Smart Strategies for Preparing for Tax Season Without the Stress

Tax stress doesn’t start in April—it starts when we ignore the basics. We sit down with Rose, best-selling author of Add a Zero, to turn anxiety into a simple, repeatable system that keeps your books clean and your tax bill smaller. From hiring an affordable bookkeeper to building monthly routines, we walk through the exact steps that make compliance easy and strategy possible.

We dig into the power of clean data: connecting your accounts to QuickBooks, letting a pro categorize your transactions, and answering a short monthly list of questions so your P&L stays accurate. Then we layer in automation using project tools like Asana—recurring tasks for contractor 1099s, retirement contributions before the cutoff, and a post-filing strategy session with your CPA. The result is less guesswork, fewer surprises, and more time to focus on work that grows the business.

Rose breaks down the tax-savvy retirement options many entrepreneurs skip. Learn how a solo 401k can combine employee and profit-sharing contributions toward a high annual limit, why a SEP IRA might fit certain team setups, and how a defined benefit pension plan can unlock six-figure, tax-deductible contributions for high earners. We also cover structure choices, salary versus distributions, and the low-hanging savings a good accountant will spot when you bring organized numbers and smart questions.

If you’re ready to stop scrambling and start saving, this conversation gives you the playbook: simple systems, clear roles for your bookkeeper and CPA, and proven strategies to keep more of what you earn. Subscribe, share with a founder friend, and leave a review with the tax question you want us to tackle next.

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Transcript

Meet Rose And Her Money Mission

SPEAKER_00 0:35

Hi Rose, how are you? I'm awesome. Thank you so much for having me on. Taxes, my favorite subject. Only half kidding.

SPEAKER_02 0:44

Of course. No, I'm excited to have this conversation about smart strategies for preparing for tax season without the straws. But before we actually jump into that, will you introduce yourself and your business to my audience?

From Debt To Millionaire Mindset

SPEAKER_00 0:58

Yeah, so I'm Rose. I am a best-selling author of my brand new book, At a Zero. And I basically teach personal finance education so that you can master your money and create a life on your terms. That's really my angle for teaching money. It's a tool to live your best life, not to like buy a mansion and get a yacht and get all these material things, but to spend your time how you want on projects that light you up. So that's sort of my angle. And my whole story is that I dug out of $100,000 in debt and became a millionaire in seven years. That's being the first millionaire in my family, not having any wealthy role models around me. And so I'm really passionate about just transmitting the mindset changes that you have to make, which is actually the biggest part. And then also all the tactical investing, taxes, budgeting, and earning skills that you need to learn.

SPEAKER_02 1:51

Fabulous. And I am excited for you to teach those to our audience today. So what's the very first thing a business owner should do when we're preparing for tax season?

SPEAKER_00 2:00

It's a very common scramble that tax season rolls around and then we start panicking. So where I don't know when this episode is going to be published, but no matter what month of the year it is, maybe tax season just passed or it's coming up.

First Move: Hire A Bookkeeper

SPEAKER_00 2:15

The first thing to do is get a bookkeeper. And this is not something you should try to do on your own. Maybe if you just started out and you are only starting to make your first few sales, so you don't have a lot of transactions, sure, do your own taxes. But getting a bookkeeper to come in and set you up in QuickBooks or FreshBooks, or there's various accounting softwares, and just have them set you up. Get your bank account, your business credit card if you have one, just connected and have them start categorizing your transactions for you so you can see everything in a nice PL or a profit and loss statement. And it just takes a little bit of setup to get them going, but you usually pay them a monthly retainer and they'll just keep your books going for you with very little involvement from you. You might have to answer a few questions like what was this transaction? What is that transaction? But it's, you know, not more than an hour a month. And that will save you hours and hours and hours and stress at tax time.

SPEAKER_02 3:16

For a bookkeeper to be able to come in, um, would you also recommend potentially just so that they have business owners have more of their hands on the expenses, maybe getting the books set up and then being able to go in themselves and kind of keep a better eye on their profit and loss themselves using the software that it was initially set up on. Is that something that a bookkeeper will normally do as well?

