In this summer’s hit show “The Bear”, a young chef comes home to Chicago to run his family sandwich shop after a death in the family. The restaurant he inherits is plagued with financial issues, causing unneeded stress on top of an already tense situation.
The show provides a great jumping off point for Emily and Amanda to discuss various financial issues that plague all small business owners. Over the past several years, especially in response to Covid’s impacts on our lives, a lot of people have started freelancing or started new businesses. These new opportunities also lead to new financial matters to address in both your personal and work lives.
We dig into:
- Business formation:
- How to pay yourself;
- Expenses and deductions;
- Tax consequences to be aware of; and
- The importance of keeping good books.
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Please support small businesses when you can: Here are 8 ways how.
Emily and Amanda mention two shows in the episode: The Bear and Lu La Rich. You can watch the shows here:
More resources for small business owners:
Look for your local small business support program. For example, here are the small business services available in NYC.
Full transcript below-
Emily Agosto (00:08):
Welcome to connecting the dollars, a personal finance podcast. I'm Emily Agosto, a CPA and financial advisor.
Amanda Vaught (00:16):
And I'm Amanda Vaught, attorney and financial advisor, both Emily and I are co-owners at propel financial advisors.
Emily Agosto (00:25):
Propel financial advisors is an investment management and financial planning company. We are fee only fiduciaries and independent registered investment advisors. I'm based in Chicago and Amanda is in New York city, but we work with clients nationwide.
Amanda Vaught (00:39):
The purpose of our podcast is to explore personal finance topics, including budgeting, investing, behavioral, finance, current events, and other helpful information. We also hope you'll get to know us along the way.
Emily Agosto (00:54):
Thanks for listening. Hello Amanda.
Amanda Vaught (01:00):
Emily Agosto (01:01):
How are you?
Amanda Vaught (01:03):
I'm really good. Excited. It's August. It feels like getting into the lazy days of summer, but we can't be so lazy that we don't record a podcast episode, right.
Emily Agosto (01:18):
Yep. How was your weekend?
Amanda Vaught (01:20):
Oh, it was really fun. I got to see an old friend and who was in town visiting, and then we threw a birthday party for my oldest daughter and she just turned seven and she had a lot of fun. So awesome. How about, how about you?
Emily Agosto (01:37):
Yeah. not too much going on over here. My husband and I watched all of the bear over the past couple weekends and it definitely lives up to the hype being in Chicago, I've read so many things about like so many criticisms about some of the sets signs and whatnot, but I don't know I'm enjoying it, but I've, this is also I'm coming from as someone who has never worked in a restaurant.
Amanda Vaught (02:04):
Yeah, no, I just I've been watching it too, so I haven't seen the, the last episode, but I think it's sort of funny, like the, the nos to Chicago, like the giant mall, Lord billboard. Mm-Hmm like, oh, are you in Chicago? Oh, right. How could I forget the, my Lord billboard? You know? Yeah. I do think, you know, a lot of the criticism and talk about it has been either about the Chicago setting or the food, or, you know, the, the trauma that people have experienced in the show. I don't wanna give too many details or spoilers for people who haven't seen it, but, you know, as financial advisors, you know, what do we notice the, yeah, the, the dire straits that the business is in, you know?
Emily Agosto (02:53):
Yeah. For sure. Like all the, the papers and the mislabeled files in the office and like, oh my gosh, gosh, how are they? They're gonna get audited. What's gonna happen.
Amanda Vaught (03:02):
Yeah. Emily starts twitching when she says that. Right. totally. Yeah. So but that's sort of a nice lead in to what you wanted to talk about today is, you know, the finances of small business owners or freelancers, there's a lot of overlap. Wouldn. You say different financial issues, tax issues that come up.
Emily Agosto (03:27):
Definitely. And it's really hard to be a business owner. I mean, you can't, you're good at what you do. You're good at your business and you are not expected to know everything about like what the best formation for your business should be the best legal formation that is, you know, how to keep track of your income and expenses. What even is an expense for you specifically. Mm-Hmm , there's just, there's a lot.
