🔥 DAILY TAX TIP #19 — RUN YOUR BUSINESS LIKE A PRO: THE 3-ACCOUNT SYSTEM Short Story: One of my clients ran his business from a single checking account. He said, “I know what’s business and what’s personal, it’s all in my head. ”I told him, “Then your head is doing your bookkeeping—and it’s already overworked. ”We fixed that in one afternoon. THE TAX RULES (AND THE STRATEGY):• The IRS doesn’t require a specific number of accounts, but Publication 583 (Starting a Business and Keeping Records) is clear: you must maintain complete and separate records for business and personal funds.• The cleanest way to do this is with three separate business accounts—a simple but powerful structure used by successful entrepreneurs and CFOs everywhere. 🧭 Quick Action — Set Up These 3 Accounts: 1️⃣ OPERATING ACCOUNT This is your main checking account for business income and expenses. All client payments go in. All business bills come out. Use your accounting software to categorize everything. 2️⃣ TAX ACCOUNT Transfer 25–30% of net income here every week or month for estimated taxes. Reference: IRS Form 1040-ES due dates — April 15, June 15, Sept 15, Jan 15.When tax time comes, your money is waiting instead of your nerves. 3️⃣ RESERVE (OR PROFIT) ACCOUNT Move 5–10% of all deposits here before paying any bills. This builds cash stability and ensures the business always has an emergency fund. WHY IT MATTERS: 💰 You stop “accidentally” spending tax money on operating costs. ⚖️ It creates a clear audit trail showing clean separation of funds. 📊 It gives you an instant financial dashboard—Operating = Now, Tax = Owed, Reserve = Strength.🧠 It replaces chaos with command and control. PRO TIP: Name the accounts exactly like this in your online banking:• “GBC Operating”• “GBC Tax Savings”• “GBC Reserves” That visual reminder keeps discipline automatic every time you log in. BOTTOM LINE DRILL CALL: A professional doesn’t run war plans out of one pocket. Separate your funds, control your cash, and know your numbers daily. Three accounts. One system. Zero confusion.

Tip #1: Don’t Overlook Small Deductions—They Add Up! Many people miss out on tax savings by forgetting to track small expenses throughout the year. For example, did you know you can often deduct things like work-related mileage, out-of-pocket charitable donations, or even certain home office expenses? Quick action: - Keep a simple log (on your phone or a notebook) of any work or charity-related expenses as they happen. - Save receipts, even for small amounts—they can really add up at tax time! Why it matters: - Every little deduction can help lower your tax bill or boost your refund. - Good records make filing easier and help if the IRS ever asks for proof. Stay consistent—review your expenses each month so nothing gets missed when it’s time to file!

💡 Daily Tax Tip #2: Don’t Wait to Organize Your Records! Procrastination is one of the biggest reasons people miss deductions or make filing mistakes. Getting your records in order now will save you stress—and possibly 💵 later! 🧭 Quick Action: ✅ 📁 Create a “Tax 2025” folder (digital or physical) and drop in every W-2, 1099, or receipt as you get it. ✅ 📸 Use apps like QuickBooks, Google Drive, or your phone’s camera to scan & label documents right away. ✅ 🧾 Make a checklist of what you’ll need to file—income, deductions, and credits. 📣 Why It Matters: 💰 Organized taxpayers claim every deduction they deserve. 🕐 You’ll avoid the last-minute scramble (and missed forms). 🧘 Less stress = smoother filing season for you and your clients. 📆 Pro Tip: Set one day each month to update your tax folder—discipline now means peace later!

💡 Daily Tax Tip #3: Separate Business & Personal Expenses! Mixing personal and business spending is one of the most common mistakes small business owners make—and it can cost you BIG at tax time. 🧭 Quick Action: ✅ 💳 Open a dedicated business bank account (and credit card if needed). ✅ 🧾 Only use business funds for business expenses—keep personal purchases separate. ✅ 📊 Use bookkeeping software (like QuickBooks 💚) to track income & expenses throughout the year. 📣 Why It Matters: 💰 Clean records make it easier to prove deductions and maximize write-offs. ⚖️ Avoid IRS red flags and messy audits from commingled funds. 🧠 You’ll have clear insight into your business’s real profit and cash flow. 📆 Pro Tip: Review your accounts weekly to catch any personal charges before they pile up—discipline builds confidence and compliance!

🔥 DAILY TAX TIP #18 — S-CORP OWNERS: HEALTH INSURANCE MUST BE REPORTED CORRECTLY Short Story: A business owner proudly told me, “I run everything through my S-Corp, even my health insurance. It’s all deductible.”I said, “Show me where it’s reported on your W-2.”He blinked.When the IRS blinks back, it’s never friendly. THE TAX RULES:• If you are a more-than-2% shareholder in an S-Corp and the company pays your health insurance, it must be included in your W-2.• It is shown in Box 1 of the W-2 (wages subject to income tax), but not in Boxes 3 and 5 (Social Security & Medicare), when properly set up.• This allows the shareholder to potentially take a Self-Employed Health Insurance Deduction on Schedule 1, Line 17 of Form 1040.• Primary references: - IRS Notice 2008-1 - Publication 15-B (Employer’s Tax Guide to Fringe Benefits) - Instructions for Form W-2 and Form W-3 🧭 Quick Action: ✅ The S-Corp must either:• Pay the insurance premiums directly, or• Reimburse the shareholder in the same tax year. ✅ Add the total premiums to W-2 Box 1 as “Shareholder Health Insurance.” ✅ Do not include it in Social Security or Medicare wages (when correctly structured). ✅ Report the deduction on Schedule 1 of the shareholder’s personal return. WHY IT MATTERS: ⚠️ If not reported properly, the IRS can disallow the deduction entirely. 💰 Done correctly, the deduction reduces adjusted gross income, which may reduce taxable income across multiple categories. 🛡️ Proper reporting protects both the S-Corp structure and the audit trail. PRO TIP: Add a year-end checklist item: “Verify total health insurance paid for each >2% shareholder and confirm W-2 adjustment completed before filing. ”No scrambling. No regrets. BOTTOM LINE DRILL CALL: If the business pays your health insurance, your W-2 must say. No shortcuts. No silent reimbursements. Documentation + reporting = protection + deduction.