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Conquer Tax Season: Shannon Weinstein's Step-by-Step Strategies for You & Your Family
Episode 6313th June 2023 • Momma Has Goals • Kelsey Smith
00:00:00 00:44:50

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Today I'm thrilled to be joined by the incredible Shannon Weinstein, an expert in tax strategy and financial management. Together, we dive deep into the world of money mindset and explore practical strategies to help moms and individuals achieve financial success.

We kick things off by discussing the importance of adopting a proactive money mindset. It's best to start your tax preparation early and create an intentional plan. Moving forward, we delve into the realm of organization and how it plays a pivotal role in financial success. Shannon shares valuable insights and tips on organizing your finances and staying on top of tax responsibilities. With these effective systems and routines, you empower yourself to make confident financial decisions and reclaim control over your financial future.

Throughout the episode, we also touch on the importance of nurturing a positive mindset when evaluating hiring options, setting yourself up for tax success, and cultivating financial conversations at home. By shifting your perspective and embracing an abundant mindset, you can unlock hidden opportunities and create a prosperous financial future for you and your family.

What you'll hear in this episode:

[3:20] Where do you wish more people had started with their tax prep?

[8:10] How to get organized when it comes to taxes.

[15:50] What are some of the best practices when it comes to accounting?

[21:00] What is the one way to evaluate hiring your kids into your business?

[25:40] Benefits as a business owner or an individual to set yourself up for success tax-wise.

[30:15] The importance of tracking how your money is coming in and going out.

[35:55] If you don’t want your accountant to do tax planning, then find someone else who will.

[40:20] What parents can do in the home to help implement better conversations around finances for their children.


Follow Shannon: @shannonkweinstein

Check out her podcast: Keep What You Earn


Follow Kelsey: @thisiskelseysmith

Follow Momma Has Goals: @mommahasgoals

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Learn more at

Join our text list. Text "Goals" to (707) 347-0319


Speaker 1 0:00

I always say like building a strong foundation is everything and that involves getting your mind right, which I think we kind of went through is like getting your mindset for like, you own a business. You have responsibilities like you have this thing you got to take care of it like on your identity as a mother on your identity as a business owner, like you are a business owner, you are here. This is part of your title now, you have to embrace it and own it.

Kelsey Smith 0:21

Let's reimagine mom life together. Mama house schools is your hub for relatable support and helpful resources that help you fuel yourself alongside motherhood. Your identity is bigger than mom, in whatever your goals are. Together, we're making them a reality. Knowing your money and how to manage it is a skill set that everyone can always improve on, and there is no limit to being better at it. It's also something that we aren't super equipped with, from school from our parents just life. It's a necessity that we're not typically really taught. And our guest today Shannon Weinstein is a CPA and fractional CFO for growth minded business owners. While she's a teacher at heart, her real life relatable examples simplifying the financial side of business so that she can help others stop stressing and start scaling. This conversation is bigger than business today, we talk about how to tap into your finances as a parent, just as a person how to know things that you should know about how to save money, how to do things differently, how it relates to maybe sponsoring your kids activities, or how you can just be better with your money and things to ask your accountant as a business owner or as not. Shannon is the host of IRS, his least favorite podcast, keep what you earn which consistently ranks in the top 100 and entrepreneurship. Shannon is also a frequent speaker in business coaching communities and masterminds. She's also just such a great human, she is fun. We really have a fun play on the balance between motherhood and finances and accounting and where they overlap. Today, Shannon shows up volunteering for different programs like the junior achievements Association, and her husband split time between Costa Rica and her home up in Connecticut. I cannot wait for you to hear this episode. Shannon, I'm so excited to have you here. We have crossed paths in my entrepreneurial journey. And every time I see your face your smile, your energy, your puppet, I'm like, Oh my gosh, I love Shannon. I love everything about her i plus,

Speaker 1 2:29

oh my God, my puppet I hate like, you know the puppet. I'm like, oh, yeah, we go back.

Kelsey Smith 2:34

Yeah, I love the puppet i and just say my favorite people are the people that come with like heart and energy, but also like knowledge packed in. And every time that is what you bring to the table. So thank you for bringing it to my audience here today.

Unknown Speaker 2:48

Thank you so much for that, I appreciate it. That's what we're trying to do.

Kelsey Smith 2:51

Amazing. So let's dive in and just talk about the benefits of having a business and you know that the majority of our listeners are parents. And I remember the first time someone told me they're like, Well, are you paying your kid for your pictures on Instagram? Or are you paying your kid for this? So let's dive in start there about hiring your kids into your business.

