S7E8: TAXES 2026 | How to Plan Ahead & Avoid Surprises as an Entrepreneur

⚠️ Disclaimer: This podcast is for informational purposes only. It is not financial, legal, or tax advice. Always consult with a qualified professional before making financial decisions.

Join the Keep It Simple Squad: https://go.pamprior.com/keep-it-simple-squad

Taxes don’t have to be scary—or complicated. In this episode of Cash Flow with Pam Prior, Pam breaks down everything you need to know to keep taxes simple and stress-free for your business.

From understanding what your tax bill will look like to avoiding last-minute scrambling, Pam shares straightforward tips every entrepreneur needs to protect their profits and plan ahead.

What You’ll Learn in This Episode:

• The #1 thing you need to know about taxes as a business owner
• How to predict your tax bill without spreadsheets and stress
• Why taxes will become your biggest expense—and how to prepare for it
• Simple, actionable steps to keep more of the money you’ve worked hard to earn

If tax season has ever left you overwhelmed or caught off guard, this episode will help you finally take control and feel confident about your business finances.

Transcript

0:00

Foreign. Hey, welcome back to Cash Flow. I am Pam Prior, the leader of your Keep it Simple squad, where we are answering all the finance questions entrepreneurs have. But we're keeping it simple. This week, everybody's favorite topic, taxes. And it should be a favorite topic for every entrepreneur because let me say right off the bat to keep it simple, it is going to be, when you are successful, the biggest expense in your business. So let's do a little talking about it before it jumps up and bites you, because I wanted to jump up and bite you a little bit because that means you've made some serious money. First of all, how do I even know what my tax bill is going to be? Great question, simple answer. You have a bookkeeping system that's kept up to date that you can run a report from, okay? When you have all those three things, you can at any point in time run a report that tells you how much money you've made and you can think about how much more you're going to make in the rest of the year. And you can tell your tax accountant, I think this is how much money I'm going to make. And your tax accountant can in turn tell you, here's what your tax bill is likely to be. That simple. Okay? Now, what if you don't have all that stuff? What if you don't have bookkeeping? What if you don't print your financial reports? What if you don't understand your financial reports when you print them all? That is possible. You can just as easily, if you have a separate business banking account and a separate business credit card, dump all those transactions, send them to your tax accountant and say, here's what my business has done. This is all the transactions related to my business. Tell me what you think my tax bill will be. He'll probably, he'll she. They'll call you back and say, well, do you think your business is going to. Excuse me. Continue at this pace, or do you think it's going to grow and you'll say one or the other? No, I'm going along in a pretty good clip. I think it's going to stay about the same the rest of the year. You can send them this in June, in September even. I like June because it gives you a little more time to save money if you're going to have taxes to pay. I actually do it every quarter, right? Every quarter I look at my numbers and go, here's what I think I'm going to make on the year. Send it to my tax account. And then he comes back to me and says, this looks like what the tax bill will be. A couple of reasons for that. I'll circle back in a minute. But that's the simple part. That's how you can know how much it will be. I will tell you. And you go back and look at a couple of episodes before this. In order to do that, you got to know what you're spending on your business and you got to know what you're making in your business. So recommendations are, have a separate business account and have a bookkeeping system that makes it really easy for you to just push a button. Don't feel daunted by that. Pop back a couple episodes. If you watch this whole Keep it simple series that we're doing, there are very easy action steps for you to take to get to exactly this position where you can send your your info to your tax account and have them tell you what you think you're going to need to pay. Question number one, answered, kept it simple. Second one, this is a big one. How do I save for taxes, Right? So say now, you know, hey, this is the first year I'm going to make some money. I've never had a tax bill before for my business because I've lost money the first couple years. Happens to almost all of us. Now I'm going to make money. How do I start saving for that again? That one's pretty simple as well. If you're making money, do this early in the year, okay? Start in April. If you know this is going to be the first year you're going to make money, then know for sure. This is the first year that your tax expense is going to probably be the biggest expense in your business. So don't pretend that your profit and loss statement ends with, here's what I made, here's what I spent. Your profit and loss statement, really, your personal one, really ends with, here's what I made, here's what I spent, here's what I had to pay in taxes. And that can really surprise a lot of people. So once your tax guy has told you, hey, you're making great money, and I think your tax bill is going to be $20,000 this year. If you know this in April, how do you save for it? You have from now until next April when the taxes are due, to save 1/12 of it each month. And if you're making money, that should be pretty straightforward and easy to do. And what I would recommend is that you don't ignore it because come April, you will get a $20,000 tax bill. And