Latest / The SmallBizChat with Melinda Emerson / Tax Filing Tips with Lynnette Khalfani-Cox

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Tax Filing Tips with Lynnette Khalfani-Cox · The SmallBizChat with Melinda Emerson

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I actually think one huge mistake is not claiming enough, not so much going to the side
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of, you know, claiming a little bit too much.
0:08
But again, especially as business owners, we should try to take every legal, of course,
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deduction to which we are entitled.
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But sometimes that requires you to do a little bit of planning, a little bit of documentation,
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a little bit of verification.
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One 0 ignition,
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liftoff.
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Ending small business failure.
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Welcome to the Small Biz Chat podcast with a number 1 small business expert, Melinda
0:39
Emerson.
0:39
Melinda's goal is to and small business failure, and she'll give you the information
0:44
you need to succeed and live the life you dream of.
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Now, here's the small biz lady herself.
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Melinda Emerson.
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Hi, everybody.
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I'm Melinda Emerson, the small biz lady, and I'm the host of the small biz chat podcast.
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I'm so excited to have you all here with us today because we have an amazing show.
1:05
Now the small business chat podcast is a peer to peer interview show.
1:09
That gives small business owners a way to get invaluable business advice.
1:14
The mission of small business chat is to end small business failure.
1:19
You're here to get advice about how to take your business to the next level, and we're
1:23
giving you different angles that you might wanna consider.
1:27
So now with that, I want to Kaufani Cartch.
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She is known as the Money Coach.
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She is a personal finance expert, speaker, and author, and she has written 15 money management
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books, including her New York Times best selling book 0 debt, the ultimate guide to
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financial freedom.
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Lynette has been seen on more than 1000 television segments nationwide, including
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Oprah, Doctor Phil, the Doctor Osha, Good Morning America, and the Today Show.
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If you want more information about her, all you have to do is go over to ask the money
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coach.com.
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Lynette, thank you so much for joining me today.
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Hey.
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It's my pleasure.
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I was looking forward to this.
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Alright.
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Well, let's jump into it.
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I know your backstory, but other people don't.
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How did you become the money coach?
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Well, I actually had no idea I would do anything in the realm of teaching people about
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personal finances and money.
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My educational background was in journalism.
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And so I got my undergraduate degree in English, then I got a master's degree in
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journalism and broadcast journalism specifically, from USC, Gautrogians.
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But then I ended up going out from Los Angeles to the East Coast And I got a job with Dow
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Jones, which was obviously the parent company at Wall Street Journal.
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So I kind of parlayed my journalism background and experience.
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I worked for the Villaf Enquirer and Fox at 10 o'clock news and all that good stuff.
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And then I started in financial news journalism.
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And, again, to be honest, I didn't know a stock from a bond when I started out.
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But I covered Wall Street ultimately.
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I started writing about corporate Finance And Investment Banking And the brokerage business.
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And, of course, over the years, I got to interview 1000 and 1000 of experts and, you
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know, stock workers and investment bankers and traders.
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And I would always ask them about what worked and what they were doing with their clients.
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And so when I left my role as a Wall Street Journal reporter for CNBC, then I started my
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own company as the Money Coach.
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And then I parlay that sort of financial journalism background into a lot of what I do
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today, which is still a lot of media a lot of writing and a lot of talking to people about
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the personal finance issues, that matter most to them.
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Well, I'm really glad you you told me all of that.
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I don't think I knew you went to USC, but, listen, and I wanna talk to you.
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You know, tax season is right around the corner.
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And so I wanted to have an opportunity first for you to clarify when are business taxes due
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and when are personal taxes due, this is a bugaboo of mine.
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Every year, people get this really wrong.
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And they get themselves in trouble.
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So I was wondering if you could first before we go anywhere.
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Can you please clarify the deadlines?
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Sure.
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So first, I should actually say the tax season isn't really technically around the corner.
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It's here.
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It's already, you know, upon us, the IRS has started accepting, and processing tax returns,
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and they actually kind of opened the window for that two and a half weeks earlier, this year
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compared to what they did last year.
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But the tax filing deadlines for corporate tax returns, it's March 15 2022 to get that 2021
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tax filing in there.
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That's if you, you have even if you have a partnership, if you file an 11 20 or 11 20s,
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folks like myself, if you have an s corp, that's what I file.
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You get sort of k 1 and dividend income And if you pay yourself a wage in that manner, your
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tax filing deadline is March 15th on the business side.
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On the individual side, for individual tax returns.
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Again, folks who are filing a 10.40 typically tax return, it's April 18th.
