Moments with an M.E.O.

Preparing for your first tax appointment for your small business, with Caitlynn

February 08, 2022 Britt Season 3 Episode 105
Moments with an M.E.O.
Preparing for your first tax appointment for your small business, with Caitlynn
Show Notes Transcript

Are you putting off doing your taxes because you're nervous about what your taxes will look like with your small business? When I first started my business I was very worried about our tax appointment. What would we owe? Would we even get a tax return? What documents should I bring to my taxes appointment? That's why I asked the wonderful Caitlynn Eldridge, CPA and CFO, to come chat with us on episode 105 of the Moments with an MEO podcast about what you should bring to your first taxes appointment.

In this episode, Caitlynn shares with us:
- What you need to do prior to your taxes appointment to make sure the appointment itself runs smooth.
- What to bring to your appointment - including your 3rd stimulus documentation - did you remember that you got one? I totally forgot!
- What to bring if you bought, sold or rented out a home in 2021.
- What to do this year to make sure next years' taxes appointment goes smooth.
- What an IRS audit is, and what you could expect.
- What are tax write offs, and what's not.

This episode is PACKED and great for any new small business owner - so share this episode with a friend who needs to sweat a little less this time of year!

Thanks for listening to Moments with an MEO; the podcast for the small business military spouse entrepreneur. Tune in each week for new tips, ideas, and PDFs to help you grow your big dreams.

Download the PDF for this episode: Your First Taxes Appointment

Connect with Caitlynn on Instagram
Connect with Caitlynn on her website

Work with Britt:
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Caitlynn Elderidge  0:00  
They had all this wealth and how are they managing that wealth? And how could it be replicated in ways that I could do? Your tax person, they're not responsible for auditing your financial. So if you come to them and say my revenue was $50,000, my expenses were $25,000. And you give them those nice round numbers. I mean, they're gonna raise an eyebrow, and they're gonna be like, Are you sure? And if you're like, Yeah, then they take that it is not their duty by any means to scrub your expenses. So please do not show up with your box of receipts for them. They don't want to see it.

Britt  0:39  
Well, Caitlin, I am thrilled to welcome you to the moments with me. Oh, podcast. Thank you so much for joining us today. How are you?

Caitlynn Elderidge  0:47  
I am well, thank you so much for having me. It's good to be here.

Britt  0:50  
I am so excited because today we're talking about taxes, which is, I think, a hot topic right now, considering it's January. And everybody is like, oh my gosh, what do I do for taxes? You know, what do I bring into my appointment? How do I get myself set up? If I'm expecting to make a lot of money this year? Like, what does that look like? I know, my first year in business, I saw all these photographers who were like the only entrepreneur I was really following at the time. You know, they're talking about like, quarterly taxes. And I knew I wasn't doing that. And I was like, oh, man, you know, I'm only making a couple $100 a month, but like, what does that look like? Am I supposed to be doing this? And so I know that this episode is going to bring a lot of value, and answer a lot of questions. So I'm thrilled. Let's just start with a brief introduction of who you are for our listeners.

Caitlynn Elderidge  1:43  
Yeah, so my name is Caitlin. I am a CPA CFO in terms of professional military spouse, that your force wife, my husband's a pilot in the Air Force, mother of four kids and a military brat. So like I grew up in this life, married and in his life and kind of just continued ever since which I don't think if you were to ask like seven year old me, I wouldn't have done this. But things happen. And so yeah, here. It's kind of work. What's let us we're currently stationed in Mississippi and wrapping up our tour here. So we'll be PCs in later this year and kind of looking forward to someplace new. Well, it's an old for us, but it'll be new to get back there.

