What Your CPA Wants You to Know

112. Our CPA Betrayal List

• Carson Sands, CPA & Teran Sands, MBA. • Episode 112

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We share the CPA betrayal list: the habits that raise your bill, drag your return past deadlines, and create tax shocks. Practical fixes help you file on time, clean up your books, and save cash for taxes without the last-minute panic.



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SPEAKER_02:

Like, Bob, Bob, come on. Like, you know, the IRS wants your money. Like, there's nothing else we can do here. You owe this money. And the fact that you didn't set aside money for taxes when you know there's income taxes.

SPEAKER_01:

And we told you, and our emails told you, and our podcast told you our emails and our podcast begged you to schedule a projection or a planning meeting, and and and then now you owe. Welcome to What Your CPA Wants You to Know.

SPEAKER_02:

Tax and accounting help can be expensive. So we've created this podcast to help guide you through it all and make you feel like you have a CPA in your back pocket.

SPEAKER_01:

I'm Carson Sands.

SPEAKER_02:

And I'm Karen Sands.

SPEAKER_01:

I'm a CPA with over 10 years of experience helping people start and grow their businesses.

SPEAKER_02:

And I'm an MBA with a specialization in marketing and entrepreneurship. Taxes suck, and we want to make sure you don't pay more than your fair share.

SPEAKER_00:

We're here to share everything your CPA wants you to know.

SPEAKER_02:

In a fun and easy to understand way.

SPEAKER_00:

Let's get started.

SPEAKER_02:

Let's do it. We're hopping on a fun trend today. Um if you're on social media, I'm sure you've seen it. But today we're going to do your CPA's betrayal list.

SPEAKER_01:

Yeah, and Taryn tells me this is trending on social media, but last time I was on MySpace, I didn't see it. So I'm not sure what she's talking about. Maybe she has a different, you know, top eight than me.

SPEAKER_02:

Carson really isn't on social media, which I love about you actually. So I have to tell him these things. And he was very confused. But basically, what it is is just a funny way to educate people on something, or if it's personal to tell people like one of your really weird pet peeves, because people have weird ones. But I thought this was a good idea to educate everyone on working with the CPA, especially new business owners, I feel like, are very uneducated on how it all kind of works, but also other people are. So this is just something that probably really irritates your CPA if you do things on this list. And we both kind of wrote some things down and we're gonna see what we both have. I'm sure we have a lot of the same ones. Yeah.

SPEAKER_01:

And if you feel like, hey, I'm paying the bill, I'll do whatever I want and they can do with it, that's fine. Your bill might be a little bit higher. But if you want to be an A plus CPA client and you want your bill to be lower, then these are some good ideas.

SPEAKER_02:

Absolutely. So the first one on my list, not shocking at all, is just turning in your tax documents late and then expecting to file on time.

SPEAKER_01:

Oh, yeah, the combination of the two. That's the that's the real problem. Because both are, you know, not great, but it I mean, some people are lay and procrastinators, and that's fine. We're we're happy to help you, and we want to do work all year, so it it is nice to not get everything in January.

SPEAKER_02:

Exactly. But we have some people that send us their documents the day of, the day right before, a couple hours before, and we're like, oh, I just realized it was the deadline. And do you think you can get this done? Ugh, that is definitely gonna put you on the list.

SPEAKER_01:

We've had people send us stuff a few days before the deadline for the extended deadline for for years, and but it's never been that many, so a lot of times we've gotten it out anyway, even though we've said, like, you know, it's past the cutoff, but we knew one year it would happen and it did. This year, there was a lot of people that did that all at once, and then it just wasn't possible, which is why we had the cutoff date that we did.

SPEAKER_02:

And we do have cutoff dates every year. And if you haven't thought about this, here's some news to you. But there is the entire country is trying to file a tax return on a specific date, and so just imagine like imaginary lines, and so if you are pulling in at April 10th, that line is long, like you can't just pull on up to the front, and I think that there's just not enough CPAs right now. It's not like the most fun job, so there's probably just not enough, and so these lines are very long, and we hate that, like we want to get more done, but you know, you can only do as much as you can do. So those lines get so long we have to say, Okay, we need your stuff by end of March if we're gonna file on time. And people just ignore those emails and ignore those emails, and they just pull right on in and expect their tax return to be done in like a day.

