AMA with Aja Evans Counseling: Facing Tax Season (and The Feelings That Come Up)

[Tom]

Hello Seller Community,

On Thursday, March 28, the Seller Community hosted an AMA (Ask Me Anything) forum discussion with Aja Evans, where we addressed the various aspects of tax season. In this discussion, everything was fair game, including the triumphs, anxieties, and potential knowledge gaps experienced by business owners as they navigate their tax journey. Aja is a licensed mental health counselor who specializes in financial therapy. She works with clients to uncover their money beliefs and narratives, so they feel more confident and empowered in managing their business finances.

Aja Evans Counseling

We recognize that many businesses within the Seller Community face constraints regarding tax preparation resources. With this AMA event, we aimed to provide you with the opportunity to engage with an expert who has experience in the following areas:

• Square Banking features that can help you be more proactive with tax preparation
• Addressing stressors and best practices for managing money, taxes, and the challenges of being a business owner
• Helping you understand your money story better and how it affects the way you think, feel, and behave with your money

Here are a few example questions:

• In your experience, what are the top three things to keep in mind or practice when navigating the uncertainty or stresses of tax season?
• How can Square Banking features make preparing for tax season easier?
• I just started my business last year, and the fear of making a mistake on my taxes has me paralyzed. How can I get past this?
• What is financial therapy, and how can it help me in my business?

This article is for informational purposes only. The information provided in this article solely reflects the speakers’ views and is not endorsed by Square. This article is limited in scope and is only intended as a high-level overview of the topics mentioned.

This speaker series or event is for educational purposes only and does not constitute legal, financial, or tax advice. For guidance or advice specific to your business, you should consult with a qualified legal professional. Aja may respond to your situation in an upcoming edition of our newsletter. Someone from the Seller Community will contact you directly if your response is chosen.

Square Checking is provided by Sutton Bank, Member FDIC. Square Debit Card is issued by Sutton Bank, Member FDIC, pursuant to a license from Mastercard. Square Debit Card may be used wherever Mastercard is accepted. Accounts are FDIC-insured up to $250,000.

[maxpete]

Thank you so much for taking the time for this @AjaEvans! 

Just out of curiosity, do you have a go-to playlist or song that you listen to when you're in tax prep mode?

[AjaEvans]

Hi @maxpete!

I love music and it definitely impacts my mood. While I am preparing all my numbers and documents I like to listen to chill, calming music — Arlo Parks, Tame Impala, and Nick Drake made their way to my playlist quite frequently this year.

[ALN01]

When we receive our 1099-K, are those numbers before our fees from square are deducted or after? 

What are qualifications for Square loans and how can we pay them off? 

[Tom]

Hi @ALN01, thanks for bringing this up!

Here is some information for you:

Gross amounts on your 1099-K include Square fees. Check out this video for a more detailed breakdown (starts at 0:24). 

Square Loans is available by invite-only to eligible Square sellers. 

There are many factors that may affect your eligibility, and accounts are evaluated as a whole. Here are some of the key factors your business is evaluated on: your Square processing volume, frequency of payments through Square, and a healthy mix of new and regular customers. You can review your eligibility factors in your Square Dashboard.

You can also find more info in the Square Loans Eligibility FAQ.

Repayment happens automatically with a fixed percentage of your daily Square sales, so you’ll pay less on slow days and more when it’s busy. Find more info in the Square Loans Repayment FAQ.

[SVLLC]

In the beginning of my career it was easy to double and triple my income. But as I make more, it seems like the glass ceiling is there. How do some people break through that to become millionaires while others get stuck at a few hundred k?

[SoulSurfer]

I feel you. My advice, Investing. Sometimes your active income just can’t be scaled enough (for internal (you) or external (the market) reasons.  I take all my business profit and buy real estate, 401k etc. it appreciates.  Unfortunately where I live millionaire just doesn’t cut it anymore, neighbors are the 5-10M+ net worth which feels like I’ll never get there and don’t want too, but you can’t help but feel the “keeping up with the joneses pressure,” esp when it comes to the school parents. 

[AjaEvans]

Hi @SVLLC,

It depends on the goals for your business and your personal goals. If the goal for your business is to break through to 7 figures it might be a matter of how you scale. Questions like “how do I generate more revenue” or “what needs to shift in order to bring in more money” can be helpful. However, if you are talking about personally, then taking a look at how you grow the money you are paid from your business will be important.

Additionally, reflecting on what you want and why you want it will always be important. While I love the ambition we have as small business owners, I know how easy it is to fall into the trap of moving the goalposts after major accomplishments. Think about why it is important to hit millionaire status, reflect on what that level of business will demand, and whether or not you actually want the good and the bad that comes with getting there. If you do, go for it, it sounds like you are already doing great!