Amanda Vaught (03:52):
Yeah. Yeah. And like the, the chef on the bear right. Is very accomplished. Chef mm-hmm and then you see him working on the books and you're just like, no, go be a chef stop. Yeah. Hire someone this is not your forte. Right. So exactly.
Emily Agosto (04:13):
Yeah. So why don't we start talking maybe a little bit about business formations.
Amanda Vaught (04:21):
Yes. sure. I don't think we don't know on the bear what kind of business they are,
Emily Agosto (04:27):
Amanda Vaught (04:27):
Emily Agosto (04:30):
Oh, now I really wanna know. But anyway, typically if you are a freelancer, so if you're someone who gets a 10 90 from from whatever company you're working for, or multiple companies you're working for, you're technically a small business owner. And if you're not legally set up in any way, then you are called a sole proprietorship. So if you haven't like filed any kind of LLC with the state you live in or are doing business in or any kind of corporate documents, then that's the category you fall into. And that's a good category for a lot of people or from very small businesses. It's very simple. It's not complicated. And
Amanda Vaught (05:15):
And don't need anything more than that legally or, yeah. Yeah. So that would cover what people who will, maybe they have a full-time job and are doing some work on the side.
Emily Agosto (05:27):
Amanda Vaught (05:27):
That could cover people who had a full-time job and then quit to become a consultant mm-hmm might not need us business structure. What else? Somebody's selling stuff on eBay,
Emily Agosto (05:43):
Right? Yeah. I was gonna say someone sell a reseller or someone like making art and selling it on Etsy, things like that. Mm-Hmm
Amanda Vaught (05:50):
Emily Agosto (05:52):
If it's more of like a side income thing the, the legal formations are LLCs S CORs partnerships and C CORs. And so the next level up kind of, I like to think about it from sole proprietor is an LLC. And if you're the only owner of the LLC, that is a single business, or sorry, a single member LLC. So if there's only one owner, you're technically a separate entity established as an LLC in your state, but it's treated pretty much the same as a sole proprietor in terms of accounting and taxes. It's a very uncomplicated way of running your business a very simple way. And I always think it's a good choice for a lot of people, especially starting off
Amanda Vaught (06:41):
Mm-Hmm . Yeah. And then what do you think of as the more, another more advanced kind either a C Corp or an S Corp? I think they're,
Emily Agosto (06:51):
Yeah. S-Corps and C Corp are very different and I don't even get into all the details here, but I think S CORs can be the trickiest, especially for someone just starting out. I hear a lot of people just being told by a lawyer or another accountant or a CPA saying, oh, just open an S Corp. And I'm not sure why you see it a lot. And a lot of times it's right.
Amanda Vaught (07:16):
I don't know what this is. Maybe it used to be good advice
Emily Agosto (07:19):
Maybe, but it they're just usually a little more complicated than you need them to be. If there's just one owner, there's really not a lot that it doesn't make a lot of sense to me as a CPA. When I see my client's books, it's saying like, it's overly complicated, it's more expensive to manage. You have to do your own, it has to have its own separate business tax return in addition to your personal tax return. And on top of that, your personal tax return is connected to the business tax return through a K one, which is a form that your income shows up on. And we don't have to get into all those details either. But it just, I don't know. I think it, it makes things a lot more complicated than necessary
Amanda Vaught (08:03):
Mm-Hmm yeah. Especially for a small business owner. Right.
Emily Agosto (08:06):
Exactly. Yeah. Let's see. So
Amanda Vaught (08:11):
Right about partnerships. Oh no. Did you wanna go over C cor next?
Emily Agosto (08:14):
Sure. So C Corp is obviously it's own entity. That is usually a better choice for someone with employees or with a business that you really want to be completely separate from your personal it's. It's a nice way to organize things because with an S Corb or a partnership, or LLC, or even as a sole proprietorship, all your taxes for your business and personal are intertwined. So if you really want that separation, then a C Corp could be a nice option.
Amanda Vaught (08:47):
Mm-Hmm okay. And, and what about partnerships? How does that fit in?
