[00:00:00] Speaker A: Success isn't given, it's earned. And earning it means becoming the person who deserves it. The bottom line is where we cut through the chaos to simplify success, uncovering the strategies, mindset and resilience it takes to win. Real stories, expert insights, and practical tools. Because the only way to the top is by putting in the board. This is the bottom line.
Welcome to the Bottom Line, where we cut through confusion and get straight to what actually matters in business and life. I'm your host, Ryan Herpin. Today we are joined by Temby Lalasi, a trusted accounting and tax advisor who blends deep tax expertise with modern technology to help individuals and businesses save time, reduce stress, and keep more of what they earn. Known for her relationship driven approach and Temby doesn't just crunch numbers. She meets clients where they are and walks alongside them with clarity and care. Today's first conversation is really all about something almost everyone avoids but absolutely cannot ignore. Taxes. For many people, taxes feel extremely intimidating, overwhelming and confusing. And that fear alone keeps them, well, stuck. And I've been there myself. Temby, it's great to have you here and with us today on the show.
I'm such an honor to have you and I'm excited to pick that beautiful brain of yours.
[00:01:29] Speaker B: Thank you, Ryan. It's a pleasure to be here. Let's have the conversation.
[00:01:34] Speaker A: So, you know, I really want to talk about why taxes feel so overwhelming and how understanding them can actually bring peace instead of panic, you know, and I want to kind of frame this in a way that a lot of our audience can relate to. You know, many people freeze when it comes to taxes. They're afraid of making a mistake, you know, afraid of the IRS and afraid of asking questions they think, you know, they should already probably know the answer to. You know, that fear often leads to avoidance. And, well, avoidance creates a much bigger problem down the road. And, well, we all know we have to pay taxes. If we don't, it could lead us to jail. So I, I really want to start this conversation with a pretty big question. You know, why do taxes feel so scary and confusing for so many people and business owners?
[00:02:20] Speaker B: Right, right. So taxes feel scary because they are full of rules. There's complex rules, there's lots of jargon, and there's lots of deadlines. Right. So most people worry about making mistakes or making mistakes that will actually trigger more penalties.
And for business owners, it's even worse if you're owning a business or running a business. It's, it's harder because taxes also tie into cash flow and they tie to compliance. And those are some of the biggest things that can make or break a business.
So the fear that people have is, is, is usually brought about by the uncertainty.
And so in, in that way it's justified. Because if you don't know the rules, if you don't know the jargon, if you don't know the deadlines, you are bound to feel very afraid.
[00:03:14] Speaker A: You know, that's, that's fair. You know, even as a business consultant, there's one area I stay away from as far as I can, and that's taxes. Because the more you look, sometimes the more confusing it would seem you're right about the rules and all the changing nature of taxes. It can be very confusing and overwhelming. And I'm curious, you know, what happens emotionally when someone avoids taxes because they don't understand them?
[00:03:39] Speaker B: Well, obviously it leads to a cycle of stress, right? So you know at the back of your mind that there are taxes that you need to do and comply with, but you also know that you are not doing them. It's like hiding your head in the sand, right?
At first, ignoring taxes feels like a relief for most people.
You are like hiding in the sand and hoping that the IRS is never going to find you. But we, we both know that the exact opposite is true. So people then start feeling guilty afterwards and they start getting afraid as, as the time progresses, time of non compliance progresses. And you'll find that eventually it also leads to shame. People start, I, I've had to chat to, to some taxpayers that will come to me and they start off whispering. They're like, I'm so not filed in five years. They are not proud of what they've done. So emotionally it drags you down the, the weight is a lot. Emotionally. You can think that you are, you are hiding or you did the right decision, but it takes its toll on you emotionally.
[00:04:50] Speaker A: That's a really good point. It's funny because I've got to highlight this in a, in a different way. The, what you just mentioned is almost like the exact pathway of a concept I'm writing a book on. We call it the circle. You know, when you don't take action on something, you know you should, it leads to worry, guilt, anger, shame. And then that leads to complaint to pass the blame. You know, maybe you have come up with reasons, excuses, and it goes right back around to procrastination, lack of action. And it gets worse and worse. But yeah, you're so right because, yeah, you know, it might feel like a short Term, oh, relief. You know, I don't got to worry about it for now. I'll figure it out later. I'll push it off for a little bit until you see fees, penalties in the risk. Just climb and climb.