Speaker 1 3:13

Yeah, so hiring your kids into your business is one of my favorite tax strategies we implement with clients, but it is also one of the most work intensive. So what you may have seen on the tick tock the Instagram that whatever, right, you're gonna see a 32nd thing saying, you know, you can hire your kids and pay them 13 grand a year. And you can do this. And you can do that. And it's amazing. And they're not wrong. But it's incomplete. Because they have 30 seconds to tell you how amazing it is. And then the work comes to actually do it. And we find that there are a lot of entrepreneurs, a lot of business owners who are parents who actually look at this and go, wait, I have to do an employment agreement. And I have to run payroll and have to pay for the payroll system. And I have to issue them a W two and I have to and I have to, and then they look at it and go, and I can I really can only pay them about 100 bucks a week or 100 bucks a month, given the fact that they're you know, six years old, and they can only do so much work, right. So they they kind of you factor it all in and you realize this really isn't what I thought it was going to be. And the benefits don't outweigh the costs for me in terms of my time and my money. So a lot of times it actually doesn't benefit people. And I know that's such a funny thing for me to say like I will always advocate for tax strategies. But it has to make sense for your situation. And I think it's content context is everything and the circumstances around how you're doing it. So I just want to put that out there as like a hey, disclaimer, fine print underneath all those tiktoks that are out there saying this is an amazing idea which it is when you can pull it off.

Kelsey Smith 4:40

Yeah. I love that. And so sometimes when we think we want to start a business, we jump in with like you said, we see these things online and we're like, oh, that's a tactic I'm gonna follow. Oh, I'm gonna go do that. So I purposely jumped into that question without asking your background because I feel like that's how people get into their tax techniques with their business. So instead of jumping On the flashy ideas of hiring your kids into your business, or just asking that specific question to your fractional CFO, let's take it back and talk about how you got started. And really where you wish more people started when they talk to you about their tax prep.

Speaker 1 5:15

I love that question. Because that makes me think about, like, where I wish people had started. That's interesting. So, I mean, my background is I'm a CPA, fractional CFO, I do implement tax strategies for my clients in a very practical way. And let's see where I wish people would start. I guess I'm going to interpret it this way and say, I wish people would not wait until they're making a bunch of money to start wanting to organize that money and start saving in taxes, because that's something you can do from day one. It's kind of like when you have kids, and you're telling them to eat their broccoli, their vegetables, and they're like, No, I don't need to yet. My hip isn't going out yet. My bones are still good, right? But it's like, but the habits you're forming now dictate what your life is going to be like later. So if you're not if like your kids don't develop the habit to brush their teeth, eat their vegetables, do whatever, right? Like take a shower, take a bath, take a shower, right? It's gonna be so much harder to get them to do that later. Because it's not built into the habit. The flow state the this is just how it is like, this is what we do, right? So I want more business owners to adapt habits into their lives early on in their business ownership journey so that it becomes second nature and they don't even think about it.

Kelsey Smith 6:29

And you focus with primarily online business owners, is that correct? Correct. Yeah,

Unknown Speaker 6:34

online and service. Yep.

Kelsey Smith 6:35

And how did you get into that area?

Speaker 1 6:37

und tax time. Like I got this:

Kelsey Smith 8:12

Yeah, and everyone is so grateful for you. And like we said, when we jumped in, I think that people come to the table with two different things when they start their businesses, when it comes to taxes. It's the Oh, no, I'm so scared. How do I prep for taxes? And the, how can I just write everything off? And it makes me think of that TV show where the sun's like, it just is a write off. And the dad's like, well, what? Yeah, it's crazy. It's crazy. It's like who's gonna pay for the right off? People, the right people. So I feel like people fall into two different buckets, where they're like, terrified, and they're like, just writing everything off. So you, I feel like you gave a great answer to the where to start is to get organized, because one, you shouldn't really be in either bucket, like you shouldn't be terrified, and you shouldn't just be writing everything off. But either way, you need to be really organized. So when someone's going to start a business, or they're kind of into their business, but they're maybe not utilizing their information and their organization to the best of their abilities, to let taxes not be a scary thing and work for them, but not overdo it. What are some best practices that you wish that your clients had in place?

Speaker 1 9:19

So I'm gonna go back to you, you just like basically mapped out a spectrum. And you were like, well, you're, they're terrified, or you're writing off everything, and I don't disagree with you. But I find the solution to both of those things is knowledge. That is the solution to both of those, and also to diseases states of being is if you are if you are fearful, you combat fear with knowledge, because then you're no longer fearful once you know the truth, because fear is just uncertainty manifested in fear. And then on the other side, it's, I'll just write everything off. And again, it's probably because you don't know the risks. So now we have to pull you back and say wait, here's the facts on the risks associated with what you're doing. Do you sure you want to go out and do that? It kind of this like, person who's driving 20 under the speed limit and 20 over the speed limit? Because they're afraid or because they're like, yeah, if it were, let's just keep going. And it's like, well, you could just like stay near the speed limit, like, there's an in between. But I feel like everyone kind of operates on the spectrum. And I'm glad that you brought that up. Yeah, that's a really good point.