Emily Agosto (08:52):
Yeah, so partnerships are kind of the most complicated, so that is in my opinion. so if you have an LLC with more than one owner, so if you're not a single member, LLC, you're automatically considered a partnership. And there's so much more to keep track of with a partnership. So those can often go off the rails if you're not really careful from the start about recording every single every single transaction. So if you're considering starting up an LLC definitely talk to someone, talk to an expert, a financial advisor, a CPA mm-hmm multiple, even because one might suggest one reason or one way to go and one might suggest another. And so it's important to know what you're getting into
Amanda Vaught (09:39):
Mm-Hmm . Yeah. And I think, you know, there's nothing wrong with getting a second opinion. Usually you hear that in the health field mm-hmm , but in the financial field, you can easily get a second opinion as well.
Emily Agosto (09:50):
Amanda Vaught (09:51):
Yeah. So, okay. So that covers sort of the basics of different types of businesses. And what do you think if you set up your business and then you decide later, like, oh, maybe I shouldn't be a C Corp anymore. You know, how hard is it to switch to something else?
Emily Agosto (10:11):
Yeah. Well, it's gonna be different for every business, depending on how many accounts you have, like, like, like banking accounts, checking accounts, credit cards, things like that. How many transactions you have, what your E is tied to your E is your employee identification number. So it's like a, or sorry, employer identification number. It's like a social security number for your business. So more often than not, if you're thinking about changing, you should probably start the process like halfway through the year. So if you're like, okay, I'm a set up as a C Corp, but I actually wanna be an LLC start talking to people in like June or July to get your C Corp closed out by the end of the year, and then start fresh with your new business on the first of the calendar year, that's usually the best and easiest way to way to go about that change.
Amanda Vaught (11:04):
Yeah. So I just, it's not impossible to change. Right. If you have made a mistake or your business really significantly changes and a different structure might fit better.
Emily Agosto (11:18):
Yeah. But just don't try to rush it all through. Cause it can be very complicated.
Amanda Vaught (11:22):
Yeah. Yeah. Okay. cause some of these, you know, we wanna get into saying, oh, if you have a small business or you're a, a solo person, you wanna have a really good financial foundation that will really pro like give your business room to grow
Emily Agosto (11:38):
Right now, set yourself up for success in, in all ways.
Amanda Vaught (11:42):
Yeah. And some of these are things that are fixable, if you do mess something up and some of them are a lot more difficult to fix. So I think the business structure, ideally you get it right from the beginning, but mm-hmm if you don't, it's a thing that you can fix.
Emily Agosto (11:58):
Yeah, definitely. Yeah.
Amanda Vaught (12:01):
Okay. And then as far as paying yourself depending on how you're structured, that's at the end of the day, what we're trying to do, right. Make some money, pay your bills, you know? So how do you pay yourself out of your small business?
Emily Agosto (12:18):
Okay, good question. So if you are a sole proprietor or a sole member, LLC, you and your business are pretty much the same, so you can just take money out as needed and put money in like, so if your business account doesn't have enough to cover a rent payment or some kind of bill, you can always transfer money directly from your personal to the business. And then likewise from the business back to your personal, just keep a good record of that. One thing I was gonna mention is that for any business, how, no matter how small, I think it's really good advice to get a separate checking account and maybe a credit card specifically for the business that you only use for business expenses and to put your business income into, and you know, at first you can't always do that, but that is like the number one thing I would tell someone to keep it all separate.
Amanda Vaught (13:10):
Yeah. I think that's just such a good point that we should spend a second on it because talk, talking about setting your business up for success. That is something that's not that hard to do that really can lay a good foundation that makes doing your books easier, you know, doing if you grow and you need to get a small business loan later, it helps you get a credit established as a business owner. There's just so many positive things that come out of just that little thing, getting a credit card, getting a separate bank account for your business.
Emily Agosto (13:44):
Amanda Vaught (13:44):
Sure. But if you're just, you know, doing side hustle, you can. Yeah. Yeah.
Emily Agosto (13:50):
And you have everything all in one place. So at the end of the year, when it's time to do taxes, you don't have to weed through all of your accounts and figure out which ones were business and which ones were personal. It's just all in one place. And especially in the event of an audit, you wanna have everything as like clear and clean as possible.
Amanda Vaught (14:07):
Emily Agosto (14:09):
Not to go back to the bear, but there is an audit moment that , I was like, that's not what would actually happened, but anyway, mm-hmm, those boilers it's about payroll.