Yeah, that's, I'm getting stressed just thinking about it. So that's, it's very true, you know. And how can learning the basics of taxes bring confidence instead of fear?
[00:05:46] Speaker B: Right. So we all know that knowledge is power, right? So that's the starting point for me when you understand even just the basics. Let's say you know nothing about the tax jargon.
Starting point, try and understand the deadlines. Let's say you start off by just getting to know when you're supposed to file your quarterly taxes, for example, that already will help you to get more prepared. That will help you to shift from being reactive to being proactive. And once you know your tax deadlines, you can move on to learning other basics. What do I owe or what do I need to do to make sure that I don't owe as much at the end of the year? So the knowledge should also be progressed, aggressive. Right. And you'll find that when you do that, suddenly taxes become manageable. They become part of your, your financial strategy. And with more knowledge that you acquire, you become more confident. And confidence will come from the clarity. If you know that you're not owing anything or you don't have any compliance requirement that you have not complied with. Let's say you know that you're supposed to pay your taxes In January, by January 15, you will relax because you know that you've complied up to your next deadline is January 15th, and you'll deal with it just before that deadline comes. But if you do not know what the deadline is, you're stressing right through the year. Even today, when some of us are preparing for Christmas, you are stressed. Right? Right. So I think it starts off with getting to know a little bit about taxes at a time. And you don't have to go into the complex jargon. We are here as a tax experts to help you understand that.
[00:07:25] Speaker A: You know, I, I, I've definitely got to highlight that because you made a really, really powerful point. You know, we don't have to be experts of all of it because there's experts like you to help us through. If we know some of the basics, some of what to do, what not to do, the deadlines, the when we should start getting prepared, when we should start making sure data is clean, concise, that can really remove a lot of that stress, especially around the holiday seasons. It's too often I run into business owners that are stressed about taxes so much so that they don't really get to enjoy the holiday season, the new year, Christmas.
It's sad to see. But I made sure to learn at least enough of the basics so I can help kind of mitigate some of that stress and in fear and kind of help create some comfort around. Okay. You know, as long as we're at this point, we can pass it on to an expert and they can take care of it.
So I'm really glad you brought that up because it is important. You know, can you share with us maybe a story of someone who went from confused to clear once they understood their tax situation?
[00:08:29] Speaker B: Right. So I once worked with a small business owner who was terrified of filing their tax returns because they thought they owed a lot from back taxes. Right.
And what they didn't know was that there is a link between the quarterly payments they were making to the tax return that needs to be filed at the end of the year. So funny enough, they had been diligent in making their annual, in making their quarterly payments. Right. But they didn't realize there was a link. So they thought the quarterly payments are different type of tax. And then when you file the tax return at the end of the year, it's more taxes that you had to pay. So after reviewing the records and explaining the deductions, and they then realized that actually they didn't need to carry all that stress. So the transformation on in their face, like the, the, the mood and the way their face lightened up when I showed them the summary of going through their tax returns and knocking off the payments that they had already done.
So this taxpayer, actually, if I may give more detail, during COVID they had fallen through difficult times and they physically fell ill. So they were not able to file the tax returns, but they had continued to make some payments to the irs, but they just didn't have that connection to say when you file the tax return by April 15, what you have been paying is your quarterly payments actually offsets what you're owing by April 15th. So I helped them connect those dots and that actually put a lot of joy in their eyes.
And that right there shows you the power of knowing something. We spoke earlier on about understanding a little bit about taxes, not a lot. So if they had understood that, okay, their only non compliance issue is not filing the tax return, but at least they are not owing as much because they've been paying, then they wouldn't have had as much stress as they had.
[00:10:32] Speaker A: It's, it's simply just understanding a little bit more, seeing the details a little bit closer and, and not jumping to conclusions. I find that to be something really common in the world of taxes is people want to jump to conclusions automatically assuming they're going to owe a lot. So like you said, they carry around a lot of very, very unnecessary stress. So briefly, what's one simple step someone can take, you know, today to stop feeling lost about taxes?
[00:11:03] Speaker B: So one of the simplest things is just organizing your financial documents. It's a small step, but a very powerful step. A lot of people miss out on deductions because they have not been diligent with tracking the expenses. So today if you incur an expense, you go out for dinner, it's holiday season, clients are taking their customers for Christmas lunches or whatever. Start by just keeping that receipt. If you are using a software, an accounting software, snap that receipt, take a picture and it's automatically gonna get sent to your accounting system. Right? So that's one step. People lose those receipts that you get from the restaurant you put it in.
