Ready to stop scrambling come tax time and start planning like the business leader you are? Well, it starts with your mid-year financial game plan.
In this episode, Danielle Hayden, CEO and founder of Kickstart Accounting, Inc., walks you through the steps you need to take to get your books in shape, plan for tax season (without stress), and build a business that’s profitable and sustainable for the long haul. Let’s make tax season feel like just another Tuesday.
Key Takeaways:
- Know the Kind of Business You're Building: Are you running a tax deduction-focused business or building long-term sustainability? Defining this upfront will shape your entire financial strategy and mindset.
- Bookkeeping Is the Foundation of Everything: You can't make smart tax or financial decisions without accurate, up-to-date books. Get caught up and stay caught up.
- Collect W-9s and Log Expenses Now, Not Later: Save yourself a year-end headache by organizing contractor paperwork and tracking home office, mileage, and reimbursable expenses today.
- Review Your Entity Type and Compensation: Are you set up as the right business entity? S-Corps, in particular, need to pay close attention to reasonable compensation and accountable plans.
- Don't Skip Estimated Tax Payments: Avoid penalties and cash flow surprises by paying what you owe and saving for taxes proactively—your future self will thank you.
⭐ Business Hack: Schedule a full “CEO Day” to knock all this off your plate!
Topics Discussed:
(00:31 – 01:15) Why Mid-Year Is the Best Time for Financial Planning
(01:16 – 04:53) Choosing the Kind of Business You Want to Run
(04:59 – 06:54) Bookkeeping Updates: What to Check and Why It Matters
(06:55 – 11:15) Must-Do Mid-Year Admin: W-9s, Home Expenses, Mileage Tracking
(11:24 – 16:00) Reviewing Entity Type, Reasonable Compensation, and Estimated Taxes
Resources:
Free Downloadable Template | Home Office Log & Accountable Plan
Episode Referenced | Entrepreneurs: Should You Go S-Corp? Pros & Cons + Expert Insight – Ep 115
Book a Call with Kickstart Accounting, Inc.:
https://kickstartaccountinginc.com/book-a-call/
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Facebook | https://www.facebook.com/kickstartaccountinginc
Episode Transcript
00;00;00;00 - 00;00;31;21
Danielle Hayden
It's not about scrambling at tax time. It's about planning like a CEO today. The mid-year point is your golden window to get ahead of the IRS, streamline your business finances, and avoid those costly mistakes. Let's talk about what to review, fix and implement now, so tax season feels like just another Tuesday. Hey there CEO, welcome back to Business by the Books, the podcast that helps you ditch overwhelm, fall in love with your numbers, and lead your business with confidence.
00;00;31;22 - 00;01;03;19
Danielle Hayden
Now here's the truth: If you wait until December to deal with taxes, you're already so far behind. The successful business owners don't wait, they plan. They take control. And this episode is your exact playbook to do just that. We're going to break down the essential steps for a successful mid-year check-in, everything that you need to know so that you can implement this strategy and land into tax season.
00;01;03;21 - 00;01;26;23
Danielle Hayden
prepared and empowered. All right, so what are the steps? We're going to jump right in today. What are the steps that you need to take for a successful mid-year check-in for your business as a CEO? First and foremost, before we go into any of the tax strategies or deductions, I want you to first decide what type of business you want to have.
00;01;26;27 - 00;01;52;20
Danielle Hayden
What type of business are you running before you decide which tax strategies are best for you and your business? Now what do I mean by that? We have worked with thousands of business owners over the last ten years, and we all fall somewhere along this spectrum. You know some people have started their LLC and their business and their primary purpose is to be able to take advantage of as many tax deductions as possible.
00;01;52;22 - 00;02;18;07
Danielle Hayden
They're really running their business for tax purposes. They're putting through every deduction that they possibly can, making as many personal expenses a business expense as possible. And they're really running their business for a tax advantage. No shame in your game, right? Like, if that's the type of business that you want to have, most of my content is probably not going to be for you, including this episode.
00;02;18;07 - 00;02;49;22
Danielle Hayden
We work with business owners who are looking to run healthy, sustainable, profitable businesses where we're going to be business owners for a long period of time. This isn't a hobby. We are here to be of service, to make an impact, and we are prioritizing running a healthy business. And what that means is that when we're looking at tax planning strategies, we're not trying to think of every personal expense that we possibly can think of to put it through the business.