Amanda Vaught (14:20):
Yeah. You gotta keep those books organized. Right. For sure. Especially if you have employees.
Emily Agosto (14:26):
Yes. So that's a good segue into how you pay yourself if it's a partnership or anything with multiple owners or an S Corp. So let's talk about partnership really quick. That is, there's lots of different ways to pay yourself as a partner. And I don't wanna get into too much, but if you are in a partnership that you're actually performing work for the partnership, there's something called guaranteed payments, which is you getting money for the work you provided to the partnership. I don't wanna get you into this because there's so many partnerships set up just as like pass throughs. So that's not, we're not talking about like investment partnerships or anything like that. But I'll just leave it at that for now, for us corpse again, if you're working for the company. So if you're providing services as an employee of the company, even if you're the owner, you, there is a IRS rule that you need to be paid a reasonable salary for that amount on a W2.
Emily Agosto (15:26):
And this is super important. And I see people, I see this not being done a lot and it drives me a little bit crazy. But so from the IRS's side, like in their eyes, if you are receiving, let's say a $20,000 salary, but you're the only person working at the, at the company, they're gonna say, well, is that really a reasonable salary for the work that you're doing? So you need to be really careful to, to make sure you're running payroll in a way that you know is appropriate. And of course, if you have employees of the S Corp, those people also need to be paid through a W2. Let's see. And when we go into C cor, if you're an owner of a C Corp, you can always be paid by a W2. And if you have employees you're paid by W2. So that's kind of the most I dunno, I like that one. It's very clean and simple. There , everything goes through W2. You don't have to worry about any kind of direct owner payments there
Amanda Vaught (16:25):
Mm-Hmm . Yeah. And then that gets into a little bit about the difference between an employer and their role and an employee and their role, cuz it's two separate legal entities and I'm thinking of like a small business or a freelancer. Sometimes you have your employer shoes on and sometimes it's the employee shoes. And when you're thinking about taxes or business formation, you know, you gotta figure out which one we're dealing with.
Emily Agosto (16:58):
Yeah, definitely. So it, we're kind of trying to focus more on someone who is maybe both employer and employee. Right. And all these examples.
Amanda Vaught (17:06):
Yeah. so do you wanna talk a little bit about self-employment tax for somebody who is the employer and the employee?
Emily Agosto (17:20):
Yeah, that's a good one. I know we were talking about the bear, but another semi recent show that's been on that's been popular is that Luva road documentary. I think it's on Amazon
Amanda Vaught (17:33):
Lu the rich
Emily Agosto (17:34):
Lua. Rich. Yeah. So I don't know if anyone, if you've all seen this, anyone listening, but basically it's a company it's like an MLM type of scheme where these people are roped into purchasing all this product. And in this case it's leggings and then they need to sell them at a profit and they get to keep all the money. So it was like selling this like, oh, this is your own business. You're gonna be a boss, babe, whatever mentality. And so all these people who became Lula rich or sorry, LuLaRoe sellers mm-hmm
Amanda Vaught (18:09):
Emily Agosto (18:10):
Would get their income on a 10 99 from the company. So they were yes, their own technical, small business owners, but they need to report this money as self-employed income. So they're not receiving a W2. And if anyone's ever spent a lot of time looking at your W2, you can see the different boxes like box one is your earnings box. Two shows your federal income tax withholding. And then there's several more boxes that show FICA or social security, Medicare wages, things like that. So we usually don't spend a lot of time analyzing what all those are just like, oh, there goes my money, whatever mm-hmm yeah. When you are paid on a 10 99, there's only one number it's just your straight income number. So you are responsible for not only your own personal taxe withholding, but you're also responsible for the F taxes on the employee side and the employer side.
Amanda Vaught (19:11):
And then just for non-tax people F I a would be social security,
Emily Agosto (19:17):
Social security and Medicare,
Amanda Vaught (19:18):
Medicare, right. Because you're in the employer's shoes. And so a lot of people don't realize the employer covers some of those taxes when they hire you and pay you through a W2. And when you're paid through 10 99, you become the employer mm-hmm and you become responsible for the employer side, right?
