Tax Tips for Solopreneurs: Save Money and Reduce Stress

It is everybody's favorite time. It is tax time. I'm kidding. It's nobody's favorite time except for the person who you are going to meet today because it is her favorite time because she understands taxes better than anybody else. And she wants you to understand them too because if you were watching this right now, then you are an entrepreneur, perhaps a solopreneur, and you were thinking about taxes. And that is a stressful, exhausting topic. You know, for

solopreneurs, for self-employed professionals, taxes can feel confusing, time-consuming, easy to get wrong. We don't know what counts as a deduction. How do you save money on your taxes? How do you stay organized when you're trying to do everything yourself? Well, my name is Jason Pfeiffer. I am the editor-in-chief of Entrepreneur Magazine. I am so excited to have this conversation today to help you. I am being joined in this live stream by CPA and tax expert with

TurboTax, Lisa Green-Lewis. who we're going to talk about how solopreneurs can make filing taxes simpler, smarter, and less stressful. She's going to talk about deductions you might not even be thinking about. Lisa, thank you for joining us here today. I'm so excited to dig into this with you. Thank you for having me. All right. So Lisa, very briefly, let's set this up here. You used to do taxes for your family when you were what, a teenager?

You know this topic like nobody else, right? And you have been a small business owner. So you see that small business owners are not often prepared as they should for tax time, right? Exactly. Yes. I mean, you, you want to be focusing on your business, but also with that, you want to track your income and expenses so that you can have the best outcome on your taxes. Yeah. Um, so what would you say is the primary

mistake that solopreneurs make when it comes to taxes? I would say, you know, not tracking year round and waiting until the last minute to do your taxes, because you might leave something important out, like, you know, some income and then definitely those expenses that are directly related to your business. You want to track those so that you get those valuable deductions. Yeah. Um, For those who are just joining, I'm going to keep saying this because I

know people come in and out of a live stream. My name is Jason Pfeiffer. I'm editor-in-chief of Entrepreneur Magazine. I'm talking with Lisa Green-Lewis, CPA and tax expert with TurboTax, about how you can save taxes, save on your taxes this tax season. Lisa, let's start digging into it and talk about deductions. There are all sorts of deductions that solopreneurs are not thinking about. And I want to hear some from you, but let's start with this one

because I know it can be a big one for people, which is home office. What do we need to know about home office deductions? Yes, you're right. You know, a lot of people are hesitant to take the home office deduction, but if you are using a dedicated space in your home for your business with the intention to make money, you should absolutely take that. And so that deduction, it's a portion of your rent, your mortgage interest,

property taxes, utilities, based on the amount of space that you're using for your business. If you're watching this live right now, you can ask Lisa a question, just drop it in the chat and I will bring it into the conversation. If it is a tax question, if you do not know what you can deduct on your taxes, we're going to help you solve that problem. Today, Lisa, take me into a couple other deductions that people need

to be thinking about but often aren't. Yeah, so anything from your startup cost. So if you're starting a business and you're doing advertising, marketing research, that could be deductible up to $5,000. Your travel, that's a big one. Or the use of your car, which a lot of people are surprised to find out how much they can deduct for the purchasing a car that they use for their business. Oh, that's interesting. Yeah. Break some of that down

because I think people don't know always that these large purchases can be deducted. So the car is an interesting one. And I'm going to throw in another thing that is not like a car in any way, which is meals. So can you break down how we should understand these expenses? Yeah. So if you use your car over 50% for your business, there's a big one. And I think we're going to talk about a little later, like

the new tax law changes. So there was an extension to what's called the Section 179 deduction. And that's where you can fully deduct the cost of business equipment up to $2.5 million. There are cars that are included in that that are on the list as business equipment. So you could fully deduct those. And then even if they are not on that list, let's say you have an SUV that's over 6,000 pounds, but under 14,000 pounds, you

can deduct up to $31,300 in the first year you put that in place. Wow. If you are wondering what to do with your taxes this year. If you're not sure what is deductible, you've come to the right place right here, right now. My name is Jason Pfeiffer. I'm editor-in-chief of Entrepreneur Magazine. I am joined by Lisa Green-Lewis of TurboTax, a CPA and a tax expert with TurboTax. And we are here to help you in this live

stream right now to learn what you can deduct, how you can save money on your taxes and the best way to do it. So Lisa, you had just teed up a second ago the new tax law that we're now all adjusting to and understanding what the new deductions are. So what are some other big changes that took place in this new law that can impact solopreneurs? So one is called the Qualified business income deduction. And so