Britt  2:23  
That's exciting. Now, you said that you grew up military brat and then transitioned to military wife. I'm curious how you met your spouse. Was it from some sort of military function on base with your parents like what did that

Caitlynn Elderidge  2:37  
high school both of our parents his dad was a pilot mine. It was what they call an electronic warfare officer. So an EVO in the same plane. So we actually unknowingly were stationed together at the same base in our early years like kindergarten, and we both ended up coming back in high school and so we met in high school doing JROTC started dating when I was 16. And he was 17. And continued ever since I got married about it years later, our parents kept kind of pushing the wedding off as long as they could, encouraging us to like live our own lives for a little bit while dating before we got married. And about the time he finished pilot training is when we finally got married, and he ended up coming back to the base and the airplane that both of our dads were on and his grandpa was on. So we use the third generation to fly this thing. And the whole base pretty much knew Him because they either knew my dad or his dad, it felt like when he got there.

Britt  3:30  
Wow. So it kind of came almost full circle for him.

Caitlynn Elderidge  3:34  
At that time, I had a job in Omaha, which is where we were stationed that I really loved. I was like, can you just come back and like fly this plane and that would be great. We go to his drop night, he gets the plane and I'm in tears and they're not happy tears because I was so miserable at work. And I was like I just wanted to move and he's like, you've been asking me for a year for us to come back here. So I learned quickly you can't change your mind. Once the military has their say.

Britt  4:00  
That is very, very true. Now, going through Jr, OTC and all of that. I'm curious. Were you always going to be a CPA? Was that the dream? I don't know. I'm not a huge fan of finances, like numbers are not my thing. Math is never my thing. So I I couldn't imagine somebody excited to do finances for

Caitlynn Elderidge  4:24  
the rest of their life. So I was actually I went into college with the intent to study foreign languages and work for the NSA or go manage hotels somewhere using that language. And part of that managing hotels and stuff was a business degree and so I was in a business program. I had to take Accounting I was in accounting 101 went to go ask the professor question after hours or during her office hours and happened to say during that conversation. This is actually a lot of fun. Like I enjoy this. And before I left her office, she had me switched my major to accounting, I was going to be graduating in the four years ready to sit for the CPA exam when I was done. And I think a triple major like she's like, Oh, you can still do your business degree, we'll just add accounting to it. And I also had French because my goal was to go study abroad. So yeah, it was totally just like, Oh, this looks fun. I'll try it never anticipated. And she's like, well, we can make a career out of it, I can guarantee you'll get employed after school. And this was back in Oh, 607. So just before the crash, but enough that I was like, oh, I need to make sure I can get a job and hotels didn't seem super, like guaranteed at least not a good level job. And I think at that point, they're like, Yeah, you're starting salaries $46,000. So it's like, well, at least I can pay off my student loan debt. So sign me up. And lo and behold, I became a CPA.

Britt  5:47  
That is awesome. And I know that you love what you do. Now, nobody's excited about finances, especially when you're not in a good financial space, when you know you're in a load of debt, or anything else, like finances can seem really overwhelming. And I built a lot of my platform around that having my own credit score be in the low four hundreds, and turning it around in two years due to entrepreneurship. And I've seen that money mindset shift. But I'm curious what it was like on the inside going from like, you know, oh, man, I'm in a lot of debt. And you know, hotels is what I want to do. But there doesn't seem to be a whole lot of stability there, too. Oh, my gosh, I like economics and money. And this is actually fun.

Caitlynn Elderidge  6:31  
A lot of good professors. And then in the work atmosphere, my first job was at a big four firm, and my clients were all high net worth clients. So you kind of either get like the high net worth clients, or the businesses and I just lucked out into the high net worth clients. And so seeing what they were doing and studying, from a distance, their numbers, I mean, it wasn't in conversations with him. But it was just fascinating to see, like they had all this wealth and how were they managing that wealth? And how could it be replicated in ways that I could do, but I just enjoyed all of it. I mean, the personal finance podcast, podcast, were really gaining momentum when I graduated college. And so listening to all of those on walks, and going through our finances, taking my husband who couldn't care less, as long as the bills are paid, he's like, I don't care what's going on, taking him through it, and having him to check me and my world, we would be super tight, and we'd be paying, like we paid off all of our debt. But we'd be investing or paying the house off faster. means like, yeah, there's a little bit of life we have to do now. So my journey has been balancing that have been kind of paper perfect. And then balancing that with like, realistic and we want to make memories and we want to have a life. And just modeling that after people we see doing that successfully.