SPEAKER_01:

Like, oh, it's April 14th, here's my stuff, and I don't want to extend.

unknown:

Yeah.

SPEAKER_01:

People have told us that before. True story.

SPEAKER_02:

Now, what's on your list?

SPEAKER_01:

Paying invoices eventually. So I get it. Sometimes things fall through the cracks, but a lot of people are repeat offenders on this, and you know, we do have to make money, and as much as I love helping people with their taxes for free, we do have to make money. So, you know, paying them two, three, four months late, or only when you need another thing of work because most of our clients have learned that we're not gonna do the next thing for you if you haven't paid for the last thing yet. Doing that over and over, that that will uh put you on our betrayal list.

SPEAKER_02:

So many people think that maybe it's like a suggestion to pay the invoice, even though they know what the price is, they know what it was gonna be, they've paid it every year, and then they just let it sit there for like 60 plus days. And I always say you're not gonna go like to a restaurant and sit down and just like not pay your food. Like you know that they did the work and we did the work and we're waiting to be paid. So oh, that will definitely get you on the list.

SPEAKER_01:

I have other clients that pay literally the next day after we send the invoice like, sorry, it took me so long to pay it. And I'm like, Wait, what I love them. I sent yesterday clients. Well, yeah, but I would've usually pay the same day. I'm like, I know you do. A plus client.

SPEAKER_02:

Exactly. Next on my list is not knowing the due dates, even though they're the same every single year. And we always say this we cannot care more about your business than you do. And those are some of my least favorite clients to work with because it's like they might be in business for 10 years and they're like, oh my gosh, I didn't know the deadline was March 15th.

SPEAKER_01:

Well, not only that, but I mean, if they're clients or even not clients, but on our email list for some other reason, then they're getting multiple reminders, multiple, multiple reminders about the due date.

SPEAKER_02:

Which is another one on the list of ignoring emails all year long until April and then sending like 20. And then being mad that you owe. Yeah. Oh my gosh, I didn't know. I didn't do a tax projection, I didn't pay any estimated tax payments, and I I didn't get my stuff together. And oh my gosh.

SPEAKER_01:

Is it too late to do a tax projection? I'm like, well, it's I mean, we we might as well just prepare the tax return. You know, it is what it is.

SPEAKER_02:

Absolutely. What's next on your list?

SPEAKER_01:

Oh, not reconciling your bank accounts for the whole year. Now, I have a lot more grace for people that have new businesses or that, you know, it's the first time they've done it, and I help them get caught up. And hey, I help the other people get caught up too that do it every year. But it does put you on our betrayal list because, you know, it's like we did this last year, and you remember, and if you want us to do it, keep help you keep up with it on a monthly basis, we'll do that. And then, oh no, you don't, okay, you're gonna do it yourself, okay. And then you don't, and then we get time to follow the tax return. And now I'm doing a lot of bookkeeping that I could have done during the year, during our busiest time. So that puts you on our betrayal list.

SPEAKER_02:

Those people we did. They get extended, yeah. They're getting extended. And if you're new and you're listening to this and you're like, I don't know what reconciling is, totally fine. It's just a second step you have to do in QuickBooks to make sure everything looks good or whatever software that you're using. And we have plenty of episodes on that. So look back at that. Don't be on your accountant's betrayal list. Okay, the next one that I have is not understanding taxes. Now, I get it, you pay your CPA to do your taxes, right? And you you shouldn't have to know all the ins and outs. But you do need to know like basically the percentage that income taxes are so that you don't have a heart attack and get mad at your CPA for the tax laws. Because CPAs are just trying to save you as much money as possible, right? But we don't control the laws. Unfortunately, we can't lower the tax rates. So if you really did make a lot of money and you're telling us, here's my PL, you know, I made$500,000. There's nothing we can do, you know.

SPEAKER_01:

Right.