Kelsey Smith:

And so you have a wealth of knowledge that's free on your podcast, or keep what you earn. And you put out five episodes a week, and we'll talk more about that a little bit later. But where's the other balance with hiring someone to take care of everything for you in you having your own knowledge? Yes.


So the metaphor I use for this is, and if you're driving this makes total sense is most people I say most business owners, especially if you're operating from that place of fear, if you're operating from that place of fear, which I think is the majority, and unfortunately, it's a lot of women too. And if you're operating in that place, what you're doing is essentially hiring someone handing them to the keys to your car, and saying, drive me. But not only that, you are jumping in the trunk and shutting it on yourself, and saying, I don't care what you take me, I don't care where we go, I didn't want to look out the damn window. You're in charge. Because I don't want to do this. I don't want to drive. Okay, well, then when you pop out of that trunk, and you are not where you want to be? Who can you blame. And there's the other side of it, which is the one who shoves the professional in the backseat and won't let them take the wheel ever, or won't let them actually navigate. So my perfect metaphor for this is you want to maintain control of the wheel. You want to put them in the front seat with the navigation and be like you tell me where to go. You tell me where the speed bumps are you tell me where the potholes are you telling me where the cops are. You tell me where where the speed traps are. So I can conduct myself in a way that takes me on the road, I want to go on and takes me to the destination I want to go to. Because if you if you relinquish all control, then you're going to end up in your document, have any idea where you're going, what direction you're heading, and where you're going, or when you got there. So you really want to maintain that control of the map and saying this is where we're heading. I want the most efficient and effective way to get there safely. Will you take me there? Yes. And that's exactly who you want to hire. And that's the hard thing to find. Because we tend to be overly trusting of people who seem smarter than us. Because somebody like you, Kelsey, I'll use you as an example. And I don't know if you can relate to this or not. It's like, if you were to hire Shannon, you might just be like, Yeah, tell me what to do. Like, I don't know, and like throw your hands up and go, I don't know, I don't know what's going on. And while I don't expect anyone to study accounting or become good at it, or become well versed in it, I want them to be along for the ride and looking out the window. I want them to hold on to the wheel and know where we're going where we've been. And pay attention to the to what's passing us the signs, just be present. All I'm asking is like be present and be with me on this journey. Because when you relinquish all the control, like we will never care about your business as much as you do. It's like handing your kid to a babysitter or a friend for the day. Like it's just not theirs. And although they will love kindly like they will do everything in their power, they they genuinely will care, they will never care the way you do. It's just a different. It's a different relationship. And that's that's what I tell people all the time and our business is not your baby, we don't want to use that exact metaphor on everything. But you know, when you're caring for your business, it's super personal, it's super oriented towards your goals, you created it, you created it of choice. And it's like, Please take care of this thing for me. And no, no accountant, no service provider on the planet will ever love it as much as you do.

Kelsey Smith:

Yeah. And it's a partnership, right. And I think, you know, using the analogy for kids, of course, there's differences. But there's similarities, like you've put so much time, energy effort and your life into this business that you're building. And even not even as a business, right? Like we all have to file taxes. So if this is just like what you're doing on your day to day you want your money to be cared for. So when you're showing up, you're showing up as a partner, a partnership and whoever you're hiring, if someone comes in, cleans your house, you're guiding them and what's most important to you, if someone comes in watches your kids, you're guiding them into how you expect things to be done when someone's caring for your child. Some parents have a different standard than others. So you can't expect that babysitter to come in and be the same babysitter for every kid. Just like your accountant is going to need you to be a partnership and drive and handle the wheel while they're navigating. So I love that analogy. Yeah, you


wouldn't. You wouldn't go to a babysitter, bring the kid to the babysitter's house and say raise my kid. Yeah. However you want to.

Kelsey Smith:

Yeah, they're gonna say hey, what times bedtime what time? What do they need to do before bed? What are the rules around here?


And you wouldn't go? Well, you're in charge. You're an expert. Yeah, that's such a really good analogy. I'm gonna start using that more.

Kelsey Smith:

No, it's so true. And I think that is something that I've learned a lot outside of accounting. But in any partnership in business, like other people that I've brought in that I've been like, well, what's your advice, and they're like, look, this is your business, like you got to, you gotta come in, give me what you want me to do. And I think that that's a mistake that people make early on in business, and actually very applicable to mistakes that people make in motherhood is when you have your baby, people are gonna give you feedback, but no one's walking the same motherhood journey that you are. So how you get your kid to sleep, how you feed them, what you choose to do, people have advice and feedback, but only you know, at two in the morning, what you need to do to get your baby to go to sleep, and whatever that looks like, or your teenager that you know, just totally threw you for a loop or whatever else, like no one's walked that journey. But you. Now that being said, there are best practices and the sense of like, Hey, these are some things that you can look out for with your teen. And this is the right way to buckle in a car seat. What are some of those things when it comes to accounting and like bookkeeping must use from the get go to make sure you're setting yourself up for success, like what is the right way to strap the car seat in when it comes to the accounting world.