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You actually have a couple extra days than the the normal April 15th tax deadline that we know
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and hear about.
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Well, I'm glad you clarified that because every year, I feel like I'm educating people about,
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yeah, business taxes are due March 50.
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And like, it's a surprise to people.
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So so let's jump into it, though.
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What are the biggest changes that people should be looking out for going into 2022?
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Well, certainly on the small business front, I would highlight 2 big changes, on the tax front
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at especially as it pertains to deductions, which, of course, all of us small business
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owners should be taking advantage of every deduction and or tax credit for which we're
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eligible and for which we qualify.
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But 2 biggies are, business meals, which for the 2021 tax year, have increased and also for
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2022 from 50% deductions to you being able to write off a 100% of those business meals as
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long as you eat at a restaurant, you know, or drink at a restaurant.
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You can't, like, order some groceries or something or, you know, get some food from a
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deli or whatever and then try to write that off.
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But if you go in and you don't have to even sit down you can have takeout, you know, again, as
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long as it's for business purposes or you're having a business conversation, you can write
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off a 100% of those business meals, not 50% as was in the past.
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Additionally, the mileage rate change And this one was not as favorable.
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It's 56¢ per business mile driven.
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If you wanna be able right off your mileage on that front.
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And that's actually down a penny and a half from 57a half since the year prior.
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So, you know, hey, the IRS, I'm just saying
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You're doing reverse inflation.
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They're doing reverse inflation on people with that.
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Like, sounds pretty ridiculous.
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It's kinda it's gonna go back up again.
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There it has for 2022, but, yes, for 2021, It actually went down for the business mileage,
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rates.
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Oh, man.
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Well, let's talk a little bit about, like, some of the common mistakes that people make with
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their taxes.
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I mean, I I would've seen that the biggest one is they try to write off too much stuff and and
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and flag themselves for an audit.
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But other than some of, like, that sort of like captain obvious one.
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Tell me some of the other things that people kind of mess up with their taxes.
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Sure.
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So there's a laundry list of, mistakes and blunders that people make when it comes to
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filing their taxes.
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I actually think one huge mistake is not claiming enough, not so much going to the side
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of, you know, claiming a little bit too much.
8:20
But again, especially as business owners, we should try to take every legal, of course,
8:26
deduction to which we are entitled.
8:29
But sometimes that requires you to do a little bit of planning, a little bit of documentation,
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a little bit of verification, So sometimes people don't take the deductions to which
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they're entitled simply because they haven't had good record keeping.
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And so that's one of the you know, big blunders.
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Then there's a whole, you know, other things from transposing numbers, having a Social
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Security number wrong, not signing, a filing, you know, all those kinds of mistakes that will
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get your return frankly kicked back.
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And, certainly, if you're owed any kind of IRS tax refund check, it'll make it longer before
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you see that money coming in your bank account.
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Well, what kinds of things can you do?
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I mean, I know it's too late now, but let's just talk about for they're planning for 2022.
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What kinds of tax planning type things can you do to avoid paying so many taxes?
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I think one crucial thing that a lot of people would be aided by is not just sort of looking
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at matters related to tax season right around February, March, April, ahead of the tax filing
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deadlines.
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Really, you should be thinking about tax planning in a strategic manner all year long.
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So one thing you can do certainly is to have connections with a professional, a CPA, an
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accountant, a paid tax preparer, somebody who can give you some guidance and feedback and to
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help you along the way to be thinking about Again, the deductions for which you qualify,
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strategies for reducing business taxes, other tax credits for which you might try to make
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sure that you are able to capture.
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And just as a whole, the ways in which you can run your business more effectively in terms of
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being able to perhaps combine some elements of your everyday life or your lifestyle if that's
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a part of your normal business activities.
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So I think one thing is to just really think through that taxes isn't just about the first
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quarter or so of the year, but it's really something that you should make a habit of, kind
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of engaging with a professional and thinking through on a longer term basis.
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Alright.
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Now I think I know the answer to this question, but unless your business is accounting, you
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shouldn't do your own taxes, should you?
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I'm not a fan of it.
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Although even though earlier in my life, you know, in my I don't know, early twenties or
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something for maybe even 18 on, and I started working on as a teenager.
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I actually did used to do my own taxes for a long time.
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I'm a geek like that, though.
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I would literally sit there and read textbooks.
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And to this day, I'm still I kinda geek out on it by read textbooks every year.
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And I like to learn about tax changes, new laws that have come about that affect all of us,
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whether we're small business owners and entrepreneurs or otherwise.
