Episode 54: Accounting and Taxes for Coaches with Jennie Schottmiller

When it comes to understanding the accounting and tax needs of service-based professionals, and especially coaches and therapists, Jennie Schottmiller is a pro. She joins us on this episode to share what you need to know when it comes to accounting and taxes for your coaching practice.
Jennie Schottmiller Coach with Clarity Podcast

54: Accounting and Taxes for Coaches with Jennie Schottmiller

Accounting and tax are two topics that bring up a lot of fear for many of us and with the April 15th tax deadline looming, that anxiety is probably rearing its head. To help you move away from overwhelm and towards clarity and ease, Jennie Schottmiller is here to simplify what you need to know about accounting and tax for your coaching practice.

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Show Notes

Accounting and tax are two topics that bring up a lot of fear for many of us and with the April 15th tax deadline looming, that anxiety is probably rearing its head.

To help you move away from overwhelm and towards clarity and ease, Jennie Schottmiller is here to simplify what you need to know about accounting and tax for your coaching practice.

Jennie Schottmiller is a licensed marriage and family therapist (LMFT) and Certified Public Accountant (CPA) who owns her own therapy private practice, working primarily with couples and families, and Simple Profit, a business for coaching and education.

I am so grateful to Jennie for coming on the show today and making overwhelming topics like accounting and taxes so simple. Jennie is a wealth of information and I know that you are going to find so much value in today's interview.

 

Topics covered

  • Jennie’s passion for helping business owners as an accounting coach
  • What does an accounting system do for your business?
  • Why your profit or loss statement is your most important tool for your coaching business
  • The differences between a client management system and an accounting system
  • When to create a separate business for your coaching practice
  • Common tax deductions for a coaching business
  • The general rule for deciding whether you can deduct your expenses
  • How to approach home office deductions
  • Figuring out how much and when to pay your taxes

Resources mentioned

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TRANSCRIPT

 

Well, hello, my friend and welcome to another episode of the Coach with Clarity Podcast. I'm your host, Lee Chaix McDonough, and today I am so excited to bring you an interview with my friend and colleague Jennie Schottmiller of Simple Profit. Jennie is a licensed marriage and family therapist (LMFT) as well as a licensed certified public accountant (CPA) in the state of Pennsylvania. So when it comes to understanding the accounting and tax needs for service based professionals, especially coaches and therapists, Jennie is a pro. She left accounting in 2007 to focus on her health and her family and then became a marriage and family therapist in 2010. But soon after opening her private therapy practice, she realized how many of her peers really struggled with accounting, taxes, budgeting and cash management and the like. And that's what inspired her to start Simple Profit. She now provides free resources, educational courses, and accounting coaching to support small business owners. She is a wealth of information, and I know that you are going to find so much value in today's interview. So let's get right to it, I'm pleased to introduce you to Jennie Schottmiller.