I love that. I love that metaphor. We're gonna keep going with this. So my favorite things I always say like building a strong foundation is everything. And that involves the bookkeeping, that it also involves also getting your mind right, which I think we kind of went through is like getting your mindset for like, you on a business, you have responsibilities, like you have this thing, you got to take care of it, you gotta like, like own your identity as a mother on your identity as a business owner, like you are a business owner, you are here, this is part of your title. Now, you have to embrace it and own it. The other thing is having really good bookkeeping in place. And by that I mean collecting data. So so let's just say we're on like a health journey. This is my best comparison for this is, if you're on a health journey, you're trying to lose weight. And you're working with a nutritionist, right? What is the nutritionist inevitably going to make you do track your food, or or at least write down what you ate, or how you felt about it something something right, they'll make you journal something, you're going to do some type of homework every day, inevitably, now what ends up happening is they will take that data and then make decisions based on that data to say, Hey, we got to tone down the carbs, or, Hey, we got to turn up the protein, or, Hey, we got to do less of this, more of this, less of this more of this and turn those speaker dials, if you will, to see where we can get the right frequency to get you toward your goals like kind of hack your body in a way. Very much like a bookkeeper will collect the data, ask basically ask you to use your business bank account exclusively, which is really important. We want to separate personal and business finances and connect that business bank account to something like a QuickBooks or some type of bookkeeping tool. And ideally hire a bookkeeper to help you with this. But to collect your data and start organizing it, categorizing it, knowing how much you're spending on these different types of things so that you can plan you can budget you can allocate your spending. And then you're not really surprised what your bank account looks like at the end of the month, quarter year, because you knew exactly what happened along the way. Looking at your bank account is like looking at the scale. It's like that's the way in that's the metric for today. But how I got here was these all these decisions that I made along the way? And I say that good bookkeeping helps you turn the data into decisions.

Kelsey Smith:

Yeah. And now that's applicable to non business owners too, right? So while you specifically support business owners, everyone should be keeping track of their protein, carbs, whatever that is for your life, right? Where what are some ways that you recommend that the general person just understands where their funds are going? What are some things that people should really be keeping kind of a gauge on not just during tax season when they're filing their taxes, but things that you wish that the general person just had better habits around?


Well, I'm not one to advocate for a certain type of budgeting. And I don't work with personal finance or personal budgeting. So like, I tell everyone, you do you whatever works well for you. I always say whatever you can be consistent with consistently do it. But I say like, let's say tax time rolls around. You definitely want to be tracking certain deductions. So I would say talk to your tax professional. Literally ask them, What can I track better for you this year? Because if I were to tell you a blanket set of things, it would be overwhelming, because I give you like a laundry list of stuff that I would say turn around and talk to your tax pro. They will be super impressed by the way that you asked this question because they will they say I'm going to generalize and say they silently put up with everybody being unprepared every year. And if you you will earn so many gold stars, if you go up to your tax pro and you go How can I do a better job of tracking and being prepared next year, they will probably give you a hug and cry. So I would say ask them how can I how can I do better? Or what should I be is based on what my tax situation is? What are some of the things that I should be tracking On the year to make sure I don't miss anything for you. One example could be out of pocket medical costs. So for example, if you're a new mom, now, a lot of times your deductible will get exceeded or your like, you'll pay your deductible, you'll have the insurance kick in, but maybe not all of your stuff is covered by insurance, or you're paying a lot of out of pocket medical costs for co pays, and for prescriptions and other stuff. Then I have a lot of new moms I worked with this year who were like, Yeah, I spent a ton of money on out of pocket medical costs, because their insurance didn't cover everything. What ends up happening is when you have out of pocket medical costs, those can be deductible as what we call itemized deductions. So if you are spending anything out of pocket, meaning your insurance didn't cover it, then you want to keep track of that really well. It's really hard to do that. When you're spending money at like CVS, Walgreens, all the doctors like to find that in your bank statements. It's such a huge variety of expenses, you could be going to CVS and getting a card, Easter candy. Oh, and my prescription, oh, and this and that. So you really want to make sure you're keeping track of those those medical costs that could end up benefiting you if you're itemizing your deductions.

Kelsey Smith:

Amazing. All right, let's take it back to the parent kid business trifecta, right. So we talked about hiring your kids into your business and why that may or may not be worth it. And so if someone's thinking about wow, you know, I do use my kids for a lot of things. What is the one way for them to evaluate that? Like, should they bring in a professional to help? Or what is you know, because in some situations, it does make sense, right? We talked about that it might not. But when it might, what are the next steps for that?