Britt  7:46  
I love that because my husband is very much so the same. I run our budget, and it's a personal choice. And it was not Nick's favorite idea. When I told him, Hey, my credit score is a low 400, you have 800 plus, and I want to run our finances. And he was like, Ah, I don't know about this. And I was like, No, you don't understand, like I'm shifting, I'm changing this, I am getting rid of my debt. And before we even combine finances, I want to make sure that while you're deployed, I can pay the bills, I can do this, I can do that. And make sure that while you are deployed, I don't have questions, and I can't get them from you because you're going to be in Afghanistan. And so I laid out everything, I got a bill tracker where I could track all of our monthly expenses. And it was hilarious that the first three months I went to him. And I was like so I ran our budget. We went over budget all three months, and it was all in fast food. I love to cook so who's to blame for that.

Caitlynn Elderidge  8:50  
We're busting the budget. Yes,

Britt  8:52  
this is where we can budget this is where we can put the debt. And this is by you know, six months from now we can drop our monthly bills by over $1,000 If we just not eat out every day of the week. So I've learned a lot and through that it is balancing because Nick prioritizes food he loves to eat out. And if I was in charge of everything, and it was just me, we would never eat out. Unless it's sushi, of course because I still can't get the role of hard one.

Caitlynn Elderidge  9:23  
Or just dealing with that kind of fish like the really fancy ones. That's the professional.

Britt  9:29  
Exactly. Oh, I love that you talk about you know this balance between you and strict and trying to stick to this budget and being perfect on paper and the reality of life and priorities because I think in a relationship whether that's your business, love interest or anything like that it's important to balance priorities. And it's not always what we think it is right off the bat. So I love that perspective. The big question everybody has it Everybody's going, oh, man, my husband made our appointment on base, or we are going to do this online and we've set up a time in a day we're going to do this. I feel like everybody dreads doing their taxes. In preparation for everybody's appointment, which is coming up. What do we need for our first appointment as a business owner,