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 Lee: Well, hi, Jennie, thank you so much for coming on the Coach with Clarity Podcast.
Jennie:Thanks, I'm glad to be here.
Lee: I am thrilled you're here, because I know a lot of the coaches I work with, and frankly, me, as well, like we have a lot of questions when it comes to finances, accounting, bookkeeping, taxes, etc. And you are so perfectly positioned to provide that wisdom to coaches, mental health professionals, healthcare professionals. So before we get into that, I'd love to start off by asking you a little bit more about who you are and how you serve the world.
Jennie: So I am a therapist, an LMFT in private practice, but prior to being a therapist, I was a CPA, and I left the world of accounting to, you know, do something that I thought would be more helpful and meaningful in the world, and that I actually would enjoy more. And I was, you know, of course, very fortunate to have the ability to do that. But once I was in private practice, I started to realize that a lot of my colleagues didn't have the accounting or tax or business knowledge that they needed, just to even be able to have the conversation with their accountants that they were having, you know, they were meeting with accountants, and they're like, I have no idea what that person is talking about. It's, it just doesn't make any sense to me, and I'm very lost. And things like budgeting or cash management, these are topics that I'd spent a whole career understanding and working in. And so when I determine that I could be really helpful in using my accounting and tax knowledge, that changed what accounting was for me. Before that, accounting was important, but in some ways, meaningless. And so I found this opportunity, pretty much as, I mean, I would say I'm an accounting coach, is kind of a word that I could use to describe myself, for small business owners. And I see myself and my services as something that fills in the gap between a business owners knowledge of their business, which they already have, and their knowledge of sort of the business and accounting world, so that they can sit down and have productive conversations with their bookkeeper if they have one, and with their tax professional at tax time. And so now, I still run my private practice, but I also have this coaching business that, frankly, is like, you know, it's very underserved. I guess that there's not a lot of people doing what I'm doing, and I think what I offer to people is a good ability to explain things in a way that make sense. I see business owners as very capable, intelligent people. You run a business, so you've got all the intelligence that you need, and to understand accounting, you don't need to feel comfortable with math, you don't have to get over all your money trauma. First, you need to actually have it just explained to you in a way that makes sense to you, in a way that works for your brain. If, you know, I explain things, usually in multiple different ways, until someone gets it, and they're like, “oh, okay, if I think about it that way, it makes sense”, great because this is not rocket science. This is not as hard as whatever else you're doing in running your business.
Lee: And I think I just want to echo that really is one of your strengths, you have the ability to take topics that, for many of us, either feel complex and maybe also feel overwhelming, and you really streamline it through your blog posts, through your videos, through your Facebook group. We'll talk much more about that later but yeah, and I love that you have found this niche that is just the perfect intersection of your training, knowledge, expertise, between accounting and service delivery, and now you're providing accounting coaching services. That's so perfect, Jennie, and that's why I'm so excited to have you on the show today.
Jennie: Yeah, and it's, you know, I think it's a lot of the same thing that therapists and coaches do with their clients, right? If someone's in a situation either with their job, with their family, with their spouse, with their child, that they are overwhelmed, lost and confused. That's one of the things we do when we're helping people is help it make sense of what's going on in internally for them, as well as externally in their situation. And when they do that, it's so much easier to create change.
Lee: Yes, yes, you're exactly right and I've seen you do this in your forums where you start by just kind of setting the tone like, “Y'all, it's okay, what you're experiencing is normal. There's no need to have any sort of anxiety or shame or fear around this. I'm going to partner with you so that you can make decisions and feel confident about where you're going”, and that's it. That's really at the heart of coaching. So, so let's, let's get into some of the actual tactical work that you do with your clients. And, you know, let's let's go like right to the most fundamental building block, which is having an accounting system in your business. And I know for some people, even just hearing the phrase accounting system feels overwhelming. So let's break that down. What exactly is an accounting system? And why do we even need one?