[00:11:49] Speaker A: Very true.
[00:11:50] Speaker B: Right. By the time you get home, you don't even know what happened to that receipt. So take a picture of that and automatically have it sent to your accounting software. That's small step. And then the next one could be track your mileage.
[00:12:00] Speaker A: Yeah, I'm going to jump in right there because we're going to have to move on to the next segment here very soon. But that is such a very good point. I've seen that so consistently and to our audience. We'll be right back. And up next, we'll talk about why so many people are paying more in taxes than they should and how to stop the money leaks.
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We are back and I am still here with the tax expert Temby. In this segment we're tackling a, well, very frustrating thing that almost everyone really shares. The feeling that you're paying more in taxes than you should without knowing why. Now we want to talk about something that really creates frustration.
More often than not, when people feel like they're spending way more than they should, that is a immediate hot button in the worst way possible. And taxes is one of those things where people feel that pretty regularly. You know, many individuals and business owners unknowingly overpay taxes year after year, not because they earn more, but because they lack planning, guidance, or awareness. Simply put, you know, the result is unnecessary and financial strain and missed opportunity is really the byproduct of it. So, temby, it's such a pleasure to have you here. I'm excited to dive into this with you.
[00:13:52] Speaker B: Thank you, Ryan. Thank you, Ryan. It's a pleasure to be here.
[00:13:56] Speaker A: Diving into this topic is really important, and I'm really excited about this one because I always look for opportunities to learn, too. So I want to start with, why do so many people and businesses end up paying more taxes than they really should?
[00:14:11] Speaker B: You say it in your introduction. The biggest reason is lack of planning.
So people assume that taxes are fixed, but they're not. They're not. The tax code is full of opportunities, credits, strategies, deductions. But if you don't know any of those, or if you're not aware they exist, then you're leaving money on the table and you are overpaying. So it's not about breaking the rules, it's about understanding them.
[00:14:40] Speaker A: That is very well, that. That should be a bumper sticker, honestly, because that's. That's right to the point, but it's also extremely true. You know, it's not about changing the game, it's about playing it better, understanding the rules better, where, you know, everyone wins, no one loses. But you're also not missing out on a ton of opportunity just because you don't know it. Right? So what are common mistakes that cause people to overpay year after year?
[00:15:08] Speaker B: There's so many.
There's so many. So I'll just go through a few of the basic ones. The one I spoke about earlier, failing to track your expenses properly. Right. Track your mileage, track your expenses, keep track of all those reports, invoices, receipts. The other one, lack of documentation. So if you claim an expense, but you cannot justify it, the IRS will come and say, no, you're not entitled to this expense because if you don't have the proof, you're not entitled to it.
The other one, failing to claim eligible deductions.
If you don't know about the deduction, then you won't claim it because you don't know what you don't know. Right. And then the other one is people ignoring tax advantaged accounts.
Very few people realize how much of an impact their contribution to their retirement accounts has on their taxes.
So if you're not aware that contributing actually benefits your taxes or results in you paying less taxes, then you're not going to do it. And I think the other big one is people waiting until taxes and to think about taxes if now it's December. If you wait until December, January to start thinking about taxes, you're going to miss out on a lot of things because by the time we get to this time of the year, there are some strategies that you're no longer able to do because of the timing.
So there's quite a few that I can list, but those are the basic ones. Documentation, track your expenses, claim what you know, use your tax advantaged accounts, and don't wait until taxes to think about taxes.
[00:16:48] Speaker A: You know, I'm curious, what are some resources that you could recommend to our audience to gain some of that basic knowledge? You know, is there good videos, YouTube stuff? Is there books, maybe that you've used or that you know to be helpful, that you know, maybe our audience could tap into themselves?
[00:17:05] Speaker B: Sure. The safest for me is the Iris website because I wouldn't recommend social media because there's a lot of information misinformation on social media and we know some of the information on the web, on the Internet is not verified. So you're safer going to the IRS website, read about your situation. They have lots and lots of information. If you want to read the tax code also, go ahead and read the text code. But I would also say reach out to your tax advisor. Most of us as tax experts have websites that have additional information. We have newsletters that we send our clients. So reach out to your tax expert and maybe subscribe to their newsletter. You'll get lots of useful information there.
