How To Handle Your Taxes, So Your Accountant Can Handle Everything Else!
Did you miss the podcast episode that goes with this blog? Then check it out here:
Taxes are a sore topic for a lot of people.
Do you know how to handle your taxes for the best result?
Most people misunderstand the complexities of the system, which causes a tremendous amount of confusion and anxiety.
I’m hoping the interview I did with an accounting nerd, Sheneya Wilson (aka The People’s CPA) will help clear a few things up for you.
She has multiple degrees in Accounting and is currently working on her Ph.D. She has prior corporate accounting experience but chose to open her own firm, Fola Financial.
Sheneya explained that Fola is a Nigerian word meaning honor and wealth, which are two things that she focuses on when working with clients. She handles her business with them honorably and helps them to build wealth.
Her goal was to serve her own people since only four percent of CPAs in America are black.
She reports she’s worked with over 300 minority small business owners, creatives and entrepreneurs.
Let’s see what Sheneya has to share with us!
Rake It Up
Do you need to improve your financial literacy?
Sheneya has written a financial literacy ebook that is truly relatable. She explains the three steps to getting started:
Rake it up: This is about bringing in money and creating wealth with it.
That could be earning extra income, finding ways to generate more wealth, and learning how to increase your credit score.
Break it down: This is about looking at all the moving parts in our financial plan.
Let’s look at our income, check our budget and see where our money is going. Does our spending habits help us meet our goals?
Back it up: Where can we back up--and cut some of our unnecessary spendings?
Sheneya gave an example from her own budget. After breaking down her budget and seeing that she spent $500 on Uber, she backed up and took steps to reduce spending in this area!
If you are looking for fun, easy, and digestible information… you might want to check out her ebook!
Sheneya is passionate about empowerment through economics and education.
She states, “I want to help my clients and serve them by providing excellent tax services or bookkeeping services. I educate them every step of the way.”
You see, she understands the power that someone will feel when they understand finances, financial terms, how to save money, and how investing works.
She actively works on her projects to help people grow those skills by speaking at conferences. She also creates and implements financial literacy workshops in middle schools, high schools, and at the college level.
Sheneya addressed how our emotions have a great impact on our finances. She teaches people how money flows.
She wants people to know how to start building wealth with little to nothing.
Tax Preparation & Planning
Which type of CPA do you have?
The one who you see only once per year or someone who is checking on your progress all year?
Sheneya helps her clients prepare for tax season on a monthly basis throughout the year.
She explained that your accountant should understand how you are operating because of the many taxed events, which can potentially save you money on some taxes. There may be things that need to be reported, and if you are aware of this, it can prevent you from receiving an IRS notice letter!
During the monthly meeting she will look at:
What is the net income?
What are the major expenses?
Have any new employees hired?
Are they considering opening up another storefront?
What is the biggest benefit of these monthly meetings?
When tax season starts, her clients and the necessary documents are fully organized. Their numbers are ready for the IRS to open up the system.
Sheneya reiterated, “I honestly think tax planning is way more important than the tax preparation.”
She continues that anybody can tax prep. However, having someone who can help build a healthy tax plan and teach us how to lower our tax bill is what makes a difference!
What are some of the best tax tips?
I asked Sheneya to share some wisdom with us.
Let’s see what she has to say:
Check your exemptions
Your exemptions affect your withholding. It’s important not to put too many exemptions on your W-4 (if you don’t have them). You’ll end up with a tax bill at the end of the year.
Do an audit on yourself
The audit includes thinking about any major changes:
New home purchase?
Did you create an HSA account?
Did you take money from your 401k?
Have you made any charitable donations?
Any major investments (including the stock market)?
She also recommends looking at common tax deductions, expenses, or events.
She recommends that any business owner should check in with an accountant before the year ends. There are transactions that can save you money, such as contributing to a retirement account or changing tax election.
Your goal is to reduce your tax liability.
Also for businesses, she said to make sure your books have already been reconciled. That means as a business owner, you are taking care of your responsibilities.
Sheneya and I agree that educating yourself is key to growing your wealth.
That’s why the Minority Money podcast and blog exist. The more you learn, the better decisions you can make, which allow you to grow your wealth!