Jennie: So an accounting system is essentially and I'm going to, I'm going to say what it is and explain what that means. So what an accounting system is, it's a system that takes your financial information and puts it into accounting statements. So okay, what's that? Well, one of the most important accounting statements is a Profit and Loss Statement, which is exactly the way it sounds, it shows your profit, or your loss. And your profit or loss is a function of the revenue that you brought in from your clients, less your business expenses. And that's it. You saw those clients, and you collected that money, so you have a general idea of what that is. And all of that money that you collect should be going into a business bank account. So not only do you have a sense of what that is, you should have a record of what that is in your bank statement. So what an accounting system does, is it takes what's in your bank statement, and it categorizes those transactions as either income from clients as business expenses, and noting the type of expense that it is, or was it a payment to yourself, or was it you putting money into your business, or was it you getting a loan from a bank, or borrowing money on a credit card, and it takes all of that, and then it flows it into these accounting statements. And if it's income or expense, it goes on that profit and loss. The profit and loss is not only an accounting statement, and the thing that you're going to use to put it, it's the input for your taxes. It's also the most important owners tool that you have for your coaching business, that profit and loss needs to be looked at monthly. And I call this a monthly review, if you're looking at your profit and loss statement every month, then, you know, not just the general idea of what happened. You know exactly what happened. What did you earn? What are the trends? If January, February, March, as the year goes on, how does each new month compared to the prior month? How does this year look next to last year? All of that information is available on a profit and loss statement but if you don't have one, or you're not looking at it, then you're you're missing a huge piece of information upon which you need to be making decisions. Because if your expenses are trending up, and your income is not trending up, you want to know that sooner rather than later. So then what's an accounting system? How do you get the profit and loss? An accounting system is anything that takes that information from your bank and puts it into these statements. So it could be QuickBooks, it could be Wave, it could be a spreadsheet, but all you're doing is categorizing and summarizing. That's it.
Lee: See, and there you go. That's an example of how you take what feels like this really amorphus concept, and you just make it clear, all it is is a way to record income and expenses in a fashion where then it makes it easier for us when it comes to tax time, which we'll get to because when this episode airs, it will be March 2021. So we're going to be gearing up for that April 15 date that so many of us have circled on our calendar. So having a solid accounting system in place will really make it easier for us when that time comes to file. 
Jennie: Yes, and I would add that your counting system is very often going to be different than your client management system. You know, when we're doing coaching, we usually want to have a way to manage our, you know, people who have contacted us that might become clients, people who are current clients where we might be doing a variety of different services, and we want to track where they are in the process. And while an accounting system can often do invoicing, that client management of where clients are in the process and keeping track of them, and notes about them and our sessions with them, that's not best kept in an accounting system. So it's a good idea to have a client management system and think about, that is where I manage sort of the business side of my client services. And and then I also have an accounting system which is going to start with my bank, pull my bank transactions out and then categorize them based on what type of transaction they are.
Lee: That's a really helpful point and I'll say for listeners, if you are thinking about “Ooh, client management system, I don't have one of those.” Head back to Episode 13 of the Coach with Clarity Podcast. That's the episode where I share my recommendations for tools to start and grow your coaching practice and we talked about options that you can use both when you're first starting out, and priority is just getting something up and running for the least amount of money, and then what you might want to consider as you grow. But I think Jennie's recommendation of keeping that system separate from your accounting system is an important one. And while we're on the topic of keeping things separate, I wanted to ask you about that, because I know a lot of coaches are starting out with their coaching practice as maybe a side hustle or a second practice. A lot of the people we work with maybe are coming primarily from the mental health background. So maybe they have a therapy private practice, and they're looking at starting a coaching practice. And so of course, the question that you and I both get a lot is, well, can't I just keep them together? Can I just have it all under one business and one business bank account? One accounting system? What are your thoughts on that? 