[00:17:50] Speaker A: You know, it's funny, you know, to our audience, if you really want to read the tax code, go for it. I'd rather call an expert like Temby so I don't have to try to go through that, interpret everything.
I never studied taxes. I don't care to study taxes. I know business.
I leave it to experts like Tempe to take care of the stuff I know nothing about. But, you know, I want to dive a little bit deeper into how proper planning really does help people keep more of what they earn. Is there something they can, you know, you've talked about tracking receipts and expenses properly. What are some of the more Detailed ways, You know, are there some other strategies they can utilize? Maybe the structure of the business, does that make a big difference? I kind of want to see where some people might not even be thinking.
[00:18:34] Speaker B: Sure.
And like you said, it's all about being proactive and not being reactive. If you plan ahead right then you control the outcome. You control even your tax results. So you spoke of business structures. Talk to your tax expert. Right. Is this the tax optimized business structure that I have?
Let them give you insights on what is best for your situation.
And the main umbrella that we discuss all of these things is tax planning. Again, we're talking about being proactive. We're talking about controlling your tax result within the boundaries of the law and the tax code.
Have regular meetings with your tax expert. Don't treat taxes as an annual event.
Like we said earlier on, taxes need to be part of your financial strategy. With my clients, we currently meet once every quarter. We meet every quarter. We review their tax situation, we look at the tax strategies that are applicable to them, and then I give them time to go and implement those strategies. And at the end of the quarter, we go and review what they've implemented. And as we review, we are also forecasting the tax bill, tax liability at the end of the year. And as part of that forecast, we then advise them, you are better off making this payment now than making it later in the year. So if you work with an expert, they will help you with the planning, they will help you with the forecasting, and they will help you get to a tax result that you are not surprised by because you've been working with them right through the year.
[00:20:07] Speaker A: So I'm, I'm curious, you know, with this strategy, what's one mindset shift people need to make to really stop overpaying taxes? You know, it's, it's a, there's a big difference between the feeling of it, the, the searching for it, the understanding of it. But what's one thing people really need to change in their mind to start using the opportunities rather than fearing them.
[00:20:30] Speaker B: Text is not an annual event. If you want to keep more of what you earn, text should be part of your daily or monthly when you do your monthly accounting review, your tax strategy, quarterly meetings. So I think the one word is tax is not an annual event. Move text to being part of your financial strategy that you routine that you routinely review.
[00:20:54] Speaker A: I think that's such a, such a powerful point. And I like that you kept it simple.
You made sure to get the point really well across because it is that simple. It's so common that we overcomplicate taxes. It doesn't have to be that way. When you have experts and you have a bit of basic knowledge and you apply the things that Tammy's talking about today, it definitely takes away the fear factor of taxes. You don't got to be afraid of it. You just got to be prepared, have some intentional time and focus put into it. So, Tempe, now for viewers who want to stop overpaying and start planning smarter, where can they learn more about working with you specifically?
[00:21:33] Speaker B: So, yeah, we are available. You can follow us. We are on LinkedIn. We are on Instagram, we are on YouTube as ATACPAs. And our website address is www.atacpas.cpa. right. Atacpas.cpa. that's our web address. And the email, if you want to send an email,
[email protected]. if I can spell that. ATA is a T, a cpas.cpa. that's our email address. That's our web address.
And those are our handles for Instagram, YouTube and LinkedIn. So happy to help anybody who needs assistance.
[00:22:16] Speaker A: And to our audience, I can honestly say I have even myself been put into situations where I was way in over my head when it came to taxes. Whether it was my personal life after starting a partnership or getting the business launched or even with several of my clients where, okay, I cannot help past this point. There are experts out there to help. It does not have to cost an arm and a leg to get that help. Honestly, a lot of them are very efficient, very effective, and very, very fair in pricing. I recommend. Don't wait, don't risk it. Don't put yourself in a position where you've got to be afraid of taxes because there's no need for it. So, Timmy, you know, having you on is such a powerful thing, especially during this time of year, knowing that tax season is right around the corner and things are going to get crazy again.
What's your biggest reason why you love doing this?