Caitlynn Elderidge  10:23  
as the business owner, what we're going to need a records for the year, so your tax person will kind of back up a little, they're not responsible for auditing your financial. So if you come to them and say, my revenue was $50,000, my expenses were $25,000. And you give them those nice round numbers, I mean, they're gonna raise an eyebrow, and they're gonna be like, Are you sure. And if you're like, Yeah, then they take that it is not their duty by any means to scrub your expenses. So please do not show up with your box of receipts for them, they don't want to see it, the best thing you can do is put that all in an Excel and categorize it. In categories that make sense to you, I find people get very stuck on what to name a category, and then they just shut down and they won't work anymore. They're like, well, I don't know if this meal is under entertainment or meals. And I'm just not gonna do it like just mix, make and pick something that makes sense in this logical and that you can explain to the person, because if they have to put it in a different category on your form, they'll figure that out. That's their job yours is to be able to explain what happened in your business. So half the big things, office supplies, we're talking your pins, your papers, your keyboards, and mouse's those are kind of office supplies, categories like software, that's one that if you were to pull up a schedule C, you're not going to see on that. Because our schedule C's are so old, they don't take into account anymore, or new day and age. So put software under something subscriptions, professional development, any trainings, you're paying for any memberships that are better in your career, but get those all categorized onto an Excel for the 12 months. So you want to show your 12 months of revenue, and your 12 months of expenses. Ideally, for your records, I'd say like have each month broken out. But bare minimum, toss them into one sheet on an Excel that shows it for the year. And that's what you're going to need to bring. Again, your tax preparer is allowed to dig into some of those items and say, Hey, this sounds really high. Can you support that and around that, they're going to educate you that if you can't support it, you lose it on audit, you're going to be facing some interest and penalties. But as a business owner, that's what we need. The other thing, since we are mid January, you still have time, if you have paid any contractors, so anyone working for you, providing copywriting or podcast editing services, and you have paid them $600 Or more via like an ACH bank transfer cheque or cash, you owe them attend 99 by the 31st of this month. So you need to make sure you get that filed because on your tax return, the tax person who's preparing is gonna ask you and they're gonna say, Hey, did you have to file a 1099? And the answer is yes. If you paid anybody that $600 or more. And then the second question is, Did you file it? You don't want to lie on your return. So you don't want to say yes, I was supposed to. And yes, I did. But I really didn't. And you also need to get them done, or else you'll get penalties, you can file them late. So if you don't catch this until you go to your tax person, it's still fixable. But the worst thing would be to lie and say like, Oh, I did it and then not do it, or said and have to even if you did, so don't commit perjury on your return because you do sign it saying that everything is accurate. That's the big pieces for your business. The other things this month is that you'll be getting to 90 nines, if you worked for somebody, they're gonna send those to you. So collect those, you want to make sure your revenues are at least the same as your 1099. And that's going to be a 10 99k that will be from like your pay pals your stripes. If you did $20,000 or more in transactions, they're going to send you one of those. So collect that and then any 1099 any C's, that's your contract are one. So your total revenue should be at least with those 1099 show. If not, you got a problem and make sure you can go back and fix it and see where people paid you money that you lost. You're also going to get some other kind of personal stuff from the IRS you need to take those with you. So if you have a W two job bring that with you. They're going to be sending out letters in January the IRS if you haven't gotten it yet, you should it should tell you what your third stimulus payment was. So like, way back in March of 2021. If anyone can remember, we got another stimulus. I mean, most of I forgotten that we got one but we got one. So you're gonna get that documentation. The IRS is gonna say hey, we sent you this much money. And then you're also going to get something for those advanced child tax credit payments that you got That, again, we'll say from July through December, this is how much money we paid, you take that to the tax person, it's so much easier than calling the IRS to figure out what you got, your life will be simpler, you will have less errors on your return. And you don't want that. So yeah, those are the really big pieces. I know, in the military community, it's super popular that we have rental houses. So again, any documentation you have around a rental house, that you are renting out someone else's in. So if you have a project, or a property manager, they'll probably give you like a one page summary, bring that with you the income and the expenses, your 1098 showing interest in Texas. And then finally, circling back to home businesses. If you work from home, in a room that is exclusively and regularly used for your business, if you guys are watching this on YouTube, mine is not you can see my bed behind me I don't get to take a home office deduction. I don't take one because I don't use this room exclusively for work. But if you do, you're entitled to a home office deduction. Some tax preparers forget to ask about that, because they're in a rush, you need to bring all of your rent for the year if you rent, or all of your mortgage interest and real estate taxes, and then all of your utilities, and then the size of your office against the size of your home. And then you can get a mortgage for a home office deduction, which is a little bit extra, as a kind of a reimbursement on the tax side for using your office to earn income.

Britt  16:31  
That is awesome. My husband and I purchased our first home. And we went from rented to home owners. And we were told their stuff that we got to bring for that too. So I'm curious about homeownership real quick. And then the other thing is that the 1099 I've had because I do contracted work for others. I've heard that it is my responsibility to do the 1099. And so what you're saying is that it's actually whoever is paying me is in charge of that correct? I just want to clear that up in case because I think this is a common misconception, I think

Caitlynn Elderidge  17:09  
so too. So you would submit a W nine or they should have asked you for a W nine before they sent you your first payment. So if you want to kind of do best practices going forward, if you're ever going to pay someone regularly, before you send that very first payment to them, ask them for a W nine, so that you can send that to 99. But no, if it is you who are paying them, the 1099 what it's supposed to show is it's supposed to support the deduction on the person paying you side. So they can say yes, I paid this person, here's that 1099 That shows it, it supports the income on the other side. And why we do cash and bank transfers, it helps if you can think like the IRS things, which is they are trying to catch payments that aren't recorded anywhere else. And to make sure that everyone is reporting the income appropriately and no one is taking an expense that they shouldn't. And so it is on the responsibility of the person who pays you to also send you that 299

