What Your CPA Wants You to Know
A podcast for entrepreneurs! We are a husband and wife team running our CPA firm together. We know just how difficult it can be to take your business dream to a reality. Our mission for this podcast is to guide, empower, and educate entrepreneurs in an easy-to-understand way! We want business owners to have the information that they need when they need it, AND without the hefty accounting invoices from a CPA! Follow along for practical advice, tips, and tricks from a CPA who knows what it is like to run a business, and strategies to keep your business thriving from an MBA! We will also show you how to run a business while keeping your family and sanity intact along the way!
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What Your CPA Wants You to Know
113. Your CPA-Approved Checklist To Crush December
We share the exact year-end checklist we use with clients to cut tax surprises, choose smart purchases, and get January filings done without the scramble. Clean books, a clear tax projection, and a few organized documents can change your entire spring.
• finishing bookkeeping and reconciling accounts
• running a tax projection to estimate what you owe
• timing major purchases before 31 December
• preparing contractor W9s and 1099 data
• listing assets over $2,500 and financing details
• tracking business mileage on personal vehicles
• gathering loan documents and interest totals
• filing early to get more CPA attention
We created a monthly accounting program where you hop on a one-hour call with us every month to tackle bookkeeping, tax planning, business decisions, basically anything you need. 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@sandsco.net
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So I know that you are very concerned if your CPA is going to give you five stars or give you an A. So if you do all of this, you definitely will get an A, five stars, and probably a cookie.
SPEAKER_01:Welcome to What Your CPA Wants You To Know.
SPEAKER_00: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_00:And I'm Taryn Sands.
SPEAKER_01:I'm a CPA with over 10 years of experience helping people start and grow their businesses.
SPEAKER_00: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_01:We're here to share everything your CPA wants you to know.
SPEAKER_00:In a fun and easy to understand way.
SPEAKER_01:Let's get started.
SPEAKER_00:Let's do it. So it's been quite a busy December for us, and you wouldn't think that you're very busy in December if you own a CPA firm, but we have been, and Carson has been meeting with all of our clients to wrap up end-of-year stuff. I think you had seven meetings one day accidentally.
SPEAKER_01:Yeah, that was a scheduling mishap.
SPEAKER_00:That's a lot because in these meetings he is basically preparing fake tax returns just to see what they think they'll owe for the next year and then helping them make any decisions. So it's very brain-heavy work.
SPEAKER_01:And I have to be very on because I have to be both, you know, it's not a sales meeting per se, and but it's also not just doing a tax return, it's a combination of the two because I'm working with clients and I'm running the numbers. So it's a combination of basically the two things I do put together. So they're mentally intensive, but that was a fun day. I haven't exercised my brain that hard in a long time. So well, good.
SPEAKER_00:Then it was good for you that I accidentally scheduled two seven meetings.
SPEAKER_01:Well, in my 20s, this was just another walk-in-the-park day for me, but now, you know, I try not to do that all the time.
SPEAKER_00:For sure. I think it would be impossible for me, but I'm glad that you did it. It was just something we were like, well, we have to do this because we are closing down. We take like a big break before tax season starts, and we're almost there. So this is kind of our last hoorah before we take our much needed break.
SPEAKER_01:And the reason we're busier in December than a lot of CPAs are than we used to be is because from the beginning, we've been pushing people to do tax projections and people are starting to listen. And our new clients, that especially the ones that are on our monthly plan, from the get-go, they've been on board with this. So that makes us busier in December, but it's for a really good cause because we always tell people after December 31st, there's not a lot we can do to save you taxes. But before December 31st, there's a ton of options.
SPEAKER_00:Yes. I do think that we have been slowly creating the clients that we want. So now it's paying off, which means we are busy in December, but it's all work that is going to save us time and make our clients happier in tax season. So we're totally happy to do it. Yes, our monthly clients are all basically doing everything we would want an ideal client to do. So we have a lot of those to get out of the way. And then other clients that we just talk to a few times a year, they are booking those meetings as well. So if you don't do any of these things yet, and you're listening to this episode because you saw the title and you thought it was very catchy, this is what we think all business owners should do before the end of the year. So we created a end of the year checklist for all business owners. And we're gonna go through this very quickly and hopefully you implement any of these things that apply to you, and it will also get you ready for all the due dates coming in January.
SPEAKER_01:So the very first one, finish bookkeeping and reconcile all accounts. Does your profit for the year look correct? And if not, investigate what happened so you don't pay taxes on income you didn't make. Okay, so it's important to do this because you have the bank accounts and you have the reconciliations. If you haven't done this, everything else we talk about on this list is pretty much useless. You don't have good data to go off of. So you might pull a PL and it could say you made a million dollars or you lost a million dollars. And none of it is accurate unless your books are up to date. So that's step one.
SPEAKER_00:So step one, get your books in order, basically. And if you don't know what reconcile means and you've never done it, go back a few episodes. We have a bookkeeping mistake. You can search that one and listen to that. So reconcile your books, make sure they're right. When you pull your PL, make sure that it looks correct because we have so many people that send them to us. Carson does the tax return, and then it's not right, but it's only not right because their PL was not correct.