[00:23:13] Speaker B: So I love doing. I always say tax is my first love. And the reason I enjoy this is because of the difference that it makes in the client's lives. If I see the relief that the client gets when I simplify something or when we do their tax return and they get a refund or even when they still are owing something, the fact that we have filed that tax return and we've taken them, walked them through, we've educated them on the deadlines, we've on the documents, we require to get them to compliance. I I get so much fulfillment from seeing the relief on the clients faces and helping them reduce their stresses. So we take care of their compliance needs and we give them enough time to run the business so they can focus on what they're doing and we focus on what we do best too.
[00:24:00] Speaker A: I've got to highlight that you said fulfillment through service is really what you just pointed out there and that to me is the key to everything.
So to our audience coming up next, we're talking about the stress of tax season and how to finally break the cycle of yearly panic.
Welcome back to the Bottom Line. Let's talk about something that spikes anxiety for millions of people every single year, including myself. Tax season for many it's a time of stress, pressure and last minute scrambling for me. I have tax experts that help me out, but even so, I've done it wrong for so many years that it still gives me a little bit of anxiety if I'm being honest. But now with those people to help me out, things get so much easier. I don't have to really worry and I know everything is going to be handled now. Tax season doesn't have to feel like chaos.
The stress often comes from waiting too long, lacking organization and not having a year round strategy as TEMBY has has brought up before. You know, with planning, tax season can become predictable, even calm. So 10B I'm so happy that you've been sharing incredible insight and keeping it so simple for me and the viewers because it is too often that things are over complicated right then I want to dive right back into this because tax season is a season of stress and anxiety.
[00:25:29] Speaker B: But tell me about it.
[00:25:31] Speaker A: Why does tax season have to feel so stressful instead of predictable and calm?
[00:25:36] Speaker B: I think the answer is simple. Stress comes from uncertainty. We said earlier if you empower yourself by just knowing a little bit about taxes, even if all you know is just the deadlines, that's a little bit of stress reduced right there. So most people wait until the last minute and then they scramble to gather documents and then you hope for the best.
So people stress because they haven't planned properly. Again, going back to what we've spoken about in in an earlier episode, tax is not an annual event.
Not at all. Tax is something that you attend to as part of your daily work. When you are going out to dinner with a client, remember that dinner has tax consequences. So if you start thinking of it that way, that every decision you make affects your taxes, at the end of the day you're not going to wait until January or February to go and see your tax expert or your tax person or your cpa. You will want to see them more often so that you can influence the decision at the end of the tax season. Taxes aren't inherently stressful. It's the lack of preparation, in my view, that stresses us most.
[00:26:49] Speaker A: Once again, that's such a good point. And you know, while we're talking about stress, I want to dive into something a little bit different here because we know what stress feels like, especially during tax season.
But I'm curious, what kind of impact can stressing about tax season have on somebody's family, on their business, on their co workers, their employees?
Do you think that that stress can negatively impact all those things around them?
[00:27:15] Speaker B: Oh, absolutely. It impacts your, your peace of mind generally. So if you are stressed about taxes. Well, let's not say about tax. If you're stressed generally as an, you are not performing optimally on any other thing that you're supposed to be working on. So if you're a business person, you're running a business, and your taxes are not in order, you have not prepared what you're supposed to, or you've not even implemented the strategies that your, your tax expert told you about, you are going to be stressed. And when you are stressed, you are not a pleasure to be around, right? Your employees are not happy to be around you, and your family is not going to be happy to be around you because you're stressed, you're grumpy, you're probably going to snap.
So yeah, the, the effect is it cannot be ignored, cannot be ignored in my view, because you, you then end up affecting not just yourself, you're affecting the business also. The decisions that you're now making for you, for your business, they may not be the best because you're doing, you're taking those decisions under stress.
[00:28:16] Speaker A: So I'm curious, you know, what would you say to somebody, whether, you know, they're doing their typical personal taxes or their business taxes on their own?
What would you recommend to them?
When is it a good time to bring in an expert?
[00:28:34] Speaker B: The good time to bring in an expert is yesterday when we started off earlier on, we say tax.
The tax code is full of complex rules. It has lots of jargon, it is lots of deadlines, right?
If you are running your business, what you are best in is running your business.