[SoulSurfer]

The cost of tax prep frustrates me.  I feel like I do a lot of work all year making sure my Quickbooks is solid, I pay a bookkeeper to reconcile everything. And then an accountant charges me $2k for business taxes prep prob another $1.5k for my personal.   Why are taxes so complicated that a company would charge this amount to plug in numbers ? Then I ask a question like, why didn’t you tell me to do “….” ? And they say, oh you didn’t pay us an additional $1500 for “year end planning”.  It’s like lawyers you can’t even ask questions without getting billed. So my question is, how do you “shop around” for accountants ? 

[AjaEvans]

Hi @SoulSurfer,

If you are uncomfortable with the price, you are right, it may be time to shop around. I always like to start with people you know and trust. Do they have accountants that they know and would recommend? From there, talk to their accountants and potentially get referrals from them as well if they do not seem like a great fit.

Having a conversation about your needs, the packages they have, and what is included is going to be of the utmost importance. It sounds like you are on top of things — shift your frustrations about your current situation into questions to help vet and ensure your comfort with your new vendor.

[Karuna]

It is not easy for me to get organized. 

What do you recommend to stay organize through out the year in preparation for tax season? Thanks. 

[Tom]

Hi @Karuna, thanks for reaching out!

I have some information to pass along:

CPA Keila Hill-Trawick, founder and CEO of Little Fish Accounting, talks about this in her monthly column in the Square Banking newsletter. She says to save all tax documents to your preferred secure document storage portal as soon as you receive them. She also says to get a consultation after the hectic tax season to check the accuracy of your numbers. 

Check out Keila’s column and scroll down to Good With Numbers to read more.

You can also automatically set aside a percentage of your daily sales in a Square Savings folder so you’ll have funds ready for quarterly taxes, payroll taxes, and income taxes — however you file. Learn more about Square Savings folders.

[Lanisoleil2020]

How can we “trust” accountants to file correctly when I’m not a tax professional? What are some red (and green) flags when looking for an accountant?

[Tom]

Hi @Lanisoleil2020,

I have some information to point you to: CPA Keila Hill-Trawick, founder and CEO of Little Fish Accounting, has some suggestions in her monthly column in the Square Banking newsletter. One green flag is to make sure your preparer is willing and able to answer all of your questions so you can sign your return with confidence. 

Check out Keila’s column and scroll down to Good With Numbers to read more.

[MudFire_Dex]

What tips do you have for people taking an emotional hit when taxes are due? I mentor a lot of young business owners and I personally don't struggle with knowing what is happening in my biz and payments are part of that....but when I try to relax them my factual explanations typically bomb 💣✨😜💖

[AjaEvans]

Hi @MudFire_Dex,

Checking in about what is coming up for them emotionally even before the conversation happens can be really helpful. Of course, we don’t want you playing therapist, but asking if they have any fears or worries before you start diving in about the factual explanations may be helpful.

It seems like they may be going through their own feelings before stepping into the room. Easing your way into the conversation, taking breaths or pauses during the conversation, and checking in to make sure they are grasping all the information could also be helpful.

[MudFire_Dex]

I've recommended individual therapy as well and some reading on thoughts about money - internalized scarcity mindset or what money and power mean to them - we are doing some word cloud exercises about what money means and what kinds of words it brings up for them so I can move more slowly and refer them to outside sources - I definitely don't want to play therapist. Thank you for your advice. I had no idea that financial therapy was a field and I am grateful to have that information now and it will be on my recommend list in future mentorship meetings for sure. 

[AjaEvans]

It sounds like you are already doing amazing work with your clients. Financial therapy is growing and there are definitely professionals available to help your clients work through some of these challenges. 

I just wrote an article about money mindsets and money personalities (think: Zodiac signs for your finances). This might be a helpful primer for you and/or your mentees. Hope that helps!

[MudFire_Dex]

This is so helpful - thank you! I mentee a group of young makers learning to run ceramic businesses making and selling their work and teaching. University level programs don't include much in the way of financial education choosing to focus mostly on only the art-making aspect so by the time they reach me they've internalized a lot and have generally made some mistakes on taxes. 

[evelyn4g]

Hello! I recently opened my business as an S corp. LLc. I do have an accountant, but I'm always afraid he will forget to file, (he did one year) I was hoping for a Calander to keep me on track for everything I am responsible for and everything he's responsible for, so I don't have to worry so much. 

Second, do you have to charge sales tax for service based services? I'm in the state of WA. 

**My biggest question is what all is considered TAX deductible for me? For instance, I have a home office I conduct business out of, what home expenses, if any can I deduct? Is there a cheat sheet somewhere I can access? (I have separate office space I lease to perform ultrasound scans)

Thanks for your help!

Evelyn

Mi Amor Ultrasound Studio

[AjaEvans]

Hi @evelyn4g,

One suggestion might be that when you meet with your accountant to ask for the specific dates and you input them into your calendar while you are together.

These are great questions! I would most certainly ask your accountant. This year sit down with them and ask them all about the things you need to track and stay on top of throughout the year in terms of deductions.