SPEAKER_02:

The tax rates are the tax rates. So if you're in business, especially, but even if you just file a tax return, a simple one every year, you should have a basic knowledge of how the tax return works and how our tax system works. Your CPA can let you know when things change and things apply to you. But you do need to, as a citizen of this country, have a basic knowledge of our tax system.

SPEAKER_01:

Yes. And this is another one where you have people on both sides because we have people that get a refund and they're mad because their refund was bigger last year. But then we have other people that it's their first year falling with us and they owe more in taxes than I make in a year, and they're like, oh man, that's so much lower than last year. Thank you so much. And I'm like, Oh, oh, great. Yeah, you're welcome.

SPEAKER_02:

You can never please people, but it just it really does get to me the people that are like, okay, well, my refund was bigger last year, and you're like, no problem, like let me look. And then you're like, Well, this changed, this changed, your income went up.

SPEAKER_01:

You you made more money and you paid less in withholding.

SPEAKER_02:

So Yeah. So and they're like, Oh, I I don't I didn't know that. So, yes, having a basic understanding, just doing like that due diligence, very important, especially if you're a business owner, because things get a lot more complicated.

SPEAKER_01:

Now, that's not to say if you're working with a CPA all year and they're doing tax projections for you and they've been telling you you're not gonna owe, and then you owe and they had all the information. Well, that's kind of on them.

SPEAKER_02:

No, that's not who I'm talking about.

SPEAKER_01:

Right. That's different.

SPEAKER_02:

So, next on my list is not looking at your tax return. So, what we do is send over a draft for you to review. It is not a final one. So, you could check your address, you could look at your refund or what you owe and ask questions, right? And some people do not do that. They just sign the form that says, Yep, looks good. Go ahead and file with the IRS. And then we file it with the IRS and we're like, okay, this has been filed. Make sure to make your payment of$10,000 to the IRS by this date. And they're like, oh my gosh, I owe$10,000. They're like, wait, can we put in some more expenses?

SPEAKER_00:

Yeah.

SPEAKER_02:

Or, oh my gosh, my kid isn't listed on here. I had a new baby. I didn't tell you about them.

SPEAKER_01:

Right. And y'all, if y'all did, I'm not on social media, so I didn't see your 400 baby pictures of your brand new baby. So you're gonna have to tell me.

SPEAKER_02:

My address changed. Right. And it's wrong on my tax return. Okay. Well, we're gonna need to look at the tax return and make sure all the numbers make sense because a lot of this is just data input. So if you didn't tell your CPA that you moved or that you had a child or whatever it is, make sure to look it over. And if you don't understand something, that's your time to ask questions.

SPEAKER_01:

Yes, man, Terrence's saucy today. I like it. But speaking of new things, this is this one has happened. Oh, I forgot to tell you about this new business that I opened. Okay. Okay, so if you didn't make money at it, it might not be the end of the world. Uh, unless if you opened it with partners and you were supposed to file or extend by a deadline, and then you're gonna have penalties. But other than that, if you lost money, great. Okay, it won't be the end of the world. In fact, it will probably save you some taxes. But if you started a new business and made all this money, well, nobody was withholding taxes for you or doing anything. So if you didn't set aside a whole lot of money for taxes, then you're gonna be in a situation.

SPEAKER_02:

Every time. Happens every time.

SPEAKER_01:

Yeah. Okay, be honest. How's your bookkeeping going?

SPEAKER_02:

If you just cringed a little, this is for you.

SPEAKER_01:

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SPEAKER_02:

The best part of this is it's at a reduced hourly rate so you can easily budget for your accounting help. And because we love our clients, we throw in a free annual tax projection so you're prepared every April 15th.

SPEAKER_01:

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SPEAKER_02:

We have all the fine details in episodes 101 and 102 of this podcast if you want to check it out, or just email us at Carson at Sansco.net.

SPEAKER_01:

Now back to the show.

SPEAKER_02:

The next one for me is mixing business and personal expenses. And we won't go into this a lot. It's very simple. If you have a business, get a separate account for that.

SPEAKER_01:

Yes, and pay the business expenses out of the business, the personal out of the personal. And if you need to pay for something personal, you don't have any money, transfer the money from the business account to the personal account and then pay for it out of the personal account.

