A recap of our MoneyTalks with Nadia Anderson at The Broad.
About Nadia Anderson.
"The first business that I started was in elementary school. My mom and my grandmother would have yard sales and I would sit at the table and draw pictures during the yard sale and then try to sell them to people for 5 cents or a quarter. That's the first thing that I did, trying to get some money." - Nadia Anderson
Nadia is a Richmond native and a proud graduate of the McIntire School of Commerce at the University of Virginia with a BS in Commerce and a MS in Accounting. She began her career in public accounting with PricewaterhouseCoopers. She passed the CPA exam in 2000 and has worked for a variety of public and private companies in the greater Richmond area. Since 2003, Nadia has served the small business and non-profit community of Richmond, helping those that do the most good. She is also a QuickBooks Certified ProAdvisor.
Highlights from the Event and Nadia's answers to the questions that were sent in.
Do I have to pay personal and business taxes separately if I own my own business?
It depends on what type of business you own. If you're a sole proprietor, no, they're not separate. If you have an LLC that has a single member it's a separate schedule (or form) on the same tax return that you would file. If you are a partnership, (two or more partners) yes, there is a separate tax return for the partnership.
Do I have to file taxes for under the table income?
What is under the table income? That doesn't really exist. In terms of income, babysitting even counts.
What is not taxable?
Here's what's not taxable; inheritances, gifts and bequests. So somebody died and gave you some money? There's limitations on even how much of that you can get, but typically that is not taxable. Cash rebates on items that you purchase are generally not taxable. Non taxable alimony payments, which is new this year with the tax changes, is not taxable. Child support payments, welfare payments, money that is reimbursed for qualifying adoptions and healthcare benefits. Those are things that are not taxable. That's a short list.
What is the best way to prepare for tax season?
I try to encourage my clients to understand that tax preparation is a process, not an event. I am never running towards April 15th. We are always gathering info because it is always tax season. You know, what's going on in your business. I know what's going on with your business. We are anticipating what's happening and I view myself as a partner in helping you build your business, live your life, and achieve your goals. Throughout the year we must be thinking of taxes because if you don’t, when the deadline comes you can't do anything different. So in my approach I want to talk about processes. What are you doing everyday? What can you look at? What can we do to make the process as a whole easier?
How do I deduct and keep track of mileage?
I have an APP, Mile Iq. It's super easy and it changed my life. So before I had this app, I would use a checkbook register, and then I found this app and you just wait and you swipe one way for personal and you swipe another way for business. If you swipe slowly then for business you can say this was a meeting, this was an errand I picked up supplies, etc... It will then send you a report on a weekly, monthly, annual basis that gives you a number that agrees to what the IRS rate is because that changes every year. It'll do all the math for you and send you a report and say this is what you should deduct.
Is there a penalty if you overpay?
No penalty for overpaying.
As a working mom, can I deduct things like childcare, or other things like that so that I can work more?
So you can take a deduction on your personal taxes for your childcare expenses, but that's not a business deduction.
Are there any benefits to filing early?
No, you don't get brownie points for filing early. Your refund might get processed quicker because there's fewer in the queue. So if you're getting a refund, you might get it back sooner if you do it earlier because everybody is waiting until the deadline to file.
In life in general, let's surround ourselves with people who support us, lift us up, and give us great ideas. Because that's what makes life worth living. So a lot of conversations that I have start about money, but don't really have a lot to do with money in general. They have to do with being a whole human and being fully functional. I appreciate everybody being here and your time and your attention and asking questions, because this fills me up. It's amazing recognizing that I can be of service to someone and help someone. So thank you very much.