Emily Agosto (19:36):
Yeah. Right. So again, like no one loves paying taxes. This comes up all the time, but you're doing yourself a favor, cuz you're paying, you're still paying into social security and Medicare. So if any tax could be deemed as good, I think the self-employment tax is something you should be like, okay, I know I gotta pay that. Like, that's just how it goes.
Amanda Vaught (19:55):
Yeah. Yeah. And I just, you know, you meet people who switch to freelancing or consulting after leaving a full-time job. And they say, oh, I make so much more money. And you're like, yeah, I, in a way but you
Emily Agosto (20:10):
Amanda Vaught (20:11):
Yeah. Such a different tax situation that it's really not a one for one comparison when you, when you cash that paycheck, you know?
Emily Agosto (20:21):
Amanda Vaught (20:21):
You guys still get a lot of taxes to pay out of it.
Emily Agosto (20:24):
Amanda Vaught (20:28):
So do you wanna go, I know I wanna talk about retirement accounts, but let's touch on business expenses.
Emily Agosto (20:37):
Amanda Vaught (20:38):
And keeping track of your books really quick before we go. Okay.
Emily Agosto (20:41):
Yeah. So going back really quick to like the LuLaRoe person who is getting paid on a 10 99 and someone else who is a W2 employee when you have that, w that, sorry, when you have that 10 99 income that like just one box amount, you can take certain deductions that are appropriate for your business to re to get to your net income, which is what's ultimately taxable. So let's say someone on a 10 99 gets, you know, $50,000 or a combination of 10 90 nines. It's $50,000 that all flows through to a tax form called the schedule C. And on that schedule C there's some sections where you can put in your expenses. Like if you are at one of these LuLaRoe people, then you would put in like how much you paid for the leggings as like a cost of good sold. Amanda was saying earlier, like if or how people pay for, I'm sorry, how people sell those leggings, they might do like Instagram parties or things like that, or try to sell them via social media. So any kind of like video equipment or a portion of your phone or special lighting, some of that could technically be deductible on your tax return potentially.
Amanda Vaught (21:56):
Yeah. Or I know people still do those, maybe not with the leggings, but any of those MLM type of operations, they have, you know, Tupperware parties and yeah. You know, if you buy food and drinks to hand out at the party, you know, wouldn't, you consider that part of a business expense.
Emily Agosto (22:13):
Yeah. That could be, if it, you know, if it's appropriate to your business. So things I look for when I'm doing people's taxes, if I'm doing your small business return and you're someone who's a real estate agent and you have a bunch of like equipment that you've purchased, I would definitely question that because real estate is a service based industry and it would be really strange if you had a lot of just like office equipment or things of that nature.
Amanda Vaught (22:39):
And then some things right. Can be sort of a mix. So yeah. Say you buy a car and you need your car to go to different homes to show people at different showings, but you also use the car for personal use. You can deduct maybe a portion of that expense for your business.
Emily Agosto (22:59):
Yeah. Right. That's a really good one to bring up on mileage, if you use your car for business and personal the IRS has really been cracking down on mileage deductions for self-employed individuals. And so it's really important to keep a log. Like I just use an app. I think my IQ is a popular one. I sh I think there's a couple, I don't actually know I haven't used them, but you need to have some sort of log to show that you're actually driving to these places and they're actually for business.
Amanda Vaught (23:30):
Okay. That's good. Yeah.
Emily Agosto (23:32):
But yeah, in general, you know, like we said, have that separate checking account, separate credit card. If you have a lot of transactions, something like QuickBooks would be really good for you to just keep everything organized.
Amanda Vaught (23:47):
Also what we get an EIN number, right. Which takes like five minutes on the IRS website. Yep.