SPEAKER_01:Okay, be honest. How's your bookkeeping going?
SPEAKER_00:If you just cringed a little, this is for you.
SPEAKER_01:We created a monthly accounting program where you hop on a one-hour call with us every month to tackle bookkeeping, tax planning, business decisions, basically anything you need.
SPEAKER_00: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:Our clients love this plan. It's perfect if you're doing your own books, but want an expert watching over your shoulder and training you on everything you need to do.
SPEAKER_00: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_00:Step two on the checklist is to do a tax projection. This will help you estimate what taxes you're gonna owe so that you aren't surprised in April, which is exactly what we've been talking about, what we're doing in December.
SPEAKER_01:And once again, these are in order because you can't do this until the bookkeeping is caught up. But also, most of the other decisions you're gonna make that we talk about with this checklist don't really mean anything unless you know how it's going to affect how much you owe for the year. So tax projection is the way to do that.
SPEAKER_00:So once you have a really good idea of how much you're gonna owe, then you need to decide have you saved enough in taxes based on the tax projection.
SPEAKER_01:Right. Taxes aren't due until April 15th. So if you haven't saved enough, you still have quite a bit of time to do that. It's better to know now. Some people avoid the projections and even extend their tax return just because they're scared of what that number's gonna be, but it doesn't go away just because you're ignoring it. Better to know now and spend five months setting aside money.
SPEAKER_00:Yeah, that happens a lot. And I think that that's way better than pushing the can down the road. So people doing projections now, they're like, okay, Carson, I actually didn't save the money that I was supposed to save, but at least now they have a number and they can save some of their profit moving forward so that they're ready for that.
SPEAKER_01:Or maybe you need a hundred twenty thousand dollar one-ton pickup that you get to deduct this year because that's what the depreciation rules say. And even better, even if you finance it, you still get to deduct the full$120,000. So that might wipe out your tax bill and yes, set you up on monthly payments on a pickup, but get rid of your tax bill altogether so you could come out way ahead that way. Again, that's assuming you need it. I never encourage people to buy vehicles that they don't need just to save on taxes.
SPEAKER_00:Well, you're jumping ahead to the next one, which is determine any last minute changes or purchases that need to be done before December 31st. So, like that example of buying a new truck, if you need it, it does have to be done before December 31st. You can't just do it in January and then apply it to 2025 taxes.
SPEAKER_01:Yeah, and you might be wondering, wait, did we go out of order? Shouldn't we figure out what we're gonna buy first and then figure out what we're gonna owe? Maybe not, because that might help you decide if it's time to buy or not. Maybe you were gonna buy in February, but you've decided, nope, let's bump that up two months so I can get the tax deduction this year. That's why we figure out what you owe first. And then if you're not happy with that number, we can see what we might do to change it.
SPEAKER_00:And this happened um last year, I believe, with one of our clients. They did their first tax projection and they owed a lot, but they also said in that meeting, like, we're planning on buying this vehicle because we need it to expand, but we're not gonna buy it until like maybe January or February. And you were like, hey, no, actually you need to buy it now. And they're like, Oh, I didn't even think about it. So that's another reason to do the tax projection and timing things like that. I know it probably isn't a big deal in your head whether you buy it end of December or first week in January, but tax-wise, it actually makes a big difference.
SPEAKER_01:And you might be like, doesn't that just kick the can down the road a year? Well, yeah, but sometimes that's all you need because hey, we're gonna buy this van and we're gonna open a brick and mortar location in April. And so now it's like you could either buy the van in January, open the brick and mortar in April, and pay the taxes in April, or you could buy the van in December and then you don't have to pay the taxes, and then you just need the money for the brick and mortar in April. You see how that little bit of difference can make such a huge change in what you owe.
SPEAKER_00:Now, the next few things aren't necessarily things that have to be done before the end of the year for tax purposes, like there's no deadline. These are just things to get you ready for what's coming in the next year. All of these deadlines that business owners have in January and early in 2026, these are to get you organized. So the first one is to gather all of your contractor data for 1099s. You do have to send out 1099s to contractors by the end of January. So make sure now that you have all of the information you need because our clients are always scrambling last minute to get those W9s in and make sure that their bookkeeping's caught up and all of that. And then it could have been done in December.
SPEAKER_01:And doing that today gives you 20 extra days is over if you wait until January 1st to ask people for these. And on top of that, if you still owe these people money, that's a great leverage. You say, hey, we're gonna get you paid just as soon as you fill out this W9 for us so that we can send you a 1099 in January.
SPEAKER_00:Now, you should have already got that, and that doesn't always happen. We know we see it all the time. So if you're listening and you're like, yeah, I didn't get that information, you do need the W9 from them, and then you need all of your amounts paid. So just make sure that you have all of that together to make 1099s very easy for you in January.