SPEAKER_00 3:39

Yeah. And it depends on your comfort level with accounting. Like I have a finance background and I had a job where I would look at financial statements. So I kind of knew my way around. So I was able to give my bookkeeper a lot of guidance. Like, here are the the income categories I want to see, here are the expense categories, here is how I want to categorize um owner distributions. Um, like I kind of knew a little bit of the nuances of balance sheets and things, but you don't need to know that. Your bookkeeper should know that. So you just tell them the level of involvement you want to have. But usually, if they just understand your business model, like I am a coach and I help people with weight loss or whatever, and I charge one-on-one, and then my expenses are usually like software expenses and travel, then she'll she'll they should know what to do.

Setting Up Software And Categories

SPEAKER_00 4:29

And by the way, bookkeepers are not expensive at all. So I think one this is for any investment we make in our business. I feel like we kind of are scared that, oh, it's gonna be a lot, so I'd I'll just do it myself, you know. It took me forever to hire out video editing and web design because I was scared that it would cost so much. But then when you actually start looking and you see how many amazingly qualified people there are who can do it for really affordable prices, you're always like, Why didn't I do this sooner? So, my the my favorite place to find contractors and people like bookkeepers, found my video editor, found a lot of great people on there, is Upwork. And Little Hack is there, are amazing bookkeepers abroad, especially Filipino VAs, the ones that have bookkeeping specialties. And I I've worked a lot with Filipino VAs, and they're really, really detail-oriented and they speak great English, and literally like $10 an hour, you know. So, all of this could be whatever this thing is that that's causing you so much stress. You can probably handle this in a couple hundred bucks and a few hours of effort, you know? It's really not something to be scared of.

SPEAKER_02 5:46

Excellent. I love that suggestion. So, can you share a few simple strategies to make tax prep part of your regular business routine instead of that last-minute scramble that so many business owners do?

SPEAKER_00 5:59

Yeah, so I'll share what I do because over the years I've developed systems and it's not perfect. There's still a little bit of a scramble towards tax season, but not as much as there used to be. So the first thing is that initial setup.

Monthly Systems That Reduce Stress

SPEAKER_00 6:13

Get all of your accounts connected to QuickBooks or some sort of accounting software and have your bookkeeper set it up and maintain it on a monthly basis. And then every month, set up a routine with your bookkeeper where they will send you a list of transaction questions. Usually I do it async, you don't even need to meet with them. They send me a Google Sheet with these transactions that happened on this credit card or this bank account on this date, and here's the memo and then and the amount, and then they'll be like, So what is this? What was this? And I'll be like, Oh, that was uh getting my hair done for a video shoot. That was me traveling to a conference for networking, blah, blah, blah. And then I don't even have to think about the accounting stuff. I just literally say what it was, and they will categorize it. So we do that every month, and because we're doing it on an ongoing basis, by the end of the year, my books are already pretty well maintained. You know, there's not like hundreds of unknown questions, and that's so so that's one ongoing thing. Another thing is to create sort of a checklist of things you have to do throughout the year to stay compliant. And I use a project management software called Asana, and there's many other ones, Monday, Trello, and they all have these sort of features, but you can set these recurring reminders, recurring tasks. So for me, there's things that um like when you mark off a task complete, if I've marked it as a monthly recurring task, as soon as I mark it complete, it will create a new task for next month. Or there's annual, bi-annual, quarterly. You can set all these recurring things. So one of the things I have is a monthly recurring task to review transaction questions with my bookkeeper, which I explain how to do. And then every January, there is a task to send out your 1099s to any contractors that you hired.

Recurring Checklists And Compliance

SPEAKER_00 8:10

Um, what else can I think of off the top of my head? Oh, uh retirement plan contributions. That's not necessarily in order to file your taxes, but you want to contribute to your retirement accounts before, usually it's before the tax deadline. So I have an annual reminder to make my contribution before the cutoff. So things like that. And then also I have an annual reminder to meet with my accountant. This is different from my bookkeeper. My accountant is the CPA who files my return to meet with her after tax season, after everything, all the madness wraps up, to just regroup and say, okay, what's our tax strategy for next year? What can I do proactively to save more on taxes next year? And this is a great time to talk about any life changes you have coming up, like, oh, I'm moving states or my business structure is changing. And then they should proactively give you advice to set up structures, accounts to save on taxes. So yeah, those are some of those routine things. And yeah, it's really just getting in that routine.