that was in place, but it was made permanently, just like the section 179 was made permanently. And so that's a deduction for 20% of your net business income. And so, um, you know, that's just another opportunity for deduction as well as, um, 1099K, so that is a form that you get if you have payments processed by a third party provider like Venmo. Last year, last tax season, they had lowered the threshold to over $600 where you

would receive that form. But now they've gone back to the bigger threshold. So it's over 200 transactions and over $20,000 that you will see a 1099K from a third party provider. But they are saying those providers could still issue it at lower amounts. So that's just something you want to keep track of. But also keep in mind those business deductions, because when you get that form and see that income amount, you're not going to be taxed

just on that income amount. You have to deduct your expenses. Right. You have to deduct your expenses. That's the name of the game here. And Lisa, it would be really helpful. Actually, why don't we return to that deduction question, because I think people are still, even though you laid out a number of them really clearly, we've got the office deduction, we've got car, we've got supplies and equipment. But I think people sometimes still feel very uncomfortable.

They just don't know what is it that I can claim and maybe how do I prepare myself to prove that it was a real business expense in the first place if I'm ever called on it? What should people be thinking about it? Yeah, you should definitely, you know, track your receipts for your expenses. And then I know you mentioned meals. So meals, you can deduct 50% of your business meals. But if you have like a business

meeting and you're meeting with someone, you want to record like the business purpose and the date, those type of details. You don't have to submit that with your return, but it's just to have that in case you ever need it. Yeah. We just got a question about whether or not this recording will be provided. Yes, I believe this will be. But also, you can go to Problem Solvers, which is a podcast. So on your podcast app

of choice, go to find a podcast called Problem Solvers, which I host, which Lisa was on, where we had a version of this conversation in much more depth than we're going to be able to get into in this live stream. So a wealth of information. And also, Lisa, I know that just a little bit later, we'll be talking about how people can work with the team at TurboTax to help on their taxes too. So anyway, that's

a great question. So yeah, listen to that Problem Solvers podcast. It was a really great conversation. All right. So what you would in the tax law conversation that we had, and let me say, By the way, my name is Jason Pfeiffer. I'm editor-in-chief of Entrepreneur Magazine, and I'm here with Lisa Green-Lewis, a CPA and tax expert at TurboTax. And we are having this conversation live right here, right now. If you're watching it, it's because we're having

it and you can be a part of it. Just drop a question in where we are here to help you prepare for your taxes because it is a stressful and exhausting part of owning a business. And Lisa is here to make it easier. So Lisa, you had laid out a number of the changes in the tax law, and I'm curious if there are other new things, whether they're deductions or changes in the law or just what

else maybe haven't we covered yet that entrepreneurs should know about that might be new this year, that might be something that could save them money? Yeah. Well, if we're talking about solopreneurs, one thing you are self-employed. So your business expenses in your income and everything, you're going to do that. It's going to be part of your personal taxes, but Since we're talking about solopreneurs, there are a lot of changes in the tax law on your personal

taxes. So things like, you know, increased standard deduction, that's the deduction that the IRS gives you if you don't claim itemized deductions. There's the increased credit for child tax, the child tax credit that increased to $2,200. I know a lot of solopreneurs they also work multiple jobs. So if you work a job where you earn qualified tips, there's deductions for tips up to $25,000. Or if you work overtime, there's deduction for overtime. So there's some of

those. Yeah. Wow. That's a lot of things to keep track of. And when I had asked you a moment ago about how, to keep track of everything and how to make sure that if you are taking a deduction or you're counting something as an expense that you're going to deduct, that you've got the evidence. You said you've got to keep your receipts. You've got to keep them organized. I bet that makes people's head spin because how

do you keep track of all that? I know QuickBooks, which is part of the Intuit world, it makes that easy. And can you tell me a little bit more about how QuickBooks and TurboTax work together? Because I know those are integrated in some way, right? Yes. So you can track your expenses using QuickBooks. And then that information will directly export into your TurboTax return. And then also another option with TurboTax, you know, we've really redefined tax

filing with the use of AI integrated with our human expertise. And so our AI agents, it can extract information from spreadsheets and import it directly into your tax return. So those expenses that you've been keeping track of on a spreadsheet, or even if it's QuickBooks, it can export that information as well as connect to your bank accounts and import expenses that are relevant to your business. That's super, super helpful. And then the next step, I suppose,

