein the wrong number, but it's
easy to go back and check thattoo.
Whereas in QuickBooks, you know, you can do a setting that's
going to cause the wholesoftware to do something
automatically.
That's wrong, and then you'renot even really the one doing it
(16:04):
, except you sort of did.
But with the spreadsheet youcan't really do anything.
That's that irrevocable.
You type the number into theblank and it's pretty simple.
Speaker 2 (16:15):
Yes, and that happens a lot.
No one is intentionally goingin there and screwing up their
QuickBooks.
It's just they know enough, butnot enough, right?
So that's what we have so far.
We're really excited to getthis out, but we are still
working on it and we did want toget input from you guys.
If you listen to this and youare really excited about it, you
think it's something you coulduse in your business or maybe
(16:37):
you're starting a business soon.
We are doing a wait list and itwill notify you when it's
available, so you don't have tokeep checking back in.
If you'll just check the shownotes, you can put your email in
there and you'll get an emailas soon as it's available.
Speaker 1 (16:52):
So that's all we have for today.
So until next time.
Thank you so much for listeningto.
Speaker 2 (16:57):
What your CPA Wants you to Know.
Speaker 1 (16:59):
Podcast.
This podcast is intended toprovide accounting and tax
information for educationalpurposes only.
All tax situations are uniqueand should be handled with the
assistance of a tax professional.
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