SPEAKER_02 9:17

I love it. Yes. No, we're definitely fans of any sort of systems that we can set up so that it just makes everything that much simpler to stay on track of. What's one underrated tax saving strategy that most entrepreneurs probably are not doing as of yet and should really know about?

SPEAKER_00 9:34

Yeah. Okay, so I won't even get into the obvious stuff like deduct as much as you can, right? Because a lot of things are legally deductible. But one thing that I was really surprised about is there are really amazing retirement plan savings options for entrepreneurs beyond even a solo 401k. A solo 401k is basically a 401k, except you're giving it to yourself since you don't have an employer. So it works exactly the same. But as an employee, if your boss gave you a 401k, you can contribute up to, I believe it's 23,000 for this year. They recently updated, so forgive me, but it's around 23,000

Solo 401k And SEP Basics

SPEAKER_00 10:16

for the year. You can put up to that much tax deductible. But as an as your own, you know, self-employed person, you can do 23,000 plus a lot more. Um, it's it's gonna be a percentage of your business profits, but the absolute limit is $23,500 for the year. This is as of 2025. Um, but if you have your own solo 401k and you're self-employed, you can contribute for yourself this $23,500 as an employee as your own employee, and you can contribute an additional profit share amount up to $70,000. So a lot of people don't know this. That's $70,000 you can put away tax-free. Like just knock that off your taxable income, which we're all trying to do, right? Um, so I think that's a pretty obvious one. It's very easy to set up. Another account that's similar is a SEP IRA. Depending on whether you have full-time employees and things like that, one or the other might be better for you. So that's an easy one, everyone should do right away. But the other thing is what you call a defined benefit pension plan. And this is a little more administratively heavy to set up, and you're gonna need um professional help to do this. But my CPA told me about this, and I was blown away because most people don't know about this. But over the last four years, I've been able to put away almost $200,000 each year, in addition to my solo 401k contributions, completely tax-free. So these are really easy ways to just knock a couple hundred thousand dollars off of your taxable income right away. And it does take a it, I'd probably pay around three thousand dollars a year to to kind of keep up the paperwork because there's a lot of things you have to file.

Defined Benefit Plans Explained

SPEAKER_00 12:11

There's like actuarial projections you have to do, so it's a little more involved. But hey, it's an easy way to get a $200,000 deduction, and it does depend on your business's income. You have to make more to be able to contribute more, but over a certain threshold, I'd say if you're making um high six figures, it's worth starting to look into that.

SPEAKER_02 12:34

And is that gonna be dependent upon whether how you are filing, as far as if you're an F-Corp or an LLC, or does it qualify for both?

SPEAKER_00 12:42

Yeah, you should be able to do it regardless of your structure.

SPEAKER_02 12:45

Okay, all right, perfect. So, what's the best way to prepare for that first meeting with your tax professional to make it as productive as possible when you are going to file?

SPEAKER_00 12:57

Yep. So I actually have a really great resource for this, my financial freedom cheat sheet. But basically, they're gonna ask you for these things. So I'm gonna help you just get ready for them because they'll ask you for it anyway. But they're gonna ask you what is your what is your like financial picture? Like what do you own? What do you owe? Like, what are all your assets and liabilities? They're gonna wanna know your business PL, not so much your personal budget, but that's why it's good to just have the bookkeeper set up your QuickBooks beforehand. And even though it's not perfect, at least you have something for them to look at. Because accountants love it when you can give them CPA or CPA, you know, view-only access to their to your QuickBooks, and they can just log in and take a peek. So it's better to just have all that ready. So because they're gonna send you a big questionnaire, you're gonna have to fill out all these things anyway.

SPEAKER_02 13:53

Absolutely. And when you're talking about that PL, so you're talking about your expenses and then any of the income being able to categorize them, which is what you were talking about before with the bookkeeper being able to categorize what's coming in, what's going out. Yeah, exactly. Perfect. So

Prepping For Your CPA Meeting

SPEAKER_02 14:09

we're gonna make sure that we link to that in the show notes that people can make sure that they grab your financial freedom cheat sheet because we all need a good checklist to keep us in line, what we're supposed to be doing. So, are there specific questions that entrepreneurs should ask to make sure they're getting the right financial advice for their type of business?