Britt  18:05  
Awesome. And then home ownership or switching from you know, you know, if you sell a home because you PCs and you move and you buy another home, what kind of paperwork should you bring to that appointment as well,

Caitlynn Elderidge  18:18  
you're going to want your closing documents on both sides, because they will list out any extra payments. If you ended up paying some extra taxes, your realtor fees all of those pieces, bring both of those. I will say in today's day and age with our increased standard deduction. It's rare that you've used that. But all of that can support your home office deduction, which is probably a little more common. But what they're really digging for those interest taxes closing costs on both sides, because those can be deducted if you end up itemizing. So with that when we talk about itemizing for your personal life, so your business is separate, we're talking personal charitable contributions, mortgage interest, real estate taxes, state taxes, those are kept, of course these days to 10,000. But if you're not in like California or New York, it's still a very beneficial deduction. If those itemized can get you above 25,200, for married filing joint, then you'll itemize in. So typically, what we see is if you really are heavy on the charitable contributions, that's where this deduction is beneficial, and where you really want all of that data. It's always better to bring more paperwork than you think you need to these appointments just because you don't want to have to be like, Okay, well, I'll come back in two weeks with more stuff like you just want to get it done. Your tax person should also send you ahead of your appointment, an organizer of sorts, kind of is what we call them, but it should be a questionnaire that says like, did you have any of these tax situations? If yes, these are the documents you should bring. So hopefully they are being prepared to and kind of guiding you Also, if they're new, you've never seen them before, bring your prior your tax return. It helps the preparer just to skim it and be like, Okay, is there anything that they forgot that they didn't tell me that I can catch off before?

Britt  20:12  
I love that. Alright, so we're all prepared for this appointment coming up in the next few weeks. And we're all ready, we feel confident, and this is great. Now to prevent the scramble, that we're gonna have to do for this year's appointment. How do we set ourselves and our business up for success for the next year? I noticed you already mentioned, you know, tracking receipts, do I need to track you know, that $9 Starbucks at a work meeting? Or you know, or going to a branding session? Like, what exactly do I need to do to be successful so that next year, it's not a scramble, and I can just walk in and go, we're done. I got this.

Caitlynn Elderidge  20:54  
I love it. So what we really want is to start monthly doing our bookkeeping, so that can look like monthly, I'm entering my bank statement credit cards into an Excel monthly, I'm using a software like fresh books, wave QuickBooks Xero, like there's so many options, pick one that you like, go with it. And that monthly, you're sitting down, and you're categorizing them, and you're saying, Okay, this is for this item. And then at that time, we're also making sure we have our receipts to support that. If you're like me, and you're completely online, I rarely step foot into anything that's going to give me a paper receipts these days, I actually have a folder in my inbox, and it just says the year and receipts. And that's where everything gets filed. For some people who are paper intensive, it's just a folder on their desktop, and they just scan everything and or take a picture with their phone and email themselves. And if you're a paper person, and that's gonna be a paper envelopes or paper folder that's like it's just again the year, you need it in case the IRS comes knocking if they say, Hey, I need to audit this tax year, I need you to prove these things to me, your bank statements and your credit card statements do not have enough detail. If you've ever looked at one you'll see like Amazon and a bunch of weird numbers and letters. But it doesn't say that you bought a printer. And so the IRS is gonna be like, you can't tell me like you can't prove you bought a $250 printer. So you can't take the deduction. So they'll take that away. So if we're doing this monthly, we're up to date, we know what's going on, we can hop into Amazon real quick and print out that receipt to support it and file it away. The other thing, if you haven't done it, is you want a separate business bank account. And a separate business credit card, some people are yes or no on credit. But if you're going to have one, and if you're going to use it for business purposes, have a business one, in this account, we use only for business stuff. And we only use that credit card for business stuff. And it will make your record keeping every month 100 times easier. Because you're not shifting through that target run. And that Starbucks run trying to decide was that business or personal, you know, if you go to Starbucks to meet a client, you're going to swipe your business card, and then you're covered a lot better.