Emily Agosto (23:54):
And you can get one, even if you're just a sole proprietor so that you don't have to provide your social security number to employers, if you're working for lots of different employers, you know, you might not want that floating around mm-hmm oh. And the last thing about expenses and things like that. And accounting, so a lot of people say deductions expenses and writeoffs as the same thing, and that's fine. But if you wanna talk about like specific tax deductions for self-employed individuals that would really pretty much just be like the self-employed health insurance deduction. What else? There's a thing called the QBI deduction that I won't get into too much. And then that kind of brings us into retirement planning, deductions
Amanda Vaught (24:47):
Yes. Fun stuff. Right. nothing gets people excited, like the phrase retirement planning, I tell
Emily Agosto (24:55):
Amanda Vaught (24:56):
. But it, I mean it's important, right? Because that's what you're gonna need when you're older. And if you don't take care of it, you're just gonna really mess yourself up. So if you are used to working as a full-time employee, you can set up a 401k through your work, and it's an automatic deduction outta your paycheck, and it just comes out and it's just sort of taken care of if you are not working full time, you really need to set this up for yourself. And so for a lot of people, I think it's just, you know, you hear the word retirement planning and you're just like, oh my God, I don't even know. And then you don't deal with it. Mm-Hmm . And you know, that is not great either. So, you know, you have several different options. So I don't wanna get into the weeds too much on what they are, because it really depends on each person and each business, what is the most appropriate type of retirement account you can use?
Amanda Vaught (26:00):
Mm-Hmm but they go from fairly straightforward, open a Roth IRA or a traditional IRA that could be appropriate if you're have like a side hustle or a small amount of income on the side mm-hmm , and you could put extra money in a retirement account that you just open as an individual. But as far as accounts that you can open through a, through a business, that would be a step IRA where a step is stands for a self-employed person, a simple IRA, which is more for a small business owner or what's called a solo 401k that's for people without employees. So de sort of, depending on where you fall, one of those might be appropriate. There's a few other options out there you can use as well. But these can be really great from a retirement planning perspective, but also from a tax planning perspective, because if you take the money out of your business and put it in your retirement plan this is earlier where I touched on you, you have the role of employee and the role of employer. And so when you have these retirement plans, you can be essentially matching your contributions as an employee, as the employer. So it's almost like paying yourself double depending on the type of plan. There's
Emily Agosto (27:31):
Like a little bonus.
Amanda Vaught (27:32):
Yeah. A little bonus. And this, you can take off your taxes cuz it reduces your gross, your gross income. Right. Which for people will lower their tax bill in general.
Emily Agosto (27:46):
Yeah. And some people can use a combination of retirement plans as self-employed individuals. They all just have like a little bit of a better advantage. Well, the three you mentioned specifically the solo 401k in SEP just all have their own benefits for the business side of things and for the employee side of things. Mm-Hmm
Amanda Vaught (28:07):
Emily Agosto (28:07):
Yeah, so definitely, and a lot of people don't know about 'em so
Amanda Vaught (28:11):
I know, and that's sort of surprising mm-hmm I mean but you know, we set up these retirement savings plan for our small business clients and I think a lot of people like it and also their employees really like it. Yeah. If you're a small business, you know, they like feeling like they're, you know, part of this retirement plan and they have somebody, their employers looking out for them. Yeah. And so in like a tight labor market that can help with your recruiting efforts to say, we offer this benefit or, you know, I know the state of Illinois recently passed a requirement that you have to offer a retirement plan as a small business owner. I can't remember. I think you have to have 25 employees. Mm-Hmm so if you're really small, you don't have to have one, but you know, there could be different state requirements where you live so that you need to be aware of as far as these plans too.
Emily Agosto (29:08):
Amanda Vaught (29:10):
So hopefully that wasn't too much boringness about your plans.
Emily Agosto (29:16):
I know there's so much to consider. We could probably do an entire episode on like an S Corp on an LLC on a C Corp. So yeah, definitely reach out with questions if you have any, or if you've watched any good documentaries or shows featuring a small business.
Amanda Vaught (29:32):
Yes. I know I was gonna say on the LuLaRoe legging show, I mean all of, or any MLM, the vast majority of people who join those operations lose money.
Emily Agosto (29:43):
Amanda Vaught (29:44):
So, you know, if you're doing a true profit and loss statement and you pay in $5,000 to buy whatever the stuff is, mm-hmm and you only sell $3,000 of it, you're making negative income. Right. And you're just putting yourself in, into debt. And so people who keep track of their books and track their expenses, right. Mm-Hmm following Emily's tips of getting your own separate account for these things. Still see that and realize, okay, this is not working.