SPEAKER_00 14:29

So I have a few questions that would be great to ask. Uh the first is uh let's start with the most wide-reaching basic one is is my business structured the right way? Because there's LLCs, there's sole proprietorship, there's S-Corp, and maybe what was right for you last year is no longer right for you this year because your revenue grew or whatever the case may be. So asking that, and that's like the most basic part. So if you become an S-Corp, then then all the other possibilities that are available to you change according to that. So we start there. And then once you figure that out, you can ask how what's the optimal way to pay myself? Because as business owners, we can pay ourselves in one of two ways, right? Salary, which is where you actually get a payroll processor like Gusto or ADP, and you literally get yourself a W2 income. Or like a lot of us do when starting out, we just make transfers over from our business checking account to our personal checking out, checking account to pay for our

Questions To Ask Your Accountant

SPEAKER_00 15:35

lifestyle expenses. Um, but as you grow, there could be ways to optimize that where maybe you pay yourself $100,000 of salary, but then only $50,000 of profit, or maybe it's flipped the other way around, depending on whether you're in S-corp and all these kinds of things. But you can you might be able to save on self-employment tax, like just a couple percent, which does make a difference. So I actually always ask my accountant, you know, what should I pay myself in salary this year versus what should I save as a profit distribution? And she'll advise me ahead of time. And sometimes I even check in with her throughout the year if my income is changing or I've got a big windfall. I'm like, okay, I want to take this money out, I want to give it to myself. Like, what's the best way to do that? Do I process a bonus payroll or do I just do a transfer of profit? So that's one great question. How to compensate yourself. Uh, I think another great question to ask is what are the most low-hanging fruit opportunities for tax savings that I have right now? Because accounts can get super fancy with tax savings structures, like, come on, Cayman Islands, we can go crazy, right? But low-hanging fruit. And likely a lot of the times they'll they'll they'll talk about solo 401ks and the defined benefit plan. But hey, any other low-hanging fruit, maybe, and then they'll ask about your life. Maybe you spend some time in uh a tax a no-income tax state, and maybe just um just spending a few more months out of the year there is gonna qualify you for

Biggest Mistakes And Final Takeaways

SPEAKER_00 17:10

no income tax instead of you know California tax or whatever the case may be. They'll they'll they'll ask about your life and see if there's ways to do that. Um and then finally, something you should ask on an ongoing basis is what are some of the new tax regulations and laws and updates that are happening, and how can I use those to my advantage? Or what do I need to do to protect myself? So, yeah, those are four good, super specific questions that will really get the ball rolling. And a and a good accountant should be able to ask you plenty of follow-up questions from there.

SPEAKER_02 17:44

Excellent. Perfect. Those are so helpful. Um, if you were to tell us the biggest mistake that you see entrepreneurs making when it comes to their taxes, what would you say it is?

SPEAKER_00 17:55

The first mistake I think everybody kind of saw this coming is just not looking at it and then panicking. Because when when tax season rolls around and you're stressed and you're just trying to do the bare minimum of filing your return on time, you're no longer in proactive mode. You're on just reactive mode. So any tax saving opportunities that you could have had, usually you had to put those in place last year. So by the time you're scrambling, it's too late to do those things. So just being reactive instead of proactive, that's the biggest mistake. And secondly, is like really leaving a lot of money on the table, or rather, paying a lot more in taxes than they need to because they're not aware of these ways, like the defined benefit pension plan and solo 401k and just little optimizations that could save you so much money because we work hard for our money. No need to give Uncle Sam more than what he deserves.

SPEAKER_02 18:51

Absolutely. That is perfect. We are definitely going to make sure that we link to those down. I want to make sure that everyone that is listening make sure that they go and get their financial freedom cheat sheet so that you can make sure that you have your checklist, know exactly what you're walking into. And if you are not keeping track of your books and you we have don't have a bookkeeper, definitely obviously take the time to do that so that you can feel fully prepared. Rose, I appreciate you so much for taking the time to speak with me and my audience.

SPEAKER_00 19:20

Thank you. This is really fun. I love nerding out about all the financial tax things.