if it happens two years in a row, right. You're going to get some penalties and interest. Because after you've made money the first time and after you've paid a tax bill for making that money the first time, you are then expected to make estimated payments to the IRS during the year, the next year. And if you don't, and if you wait till the end of the year to pay next year's tax bill, which if your business is doing well, could be $40,000, then you're going to have penalties because they're going to say, hey, you paid me money last year, so you know you're making money. You knew you were making money this year. You're supposed to be paying me every quarter, and you didn't. So now not only am I going to tax you for what you owe me, I'm going to give you a penalty for not having given me that money earlier on. Okay? So that's really, really important. First year, you definitely want to save for taxes and do it by just doing it as early as you can. Make a good assessment in April of what you think you're going to make for the year, you might be wrong. Worst case, you're going to save too much money and you'll have extra money. That's cool. But once you know that, shoot it over to your tax accountant, run it through a version of TurboTax, or if you do your own taxes and see what your tax bill's gonna be. Okay, once you do that, take it. Divide it by 12. As long as you start in April of this year, you'll be ready by April of next year. No harm, no foul. Okay? And then the only thing I'm adding to that is next year. Not only do you have to save it, but you have to go ahead and send it to the IRS every quarter. There's a schedule for it. That leads to our third question. What if I can't pay my taxes? And this happens to a lot of people, and it is nothing to be embarrassed about at all, because like I said, we often go through years of not making any money so we don't have a significant tax bill. And then all of a sudden, the first year we make money, we're investing to grow, so we use up all our cash for good reasons. To us at the time, we're always making the best decision we can at each moment with the information that we have. Right. So I'm just going to give you a little more information. Good part is, what if you can't Pay your taxes. And again, this is not tax advice. And I can't guarantee that this will be the case forever, but it has for a lot of years. If you finally get that tax bill and you're like, holy cow, this is$20,000 I don't have. What do I do? There's a website you can go to. Everybody has a portal for their taxes, and in most cases, for your businesses, the taxes are going to be personal. That's a long, complicated story, and we're keeping it simple, so I'm not going to go down that road. But you can set up. It's going to be a personal tax bill that you owe, and you can set up an ID in this portal and we'll drop the link down here in the, in the YouTube notes and in the podcast notes so that you can find this, and you'll put in a little bit of information and they'll pull up what your tax bill is right there on the portal because they know this is an IRS website. Don't. Don't use it. If it doesn't end in gov, okay, that's going to be a scammer. Anything that doesn't end in gov, make sure it's the real IRS website that's doing this. And it'll say, okay, what do you want to. How much time do you want to pay it over? How much do you want to pay per month? For the most part, if it's reasonable, they'll let you pay that over five, six, seven, eight years and you can make your payment as small as you want to. Yes, there'll be interest charged on it. Bottom line, like any loan, that's what it is. There'll be interest charge on it. The other thing that will happen is if next year, for whatever reason, you happen to get a tax refund, they'll apply it to that first. You won't actually see that refund check, but it lets you not panic. It lets you. The worst thing you can do with the irs, Absolutely. The worst thing you can do is ignore them. If you don't ignore them, if you engage with them, if you set up this method to pay your tax bill, even if, you know, say it is$20,000 and you say, I can afford 200 bucks a month, pop that in there and they'll go, okay, here's your, here's your plan. Click here and it's your $200 a month plan. If they think it's too low, if you're being ridiculous, if you pop in $10, I can pay$10 a month, they'll probably come back and say, no, I actually haven't tested that, so I could be wrong. My assumption is if you make a ridiculous offer, I'm going to pay $10 a month for the next 30 years. That they'll go, yeah, that's not going to work. But every time I've done this with a client, I even had to do it for myself. Once I put a reasonable estimate in for it, even a little low. Like, if reasonable is 500amonth, I'm like, let's try 250amonth just to buy them some time. And they take it. And the cool thing about these loans, too, when you, when. When you all of a sudden find some cash and you can pay it off, you can pay it off and the interest stops and it's all done. So that's a very easy answer to what do I do if I can't pay my taxes? Go to this website. They'll let you set up a loan plan and you pay it over time. And then I will tell you again to go back to the last question. You know you're going to have a tax bill next year now, so start saving for that one. Okay, why pay interest next year as well? This year, just pay yourself a savings account, make some interest on it, and then you can pay that bill every quarter when you're supposed to pay it. Again, not tax advice, but this was the tax Keep It Simple Squad answers to your questions. Hope you've enjoyed it and I hope I see you on the next episode. Please share this with your friends if you find it would be useful for them and hit us with a Like and subscribe so we can keep bringing you this amazing content. Keep it simple. Take care. Sa.