00;02;49;24 - 00;03;13;12
Danielle Hayden
In fact, over the last ten years as a business owner, I've actually gone the other direction. I really make an effort and a point to not put personal expenses through the business, because this allows me, as a business owner, to see exactly how my business is performing. I want to know what the health is of my business, and then I can look at my personal expenses very separately.
00;03;13;12 - 00;03;38;14
Danielle Hayden
So I'm not having to look at when I'm not profitable, is this really a personal bleed, right? Like, did I just go out to eat too much? Did my family have a personal bill? Did I make a personal contribution? These things are totally 100% separate for me. And so when I am looking at my profit and loss for our business, I can see the exact health of my business.
00;03;38;21 - 00;04;02;28
Danielle Hayden
I'm paying myself as a business owner through salary or draws, taking that money from the business account to the personal account. So this is a very different strategy for business owners who want to run a very healthy business. We are trying to create profits so that we can show lenders, investors or a potential buyer down the road that we have a business worth buying.
00;04;02;28 - 00;04;22;10
Danielle Hayden
We have a business worth investing in. Then when we go to get a loan, that we have the profit and the payroll, as a business owner, to be able to validate that this is a healthy business and I'm here for the long run. I've created something that's sustainable, and I don't have to deal with those types of losses
00;04;22;10 - 00;04;53;21
Danielle Hayden
when I go to buy a new home, buy a vehicle, when I go to take out a line of credit for my business. So that's the first things. First is what type of business are you running? Are you running a business where you are maximizing your tax deductions, or are you running a business that's healthy, sustainable, and profitable so that when you go to sell your business, go get lending, or invest in something in the future, you have a healthy business to support that in the future?
00;04;53;22 - 00;05;22;05
Danielle Hayden
All right, so let's jump into our more tactical aspects of this mid-year check-in. Wanted it to start with mindset. The next is to review your bookkeeping. Now there's going to be a few aspects in reviewing your bookkeeping. First and foremost, if you are doing DIY bookkeeping, if you are not a Kickstart Accounting, Inc. client and you are doing bookkeeping on your own, it is really important at this point in the year that you take the time to get caught up, you process all of your transactions.
00;05;22;08 - 00;05;43;19
Danielle Hayden
Do a balance sheet review, reconcile all your accounts, or finally book that discovery call and let us take care of the catch up for you, because you really can't do anything else in this check-in, or any other planning strategies without accurate bookkeeping. So the first things first is to make sure that your bookkeeping is caught up and accurate,
00;05;43;19 - 00;06;04;28
Danielle Hayden
up-to-date. Now, if you are a Kickstart Accounting, Inc. client, I need you to do two things for me. I need you to respond to our statement requests that we have fully implemented into our project management system, Financial Cents. All of our clients are getting pesky little reminders for all of your statements. We have to have your credit card statement.
00;06;04;28 - 00;06;30;17
Danielle Hayden
We have to have that loan, the line of credit, all of those statements. It's really important that we have those monthly. But let's pause at this mid-year check-in point and please respond to us with all of those statement requests. It's going to allow us to accurately put the interest on the income statement and then reflect the accurate balances on the balance sheet, because this is so important for your taxes.
00;06;30;20 - 00;06;55;01
Danielle Hayden
If you don't understand why we're asking you for your statements, let me explain right now: In order for your bookkeeping to be correct, in order for your tax return to be correct, we have to have your statement. It is a non-negotiable for us that we have to have statements for every single balance on the balance sheet. And if you can send those to us right now, we can make sure your bookkeeping is accurate.
00;06;55;03 - 00;07;12;20
Danielle Hayden
Next, I want you to book a call with our team. If you haven't talked to us yet this year, book your call. If you are a Standard or Premier client, you get a call with our team once a month. They are optional. We’re not forcing you to talk to us, and if you're a Basic client, you have an option for a quarterly call.
00;07;12;22 - 00;07;34;06
Danielle Hayden
Get on a call with us so that we can review the classifications with you. You can review the bookkeeping to make sure that you understand it. Now also in that review, I also want you to look at anything that we have classified as personal expenses. We do our best throughout the year to determine what's business and what's personal, but we need your input.