SPEAKER_02:

The people that do this every year and ignore us and our advice on this, it's a mess every single year.

SPEAKER_01:

Well, you just miss expenses because if everything that runs through an account is business related, we're gonna figure out what it is and deduct it. But if if it's mishmash, then there's gonna be a lot of things that you're like, oh, that was probably personal, but maybe it wasn't.

SPEAKER_02:

And there's a lot of problems with it. That's just like number one. So don't mix those.

SPEAKER_01:

Next one, can you guarantee my refund? Um, no. I can't. Well, maybe pay one million dollars in estimated taxes every year, and then I promise you'll get a refund.

SPEAKER_02:

That goes along with not understanding the tax system. You should know that getting a refund means that you overpaid, and that if you make more money, you owe more in taxes. Those are the simple, like basic building blocks that I feel like you should know. So when the people are like, My last accountant guaranteed I got a refund every single year. Like, who are you seeing?

SPEAKER_01:

As soon as he gets out of prison, he can prepare your next tax return.

SPEAKER_02:

He must be in jail for sure. The next one on mine is not booking a meeting. And this really frustrates me just from a business owner's standpoint, because we do work with business owners. We don't do this, and your CPA doesn't do his job for free. Like, this is not a fun job. This is a very draining job, many days, and people people know like our processes, and they will literally send an email that's like five paragraphs and be like, when you get a minute, can you answer these questions?

SPEAKER_01:

Right. Now, I and I get that some people are like, Well, you know, is like is that included with my tax return or is that whatever? Usually not, because the thing is we would have to charge everybody, you know, a whole lot extra for their tax return that they may never use that time and just in case they did need to ask us questions. So instead, we charge a fair price for the return. And then if you need additional help, then you can book a consulting meeting. And that actually goes along with the next one on my list, which was just asking for a quick favor that's actually four hours worth of work. So, you know, just that's something to be mindful of. A lot of things take longer than you think, and you know, you can always ask, is this is this something I can do, or is this something that needs to be done by a CPA? And if you are going to have us do it, you know, be aware that there's gonna be a bill.

SPEAKER_02:

Yes, your tax return does not include support all year long. Now, if you get a letter about your tax return or something like that's different, you know, we prepared it, we're gonna look into it, help you solve any issues that come up on that, but that does not include access to your accountant all year long. That is just a fee for the tax return. So, how CPAs work is they charge in time. So if you want to get a projection or you want to get some consulting on your retirement accounts or anything like that, it's charged per hour. And you know, all CPAs kind of go about this a little bit differently, but the way we do it is we have like a set price and we have links for people to book. So if you think you need 15 minutes or 30 minutes or an hour, you go ahead and set that up. The other thing with CPAs is they're not just sitting there waiting for work to come in. Like we have work all year long and emails come in about as fast as you can blink. So getting to those emails is really difficult, especially if they are ones asking a lot of questions that just has to be put on the schedule, or we just can't get to them all. Like now, if you're like, where can I track my refund? We answer those all day long. Like, that's a quick email. We don't charge for things like that, but a lot of clients will know that we have the link, go around it, and just send paragraphs and paragraphs at a time. And it kind of makes me slowly die inside as the person who responds to a lot of our emails.

SPEAKER_01:

Right. Yeah, she does. Now she's she's usually she's just like, okay, um, you're gonna have to book a meeting. So I usually don't even see those emails. If they're that long, Taryn will catch those and you know get people to book a meeting. So I don't even usually know that they exist.

SPEAKER_02:

And usually for the most part, people are like, Yeah, no problem. But it's the people that keep doing it. That's the retrail list.

SPEAKER_01:

You made the list.

SPEAKER_02:

You made the list. What's next on your list?

SPEAKER_01:

Uh changing your numbers after they're finalized.

SPEAKER_02:

Oh my gosh. We've had a lot of that recently.

SPEAKER_01:

Yes. And now some sometimes it was a bad in-house bookkeeper, and I mean they rectify the situation. They're like, okay, we got a new person, or I'm gonna do it myself now, and you know, it's it's a one-time thing. Again, these these are most of these are for like repeat offenders, and we do have people that every year it's like we do the tax return and they're like, Oh, you know what? I don't think my books were right. Let me let me redo those.