would be talking to that TurboTax expert. So this is something that TurboTax talks a lot about is that when you work with TurboTax, you get connected with an expert who can help in your specific area. Can you unpack that a little bit more? What does it mean to work with that expert? Yes. So you're matched with the expert that they are experienced in your specific industry. So I know there's so many industries out there. And so

they're giving you advice and proactively telling you what deductions that you're eligible for that aren't just your standard deduction. So if you're an influencer, you know, they're going to flag for you that you should definitely take into account the money you spent on a ring light, video equipment, website development and specifics like that. So you don't leave any money on the table. Yeah, that's really helpful. I am Jason Pfeiffer. I'm the editor in chief of entrepreneur

magazine. I am here with Lisa Green Lewis, who is a CPA and tax expert with TurboTax. And we are talking today about how to save on your taxes. And this is something everyone should be thinking about. Well, Lisa, not just today, right? As tax time approaches, but you made this point to me when you were on the Problem Solvers podcast with me. This is something that entrepreneurs should be thinking about all year round, right? Tell me

about how entrepreneurs and solopreneurs should be thinking about and planning for taxes throughout the year. Yes, you should be tracking your income and expenses year round, especially self-employed or solopreneurs. You have to pay poorly estimated taxes if you expect to owe a thousand or more dollars in the year. So you want to track your expenses so that you're lowering the amount of estimated taxes that you have to pay. And then also at tax time, so you're

not scrambling around getting everything together. Right. And actually, let's just double click on that because I think that's something people really miss. So those quarterly taxes, you can produce these quarterly, well, you've got the language and I don't, but I know that I've seen them and I filed them myself. So it's these quarterly payments that are estimated based on your previous year's income. Is that right? And then you're paying government as you go. And then if

you overpay, you'll just get a return. Right. And it's also based on, you know, if you're self-employed, like what income, you're making right now, because for self-employed, things change and hopefully your business is growing. So you might be making more income, spending more on those deductible expenses. But yes, if you owed or expected to owe $1,000, you have to do the quarterly estimated payments. I do have one tip that a lot of people are surprised and

don't know about. You can annualize your payments. And by that, I mean, The IRS knows that most self-employed don't receive the even amount of money every quarter. So they allow you to recognize your income in the quarter that you earn it instead of evenly over four years so that you can avoid a penalty in the quarter. Like let's say the first quarter you didn't earn any as much money. Um, then you wouldn't get that penalty. Hey,

Lisa, we got a question and it's a good one. Is it possible to over claim business deductions is what our viewer asks. Is it possible to over claim business deductions? There are a couple of ways that I can think of interpreting that question. So number one is, well, what if I claimed too much? And, you know, I guess I get audited, what would happen? But you tell me what you're hearing here and whether or not there's

either a risk of over claiming or, you know, maybe I maybe I under claimed and there's some way to get money back. Yes, I think what they're asking is, you know, if they claim too many expenses, is it like a red flag? But I know the IRS does know that people, when they're starting businesses, they might not be making as much money. You might be putting out more to make that money. So I would say as

long as you have everything substantiated by receipts, um and it is directly related to your business you should feel empowered to take those deductions yeah uh one more time my name is jason pfeiffer i'm editor-in-chief of entrepreneur magazine and i have been joined today by lisa green lewis cpa and tax expert at TurboTax. We have talked about deductions. We have talked about law changes. We've talked about how to utilize TurboTax and their tax experts to help

you file your taxes. Lisa, is there anything at the very end here that you want people to know that you want people to do next, maybe how to get in touch with TurboTax and start that process with the tax expert? Yeah. So I know it's tax season is fully enforced and the tax deadlines will be coming up. So if you want to do your taxes yourself or with help from an expert, you can go on to

TurboTax.com and you can also have a TurboTax business expert do your taxes virtually, or you can come into one of our stores. We open 20 flagship stores and expanded to 600 other locations where you can go in and get your taxes done. Fantastic. So helpful. Well, Lisa, it has been such a pleasure talking to you again. If anybody wants more of this, I really strongly recommend that you go listen to the problem solvers episode. Just open

up, uh, open up whatever. app you use to listen to podcasts, find problem solvers, you'll find a deep conversation with me and Lisa where she gets into more deductions. We help a friend who's afraid. Remember this, Lisa? We helped a friend who is afraid to claim deductions on her home office and we got her straightened out. I do remember. Lisa can help you and so can TurboTax. Lisa, it is always a pleasure to talk to you.

Thanks for helping entrepreneurs get their taxes straight. Thank you for having me. Thanks, everybody. Have a great day.