Jennie: Yeah. So I mean, I would say that anytime, whether whether you are going from therapy to coaching, or just adding on coaching, or you are starting any other business, the thing that I look at is, is this business very different from my existing business? Should it be a separate business? And the way that I kind of answered that question is a distinct business needs to be set up as a separate business. In general, am I serving a completely different population with a different set of services, and in particular, is this one of my businesses, I was under my professional license, and the other one isn't, or in my case, where I have two professional licenses. And I generally would think that if I have a professional license, and then I'm going to do something that's not under that professional license, I'm going to want that to be a separate business. Both from a ease of, of managing the business. So one factor I look at is, I want to know how my therapy business is performing, and I want to know how my coaching business is performing. And if they're all lumped together, I can't see how each separately is performing. So let's say my therapy business is lagging a little bit, but my coaching business is taking off, I can't see that if I have all of my expenses, I can separate my income out, I can have different income streams but I can't see that from my expenses because my therapy office rent is in the same profit and loss statement as my, my website for my coaching business and my client management system for my coaching business. So managing it and being able to see how they're performing is really helpful when they're separate and also how important it is. I don't have a really strong feeling about what other people necessarily should do. But I do think it's really useful to think about what's going to make your life easier. And having a business that's really complicated by the fact that two businesses are mushed into one business isn't going to help you in the long run, the time that you're going to spend open up a separate LLC, a separate bank account, and have a separate QuickBooks account is not as much as the time you're going to spend trying to sort through all the myriad of transactions that are all mushed together in a one pot when they really shouldn't be. I also think I would, you know, always consult with an attorney in terms of what liability issues might if one, if one of my businesses or my activities has a different kind of liability risk, then I'm going to want that to be separated out. And if my two activities have different insurance needs, I'm probably going to want to separate those out because that's also very different.
Lee: So and for people who have questions about the legal aspects, definitely head back to Episode 34, my friend and attorney Braden Drake came on to talk about issues around why having separate businesses are important from a legal perspective considerations when it comes to insurance, liability, mitigating risk, all of that good stuff. But Jennie, I think the point that you made about doing a little bit of upfront work now to keep things separate will save you time, energy and likely money in the long run. And yes, there are financial costs and energetic costs associated with establishing that separate business upfront, like, you know, let's be upfront about that. But in the long run, it's going to serve your business better, it's going to keep the waters from getting muddy with all of these different expenses. And that's equally as important when we're actually serving our clients too, when we've got clear messaging, clear boundaries around the work that we do, and we've got a separate accounting system to support that. It just allows both businesses to grow.
Jennie: Yeah, and when you're saying that in my head, you know, what's happening in my mind is I'm thinking about my silverware drawer, and how I don't throw my spoons and my forks and my knives into one pile in the middle, you know they're in like the little containers and the spoons over here and the forks over there, knives over here. So that when I go into the drawer, I can grab what I need, and when I separate out two different businesses, that's what I'm thinking about, is it going to be useful and easier for me to have these and manage these as separate businesses? So that my processes are clear, understandable. And I always, when I make a decision like this, I'm going to do what you suggested, I'm going to go get the advice, I'm going to talk to an attorney, I'm going to talk to an accountant, talk to an insurance person, so they understand what all the factors are. And then I as the owner, I'm going to make my own decision. And that's, you're a business owner, you don't I personally, am not running my business based on what other people want, but I do want their helpful information and advice, sometimes a second opinion if I felt like I didn't get a good opinion and consider all those factors in my decision.
Lee: Yes. Okay. Well, first off, I love the metaphor of the silverware drawer that clarifies things so beautifully, because yes, they're all utensils, but if we just throw them all into one drawer, and we don't organize it, it's going to make it more difficult when it comes time to find, you know, the salad fork or the soup spoon. So I think that's such a great metaphor. And I also want to just say how much your perspective really resonates with me, that none of us are here to tell someone what they must do in their business. Even on this podcast, you know, I will talk about topics that I think are important for coaches to consider but ultimately, and a lot of you know, I'm huge into Peloton, I'm constantly on my bike, one of the instructors is a great guy named Dennis Martin, and he says, “I make suggestions, you make decisions”. And I'm like, that's, that's it, that's what we're doing. That's what you do in your work, that's what I do with in mine. I want you to have all of the information you need to make an informed decision, but at the end of the day, you get to be the CEO of your business, you get to make the choices that are going to work best for you.
Jennie: Absolutely, and that's a really good way to bring in, I love that, I make suggestions and you make decisions. And I think sometimes when we feel that we are not as competent in a particular area, we tend to rely more on professional advice, but those professionals don't know your business. They're not the owner of it, and they're there to give you advice, and then it's your choice, whether to take that advice or not.
Lee: Absolutely, and a good coach understands that, too. A good coach knows that their job is not to come in and give you instructions on how to do something, they're going to elicit your own knowledge and maybe supplement it with some guidance when asked so that you can make right decisions. So, good stuff, all right. I wanted to ask you, while we're kind of on the topic of accounting systems and expenses, when we're looking at those expenses, some of them will be deductions when tax time rolls around, and I'm curious kind of what some common deductions are for coaches and what we should be thinking of when we're looking at business expenses and thinking, okay, tax time, deductions, what do I need to know?