Emily Agosto (30:17):
Amanda Vaught (30:17):
Faster than somebody who's just like only looking at their 10 99 checks that they're getting in from LuLaRoe or whatever operation it is, you know?
Emily Agosto (30:26):
Right, right. Yeah. And some people, you know, there are a few people that do make money on these things, which I think why they're keeping perpetuated, but yeah. The statistics are not in most people's favors.
Amanda Vaught (30:38):
No. Yeah. And what if you're, what if you're the bear, you know? Yeah. What if you're a small business owner and you're really trying to get out from under some kind of financial problem mm-hmm what would you tell him to do Emily?
Emily Agosto (30:55):
Well, I would tell him to hire a CPA get QuickBooks, have someone go through all those files and get 'em organized.
Amanda Vaught (31:03):
What if he says, I can't afford that.
Emily Agosto (31:06):
That's that's a tough one. Sometimes you just need to invest in an expert to help you because in the long run, it's just gonna cost you more. Like if the IRS comes and performs an art audit on you and you're not ready for it, then you're gonna have to hire a CPA anyway, to help you get through it. So yeah. I mean, I know it's hard, but you gotta kind of find a way or at least start doing the research, start getting some start somewhere.
Amanda Vaught (31:30):
Yeah. Yeah. Don't just like put your head in the sand and think the problem's gonna go away, you know? Yeah. Which I don't think that that character was doing that, but it sounds like his, the prior owner before he inherited the business right. Was looking the other way on a lot of things financially, which just leaves other people to deal with your problems.
Emily Agosto (31:51):
Amanda Vaught (31:52):
Right. So mm-hmm, be kind to yourself, right. If you're in that situation and, and just do what you can.
Emily Agosto (31:59):
Amanda Vaught (32:01):
Emily Agosto (32:01):
One's gonna yell at
Amanda Vaught (32:02):
You. Yeah, yeah. No, right. Cause I just want, you know, we're as much as we say, you should do this, a lot of people are not gonna listen to us. right.
Emily Agosto (32:11):
Well, I hope someone does or at least considers you know, like maybe thinks a little more talks to a few more people before they just yeah. Really nilly. Oh, I wanted say one more thing. I know we're kind of wrapping up here. Yeah. But if you own a rental, you're technically a small business owner that should all be separate going through a different account. That would
Amanda Vaught (32:32):
Be you own a rental property.
Emily Agosto (32:34):
Ideal a rental property. Yes.
Amanda Vaught (32:36):
Emily Agosto (32:36):
Okay. Or if, you know, like you rent out part of your home at some point cause I know, I feel like that's been more of a thing now with Airbnb and it's just never been easier to have a rental property.
Amanda Vaught (32:49):
Oh, okay. Yeah. It sounds like you've been seeing a lot of that come up.
Emily Agosto (32:52):
Definitely. So keep everything clear, clean as much as you can while you're going through the process, instead of trying to do it all at the end of the year and then like making your CPA, cranky
Amanda Vaught (33:07):
Mm-Hmm . Yeah. And that's what I was gonna circle back to. If you listen to anything we say, keep your CPA happy
Emily Agosto (33:14):
Amanda Vaught (33:15):
Yes. and you'll be okay. They'll take care of
Emily Agosto (33:19):
You. Yes. We wanna help. Yes. All right. Well I think that was a lot of information. I
Amanda Vaught (33:26):
Know we covered a lot today. I think we went a little over on our time, but hopefully it will help someone.
Emily Agosto (33:31):
Yeah. Or spark some conversation. All right. Well thanks, Amanda. And I will talk to you next time.
Amanda Vaught (33:39):
Okay. Emily and I hope you go out for a nice Italian beef sandwich and a shot of Mallor soon.
Emily Agosto (33:45):
Oh yeah. So what we do here down in Chicago.
Amanda Vaught (33:49):
Emily Agosto (33:58):
For all links and resources mentioned today, head over to connecting the dollars.com. Thank you for listening.
Amanda Vaught (34:06):
This podcast is for informational and entertainment purposes only and should not be relied upon as a basis for investment decisions. This podcast does not engage in rendering legal, financial, or other professional services.