There are lots of ways Yeah, and I don't want to discourage you from doing it. But I do want to like temper the heat of Oh, my God, I can hire my kid and pay them 14 grand like. So. In 2023, the standard, the standard deduction is $13,850. For a single filer, the standard deduction is the number of how much you can pay your kid tax free. And that number will change every year. So whatever year we are in listening to this, that, Stan, if you Google standard deduction for insert year, here, you'll find it, it happens to be right now it'd be 13,008 50, which is huge. So now what that means is I can pay my kid up to that amount tax free, if they make money from no other sources. So if your kid works at McDonald's down the street, like they can only make that much money tax free total. So you may want to basically back out whatever money they are making from other babysitting, other sources of income, part time jobs, and so on. But let's just say you have a kid that doesn't work, let's say excuse me, they're like 12 years old, or something like that. And maybe they're not working yet. You can hire them into your business, and do duties that are appropriate for their age and skill level. And that's a really key factor. So like, you cannot hire your care. 12 year old to be your Uber driver. You can't hire the four year old to be the Social Media Manager like you just can't do that. I mean, who knows? Now, I bet maybe a four year old knows how to use an iPhone, but but the fact is that you can't it has to be age appropriate and make logical sense that like you would sit across from an IRS agent explain the story and not make a smirk like, my kid does this. So you want to make sure that makes total sense. And then once you figure that out, you go, Okay, how many hours? Can they legitimately work? How much is this work worth? So like? How much is having a social media manager who works one hour a week worth? Like? How much would you pay in the open market for that person? And how much would you pay for someone with their skill level? So when you actually back into that, yes, it can be 13 850. But I think that you'll find that's more the case with the older kids or with the kids who can drive or the kids who can do more for your business. I always say it's under 18. Ideally, it's under 18. Ideally, it's over seven, because of social security laws and things like over seven generally has a better chance of getting hired without any pushback from the IRS, and under 18. So So I would say or maybe it's 18. And under, I have to double check. I'll double check it on my podcast. But he, when it comes down to is having an age appropriate skill appropriate job title for them. And you'll have to run payroll, you'll have to pay them do the W two and all of that stuff. So when all is said and done, like I was thinking the top of the episode, when all of a sudden done, you might be going, all they can really do is like print stuff for me. Okay, so how much could you actually pay them? Is it really worth going through all the trouble, but when it is worth it, it's huge because not only can you pay them up to that 13 850 You could then take six grand of that, at least as of this recording. You can take six grand of that and you can put it into a Roth IRA and the Roth IRA, not only because it's going in tax free, will grow tax free and be withdrawn tax free. So you put that money in when they're young and they will have gotten How much money by the time they graduate college, that would be like their first down payment on a house or their first few months rent on an apartment or whatever it may be. So you could really help them out by having them do a little bit of work for your business, and then paying them. It's one of the most rewarding strategies we implement, because it has that lasting effect to not only educate them about money, but to position them well for success in the future.

Kelsey Smith:

Yeah. And values and ethics around kids on social media separate from this conversation, but you can pay your kids to be your models and part of your content. Right. And that can be on a contract relationship rather than running payroll every week. Is that correct?

Unknown Speaker:

Can it Yes? Is it a good idea? No.

Kelsey Smith:

Okay, that's good to know. Let's dive a little deeper into that. Why is that?


Never hired them as a tenant and contractor? Okay, why? Because they're going to have to pay 15.3% self employment tax, because now you're saying they run their own business. They don't you want them as a payroll employee, if you want to avoid as many taxes as possible, you'll end up paying self employment, aka payroll taxes on the 1099. If you were to do that for them, and that would put them into more of a pickle, because then they'd have to claim a Schedule C business on the tax return, it would, it would complicate things, I would definitely and again, like, disclaimer, disclaimer, this is not individual tax advice, but I would probably not put them as a 1099. If you're simply hiring them into your business, the way I described in the previous segment,

Kelsey Smith:

amazing, such good info. Okay, so outside of hiring your kids, and outside of like traditional just business ownership, there are different things that come up that have to do with taxes with children, whether it's sports activities, or donations, sponsoring different children events, let's talk about some of the benefits as a business owner or as an individual, to set yourself up for success tax wise with those, let's call them opportunities as a parent. Yeah, so.