SPEAKER_02:

Every year because they don't like the final result.

SPEAKER_01:

Right.

SPEAKER_02:

So like, hang on, I think we need to redo that, which r means redoing the tax return.

SPEAKER_01:

Yes. Which now, I mean, you know, I haven't always been as good about this as we are now, but now that I mean, you it does mean getting another invoice for basically a whole nother tax return.

SPEAKER_02:

Right. It's like asking someone to do a job and then asking them to redo it. But people just I think people think you can just like change one number on a tax return because they've never done it, they don't understand it. Right. It's just redoing everything. So redoing it again, you need to be charged for two tax returns. Which leads me to the next one on my list. And we've talked about this on a few episodes. But if you're new, this is a good one to note. Coming to us and saying that you're ready to file, and then Carson preparing the tax return, but you have not looked over your numbers yet. That's a big one, and you would think that people didn't do that. If you're one of those really type A clients, you would just be like, What? That doesn't make any sense. But it happens all the time. People send over their stuff and say, Hey, I'm ready to prepare the return. Carson prepares the return, and their PL is not just like a little bit off, it's like way off. Like their income is doubled or something crazy. And they didn't look at it before they sent it. And this happens a lot. So please review your PL before you send it to your accountant because that is just like so important to know if it matches what you know your business made.

SPEAKER_01:

Right. You can you can tell at least in general if it makes sense.

SPEAKER_02:

Yeah, and I'm talking about the ones that are like way off. Like every single person should look at your PL before you send it over to have your tax return repaired because that is what they're using. But a lot of times the people are realizing it only because the numbers are so off on the tax return, and they're like, Why did you put I made a million dollars? I didn't. And you're like, because that's what you sent me. It's what literally said that's what you made. Right. So I'm just preparing it on what you gave me.

SPEAKER_01:

Right. And we, I mean, we help a lot of people with their books, and then that doesn't happen. But then if people, you know, tell us they're gonna do it themselves, then we trust them to do it themselves, and then the numbers they give us, we assume they're right. And because we've offered, like, hey, we can help you, but if I mean, we don't have to, you can do it yourself, and then now you're not happy with the numbers. Well, you're the one that did it, so okay. Exactly.

SPEAKER_02:

Another one on my list is waiting until the last minute or specifically after the deadline to send something in and then wanting it ASAP. And the reason why your CPA doesn't like that is because they have been working their butts off for months without a day off, and they plan those days off. Like Carson takes a what do you call it? Your your dark day.

SPEAKER_01:

My dark day, right after tax season's over.

SPEAKER_02:

Yeah, right after tax season, he takes a dark day. And in the past, when our kids weren't so busy, we would take like a week off and just kind of reset before we started all the like extended people. Just need a break. Like you just need like to get your sanity back. But it seems now that there are so many people that give us their stuff on April 16th and they're like, hey, when can you have this done? I I'm I'm in a hurry.

SPEAKER_01:

Well, and if you do bring it in April 16th, remember that you know our cutoff for getting things done by April 15th was March 15th. But that means that for a whole month people were sending us stuff and we were telling them we're gonna have to extend. And if you come April 16th, you're behind all those people. So we have a month's worth of work to do.

SPEAKER_02:

And it makes it longer because we are gonna take the time off.

SPEAKER_01:

Right.

SPEAKER_02:

And so not not realizing that, and then I think it gets even worse on this last deadline. The October 15th is like the final big push for the year, and we are like, Oh, it's like our time of year to breathe a little bit. And we've had a lot of late people that came in like on October 16th or 17th. They're like, we really need this as soon as possible, and that's literally when we have put our vacation time in on the calendar, like we're looking forward to it all year, and then people just are so not understanding of that, and they wait till the last minute, and then they're mad that it's not done quickly.