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But, no, frankly, I think that the experts are best left, our best position to be able to help
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us to not only file and prepare our tax returns, but to do so on time and to make sure
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that they, you know, in a way that they understand all of the new things that happen.
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Because unless you're, you know, a CPA and accountant, the tax preparer, nobody's gonna
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have the time, the effort, the energy, or frankly, most people that were with all and the
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desire to keep up with all of those, updates in the law, and they do happen on an annual basis.
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Now I know that you have some specific advice for people around should they be so fortunate
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as to get a tax refund?
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Like, what is it that, you know, how should people plan for their tax refund?
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You know, a lot of people just blow their tax refund.
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Like, what, you know, what do you think people should do if they if they believe they're gonna
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get a tax refund?
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Right.
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Well, the IRS actually says that about 75% of all taxpayers do get a tax refund check, and
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the typical tax refund is almost $3000.
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It's about $28100.
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So that's a nice chunk of money to to work with.
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I think there's 3 smart things that you can do with that tax refund check if you're so
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fortunate to get one from Uncle Sam.
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1, pay down some debt.
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Way too many Americans have way too much debt.
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Small business owners included a lot of the marches you know, putting bills on their own
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personal credit cards and or their business cards, etcetera, but pay down some debt.
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That's a strategic smart use of some of your tax refund, monies.
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You should also save more.
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Unfortunately, the average American, again, has a woefully small amount of savings.
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In fact, you know, studies from the Fed and and elsewhere show that the average American
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doesn't even have $400 in emergency savings and that if an emergency did come up they'd have to
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whip out plastic, borrow from someone else, or, you know, go to another source to be able to
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deal with that unexpected event.
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The savings problem in this country is huge, especially given the pandemic, where we saw
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that so many things can be sort of out of our own control It's one of the reasons, Melinda
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that I know that you know that I'm super happy to have partnered recently with H And R Block.
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They've actually launched a digital banking app, a mobile banking app, and a savings
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account called Spruce Money, And it's phenomenal in terms of helping people to be
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able to meet this challenge of saving more money.
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It's a free app, and you don't have to be a agent or block client to do so.
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But you get to use this app in ways that really foster greater savings because they're giving
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you little nudges to tell you to save.
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They're helping you to track your spending, and they're helping you to allocate or to earmark a
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portion of your tax refund check to to say, how much do I wanna put automatically into savings?
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So they're making you be more mindful about the smart use of that fund as opposed to just, you
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know, blowing the money as soon as you get that refund check.
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So so Spruce is a great resource that I would definitely encourage your audience to to check
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out.
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And then lastly, I would say investing in yourself.
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Certainly, As small business owners, we all take risks.
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We all do invest in ourselves.
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We invest in our businesses, but, you know, there's other things you can do to upgrade your
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skill set to take boot camps, workshops, courses, etcetera, things that will help you in
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your career or in your line of work That's a great way to use your tax refund check as well.
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I love it.
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I love it.
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That was great advice.
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Alright.
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I got one last question for you.
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What is the best business advice that you have ever gotten?
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Hands down, the single best advice I've ever received was from, my sister Debbie.
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She passed away, unfortunately, in 2014.
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But Debbie was a phenomenal person, and she always told me this message, which was bring
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your a game.
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And it was about excellence.
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It was about always striving to be the best at what you do to not make excuses.
15:34
To not do things in a half baked manner, and to show up in a way that represents you personally
15:41
and professionally in the best possible light.
15:44
So, you know, I really took that advice to heart in so many ways throughout my career, but
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certainly in the in the wake of her passing, even more so, it made me think about the high
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standards, that she set.
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She was a small business owner as well.
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And I like to think that I'm kind of carrying that torch along in her honor and beyond that
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I'm definitely bringing my my a game.
16:08
I love it.
16:08
Alright.
16:09
This is Melinda Emerson.
16:10
I'm here with Lynette, California Cost, the Money Coach, and we'll be right back.
16:15
Hi.
16:15
I'm Melinda Emerson's small biz lady, and I wanna welcome you to small biz lady university.
16:20
Our mission here is to end small business failure.
16:24
So all the courses here are about 2 things, how to become your own boss, or how to make money
16:31
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16:31
So that's we do here.
16:33
So whether you wanna learn about email, marketing, and sales funnels, or you're ready
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to get with social media selling, or if you're really just getting started with ecommerce, you
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Either way, if you want to learn how to become your own boss and do it well, I have everything
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you need here at smallbizlatinguniversity dotcom.
16:57
If you have any questions or have any technical problems getting signed up, just email us at
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support@malindamerson.com.
17:05
Take care.