So basically, when it comes to like, let's say you're donating to your kids sporting organization, the drama club, like other light, and this always assumes, by the way, in this whole thing is that they are a registered 501 C three nonprofit, like they are a legitimate, you know, nonprofit entity. Because when you donate to a 501 C three nonprofit. And by donate I also mean by the way, you get nothing in return for that. So you're giving money to them getting nothing in return. Now, you can deduct those, those expenses or those donations as charitable donations, which is totally fine. That may or may not benefit you from a tax perspective, because you have to donate so much added to your out of pocket medical added to your home mortgage interest added to state and local taxes. By the time you add all that stuff up, it has to be bigger than the standard deduction, which I just mentioned in 23 is 13,008 50. Or it's double that if you're married. Right, so we're looking at what was it 2027? Seven from doing the math in my head? I don't know. You get the just double 13 850. So then what ends up happening is, you're like, Oh, so now I'm definitely not I'm only I donated 100 bucks here, I own my house outright, or I rent and I'm really not going to exceed that Shannon. So does this even benefit me. It may not. However, there's a little bit of like a, I don't want to call it a loophole, more of a workaround. If you're a business owner, then what I would encourage you to do is find opportunities to sponsor your kids events. And by sponsor I mean, in return for you spending money towards them, you're going to get an advertisement on their shirts on a banner on the program, on a sign whatever that is, or an announcement that says sponsored by keep what you earn sponsored by you know, Mama has goals. So in that case, what you're actually paying for a sponsorship, aka advertising. So that can actually just be a legitimate business expense. That goes as a deduction against your profit when you're paying taxes. As a business owner, which can have more benefit, it's more of a certain benefit. It's not a better benefit in terms of dollars, because dollars or dollars. But at the end of the day, you're more likely to get to claim that deduction if it's a business expense than if it's a charitable donation.

Kelsey Smith:

And one thing that people talk a lot about is that you can't deduct things until you're profiting. Can you talk a little bit about deductions prior to profit and how having your things organized matters, kind of regardless of where you're ending your year financially.


So deductions prior to profit, do you mean prior to revenue or prior to profit

Kelsey Smith:

prior to both? So when you first start your business, it's important at the very beginning to keep track of anything that could be considered a deduction, regardless of you have customers Yeah, or you're really profiting like So I know that I've talked to a couple of b&e business owners, and they're like, well, they think of a deduction of why profited here. So I'm deducting from my profit. And that's not actually how like the accounting world works. So it doesn't really matter if you're profiting or revenue is you need to have just like organized where you're spending money. So talk a little bit about that.


Yeah, I mean, regardless, you have to be tracking how money is coming in how money is going out. Like I said, the data collection is imperative, because how are you going to make decisions for your business if you don't know, the footsteps you've left behind, but in terms of deducting it, so if you are if you started a new business, and you have expenses, like setting up the LLC, hiring the consultant or coach hiring the lawyer, you know, getting the lemonade stand built, right, like paying for the lemons, paying for the pitcher or paying for the little thing, like paying for the signs, right? So I'm oversimplifying it, but it's basically paying for the advertisement. So you can start the business, but you don't have a customer yet. And for all I know, like you started a business like December 1, it's like, well, I didn't exactly have a ton of time to go make money, that's fine. But all of those expenses are still deductible. It's just that the way you deduct them will change depending on if you have any customers yet. So if you haven't had any customers yet, easy example. Let's say you started a business in December 2022. And you just paid for like lemonade stand, right? You paid for the lemons, you paid for the petrol you paid for the sign, you know, and you posted on social media, whatever, right? Now you're like, okay, no customers yet, because it's cold outside, at least maybe you're in California, I'm in Connecticut. So if you started lemonade stand in December, you're gonna be very sad. What ends up happening is all those costs. This is we're gonna get like, I always say, keep what you earn is the judgment in jargon free zone, but like, I'm gonna go take a little jargon in this one. And go, this is where we have what we call startup costs, startup costs, are amortized. If I haven't lost yet on that word, amortized over 15 years, 15 years, 180 months. So 15 years, you get to spread those costs out over the over the next 15 years. Because we don't get to claim them in the first year necessarily as straight expenses to offset your income. But what you do get is you get to spread a piece of those like 1/15, every year out over the next 15 years out as you operate the business. So you get to kind of deduct a chunk of those startup costs every following year. So if you're pre revenue, then that's likely the approach you're going to take. And then I'll just claim that and say, talk to your tax professional and just say, Have you startup costs or organizational costs? Or? Or should we deduct them. And there are limits to that and other math to do to figure out how much you can deduct, which I won't go into, but you treat them a little bit differently. But if you have been making money, and you're just not profitable, like you're not exceeding your expenses with your revenue, everything's still deductible, they're still valid expenses. What makes them a business expense? Is the nature of what you did not anything else, not your performance, or not how much money you made? It's, did you spend money on something that is ordinary and necessary to run your business?

Kelsey Smith:

And someone's going, they're like, Okay, they're listening to this. They're like, I need a tax professional. One, they can come work with you if they're an online or service provider. And so if they don't fit into that category, what are one to three questions that you wish everyone would ask a accounting provider that they're looking to go hire?