SPEAKER_01:

And that ties in right with my next one because specifically that one for the last three or four years has been a lot better because we do have a much better, more sophisticated to-do list that is through Monday, and we keep track of how much we have in the pipeline and projected dates for each one that's going out. So we are able to give people dates if they do bring stuff April 16th, it's like, okay, you're gonna get it, you know, you're gonna get it May 18th or something. And so we're able to tell them. So that's been better, except a lot of people will still in the meantime, they know that their date's May 18th. We told them, like, that's the day we're gonna get it to you. But on May 1st, you're like, well, how's it looking so far? How's it looking? How's it look? And that one, that one, it just makes me laugh because it just makes me picture that people think I'm sitting there and like I do like a little bit of this guy's return, and then do I do a little bit of this girl's return, and then I do a little bit of this business return, then I circle back and do some more on the first return, and that would be a really insane way to prepare a tax return. So if it's the day before or two days before the day you're gonna get your return, we might be working on it. Um, because it might take a day or two or three to do your tax return. But if you think about it, if it was gonna take 18 days to do your tax return, you know, it would probably cost a lot more than it does. So if you were that far out, we don't know how it's looking. We haven't even looked at it. That's to be to be honest, okay? I know that's not what anybody wants to hear, but that's the truth. It's not looking like anything, it's looking like the way it was when you gave us the information because we haven't even glanced at it.

SPEAKER_02:

That is funny because we do get a lot of those emails. How's it looking, Carson? Like it's hasn't looked at it. Not not at all. It's been basically put on the list, and then I take it and put it all into the drive so Carson can get to it when he gets to it. But yeah, if we told you that date, you're either working on it like two days leading up to it, or we're behind.

SPEAKER_01:

Right. I mean, it sucks when that happens. You really don't want us to work on it for 18 days. No, that would be quite expensive.

SPEAKER_02:

Yes. So just know that which I don't think that a lot of CPAs give an anticipated date. That's just kind of like a little type A thing of mine. They just people wait around, so maybe they're used to that. But yeah. Right.

SPEAKER_01:

I want I want people to know. And in general, it doesn't take a month or two months to get to stuff. It's just it in that window of time, it can really build up. And so we want to let people know.

SPEAKER_02:

Yeah, if you want your tax return prepared before the deadline and you don't want to have to get in this long line, you gotta be ready in January and February. And the people that are like A plus clients, they do because they just want to get it taken care of and not worry about it. So just know that if you're that kind of person, you gotta be ready right from the start. The other one on my betrayal list, and Carson always tells me that I cannot put this on our outgoing email, is that there is no such thing as an accounting emergency. And he hates that. Well, it's funny. He just doesn't think I should tell the clients that. That's not an emergency. There have been a few things that pop up that are like a payroll thing, and we are always ready to be there to fix things like that. But whenever it is like the off-season, like I don't know, December like 17th. Yeah, your CPA doesn't want to hear from you then. I'm sorry to tell you.

SPEAKER_01:

No, and it does. It falls into one of the four quadrants. There was a famous entrepreneur that had those, and there's there's emergency, which is something that's urgent and important. There's urgent, which is something that is timely, but it's not that important. There is super important, but it's not an emergency because it's it's not timely. And then there's things that are none of the above. Those are the four options. Most things are important, you know, especially if it comes from the IRS, but it's not an emergency. Because when they send you the letter, they usually give you a month to respond. So it's not a like 24-hour emergency thing. Now it might become one if you don't send it to me until the day before. But as I like to say, your lack of planning does not constitute an emergency on my part.

SPEAKER_02:

Exactly. And that happens a lot, especially people that don't file their tax return, so then they get things revoked from the state or from the uh government, and then they're mad. But we haven't heard from them all year, even though we have been emailing them all year. And then we go to a vacation and they're like, Oh my gosh, Carson, Carson, Carson, Carson. Like, oh my goodness.

SPEAKER_01:

Yes, but there are exceptions. There, there actually are a few emergencies like um QuickBooks screwed up and payroll didn't run. And yeah, your em some of your employees they don't really have the the uh savings to miss a paycheck. So that is both urgent and important. So that does constitute an emergency.

SPEAKER_02:

And we are always ready to fix that for clients. Like we take payroll very seriously.