Britt  23:05  
I love that. And I think it's so important to stay on top of it. And to stay consistent. Because I feel like a lot of times, you know, New Year New us new year resolution and we do it for a couple of weeks and then we fall off the horse. But this is something that you really cannot fall off the horse on. And just to kind of put that into perspective. Can you just talk about exactly what an audit is? And what happens if it comes back? And it's like, you were really wrong? What kind of implications like what is the risk here?

Caitlynn Elderidge  23:42  
Yeah, so with smaller businesses, the risk of a full blown audits pretty minimal, what they usually look like or what we call it desk audit. So the IRS is gonna send you a letter, and they're gonna say, Hey, we are taking issue with this category of expense, please prove it to us. And so at that point, what you would do is you'd either reach out to your tax accountant or you cover it, and you would start assembling, you'd say, okay, so they have issues with my professional development cost of $12,000. So I would start finding every receipt that supports that $12,000. If I have QuickBooks, I'm going to go and print out the actual account detail that lists out every single expense that gets me to that $12,000. I'm gonna send that all back to the IRS. At that point, they get to say, okay, cool, we're good with it. Or they might get into it with you and be like, I don't really think that for some reason this retreat qualifies as a business expense. And that's a whole different story. But let's say that they were like, Oh, we're going to disallow this $5,000. It doesn't count. Well, now you're going to owe taxes back on that $5,000. So not the whole 5000 But the tax amount of it, plus interest and penalties because you should have paid that tax two years ago. And so they're going to tack on some interest in penalties for that. You definitely want a tax person working with you on this. You want someone who can represent you in front of the IRS to walk through this, I would never recommend doing it alone, it'll be worth the cost of hiring someone. But that's why we keep those receipts is because it makes the tax persons in your job so much quicker. And the easier you make the life of the IRS agent because it's a person on the other end, the more likely they are to go with you anyways, like we had a client who she had some cancellation of debt, which is something more personal, but she was technically insolvent. And so that we made their life super easy. We're like, here's a nice chart. And here's a color coded thing that ties all these numbers together. And I took the IRS, I think one more letter back saying yeah, give us one more form. And then they went ahead and agreed with us. And so again, the easier we make their life easier your life's gonna be. And then usually it'll just let it go without too much hubbub. But that's the risk. If, however, you're a fraudulent person, which I don't think anyone listening to this is, and they go through, and they're like, oh, no, you're like, purposely up to no good in this business of yours. They're allowed to go back seven years, and they're allowed to assess like, a lot more fines and penalties. So don't commit fraud, like, don't write off a bunch of random expensive stuff. But that's why we will tell you to keep your receipts for seven years, most audits happened within three. But if they find something, they're allowed to go back seven,

Britt  26:17  
gotcha, that's super helpful. So I think, here, it's make sure that you're on top of it for this year. So that next year, you're not sweating bullets going, did I miss something,

Caitlynn Elderidge  26:28  
right, and it cost you if you're not tracking those expenses through the year, you're not going to remember them, and then it just cost you money. And you end up paying more to the IRS because that's what people will do. Honest people, what I find they will do is be like, I just want to take the expense, I don't remember it, I can't support it, and you're just paying extra money to the IRS. I don't agree with that either. But if I'm going to take a path, I'll take the more conservative one. But I want you to be able to keep all the money you deserve, which means keeping track of those receipts.

Britt  26:54  
Absolutely. And I love that you mentioned that, like retreats, and you know, all these different things like your office space, if you have an office, like we have an office here, I had an office at our condo, I think it's just so important to realize that there's a lot that you can write off. You know, that personal development book that you paid for every month or the Starbucks that you bought your photographer on your way to a branding shoot like these things are tax write offs, correct?