I love this question. I did a whole episode on this, which was questions to ask your provider. And it was like a list of interview questions, which I was like, the account is going to hate me for giving you this. But like, these are the things you need to ask people to see if they're a good fit. Because first of all, going to the person down the street, your uncle's guy, your friends, guy, whatever, whatever, right? It's fine. But like, if you're, if you're going to Google any accountant, just to find any accountant, well, you're gonna get any accountant. If you want to be methodical about like, I want an accountant that serves or tax professional that serves real estate investors and business owners and you want to find someone who specializes in your area. Like I don't mean geographic. I mean, like in your bubble of categories, so like, if you consider yourself, I don't know, let me if you're basically like a W two employee, it's pretty simple. But if you're a business owner, or if you're a real estate investor, or you have a certain type, like you were just telling me, Kelsey about livestock. I don't know jack about livestock. And I'm like, do not hire me if you want to talk about livestock sales and all that stuff. Find someone who's good at that stuff like farming, crypto, like, if you're into that stuff, there are specialists out there. So I'll say that like, find a specialist that works with you. It's like a doctor, like don't go to a general practitioner if you need like, a very specific surgery. Right. So stick with that. But I would say that one of the questions I think that gets missed all the time, and I know you said three I'll come up with three. There's so many. One is well, one is do you work with other folks like me, like Do you have other clients like me? I'll use that and say, Do you have other clients like me? Who do insert here? Number two is? How do you prefer to communicate with you? And how do you communicate? This one is missed all the time. Because the number one complaint I see is, they didn't tell me where my tax returns stands. They didn't get in touch with me the whole tax season, they just disappeared. They, you know, they I hired them, they disappeared, my attorney, my return up here the day before the deadline, I have no idea what they were doing. They never talked to me. They never booked a meeting with me. And I'm like, that sucks. But did you tell them you wanted those things? Or did you pay for a tax return to get done? And that's what you got? So like, there's the blunt answer of like, well, what did you What did you hire them to do? And I want I think setting expectations up front is really key in terms of how you communicate and how you want to be served. So if you say, I would really like a status update every two weeks from you, and the accountants like, I'm not gonna give you that. Fine, then you can find somebody else who will. And yes, that's a weird request from people and accountants are not used to that. But I bet you you'll find someone who you can pay to do that. And they may cost more just a heads up, because that's something that's not typically not typical. But if it's something that you need, perfect if it's gonna make you feel better about the service, and have you see value in that. Awesome. And then the last thing I would say is, ask them if the scope of services that you're hiring them for includes tax strategy. So if are you the way I phrase this is, are you basically publishing the story, are you co authoring it is a big difference. Because if you're publishing the story, then our relationship is transactional. Where I drop off paper, you take paper, put numbers and machine machine gives me tax return. That's it. And we are paying them to key numbers into software, you're paying them to review that to make sure it makes sense that it's in line with the code and all this stuff, sign it, and you're good. And most people are fine with that. But if you actually think your accountant is supposed to be saving you money in taxes, then you need to make sure that your service includes some element of strategy or planning and that your accountant meets with you during the year. Because there's nothing you can do when the ink is dry in April from last year. We cannot change the story it has already been printed. You cannot go back in time, a lot of what your tax situation a lot of the outcomes that your tax situation will bring are determined in the middle of the year. And then once the sunsets we go to bed on 1231. You know, the ball drops in Time Square. Tax Planning is over. For the most part, there are a few things you can do. But for the most part tax planning is over. And that's suddenly when people wake up. They watch the Superbowl commercials for h&r block and Jackson Hewitt and they're like, I gotta do tax planning. I'm like you've been gone all year. This is when you're supposed to do it. So I would definitely make sure there's an element of planning in there.

Kelsey Smith:

Yeah. And so good right now when this airs will be just about halfway through the year a little before. So now's a good time to see okay, should I've done something better the first half of this year, and what can I fix the second half of this year, so definitely make sure whether it's personally professionally or reaching out to a tax professional, Shannon, you have created a really fun environment for you to talk about something that people don't really like to talk about. They don't really love to talk about finances and taxes all the time, unless they're like just rolling in the dough. So how have you been able to make this fun for you and create a really successful podcast alongside with it and giving out so much good, valuable information every week?


