This past Saturday on April 27 we had the April meetup at Ironside Kitchen and Pizza with LeeBetsy Charon, a Certified Public Accountant (CPA), who gave us fantastic, useful, and insider tips on how to appropriately manage our businesses’ taxes. The meetup was setup entirely as a Q&A, which gave bloggers from various backgrounds the chance to hear valuable insight of how to stay true to IRS guidelines while maximizing deductions where possible. We are so grateful to Leebetsy for her detailed responses and our audience was so excited for her expertise it was agreed everyone would love to benefit from a workshop sometime soon on how to create an LLC and set-up an employee identification number (EIN). Here are some of the questions that were asked – if you find yourself asking these or other questions reach out to LeeBetsy directly on her Instagram page @thecraftaccountant
- What are some of the best ways to track expenses for deductions?
- The application/websites for Wave and Quickbooks
- What are the benefits of being an LLC vs. a C-Corp or S-Corp?
- An LLC is better for bloggers since C-Corps and S-Corps are subject to payroll taxes and really are for businesses making significantly more money.
- What tax rate should I always pay in Florida, at a minimum?
- 15.3% at the very least to cover the federal minimum for Social Security and Medicare taxes. It’s best to pay this so that, even if you have many deductions that benefit your tax situation, in the worst case scenario you will get money back the following year.
- How should I deduct food, if at all, from my taxes? What about clothes if I am a fashion blogger?
- When purchasing food at events, it should be deducted as event-related deductions on your tax return. The major benefit here is that as an event-related deduction it’s 100% deductible, vs. if it’s listed as food alone it’s only 50%. Since this is in fact an event related expense, it would still be accurate to report this way.
- For clothes, even if you use this for regular daily use after purchasing, if the original use was for blog/promotion or an event, then it is deductible. It can be deducted under the category “uniforms”.
- Is it beneficial to have more than one person in my LLC? What does it mean for my taxes?
- If it is someone you file taxes with (your legal spouse) then it’s still simple in terms of how you track your expenses and file your tax returns each year (you would file the same forms). However, if you do have one more person in your LLC that you do not file tax returns with (not your legal spouse) then it would be considered a partnership account and additional tax forms would have to be filed. In this case, it’s useful to speak to a tax professional about what’s best for your situation.
- How do miles and gas contribute to deductions? Can I use both simultaneously?
- You can only use one or the other when filing for deductions. Miles have a set formula and your actual auto expenses (gas + repairs due to business-related-use) typically vary depending on the type of business/blog you have. This is another item that is best to review with a tax professional in order to determine which one gives you the biggest deduction for your situation.
- Should I have a separate bank account for my LLC?
- This was a huge recommendation and LeeBetsy completely supported having a separate bank account for your LLC, since it’s easier to track both income and expenses in one account vs. having things pass through your personal account. That said, if you ever do have expenses in your personal account related to your business, always do your best to consistently track what those expenses are and have them on record for tax season. When in doubt, always keep record!
We were so happy with the turnout and very thankful to Ironside Kitchen and Pizza who served us with outstanding service, food, and beverage throughout the event. We highly recommend checking their spot out as well, it’s beautiful, rustic, open, and convenient for a variety of events. We’ll see you next month!
All photos courtesy of Nabila Verushka photography.