00;07;34;06 - 00;08;11;19
Danielle Hayden
We need you to verify those transactions. And so we'll, either during one of those calls or through our Financial Cents requests, have you review all of the personal expenses that you have put in the business to make sure that those are accurate. Now, you guys just know that we are using our accounting knowledge when we are classifying. So if you're going to Nordstrom to buy clothes that you deem as air quote uniforms, we are using our accounting knowledge that we have where the shopping at Nordstrom's, it really actually isn’t a business expense.
00;08;11;19 - 00;08;39;01
Danielle Hayden
You can't expense uniforms on your income statement unless they've been embroidered with your logo. And so when you review those personal expenses, just know that we've applied our expertise to classifying those transactions. All right, now we also have transactions the other direction. So you might have business expenses that you paid for personally. Totally okay. It happens sometimes. We walk out of the house with just the wrong credit card.
00;08;39;02 - 00;09;07;27
Danielle Hayden
If you have any business expenses that you've put on a personal card, please send those to us right now. Please, please, please do not wait until the end of the year. We cannot give you accurate tax reserves or estimates or any accurate information if we don't know and we don't know that you're doing that. So please send us or whoever your money team might be, all of those business expenses that you paid for personally. Okay,
00;09;07;27 - 00;09;31;00
Danielle Hayden
so that is the bookkeeping review. Remember we want all of our transactions, updated statements reconciled. If you are a client, respond to our statement request, review the personal expenses, book your call, and send us any business expenses that you have paid personally. I want to give you a few other strategies that I want you to implement as a successful CEO.
00;09;31;03 - 00;09;53;15
Danielle Hayden
Next is collecting W-9s. You guys, if you have paid somebody $400 year-to-date and you don't know if you're going to use them again or not, go collect their W9 now, right now. I want you to have W-9s for any contractor that you've worked with year-to-date. Kickstart Accounting clients, we give you a portal where you can upload all of your W-9s.
00;09;53;15 - 00;10;22;11
Danielle Hayden
We will help you keep track of this so that we can send your 1099s at the end of the year. So even if you're not sure if you will pay that contractor $600 this year or not, start collecting those W-9s right now. Next, I want you to start logging all of your home expenses. This is if you have a home office deduction or an accountable plan, regardless of whether or not you have an accountable plan or take the home office deduction, you need to have all of your home expenses logged.
00;10;22;14 - 00;10;44;19
Danielle Hayden
Don't wait for the end of the year to do this. You guys, I can't remember what I had for dinner last night. I'm not going to remember my expenses from January next December, so create a log for all of your home expenses. Now, you can download our log for home expenses and the accountable plan at KickstartAccountingInc.com/log. Now,
00;10;44;19 - 00;11;07;06
Danielle Hayden
I also want you to review your mileage. If you are somebody who is driving for the business, you should be using some type of form of tracking. I suggest an app like MileIQ, but however you have decided to track either the your vehicle or mileage, this is your mid-year point to make sure all of those miles are tracked.
00;11;07;08 - 00;11;29;22
Danielle Hayden
We are not entering that information into QuickBooks. However, you can upload it into your Financial Cents portal so that we have that information at this mid-year point. Now, if you are a KSA Tax Partner's client, we will send you our mid-year Tax Snapshot. I love our Tax Snapshot. Here is where we're looking at your entity type to verify you're in the right entity type.
00;11;29;24 - 00;11;55;09
Danielle Hayden
Hello LLCs, should you start considering becoming an S-Corp? Becoming an S-Corp allows you to take advantage of tax savings. It allows you to be a business expense to your business and pay yourself through payroll. Again, if you're a KSA Tax Partner's client, we'll be reviewing your entity type for you. If you are not a client, I want to advise you to go and review your entity type.
00;11;55;09 - 00;12;15;29
Danielle Hayden
Now I will drop a link in the show notes to our episode on S-Corp: the pros and cons, so that you can think through is being an S-Corp the right entity type for you? Now, if you are an S-Corp, you have to pay yourself a reasonable compensation. This isn't Danielle’s rule. This isn't Kickstart’s rule. This is the IRS rule.