And you will find that if you try and chase running a business and trying to be a tax expert, something is going to fall through the cracks and you don't want either of those because the business will either fail or your taxes will fail. And if your taxes fail, Uncle Sam is going to be on your back. So my suggestion is that the moment you start running a business, engage a tax expert, engage your cpa, engage your, whoever your techspot is, and let them walk the journey with you. Because like we said, every decision that you make in your business has a tax effect. So we're not going to wait until end of the year to go and see the tax person. Because by that time you go and see the tax preparer at the end of the year, maybe you've been running a business under, in an incorrect, maybe not incorrect. Under the wrong business structure, they could have helped you register the correct business structure, correct business entity for your business, which is tax optimized. So again, back to my first point.
Yesterday was when you should have engaged a tax expert.
The next best is today.
[00:30:05] Speaker A: You know, it's funny you mentioned even understanding the structure.
Now. I had a previous client make a very, very.
You know, it's a mistake that I can't knock them for. I can't say anything bad about them for making the mistake because they're not.
They're specialists in the trade that they have now. They started a partnership and they started paying themselves a W2 from their business here in Texas. And that turned into a big problem because they needed a schedule K1. It changed everything. It caused a lot of problems. They had to go back, they had to try to fix things.
Then they had penalties from time and trying to push it off. And they got scared into the position where they procrastinated further and further. And it took me bringing an expert in to essentially force them to get it done correctly. And it saved them so much stress. And in the end, it was not as big of a problem as they thought it was. It just took the right person at the right time to go through all the information to correct the problem and to communicate with the IRS on their behalf, which I cannot stress that enough.
[00:31:10] Speaker B: There we go.
[00:31:12] Speaker A: I do not like talking to the irs and I don't know very many people that do, except for people like you that are gifted at it. You're skilled, you know what you're talking about.
And honestly, it's a foreign language to most of us. So to our viewers, don't wait. Bring in a tax expert as soon as possible, because the sooner they get to know you, your business, what you're trying to accomplish, the sooner they can partner with you, your plan, and keep you 10 steps ahead of risk problems and loss of money.
So temby, can you share a story of someone who finally stopped dreading tax season and started approaching with a calm demeanor?
[00:31:56] Speaker B: You know, as you were talking just before I asked this question, I was thinking already of this example.
There's a taxpayer that reached out to me last year, right? And they're single member LLC, but they had been taking a W2 salary the whole year. By the time they got to me, it was December. Like, no, I need somebody to help me do my taxes.
The first thing you see is, so whose salary is this? Oh, it's my salary. And you have single member will verify the registration documents. I'm like, yeah, so anyway, we helped them fix all of that. We had to reverse all of that and get the payroll company to do amendments. It was a lot. It was a big project. But since that time, we have been meeting with this tax client every quarter. So we are the, we're in an advantage situation that we do their bookkeeping also. Right. So we are already helping them with bookkeeping at the end of every quarter we meet, we review the numbers and then I've gotten them onto some tech strategies that are applicable to them because it's a, it's a young lady, she's just starting her family, so helped save on staff, create some tax advantaged accounts like the 529.
And she's in a very, very.
Well, she's very happy at the moment. And tax wise, she's actually in a very, very different situation than that she was on like more than a year ago.
[00:33:22] Speaker A: You know, you brought up another very important thing to consider a proper bookkeeper.
[00:33:27] Speaker B: Oh yeah.
[00:33:28] Speaker A: That can prevent an astronomical amount of problems, stress and just chaos, especially come tax season if you're categorizing things wrong, putting things in the wrong accounts. Well, if you're not counting for depreciating assets and a plethora of other things, you're going to miss out on a lot of opportunities and cause a significant amount of drama, problems and stress during tax season. Having a good bookkeeper changes everything.
[00:33:52] Speaker B: Right, Right. Sorry to speak over you there. I cannot overemphasize the importance of proper bookkeeping because taxes are dependent on correct bookkeeping numbers. And we have business people that want to try and DIY bookkeeping. And then at this time of the year, December, they want to say, oh, Timbig, please help fix this. It's. Yeah, it becomes more costly for you in terms of time, in terms of stress for you, and it's just not working efficiently. So, yes, bookkeeping, get something.
[00:34:24] Speaker A: Like you said, they want you to work miracles. I mean, that's what you're supposed to be, right? You're magic, you're a magician. You're, you know, you got superpowers. You can just snap your fingers and all the problems and books are correct and solved. It's, it's not that simple. And, and the sooner that people understand bringing someone like you into the mix sooner rather than later is the best bet. Having a good, proper bookkeeper and a good tax advisor is so detrimental to the success of a business. And I'm sure you can agree with this. People don't start a business because they're good at business. They start a business because they're good at a service or product and they want to do the best they can at those things. A lot of the time they're an operator before they really own the business.