Caitlynn Elderidge  27:26  
Yeah, big categories, ordinary and necessary. What's ordinary necessary to run your business. In the online world it is its branding shoot. So the area that gets people caught sometimes. So if you go and get your makeup done at like Sephora, and you pay for it to do your makeup that day, that would be an expense for that branding, shoot. But going in buying your foundation that you're going to wear every day and just applying it not a business expense, the coffee that for that branding, shoot props for that branding, shoot, all of that would be a great write off. If you choose to have a separate business phone, the whole thing becomes a write off, you can write off a portion of your personal phone, too, which is something to consider because most of us are running our businesses partly on our phone. So about 50% is usually the kind of easy guide for what you can write off personally. But that's just yours. If your husband's not part of your business, if your spouse isn't part of your business, you can't write off there. So it's just you as the business owner. But keeping all of that in mind. Again, anything business that's going to help you make money in that business equipment, especially upgrade, upgrading your computer upgrading any technology that you have software, editing stuff, editing software for videos, and such would be write offs do.

Britt  28:39  
Yeah, and I know we touched upon this briefly before I hit record. But who needs a CPA? I mean, if I'm just starting my Etsy shop, and I've made $100, do I need a CPA? You know, how do I know how much in taxes I need to save each year? I'm assuming that that's a CPA or an accountant. But like, how do I know that I'm not going to get in trouble in January next year.

Caitlynn Elderidge  29:06  
So tax preparers, there's three kinds, we can have a non licensed one, we can have an EA or CPA, all three options, as long as they have experience are great. I like CPAs and EAS the best because they can represent you in front of the IRS. So when we talk about those audits, like they will have to stand there and put their name to it too, which I think just elevates the experience. When you're getting this year's return prepared. Ask them to run you an estimate for 2022 and say, Hey, I think I'm going to make this much can you tell me what I should send in for quarterly estimates? Most every software can do that pretty simply they might charge a nominal fee to do it. It'll be worth it. They'll give you the four vouchers and they'll say send these every quarter. And that way you'll be covered. If you make if you owe at tax time $1,500 Or more think it's 1500 and might be 2000. Now, you need to pay quarterly estimates. We Have a pay as you play system as you earn money, you need to send it in to the IRS quarterly, April 15, June 15, September 15. And then January 15. So just a couple days ago would have been due for 2021. Think of it like your W two, how you have those taxes withheld all the time. That's essentially what the IRS is trying to recreate with business owners is that, what they find is if they don't take that money as you make it, then you don't have it when you actually have to send it in. So they want you to send it. If you don't have anyone who can run any kind of estimates for you. You can do kind of like a thumb in the wind. Take your income, subtract out all your expenses, because you've been doing your monthly bookkeeping, multiply it by about 25%, cut that check off to the IRS every quarter and send that in. If you've ever read like a Profit First, they'll say that's about I think it's 15 or 20%, to have every revenue dollar, I find it a little aggressive. But if you are a spender, then go ahead and just like cut it off the top, set that money aside, I'd rather you have a fat tax account than have a skinny one and not be able to send the money in. Perfect.

Britt  31:09  
And then how can we connect with you to learn more to follow you to get tips, because I know that you do that. And then if somebody is your ideal client, you can kind of describe your ideal client and how they can work with you.

Caitlynn Elderidge  31:23  
At Caitlyn Eldridge on Instagram is probably the number one place to find me. Stories lives, all of the good stuff are there. So as you start seeing, like tax law changes, that's where I'll most likely be posting any of it. And then we as a firm work with businesses, and kind of the half a million to $3 million range who really need a CF O. So we come in, and we really do the CFO work of the advisory in the strategic growing and getting past the humps that we see it like searching revenue markers, building your team out, that's a big one that we really work with folks on is like, is it worthwhile to kind of add someone, I also have, if you were to pop over to my website, Instagram will take you that direction. I do consulting hours. So if you're like, Caitlin, I just have like 10 questions, I just need to sit down with someone for an hour and hammer these out. I do those and I absolutely love them. I have a couple people who come back maybe once or twice a quarter. And we just go through those, they either have a tax preparer that's fine, but won't answer their questions. And so they'll come and asked me, or they're still doing it themselves, and they just want a little bit of guidance.