I appreciate that. Thank you. Um, I really don't know yet. Like, it's hard to articulate because it's mine. And I'm like, I'm still surprised people listen to this. I'm like, y'all really enjoy this. This is interesting. I actually say this in my intro, which is that like finances feel like the broccoli of the business is the thing you kind of have to tolerate. But like you're not, it's not tasty. So you're not ordering it for fun, but you'll eat it if it's there. Right? So maybe some of us do, I should come up with a better vegetable like kale. So like, it's the kale of the business and I just I use broccoli because I say then this podcast is the ranch dressing. Because are the Velveeta if you're from my generation, so the it's the fact that you can laugh that you can understand these concepts using very tangible examples from life that you can understand and go, Oh, okay, so it's kind of like this. If I can take a complex topic, and parallel it into a metaphor, that is not a complex concept, and it's something that people understand and have experience and can relate to, then the other thing becomes more relatable, inherently and less intimidating. So I find that the superpower that we have with the show is simplification of complex concepts just to be like, It's not that serious. Like I know that it seems that serious because like the dudes in suits have made it sound that serious that your whole life because they'd like to sound smart and they're trying to make themselves sound harder by saying all these complex words to make you feel dumb, and it worked. But I'm here to tell you that all they're doing is getting on microphones to sound smarter, like their goal is I want to make sure I sound smarter talking to people. My goal is, I want you to understand it. Because if you don't understand it, I haven't done my job. And me sounding smarter. Yes, it builds quote, unquote, credibility, but with a side dish of intimidation, and that's not what we're here for I go, my credibility and authority should be built on trust, not on. Wow, she's smarter than me. And that's like the last thing I would want.

Kelsey Smith:

And that's such a parallel example to parenting, right? We don't want our kids to respect us because we're instilling fear in them. We want them to respect us, because we're teaching from a place of knowledge and yeah, and helping support them. And that's actually the last question I have for you today is, as parents are listening to this, and they're like, Great, I'm trying to figure out my own finances. I'm trying to figure out my own taxes. What are some things that you think parents could do in the home to help implement better conversations around taxes and finances for their children?


I think that, you know, well, first of all, it comes from healing what you have going on and not projecting that on the kids like, Whatever money story you have, you have to be open to the fact that there are so many money stories out there that you get to choose the one that your kid will have. And while that might sound like it's a lot of pressure on you, it's actually not because if you could start with a clean slate with what you know, now, what would you do differently, and it's a huge opportunity. I would say if you're not the person who feels capable or qualified or anything to teach your kids about money, that there are so many resources, like God bless we live on 2023 because you can get YouTube clips you can find like my podcasts, other podcasts. I personally volunteer with and donate to an organization called Junior Achievement. If your school does not have Junior Achievement, talk to someone about bringing them in. They're phenomenal. And they teach kids around money topics resume building professional, you know, skills. Honestly, the stuff school should teach them. The stuff school isn't teaching them that they should I actually, I volunteered for a third grade classroom where we taught them about entrepreneurship. And I'll never forget this, there was a big blanket on the floor, Kelsey, big blanket of a town. And the kids had to plot where the certain buildings were gonna go, or like where they were going to have a hotdog stand. Like, Hey, Billy, where do you wanna put the hotdog stand? And I'll never forget this, like nine year old, I think that's about that age nine year old kid is like, well, we want to put it here because the church gets out on Sunday here, and they're gonna walk across the street. And then over here, it will be the most profitable because of the intersection between the church traffic and this thing, and I'm like, you are going to be very successful. This nine year old kid is like talking about origins. It's like, I'm like, Are you watching MSNBC? Like, what are you are CNBC, whatever the business one is? Right? So like, are you watching the like Bloomberg at night? What are you doing? So I was so proud, because I love the conversations that are happening where the kids see this as a game, they see it as problem solving. They see it as fun like a puzzle to compute. And they have fun with that, as opposed to this intimidating thing that's meant to tear them down. They're looking at as a tool that they can use in life. And that's the most imperative thing for me is reframing. What business what money is to your kids?

Kelsey Smith:

Gosh, so good. Shannon, thank you so much for your time today. I cannot wait to have you back. Because like you said, before we post record, we could dive into all of these topics and so much more. Let's tell everyone where they can find you how they can just pour into your podcast especially but other ways that they can tap into you and all your knowledge and everything you share.


Appreciate it. I'm on keep what you earn on all podcast platforms, keep what you earn. My Instagram is at Shannon K. Weinstein. And you can also follow the podcast Instagram at keep what you earn. Basically, anywhere you find that phrase, you can find me keep what you For more information on the podcast. And that's where I'm the most active.

Kelsey Smith:

And Shannon, what is something that you currently have as a goal, something that you're excited about in what you're working towards?


Oh, God, this is going to open up a whole can of worms, but the pot the prospect of moving full time to Costa Rica.

Kelsey Smith:

Oh, and that was the one thing that we didn't dive into today. So we'll have to have you back to talk about what that looks like.


Yeah, because it's very much in the future. Thank you so much, Kelsey,

Kelsey Smith:

thank you so much for being here. Sometimes the smallest acts of love is all a mom needs to feel reinvigorated. If you can relate to that I feel so supported by your five star rating and written review. Take a moment and let me know what you thought about this episode.