Episode Summary: A behind-the-scenes look at Mike Murphy LLC's finances — what an LLC actually is, how taxes work, what filing costs, and the simple 3-tool system used to track it all.
What You'll Learn
- What an LLC actually is, and why it protects personal assets differently than a sole proprietorship
- How LLC taxes work with the IRS, and the real cost of filing
- The 3-tool accounting system: FreshBooks, Mint, and a simple Google Sheet
- A monthly reconciliation habit that makes tax time painless
Legal Entities
Mike Murphy LLC is a limited liability company. Per Wikipedia: "A limited liability company is a hybrid type of legal structure that provides the limited liability features of a corporation and the tax efficiencies and operational flexibility of a partnership. The 'owners' of an LLC are referred to as 'members.'"
An LLC isn't a corporation, and functions similarly to a sole proprietorship — with one major exception: business debt only puts business assets at risk, not personal ones, as long as funds stay properly separated. A sole proprietor going into business debt puts every personal asset (home, savings, everything) on the line — riskier, but far cheaper and simpler to set up.
Cost to start the LLC: $350 to an attorney, $150 to an accountant.
Taxes
Per Wikipedia: the IRS treats single-member LLCs as sole proprietorships for tax purposes — the LLC itself doesn't file or pay taxes; all profit or loss gets reported on Schedule C with the personal 1040.
- Tip 1: Florida business taxes are due March 15, not April 15.
- Tip 2: as a sole proprietor or LLC, stash away 20-30% of everything earned — unlike a paycheck, taxes aren't withheld upfront, so the payment happens on the back end.
- Tip 3: track every dollar spent and earned. Easier said than done, but genuinely the goal.
- Tip 4: open a dedicated business bank account plus debit and credit cards, kept fully separate from personal finances. (Using a personal card for a business purchase is still technically fine and still claimable as an expense.)
Cost to file as an LLC: roughly $300, paid to an accountant to file as an S-Corp.
The Tools
Foundation: a business credit card for all bills, and business accounts (Stripe, PayPal) for income.
Tool 1 — FreshBooks. Sends invoices, tracks expenses, tracks time, and generates reports (expense reports, P&L statements). Snapping a photo of a receipt and entering the total is the entire expense-logging process.
Tool 2 — Mint. Intuit's budgeting tool — connects unlimited accounts (checking, savings, money market, investments, credit cards) and auto-categorizes every transaction. Bills and reminders can also live here. The best part: categories can be trained to match exactly what an accountant needs.
Tool 3 — a simple Google Sheet. One column of expense catego…
Read the complete show notes and resources on mikemurphy.ai.
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