SPEAKER_01:All right. Next we have make a list of all of the assets you purchase that cost more than$2,500. So the reason for that is if you're using the de Minima selection, that just means that any items under$2,500 you can put as, you know, office supplies or whatever. You don't have to depreciate a$500 computer necessarily. But anything over$2,500, we need the details because we have to account for those differently. You still get to deduct it, but there's just a different way that we have to handle it. On top of that, a lot of times big fixed assets, especially vehicles and heavy equipment, they're financed. Well, if you have a car that you paid cash for, we'll probably see it in your checking account and we'll be like, hey, what's$60,000? And yeah, we'll put it to the fixed assets where it goes, we'll help you with that. But if you financed it, we're not gonna see that anywhere in there. We won't see any money being spent, so we won't even know that you bought this. But you get to deduct it even if you financed it. So you have to tell us about it or we won't know.
SPEAKER_00:So when you're getting ready to file your tax return, what you need is a list of the assets that you purchased in the year. And you can gather your receipts for those things and purchase dates, all of those. Your CPA needs that to file your tax return. So make sure that you take the time now to gather all of that data. And that makes sure that you can take advantage of the tax savings for things like that.
SPEAKER_01:Now, if you have a vehicle that is not a business vehicle, it's your personal vehicle, but you still use it occasionally for business purposes, you need to track that mileage. Now, even if you weren't tracking it all year, you could probably still go back and remember most of the driving you did for the business and add up the miles. You can even use Google Maps to see how far it is. But when we get to April, or if you extend, God forbid, and then we're looking at this in September, you're not going to remember what you did, you know, a year and a half ago driving wise. So now is the time. If you weren't already keeping up with it through the year, now is the time to go back, add up those miles, start getting those ready to hand over to your CPA at the end of the year.
SPEAKER_00:And it's really simple. Your CPA just needs a list of the vehicle that you use and how many business miles you put on it and how many personal miles for the year so that they can do your tax return.
SPEAKER_01:Now that's all we need, but you do need to keep track of each trip, where you went, why it was a business purpose, you know, things like that. The actual data.
SPEAKER_00:But your CPA is not there to be the IRS. So what they're gonna ask is for, and hopefully they ask for this so that you can take the deduction, they're gonna ask for the business miles. And many CPAs didn't or won't. So make sure that you have that available just in case.
SPEAKER_01:Yeah, if you're working with someone besides us, you know, let's just assume they're not being proactive and give them all of the information.
SPEAKER_00:Yeah, in this case, you want to be proactive and just provide that information because that's not something that you're gonna think and put in your books, you know. You need to provide this separately, so that's why it's a separate step on the checklist. And last but not least is just together all your loan data and paperwork if you have a new loan for the year.
SPEAKER_01:Those can be tricky because if you got a if you financed a vehicle, for example, you've been making those payments. Maybe you booked some of the payments to the car expense or the fixed asset or just an expense account called auto expense. You know, that's the wrong place for it. Um, or maybe you booked all of the payments to the loan balance because you did correctly put the loan into your balance sheet in QuickBooks or something, but there's a portion of that that's interest expense that you get to deduct. By giving us that loan balance, we can make sure that the end-of-year loan balance on your balance sheet is correct and then it will be correct on the tax return. And that will help us adjust for any interest that was paid during the year to make sure that you get that deduction.
SPEAKER_00:And that's the end of the checklist. So if you complete the checklist, you will actually be all ready to file your tax return and your books will be in order, you'll know how much you owe, and you'll be organized to meet all of the deadlines coming up in 2026.
SPEAKER_01:And you'll get an A plus from your CPA.
SPEAKER_00:Yes, I know that you are very concerned if your CPA is going to give you five stars or give you an A plus. So if you do all of this, you definitely will get an A, five stars, and probably a cookie.
SPEAKER_01:Right. I mean, in general, most people are like, okay, does God like me? Does my mom like me? And then third is does my CPA like me ahead of your spouse and your kids, even.
SPEAKER_00:I do love the clients that email and were like, here's my spreadsheet. I broke it down by this, and then in this folder, I put my personal items. I hope this is good. Like, I hope you like it. I try to be really organized. And I'm like, yes, of course. We absolutely like that.
SPEAKER_01:We do like it. Yeah. I love the ones that one time on January 6th, we got a QuickBooks file from a client that normally sends it on January 4th. He's like, sorry, I'm late this year. He's always the first one. And it cracks me up.
SPEAKER_00:Oh, your CPA will love you if you're early because they have more time to work on your stuff, which is actually better for you, right? You want the CPA brain in January. You're not gonna want it later on. Like, get in line first, right? And then they have more capacity, they have more patience, they probably want to give you a phone call and talk about your tax return. All of those things, they don't happen in March and April.
SPEAKER_01:Yeah, that's true. We're just as smart in March and April, but we are busier.
SPEAKER_00:Grumpy. Just grumpy, tired of doing tax returns. Like, you get it, it's not that fun. But January, and if you own a business, all of this can be wrapped up in December and then knock out it in January and then be done. Like get into the routine of doing this. Those are our favorite clients.
SPEAKER_01:Yes, you'll get an A plus and you'll be our best friend.
SPEAKER_00:Okay, well, that wraps it up for today. Until next time, thank you so much for listening to What Your CPA Wants You To Know podcast.
SPEAKER_01: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.