SPEAKER_01:

Yeah, the IRS doesn't joke around about payroll taxes, and your employees really don't joke around about you know feeding their families. Greedy employees wanting to get paid.

SPEAKER_02:

I know, for sure. I have one last one, and that is not saving money for taxes. This happens all the time, and this is mostly self-employed people, and they make Asia a ton of money, and we're like, okay, Bob, you owe only$20,000. Like, you made so much money, and look, we got it down to$20,000. We did all these tax plannings and whatever. And they're like, Kristen, I didn't save, I don't have any money. I don't have$20,000. We're like, Bob, Bob, come on. Like, you know, the IRS wants your money. Like, there's nothing else we can do here. You owe this money, and the fact that you didn't set aside money for taxes when you know there's income taxes, and we told you, and our emails told you, and our podcast told you.

SPEAKER_01:

Our emails and our podcast begged you to schedule a projection or a planning meeting, and and and then now you owe.

SPEAKER_02:

And Carson did like a bomb job on the tax return, and they're still mad, like because they didn't pr plan properly. That probably is my biggest one on the whole list.

SPEAKER_01:

I have people that do the opposite, that they do projections with me and they still don't trust it. Like, I mean, and and I don't blame my hey, be conservative if you want, and they put aside extra money in addition to what I tell them to pay in. They're like, just in case, just in case Carson's wrong. That's cool. That's cool. And then whenever we do the tax return and you realize I was right, you'll have all that money and you can spend it on whatever you want. Or more more likely spend it on the um first quarterly payment for the next year, because that's how taxes are, they just keep rolling.

SPEAKER_02:

Yes. And the only thing is that everyone knows that there's income taxes and self-employment taxes. Well, not everyone might know about self-employment taxes. If they're no you know. Yes, there are self-employment taxes. It's very expensive to pay taxes when you're a business owner.

SPEAKER_01:

If you don't pay Medicare and Social Security through a W 2, then the IRS doesn't just give you a pass on payroll taxes, they make you pay self-employment tax, which is the same thing. And yes, you still have to pay income tax the same as you did when you were working a W 2 job.

SPEAKER_02:

But we all know in this US of A that we have to pay taxes, and so even if you don't know any of the tax rules, you know that, right? I think every single person, even our children, know this. We have to pay taxes, so don't go spending all of the money that you made. If you're a business owner and you haven't paid in any All year. So it's not being taken out. No one is withholding. You still have to pay Social Security and Medicare and your income taxes. So don't do that.

SPEAKER_01:

And if you're not going to do planning or projection, at least set aside a quarter of what you're making, and preferably a third if if you or your spouse is making quite a bit of money, set aside a third when you become self-employed.

SPEAKER_02:

Absolutely. Do you have any more on your list?

SPEAKER_01:

No, I think that is the end of the list.

SPEAKER_02:

I fear we could keep going, but we're not going to. I think this is a funny episode, just a like way to kind of look at what your CPA is thinking and just get a like a closer look at but like behind the scenes.

SPEAKER_01:

And if you've done any of these, just laugh along with us. It's okay. We still love you. And well I do Taryn gets real mad, but no No, I only get mad at multiple offenders.

SPEAKER_02:

So if you've done it once and or you're learning, don't worry about it.

SPEAKER_01:

Yeah, it's like like the court system, you know? Yeah. Third offenders. Third offenders, that's it. You go to jail.

SPEAKER_02:

For sure. I'm like, Bob, hey, Bob, you didn't pay your invoice, just so you know, we don't file tax returns until invoices are paid because we've got burned a lot, and I am a stickler on that. And Bob's like, oh, no problem. I didn't know. Don't worry. I'm not mad. It's fine. Or if I'm like, hey, Bob, that you know, two-page email you just sent, we're gonna need to chat about that on a phone call. Can you book that? And Bob's like, sure, no problem. That's that's fine. Don't worry about it. But if you do it all the time, definitely have a list. Okay, I think that's all we have for you today. Thanks so much for listening to what your CPA is.

SPEAKER_00:

This podcast is intended to provide accounting and tax information for educational purposes only. All tax situations are unique and should be handled with the assistance of a tax professional.