17:09
Welcome back to the small biz chat podcast.
17:11
I'm Melinda Emerson small biz lady, your host, And I'm here with Lynette Calfani, Cox, the
17:16
Money Coach, and she's gonna give us some advice now of for if you have some tax issue,
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what do you do?
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If you're afraid of IRS, what should you do?
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Lynette, tell us, you know, if you've got some tax troubles or you haven't filed in 2 or 3
17:30
years, and you're getting these threatening letters from the IRS.
17:33
What should you do?
17:35
The main thing is don't avoid the IRS.
17:37
They actually have a number of flexible payment plans, installment plan options, and other
17:44
things to help people to deal with their tax issues.
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And so if you owe $50,000 or less, you can get into a an installment plan.
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So you don't need to fear the IRS in ways that most people to to kind of keep themselves up at
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night with fear and worry.
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Well, and now if you do have an issue, though, should you try to negotiate yourself or should
18:06
you hire an enrolled agent, which is a CPA that's gotten some additional certification
18:11
training to negotiate with the IRS on behalf of clients Is it good for you to just try to pick
18:16
up the phone yourself, or should you hire some help?
18:19
I think that for routine matters, you can actually do it yourself.
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If you have a very basic kind of situation, you wanna explain that to the IRS, I don't think
18:29
that you have to hire an enrolled agent.
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For more complex matters, for multi year matters, for more sophisticated, let's say,
18:38
issues or problems, I don't think it can certainly hurt to have an enrolled agent on
18:42
your side.
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But I just don't want people to think that if they've been behind the financial eight ball or
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if they don't have the money to hire somebody that they kinda stick their head in the sand
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and do nothing.
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It's much better to approach them on your own rather than do nothing.
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Alright.
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You heard it here from Lynette Calfani Cox, the money coach.
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She told you, if you got some IRS problems, don't be afraid.
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Pick up the phone.
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Hiding your head in the sand is only gonna make your problem worse.
19:09
What is your favorite podcast, Lynette Calfani cars?
19:12
What is your favorite podcast?
19:14
Oh,
19:15
I guess I would have to say, I like, his and her money.
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Think I like a lot of folks that are doing.
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You put me on the spot with that one.
19:24
But I'll I'll go with I'll go with I'll go with his and her money.
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Alright.
19:28
I'll take it.
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I've haven't heard of that one, so I have to check it out.
19:31
Alright, Lynette.
19:32
What is your favorite business app?
19:34
I guess I would say MyIQ tracking your business mileage, which is one of the things that I
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alluded to earlier in terms of, what folks need to know for their taxes and you're a small
19:45
business owner and you're driving around, you wanna make sure that you keep tabs on what
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you're doing for the personal front and on the business front.
19:52
Love it.
19:53
Lynette, what's your favorite business book?
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I'll go with a with a with a classic, a twenty five year old book originally, which, still
20:02
resonates and has been updated, for today.
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The brand called you, by Peter Montoya.
20:09
And when you think about it, this book was, I don't know, written in 97 or so, I think,
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originally, but even more relevant for today, we think about big brands, Coca Cola, Nike,
20:19
etcetera, but it's all about every one of us having a personal brand and how that carries
20:25
out in the work that we do and how we need to pay attention and curate those brands.
20:30
I love it.
20:31
I love it.
20:31
My favorite book is Disrupt You by Jay Samit because he says if you wanna disrupt the world,
20:36
start by disrupting yourself.
20:38
I love that book.
20:38
I think everyone should read it.
20:40
This was so awesome.
20:41
Please support my guests because they have given their time and advice here tonight to
20:46
help all of us do better in business.
20:49
Thank you all for watching this episode of the small bitch chat podcast.
20:53
If you're looking for your digital pivot, I've got a resource that's gonna help you.
20:57
We've got wonderful courses over at Small Buslady University, and I have one called
21:01
social media selling that we just launched earlier this year.
21:05
So if you're looking to figure out how you can turn your social into cash, I've got everything
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you need.
21:10
All you do is head over to smallbizladyuniversity.com.
21:14
You know, the mission of small business chat is to end small business failure.
21:18
It is my honor to work with you all and share my insight and thought of my guests and I wanna
21:25
leave you with this.
21:25
You never lose in business, either you win or you learn.
21:29
God bless everybody.
21:30
Good night.
21:33
Thank you for listening to the Small Biz Chat podcast with Melinda Emerson.
21:38
For more resources and small business success strategies, visit succeed as your own boss.com.
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Subscribe to this podcast wherever you listen to podcasts and join us next Wednesday.