So don't expect yourself to be a tax expert, to be bookkeeping expert. That's why people like Timbi exist. That's why she loves doing what she does. Because, you know, because it makes the life of the business owner easier. It makes it simple for you to be able to do your best without having to stress, without having to worry, without having to make mistakes. And it's very vitally important that you understand. The sooner the better, you know, I'll harp on that point as long as it takes and as many times I have to.
So, up next, stretch out, get ready, grab pen and pad, drink some coffee, whatever it is you need to do. Because we're addressing one of the biggest fears people have.
Drumroll the IRS and why knowledge is the real antidote to that fear.
Welcome back to the Bottom Line. Don't miss a second of this show or any of your non media TV favorites. Streaming live or on demand, whenever and wherever you want.
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[00:37:28] Speaker B: Thank you. So am I.
[00:37:31] Speaker A: You know, the IRS is like a mythical enemy to a lot of people. They're so scared of it, it freaks them out, you know. You know, in between segments we got to chat a little bit and you said something that I found to be so funny, yet so true. Efficiency and the IRS don't really go together in the same sentence all the time.
So I am curious, why are so many people scared of the IRS instead of informed about it?
[00:37:57] Speaker B: The fear of the unknown. Like you said, most people don't understand how the IRS works, right? So they assume the west from the get go. They assume, I'm going to lose my business, I'll get penalties, I will get letters. So you're already assuming the worst. And in reality, the IRS operates on clear rules. The tax code is all about rules and regulations and laws, and when you know the those rules, you replace fear with confidence. Right. And the reality really is that IRS issues don't come from fraud.
They come from simple mistakes that we do as taxpayers.
So going back to the unknown and knowing a little bit about taxes will help you a lot in overcoming the fears that you have in replacing them with confidence.
[00:38:51] Speaker A: You know, it's funny because, you know, I like to make references and, and points and examples that are so simple that a kid could understand.
[00:38:59] Speaker B: Right.
[00:38:59] Speaker A: Then here's a great one. My toddler, he's three years old, he's fearless for most everything on this planet. And his survival instincts are not that great so far. So I have like, I'm pretty much raising Johnny Knoxville, right? Well, recently he started, started to show a fear of the dark out of nowhere. And I've, I've understood now it's a fear of the unknown.
So it's just like the fear of the irs. It's what you don't know that is scary. The dark isn't scary because you just don't know what's there. So you're concerned. But I am curious what usually triggers IRS issues for Individuals and small businesses. You said it's all about codes, regulations, laws. What's the number one problem people run into the IRS from your point of view?
[00:39:46] Speaker B: In my experience under reporting income, that's a big one. And I'm gonna give an example of somebody using cash. If you're running a business and you receive cash in your business, let me actually give you a real example. There's a client that I, I used to work with running a restaurant. And you know, when you go to a restaurant, sometimes you pay using cash.
And so what they do pay using cash, they take the cash, they put the cash in the cash box, and then somewhere during the cooking of the food, they run out of ingredients. Somebody just goes and grabs the cash from the cash box and they go and buy the ingredients that are needed from the restaurant. So right there, if there is no record keeping of how much came in as income and how much went out to buy expenses, you're already in trouble with the irs. So there's a high risk that you're going to under report your income. That's number one. Another big one is poor record keeping. And what I just gave as an example, that's another example right there. If you're just putting cash in the cash box and you're not recording it as a sale and you're just taking cash from the cash box, you're not recording to say, we've taken our cash and we've used it to buy this. That is an example of poor record keeping. And it goes back again to that bookkeeping issue that we spoke about.
Very important to make sure that your bookkeeping is done correctly and accurately.
Another red flag that the IRS likes is mixing business and personal expenses. Business owners, please note, this is a big one for the irs. There are, there are many others. The other one I can think of is missing deadlines.
Deadlines come and go. You don't file your taxes, you don't do anything until the irs like, wait a minute, this person is running a business. They haven't filed xyz and they send you a long list of letters. So, yeah, those are some of the main ones in my experience.
[00:41:45] Speaker A: You know, going through that story, all I had was red flags and alarms going off in my brain about the, what I call the chain of custody for money.
Every financial transaction has to be tracked from start to finish. Every input, output, where it goes, how it gets there.