Britt  32:28  
That's wonderful. And I'm gonna put all of that in the show notes. So whether you're watching on YouTube, or whether you're listening on your favorite audio platform, you can just click on the show notes, and you'll get access to all of those links as well. In season three, we are really focusing on this concept that as an entrepreneur, we are ever growing, ever changing. And we are constantly learning no matter how long we've been an entrepreneur. And so I'm curious, what is something that you're learning right now? Yeah, so

Caitlynn Elderidge  32:58  
I have really been focused on the concept of how to spend money. So we've kind of touched on it earlier. But I have been following someone who speaks about living your rich life, and how you can do that now, even if you have these other obligations, or even if you're not making millions of dollars, how you can live your rich life now. And so that's what I've been really diving into is like, how do I define a rich life? How's my husband define it? Where do we want to spend the money that we make, I had actually done a story recently about it. And it was like, for some people flying first class, that's their rich life like they will sacrifice so much if they can fly first class and stay in first class accommodations when they travel? Well, for me, we have a big family. So a nice large home means a lot more, I want a place that we can all hang out. And so for that we drive older cars, and we travel coach in those kinds of things. So really investigating how to spend in a way that feels fulfilling, so that you're not spending just for the sake of spending.

Britt  33:59  
I love that. I have one more question for you. And that's how do you embrace being an M e o a military spouse, entrepreneur,

Caitlynn Elderidge  34:09  
one day at a time. If I've learned anything, it's that we have a beautiful community to support us in this ever changing world. But I keep trying to connect and find more people within it. I live a lot in the online coaching world. And so finding people who understand that, like our spouses disappear on us quite quickly with no support, and how do you build a business around that? So it's building that military community, I've got a lot of spouses to lean on and to say like, Hey, this is just hard. And it's just frustrating sometimes, but it's also so freeing. I mean, I've got more freedom than a company could ever give me. So just trying to take it a day at a time of deployment at a time of PCs at the time.

Britt  34:51  
I love that and I think that that is so important to have people in your circle, who both understand and support at the same time, I think It's just so, so important. Caitlin, I want to thank you so much from the bottom of my heart for coming on and sharing the wealth of knowledge that you have. I think taxes can be something that is so confusing, that it's so overwhelming to so many, especially brand new business owners. And so I truly believe that this episode is going to provide that value that they desperately need, and provide those answers that they've been seeking and searching for. So thank you so much.

Caitlynn Elderidge  35:32  
My pleasure. I will leave you with being a military entrepreneurs' hard, probably gonna need to talk to jag once in a while to make sure that you're like in compliance with your state. So we like talk to you federal stuff. But don't forget, there's a state aspect to all of that. We just have a complex

Britt  35:48  
life. Yes. And in a previous episode we did touch upon when creating your LLC, you know, what state do you have to have your LLC in versus you know, your regular personal finances if you know your residence is at a different state, etc. And that's just something so important. The very next episode after this one is all about money mindset. So how I went from, oh my gosh, the world is ending. And as my dad would say, a credit card is a great idea to cutting up my credit cards, living paycheck by paycheck, and expanding on that and actually paying off over $100,000 in debt, and completely flipping around my own credit score. So if you are in a situation where you are living paycheck to paycheck, or you're scrambling or sweating, trying to just cover business expenses, if money is something that freaks you out, if budgets freak you out, you're gonna want to tune into this episode, and listen to money mindset, and that's going to come out on Thursday. So, thank you again, Caitlin. I really appreciate it and to everybody else, happy tax season. Hopefully not You're not so stressed out, and you're ready to take on your appointment.