Jennie: So some of the deductions that are really common for a coaching business are going to be in the area of office tech and marketing. So things like a computer, a printer, a web platform, your client management system, phones, headset, if you're if you're doing videos, things like cameras, lights, and setting up your home office, which I think we might talk about a little separately. The website, any advertising, getting professional photos done, is a business deduction. And I think that's, professional photos is one of my favorite ways to describe the difference between personal expense and a business deduction. And so for a business deduction, you want to know that it's ordinary and necessary. So that means it's usual for this for coaching business, and that it's useful and helpful for getting clients, or seeing clients or managing clients. And that it's not personal, so here's my example. If I go and get photos done, I'm only using those for my business, that's not going to go on my Christmas card. So it's a business expense, but I also want to want to show up in a nice outfit, I want to have my hair done and might have my makeup done. If I buy makeup, that's gonna last me for months and so it's going to be personal to use, I'm going to get that, it is primarily personal, and it's not going to be a deduction. But if I go to a photographer who has a makeup artist, and they put makeup on me, and I don't own the makeup, I'm leaving that day with just the makeup on my face, and it's going to wash off, I'm going to deduct the service that I paid for to have that person put makeup on. Also, if I go and buy an outfit, we wear regular clothes as coaches, and there's nothing special about our clothes that would cause them to be like a safety uniform type thing that we could deduct. So if I'm going to buy clothes, I'm going to keep those clothes, the personal benefit of the clothes, the IRS would say that's not a business deduction, because you benefit personally from those clothes. However, if I were to rent clothes for the day, just for the photoshoot, and then I'm going to return them, I'm not keeping them. And that cost is strictly related to that photoshoot, and now I'm going to be able to deduct it. So when you're thinking about things like my phone, and my computer, you want to think about is, am I using this for personal or am I using this for business? And if I'm using something for both, I want to divide the cost between the business portion and the personal portion.
Lee: That's really helpful. And you're right, professional photos are the perfect vehicle to describe what is a business expense, what's a personal expense. And it sounds like if it's something that's used exclusively for your business, like these professional photos, and everything that goes into the prep for that, having your hair done, getting your makeup done, that would be a business expense. But if there's anything you're buying that you would then use outside of the business, that's where it gets a little tricky.
Jennie: And the IRS expects us to show up to our job, our work, our busines, ready to go. So our food, our personal grooming, our clothes, our transportation to get to the office, if we are going to an office are all considered personal expenses. But once we're at work, then the things that relate to our business are deductible. So some of the other things that you might think about when you're thinking about business deductions is any professional memberships if you joined a professional membership, any professional coaching, and I would distinguish that between personal coaching, where the topic of the coaching is your life or your relationships or your parenting situation, versus professional coaching, which is about how to grow your business, how to have a business mindset, how to set things up. Any books that are about your business, growing your business, developing your business, also training and travel to training. So once we're free to travel and conferences are happening again, one of my favorite business deductions is to take your family with you to a conference and if the conference is five days, stay eight days. And you get to deduct your own airfare, your parking, and travel to the airport, your car rental, all the things you would have incurred if it was just you going. And then you will not deduct your family's flight, any extra hotel rooms or extra costs at the hotel, or any costs on a day that's a personal day. So after the conference is over, if you're staying an extra couple of days, as long as 50% or more of the trip was for business, you can deduct all of the business-related costs of that trip.
Lee: That's like the perfect way to blend business and pleasure. When you can bring your family with you on that on that trip, and that's something that my husband and I try to do of course, when it's safe to do so, but it's also a great way then for our kids to see new places and and be exposed to new cultures. So I love that and but what what I heard though, is that it's got to be 50% or more of that time devoted to the professional conference or the business related reason that you're traveling.
Jennie: Yes, you cannot go to Disney World and then say I'm going to spend one afternoon going to a three hour training but I'm in Florida for the week. That will not be a trip that is primary for business. So it has to be primarily for business, and then you're only going to deduct the business portion of the costs. Some of the other expenses that I think are common for coaching business, are business setup costs, insurance costs if you purchase like errors and omissions insurance, or any kind of other insurance for physical office, and accounting and legal services, banking fees, credit card fees, virtual assistant, hiring someone to develop your website. Those are a lot of the same costs. There's also some additional deductions that you can have if you are self employed and you cannot get health insurance through an employer, either a second job you have, or a spouse's employer and your business is making money, you're allowed to have a self employed health insurance deduction, which is a huge benefit, given the cost of health insurance. So that's another one to be thinking about.