00;12;16;02 - 00;12;46;23
Danielle Hayden
You have to pay yourself a reasonable compensation before you can take any draws, including estimated tax payments. This is a great time of the year to review how much have you paid yourself through payroll and how much have you taken as draws? Again, if you're a KSA Tax Partner's client, we send you your reasonable compensation paperwork back in February, so grab that document and compare your reasonable compensation to what you've actually paid yourself.
00;12;46;25 - 00;13;05;11
Danielle Hayden
We want to make sure that you're on track to pay yourself that salary by the end of the year. If you are not on track, I want you to contact your money team right now. Don't wait until quarter three, quarter four. Let's have a conversation today to see if we need to move some drawers and run them through payroll.
00;13;05;16 - 00;13;34;14
Danielle Hayden
So if you have not paid yourself enough but you have taken those draws, contact your money team so that we can help you. Next is our accountable plan for our S-Corp listeners. If you are an S-Corp, you have an option for an accountable plan and the accountable plan allows you to reimburse yourself for any business expenses that you have paid for personally, including all of those home office expenses, your cell phone, and anything else that you might have paid for.
00;13;34;15 - 00;13;59;06
Danielle Hayden
Now, the coolest part about being an S-Corp and having an accountable plan in place is that you get to actually reimburse yourself, but it's also a requirement. So the IRS rules are that in order to take the accountable plan, you have to reimburse yourself throughout the year. It's our mid-year check-in point. You guys, create the plan, document your home office expenses, and make the reimbursement
00;13;59;10 - 00;14;19;28
Danielle Hayden
right now. Do not wait for the end of the year. We want to see these reimbursements be made quarterly. You have to create the accountable plan document. You have to be the one to track all of your home office expenses. I'm sorry, you guys. I wish we could do more of this for you. If we do your personal bookkeeping, we can help you with your home office,
00;14;20;00 - 00;14;44;08
Danielle Hayden
but if we are not doing your personal bookkeeping, this is something that only you can do. So I really want you to take some time to document out all of your home expenses, whether that be for the home office deduction as an LLC or as an accountable plan for reimbursement. All right, lastly is estimated tax payments. You have to make estimated tax payments throughout the year or you'll be penalized.
00;14;44;10 - 00;15;07;12
Danielle Hayden
I mean, it's not the end of the world. You'll pay the penalties and interest. However, successful CEOs and business owners, they face their financials. They don't run from the IRS. So I want you to pay your estimated tax payments. This is based on the information your CPA gave you when they filed the previous year return. That is the amount that you are required to pay the IRS.
00;15;07;14 - 00;15;29;03
Danielle Hayden
If you want to save additional dollars. I always suggest having a high yield savings account where you can save 25% of your net income so that you are prepared for tax season. You guys, what happens all the time is that our clients are so successful, they keep growing year over year, and so they're saving based on last year's profit,
00;15;29;03 - 00;15;52;09
Danielle Hayden
and they forget that this year, it’s more profitable. And so I want you to be prepared for that. If you are a client, you receive your monthly Snapshot report. On your monthly Snapshot report is something that we call the year-to-date tax reserve. This is the amount that is based on this year's net income. So take action right now,
00;15;52;13 - 00;16;18;20
Danielle Hayden
make your estimated tax payments, and start saving for tax season. We know that payment is coming. You cannot hide from it. Let's get prepared. All right, you guys, this is a lot here. I know there's a lot to do. I would love for you to schedule what we call a “CEO Day”. Take some time to review your financials, review your bookkeeping, book a call with your money team, review your entity type, your Tax Snapshot,
00;16;18;21 - 00;16;39;28
Danielle Hayden
make those estimated payments, log all of your home office expenses, send a request for your W-9s. I know there's a lot to do, and that's why I'm asking you to take a full “CEO Day” where you can do all these admin tasks, set yourself up for success, and stop waiting for tax season.
00;16;40;00 - 00;17;28;07
Danielle Hayden
I hope you enjoyed today's episode of Business by the Books. Don't forget to hit like and subscribe! This is the number one way we can help other entrepreneurs find this podcast, because here at Kickstart Accounting, Inc., it is our mission to help entrepreneurs understand their numbers, get access to this information, and grow and thrive in their business. So please help me, help other entrepreneurs understand their numbers so they can finally grow and thrive.