Money Talk to Help You Earn, Save, and Pay Yourself More with My CPA, Brittney Suttle
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I’m so happy you’re here because in this episode we’re talking about money. Our guest is my very own CPA Brittney Suttle who specializes in female entrepreneur-owned businesses. Brittney helps you run your books so you can run your business. In this episode, we cover everything from write-offs to sales tax, quarterly tax, and how to manage your money as a small business owner so you can earn more, save more, and eventually pay yourself more. We also found a way to pay for my weekly Starbucks trips so you are not going to want to miss tuning in to the full episode.
Two of the most common money mistakes small business owners make
Brittney sees a lot of business owners mixing business and personal finances. You should have separate accounts to make not only your life easier but also any other tax professional’s life easier when the time comes.
2. Not hiring a CPA to do your taxes is another mistake Brittney tells us. She has seen so many business owners that attempt to do their taxes on their own and they’re losing out on so much money. There are so many deductions, tips and tricks, and loopholes that you could be eligible for within your business.
How to diversify your income
Brittney explains to us that diversifying your income essentially means to have different streams of income coming in through your business and you’re not depending on just one source. If there’s one thing that Covid has taught us is that the market changes and if you’re offering just one thing that the market no longer wants then you’re just up a creek without a paddle.
Some examples of diversifying your income within your business might look like offering different levels of service at different price points in products. Diversifying can also go between active income, where you or your employees/contractors work directly with your clients or customers, and passive income where you put something out into the world and it kinda generates income in the background.
For every business it will look a little different but it’s all about building different streams to tap into the market in different ways.
Write-Offs 101
Something Brittney likes to talk about especially when it comes to tax strategy is not to buy something for your business just because it’s a write-off. “You may get a 20% tax deduction on whatever you’re spending but if you weren’t spending that money you would have 100% of that cash to do something else with it,” Brittney explains. She gives us a great example of buying a new desk for your business. You could buy a nice $500 desk or a nice $2000 desk. Buying the $2000 desk just because you could write it off actually robs you of $1500 that could have gone to something else for yourself or in your business.
Tax laws all business owners should be aware of
25-30% is a safe percentage to be saving for taxes.
You are required to pay quarterly estimates if you think you will owe $1000 in your business at the end of the year. A good estimate is if you are making $4000 per month in your business, there’s a good chance you’ll owe $1000 in taxes at the end of the year.
The fine for not contributing to your quarterly taxes could be a few hundred dollars at the end of the year.
If you’re selling products almost without a doubt you need to be charging sales tax. This goes for not only tangible products but also some states charge sales tax on digital products as well. Most states don’t charge on services but you really need to look at the requirements of your state. Most payment platforms will do the calculations for you in terms of charging your customers the correct rate but you would have to file and remit that it to your state.
There’s a difference between a business entity and tax status. States have different business entities that could be a sole proprietorship, LLC, general partnership, or corporation. Sole proprietorships and LLC are generally taxed the same but with an LLC you have liability protection. Corporation obviously everything is separate and you’re essentially a shareholder or investor. With an s-corp you can either be an LLC or corporation, you are just taxed as an s-corp.
Previously any business meals you had with clients or while traveling you could only deduct 50% of those. Now you can deduct 100% of that through your business which is a huge benefit.
If you have employees and were government-mandated to fully or partially shut down your business or if you had gross recipes that dipped below 20% in 2021 vs the same quarter in 2019 you could qualify for an employee retention tax credit. This credit is 70% of the first $10,000 you paid in wages per employee. So if you fit the criteria, please reach out to your CPA because it’s a huge benefit if you apply.
In terms of food write-offs, if you go to Starbucks and buy yourself a coffee, that’s not a business expense. But, if you go to Starbucks and meet a client and buy coffee or pick it up for your team, that is a business expense. Also, if you’re traveling for your business you can write off your food and beverages.
More from Brittney
Brittney shares so much more in this episode including being a spender vs. being a saver, and dishes on the investments she’s made in her own business. To get even more money tips from Brittney make sure to follow her on Instagram @brittneysuttlecpa and online kniesandco.com. I hope you’ll hit play on this episode to hear her full story on The BrandWell Podcast.
KEEP BRANDING WELL,
Victoria
