Episode 183
Taxes, Deductions, and Red Flags for Tax Season | April L. McDaniel | Certified Public Accountant | Certified Retirement Services Professional | Consultant | Educator | Kopsa Otte CPAs + Advisors
Tune in to hear April McDaniel of Kopsa Otte CPAs + Advisors unveil crucial tax season secrets, from decoding the intricacies of deductions for beauty industry professionals to demystifying the ever-changing meal rules. Don't miss this episode if you want to ensure you're not overlooking vital information that could save you money and headaches during tax season!
*This is not financial, legal, or tax advise
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KEY TAKEAWAYS:
- April started off as a private sector auditor before working with Kopsa Otte helping the beauty industry with their taxes!
- If you are a suite owner, you are a business owner and must look at taxes differently than an employee.
- Service Sales vs Retail Sales are going to be your source of income.
- Keep your receipts, write down, in detail, why it is a business-related expense, and take a picture of the receipt and save it in a Google Drive file! The IRS says that your credit card statement is not sufficient; they want to see itemized receipts.
- Meal rules change every year, so make sure to talk to your accountant to understand the new rules for deducting meals.
- Personal car use is only a business expense when you use it explicitly for business purposes...driving to and from work does not apply.
- Get QuickBooks and learn it; it will make your life amazing.
- Solopreneurs and salon owners have a better argument for the home office deduction, but you must document it by keeping a calendar that shows the time you spent in the office. S-Corps, not so much.
- Car Deductions: it has to be primarily used for business purposes and your commute to and from work does not count as a business purpose, technically.
- Meals at super expensive restaurants could be seen as research on your part into hospitality and customer service, but you must document the service on your receipt when you store it. Otherwise, it could look sketchy....basically, meals are not easily deductible and you do not get 10%
- Tips are income, and you have to claim all of that income. Venmo is a paper trail, and they will report you to the IRS eventually, so stay apprised of all updates and start claiming your tips now!
- TIPS: the Govt can assume you make 10-15% in tips of your total revenue. So, if you are not claiming your tips at all, then you could be due to pay back taxes and penalties. VENMO and ZELLE have systems to identify your transactions, so do not think that using those platforms and not claiming tips is safe.
👉Follow Kopsa Ottee CPAs + Advisors on Instagram, check out their website, and get April's personal recommendations on her episode page
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