The Tax Man Cometh · Every Day Rockstars

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The Tax Man Cometh

I know it’s only the beginning of February, but tax season is closer than you think. Give yourself an edge this year. Save yourself the April panic spiral and start now!

If you’re anything like me, there’s a small part of you that would happily be tossing tea into a harbor somewhere. I still lean hard toward the belief that taxation is theft -- or at the very least, forced participation in a system you didn’t design and never agreed to.

You don’t have to love it. But you do need to understand it.

You don’t win by yelling at the system... you win by knowing it better than it knows you.

So, let’s prepare properly for tax season.

Step 1: Get Your Documents in Order

Before you think about TurboTax or a CPA, you need your paperwork straight.

Create a folder right now called: TAXES 2025

Digital. Physical. Both. I don’t care. Just do it.

🧾 Most Common Documents to Collect

If you’re a W-2 employee:

W-2 from your employer
1099-INT (interest from banks)
1099-DIV (dividends from investments)
1099-B (investment sales)
1098 (mortgage interest)
1098-T (tuition payments)
Childcare statements (if applicable)
HSA contributions (Form 5498-SA)
Retirement contributions (Traditional IRA receipts)
Property tax statements
Charitable donation receipts

Overlooked items people forget:

Side gig income (Venmo, PayPal, Stripe 1099-K)
Bank bonuses
Gambling winnings
Jury duty pay
State tax refunds from last year
Marketplace health insurance Form 1095-A

If it hit your bank account, assume the IRS might know.

Step 2: If You’re an Entrepreneur, It’s a Different Ballgame

If you’re 1099 or self-employed, welcome to the big leagues.

You are responsible for:

Income tax
Self-employment tax (15.3%)
Quarterly estimated payments

Before filing, have:

All 1099-NEC / 1099-K forms
Full income summary (Stripe, PayPal, Square, etc.)
Profit & Loss statement
Mileage log
Business receipts
Home office square footage
Health insurance premiums
Equipment purchases
Software subscriptions
Contractor payments (and 1099s you issued)

Overlooked deductions entrepreneurs miss:

Business use of phone & internet
Education related to your business
Business meals (properly documented)
Depreciation on equipment
Retirement contributions (SEP IRA / Solo 401k)
S-Corp election timing

If you are not tracking throughout the year, tax season feels like punishment. If you are tracking all year, tax season feels like strategy.

Step 3: CPA or DIY?

Here’s the honest breakdown.

DIY Makes Sense If:

You’re a single W-2 employee
No rental property
No side business
No major life changes
Standard deduction covers you

You’re basically filling in boxes.

Hire a CPA If:

You own rentals
You have business income
You itemize deductions
You had marriage, divorce, kids, inheritance
You sold property or significant investments
You just don’t want to risk missing something

A CPA is compliance insurance.

Step 4: When to Hire a Tax Strategist (Different From a CPA)

This is where people get confused.

A CPA files what already happened. A tax strategist helps you plan what will happen next year.

Hire one when:

Your income crosses six figures
You own a growing business
You’re stacking multiple income streams
You’re considering S-Corp election
You want to reduce taxes legally long-term
You’re building wealth, not just earning income

If you’re making real money, strategy saves far more than preparation.

Step 5: Know the System You’re Playing

Quick reminder:

We have a progressive tax system. Being “in a higher bracket” does NOT mean all your income is taxed at that rate. Only the dollars in that bracket are.

Making more money does not make you poorer, but not understanding how it works does.

Action Plan