Lee: Excellent. Wow. So one thing I wanted to ask about, I know we were just talking about travel, but right now most of us are not traveling, in fact, most of us are staying at home and working from home. And so I'm curious if there are special considerations we need to have, if we find that most of our business activity is happening within our home, what do we need to be aware of, especially when thinking about deductions?
Jennie: Yeah, this is really, really pertinent for coaching, because a lot of coaches are not just seeing clients in their local area. And I would say most coaches, I imagine are online even before the pandemic. So when you're setting up your space at home, you want to be thinking about exclusive use, that's one of the most important things, regular use is also important. You want to use your space regularly, and only for your coaching business. So what that means is, is that there's a space that's dedicated, that your family doesn't use, it's not the place you sit down and pay your personal bills on the weekend. It's not where your kids also sit to do their homework. It is not where you do hobbies, or crafting or things like that, when you're not working, it's set aside. And you're going to measure that space so that you know what percentage of space is being exclusively used for business compared to your whole house or apartment. And then you're gonna track your costs, and we can link under the podcast a resource I have that will help you understand all the detail rules as well as get a free spreadsheet to track the costs. You're going to track what costs are related just to the space, as well as what are costs related to your larger home. So for example, if I paint the walls in my office, if I install new flooring, or if I bring in an electrician to add an extra outlet to my office space that's exclusively related to that space, I'm going to get to deduct 100% of that cost. If I have a larger home cost, like my rent or mortgage, like a plumbing repair, like a roof repair, because the IRS recognizes that I have to keep my house operational in order for my office to be functional, I'm going to deduct those costs as a percentage – my square foot of my office divided by my whole house square footage times the cost. So that's math, which nobody really probably likes, but let me just explain what that means, is like if my office is 10% of my house square footage, and I get a plumbing repair, and that's like $1,000, 10% of $1,000, it's going to go into my home office deduction. But what's really important at this home office deduction is not a regular business expense, you're not going to pay your home office expenses out of your business, you're going to pay them out of your personal funds out of your personal account. And then you're going to track the costs so that at the end of the year, you're going to get this additional deduction. Most coaches I imagine are self employed. And what that means is that you're a sole proprietor or a single member LLC or a partnership. If you're just you single member LLC or a sole proprietor, you're gonna get this home office deduction, right on your tax return. So you don't have to do anything other than track it through the year and get the deduction at your end. If you are a S-Corp, if your entity is taxed as an S-Corp, you need to reimburse yourself as an employee for these costs, like monthly or quarterly. So there's an additional rules as an S corp, which is going to be covered in the resources we link below.
Lee: Excellent. So yes, definitely check the show notes for this episode, because we're gonna have a lot of links to resources that Jennie has, which will help come tax time, which again, if you're listening to this, when it drops, we're looking at about a month now. So these resources will be super valuable. Jennie, I wanted to ask you again, because with taxes coming up, a lot of people are a little confused about especially if they're self employed, how do I know how much to pay in my taxes? When do I pay them? You know, do I pay them on April 15? Do I pay them throughout the year? So what is your guidance, particularly for coaches who are self employed, when it comes to getting kind of squared away for tax season? 
Jennie: Yeah, so we know how it works when we're working for someone else and we're an employee right? We get money pulled out of every single paycheck and what we don't necessarily see is what happens to that money behind the scenes. That payroll company or the accountant or the business pulled the money out and set it aside in a separate account and then quarterly, they report to the IRS and to the state, if there's state income tax, here's the money I owe you, and here is the actual money. So we're going to do a very similar thing when we're self employed. And it seems confusing, because we haven't seen that behind the scenes part. And because we don't have a payroll company to calculate the taxes for us, it looks a little bit more confusing. But what you kind of need to know on a high level is that if you have a general sense of how much taxes you were paying, when you were working for someone else, or that you have paid in the past, you can use that information to kind of estimate what you think you're going to pay. And I have a course that helps people and I do this in coaching, helping people look at their actual taxes and figure out what that rate is. But once you know, “oh, I generally pay about 20% of my income and taxes, but I think I'm gonna make a little more this year, so I'm going to estimate a little higher”. Keep in mind, this is an estimate, you're trying to guess. One of the things I say in my course is it takes about three years to get good at estimating, which is why when you buy my course, you get lifetime access to it, because you're going to need to do this for a couple of years. But you're going to guess, and then you're going to go surprise, let me find out a year on how close I was. And you might be happily surprised, and you might be unhappily surprised, but either way, you're going to take that knowledge that you gained from, “hey, I did this, and this is how it turned out”, and you're going to revise your estimating process. And then you're going to try again, and then you're going to get surprised again. And by the third year, you're probably going to say, “I got this”. So that's the estimating part, you also asked like, when and how. The main goal when you're paying estimated taxes, you're trying to get the money out of your account into the government's hands, the IRS, for sure. And if you have state income tax, then also to your state. So what you want to do is on a monthly basis, look at what you made and set aside a portion of that money for taxes, and one of the common mistakes people make when they're very first in business is they don't do that right away, they might hear that, oh, if I'm new business, I don't have to pay estimated tax the first year and that's not necessarily true. If you were a taxpayer last year, they expect you to be a taxpayer this year. And even if you know you're going to avoid a penalty, and you still want to set aside that money, because guess what, next year, your taxes are going to be due at this same time as your first estimate for the new year and that's a double whammy. So you're going to take this money every month and something you're going to put aside in a separate account, it could be a business savings account, it can also be a personal savings account, and then monthly or quarterly, you're going to pay that into the government. You're going to go on their website, that's the easiest way, you don't have to worry about checks getting lost in the mail, and you're going to go on the website for the IRS, you're going to go on the website for your state, if you have state income tax, and you're going to give the money to them, you're gonna keep a record of that, at the end of the year, how much you paid, is going to go on your taxes. So let's say you do your taxes at the end of the year, and the tax software says, “Well you owe $10,000”, the next thing that it looks at is well then, how much did you pay? If you owe $10,000, and you paid $9,000, you're gonna pay an additional $1,000. If you owe $10,000, and you paid $11,000, you're gonna get a refund. That is the extent of the math of this whole thing, you're gonna get money into their hands, you're gonna find out where you’re at year end, and you're either going to pay a little more or you’re going to get some money back.
Lee: That makes sense. Again, you're so good at like taking these concepts and just explaining them in a way where it's like, this doesn't have to be complicated. And sometimes the government does kind of complicate things, you know, we got to give them that, but if we can just make it really streamlined, which is make your estimates, understand that it's going to take some time to really get good at that, and that's okay, that's part of the process. Save your money, what you're estimating you'll need to pay in taxes, and then just head directly to the federal and the state websites, if applicable, and pay it and then when you do your taxes, that's going to be factored in. 
Jennie: Hmmmhmm.
Lee: Excellent, awesome. 
Jennie: The dates are usually, most years, they are April 15, June 15, September 15, and then January 15 of next year. So it gives you a little time after December 31 to pay that in. So if you're listening to this in March of 2021, the 2020 estimates are done and over with and now you're just looking at what do I end up owing. And if you do get surprised by a big tax bill for this year, when you're doing the taxes this year for 2020, then just know that you're going to get yourself out of that hole. If you don't pay enough in tax, you can go on what's called an installment plan and you can pay monthly now it's going to be a little painful because you're paying last year's taxes as well as you need to be saving this year’s taxes, but you're going to get yourself out of that hole and then you're never going to let yourself get back into that hole again, because you just don't want to be behind on taxes. It's just painful. But sometimes that happens to people, and then you're going to catch up, and then learn from the experience.
Lee: And I just want to close by saying it does happen to people. And let's remove any shame or stigma around it. Okay? It's one of those things where you're not alone, we've all made mistakes, financial and otherwise, that we've learned from. And what's important is that we take that knowledge, we apply it and we do something differently moving forward. So no shame if you're getting caught up on your taxes, or maybe you haven't paid them in full in the past, just decide today that this is the day you're going to turn that around. And if you need support in doing that, I cannot recommend Jennie and her website and her services highly enough. We're going to have links to all of them in the show notes. But Jennie, I have a feeling people are going to want to connect with you after they hear this episode. What's the best way for them to
do that?
Jennie: So the best way is probably to go on my website and either send me an IM or send me an email at Jennie@simpleprofit.com. I have resources on my website to help understand a lot of the tax issues, I have a lot of resources on my blog, I have a whole web page for just starting your business, so use my free resources and then reach out and schedule a coaching session or take one of my courses if you feel like you need some additional knowledge in that area.
Lee: Excellent. So head over to simpleprofit.com to learn more, reach out. Jennie, thank you so much for coming on the show. I've so enjoyed our conversation. I know it's gonna serve a lot of coaches, and I'm really grateful to have spent this time with you today.
Jennie: Thank you so much for having me.