So important for, you know, I'll, I've, I consult for a lot of different businesses, including like auto repair, you know, skilled Trades. There's a lot of transactions in cash. You have to track that to the T. You have to know where it's at, what it's being used for. And all I could hear was, risk, risk, risk, and underreporting to the irs. Yeah, that's a pretty big problem.
[00:42:23] Speaker B: That's a big one.
[00:42:25] Speaker A: But at the same time, it works in so many different ways. It's just like in any business as inventory.
Think of it as cash because it's treated very, very similar.
And if you misrepresent your inventory values, you're looking at a problem with the IRS as well. It may take longer to spot, it may take longer to deal with, but an audit will come your way, and it will not be pleasant. I've seen it time and time again.
But in your business, anyone that handles cash, make sure they know the proper process, procedure, and the reasons for why that's there. If you bring up the irs, people tend to listen a little bit more. So tell them you don't want to get attacked by the irs, so don't touch the money unless you know what you're doing with it. Now, I'm very appreciative that you shared some of those examples, because it is very important to understand and to know what are the major issues people run into. And, you know, how does staying compliant actually create peace instead of pressure? Right. You know, we've talked about this a little bit, but I want to reframe it, because how much more efficient and effective can a business owner be when they've got someone like you in their corner?
[00:43:36] Speaker B: So compliance means that there's predictability in what you're doing, right? When your records are clean, your filings are accurate, you eliminate surprises. You eliminate that stress that we spoke about earlier. You know where you stand. You can focus on growing your business instead of sitting there fearing the audit, of fearing the irs. So that being proactive with your work and making sure you are compliant and your books are clean brings with it peace of mind, and you are better prepared when tax season comes around. Even if the IRS decides to come and audit you, you are not going to be stressed because you know your record keeping is on par. You know that your tax expert has walked you through the tax return, and they've prepared the tax return based on the information that you gave them. So even if the IRS sends you a letter and say, hey, we're coming to audit you, you don't get stressed. You just prepare the file that they need. You give them the documents they need, and they Go through the audit and they discuss it with you. And most of the time, you'll find that the audit will be completed and there will be no adjustments. Even if there are adjustments, you understand what the adjustments relate to.
So it's always better to be prepared. And the best thing you can do is get yourself working with a tax expert.
[00:44:57] Speaker A: I couldn't agree more. Preparation is the platform for success.
If you want to be successful, you got to prepare the right way. And that's, you know, a lot of the time. A lot of business owners, from my understanding, they are afraid to work with experts because they're afraid it's going to cost them an arm and a leg. But it's going to cost you a whole lot more if you procrastinate. Push it off and act like it doesn't exist. And the great words of Jim Rohn, well, the weeds will take your garden if you refuse to look at the weeds. It's the same thing with the IRS and taxes. If you want to lose everything, avoid the taxes, avoid dealing with it. And I promise you, you're going to have to face some hard truths later. Now, temby, this has been an incredibly valuable conversation. Where can people follow your work and continue the conversation?
[00:45:45] Speaker B: Right. So yes, they can go to our website, www.
Atacpas.cpa.
so not again, the last part is.cpa not.com right? So it's Atacpas CPA. And we are on Instagram, we're on LinkedIn, we are on YouTube on all those platforms, we are ATA YouTube CPAs. So Atacpas, you can find us there. And if you want to send us an email, we welcome, we welcome that too. You can send it to hello@ACPAS CPA. So you can contact us using any of those platforms. We'll be very glad to assist you.
[00:46:32] Speaker A: Now, Tambi, I. I cannot tell you how much I appreciate this conversation. You bring a lot to the table with this topic, genuinely. And one thing I've got to give you some credit for is, you know, how to talk about it in a way that keeps it simple, straightforward, and not so scary. You know, when I first was transitioning from, you know, a business leader or a manager of a company to a business owner, it was scary. And if it wasn't for someone who was like you, it would have made it a whole lot harder for me to want to move forward confidently.
So thank you for bringing clarity, calm and compassion to a topic that so many people fear. Today we learned that taxes don't have to control us understanding, planning and the right guidance can change everything.
If you're watching and feeling overwhelmed, let this be your sign to stop avoiding and start empowering yourself.
That's the bottom line. I'm Ryan Herpin. We'll see you next time.
Stay focused. And remember, success isn't given, it's earned.