* * * * * * * 

I am so grateful to Jennie for coming on the show today and taking very complicated overwhelming topics like accounting and taxes and making them so simple. I mean, I think the name of her business, Simple Profit, speaks volumes because she approaches this from a place of simplicity, of ease, and she takes all of the shame and anxiety out of it. So Jennie, thank you so much for coming on the show, and if you would like to learn more about Jennie and her work, you will definitely want to go to simpleprofit.com and do check out the show notes for today's episode. You can find them at coachwithclarity.com/54, and we will have links to some fantastic blog posts as well as some of the courses and other offers that Jennie has. Jennie is also a past guest expert for the Coach with Clarity Membership, and she provided such a valuable in depth training exclusively for our members. So if you are a Coach with Clarity Member, you will find Jennie's training in the archives, just head to guest expert trainings and you'll see it right there. And if you're not a member, well what are you waiting for? Come join now, you'll be able to access not just Jennie's training, but dozens of past trainings from industry experts, as well as all of the hotseat coaching calls and Q&A calls. Plus you will get access to the Coach with Clarity Toolkit that includes all sorts of templates guides, video resources, and an attorney prepared individual coaching contract template that you can take and modify for use with your own clients – it is a huge benefit to the membership. So if you haven't joined yet, head over to CoachwithClarity.com/membership to learn more and become a Coach with Clarity today. Alright my friends, that's it for me. Thanks again for joining me for this week's episode. I'll be back in your feed next week and until then, my name is Lee Chaix McDonough reminding you to get out there and show the world what it means to be a Coach with Clarity.  

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