Accounting

Struggling to Track Business Expenses for Tax Season? How Can You Fix It Before Filing?

Summary of What This Blog Covers

Why poor expense tracking leads to tax trouble.
Tools and habits to organize business expenses.
What to track, from subscriptions to 1099 NECs.
How monthly reviews lead to stress-free filing.

Let’s start with a truth bomb most entrepreneurs won’t say out loud:

You know you’re winging it.

You’re running a business, juggling clients, building your brand, and maybe trying to sleep. You’re the CEO, CMO, CFO, and the one who fixes the printer. The last thing you’re thinking about in Q3 is “Did I categorize that expense correctly in WaveApp?”

So here we are. It’s tax season. You’re squinting at bank statements, wondering if “Processing Fee” means Stripe took a cut or if you bought coffee for a client or just for yourself, during a breakdown between meetings.

If you’re a digital consultant or small business owner and that scenario made you twitch a little? You’re in the right place.

Tracking your business expenses doesn’t have to feel like chasing squirrels with a calculator.
It can be smart. It can be simple. It can even—wait for it—be satisfying.

Let’s walk through how to fix your expense tracking before you file. Because no one builds a profitable business by guessing their deductions on April 13.

Step 1: Stop Trying to Be the Accountant and the Visionary at the Same Time

Let’s just call this out. Most people running small businesses treat bookkeeping like laundry: put it off until it’s overwhelming, then deal with it in a frenzied blur, hoping no one notices the sock you lost in the process.

But here’s your first aha moment:
Tracking expenses isn’t about spreadsheets. It’s about strategy.

It’s about seeing where your money is going, understanding what’s working, and not being surprised when your CPA in Austin, Texas says, “So, where’s the documentation for this $1,200 Adobe subscription?”

The real reason you’re stuck is that you’ve been trying to be everything at once. And when you treat expense tracking like a low-priority admin task instead of a core business function, it shows up in your tax return and your stress levels.

Step 2: Choose the Right Tool (and Use It Like You Mean It)

This isn’t about being fancy. It’s about finding a tool you’ll actually open.

Here’s what most consultants do:
They sign up for QuickBooks, open it once, get overwhelmed by the dashboard, and go back to doing math on their phone while watching Netflix.

Let’s not do that anymore.

Pick one of these:

QuickBooks Self-Employed: It syncs with your bank, tags transactions, and tracks mileage. Think of it as your smart, slightly smug financial assistant.
WaveApp: Free and friendly. If you hate overcomplication, start here.
ZohoBooks: A little more structured, ideal if you’re scaling.
Google Sheets: Old school? Maybe. Effective? Absolutely. Especially if you love building templates with too many colors.

What matters isn’t the tool, it’s the habit.
Open it weekly. Track as you go. Don’t let a year’s worth of Amazon receipts sit in your email like a trap.

This is how real businesses operate. If you’re looking for long-term sustainability and fewer audit nightmares, your tax preparer or certified CPA near you can help connect the tool to your tax plan.

Step 3: Know What to Track And Don’t Just Wing It

Let’s play a game. What’s deductible?

That $199 design tool you used once?
The coffee for your client meeting?
Your internet bill?
The mic you bought for Zoom calls?
That online course you half-finished?

Answer: All potentially deductible if you tracked them correctly and have documentation.

Here’s the thing. Most people miss out on huge tax savings not because they’re lazy, but because no one ever explained what counts and what doesn’t in a way that wasn’t riddled with tax code language.

Let’s fix that.

Categories That Matter (And How to Label Them Like a Pro):

Home Office: You can claim a portion of your rent, utilities, internet, and even repairs if you work from a dedicated space. No, your couch doesn’t count. Yes, your converted closet might. Talk to your tax consultant near you to get this right.
Software + Subscriptions: If it helps you do your job, communicate with clients, design content, or build strategy, it’s fair game. This includes Zoom, Notion, Calendly, ConvertKit, and all those tools you forgot you’re still subscribed to.
Contractor Payments: If you paid someone over $600 and they’re not incorporated, you owe them a 1099 NEC. Also, W9s aren’t optional. Your Austin accounting firm can handle this for you.
Marketing + Advertising: Paid social ads, designers, branding, email platforms. If it made you more visible, it’s deductible.
Travel + Meals: Business meetings, events, client dinners, yes. That taco run after working late alone? Probably not.
Phone + Internet: If your phone is glued to your hand for work 80% of the time, then 80% of your bill should be working for you at tax time. The IRS doesn’t care if the account is in your name, they care how it’s used.

If you’re unsure, bring it to your certified public accountant near you. That’s literally their job.

Step 4: Keep Your Receipts and Tell a Story

Let me say this as clearly as possible:

The IRS is not a mind reader.

That $68 dinner could’ve been client onboarding or your aunt’s birthday. Without a receipt and a note? No one knows. And when no one knows, guess who wins? Not you.

Here’s what you need:

Receipt (physical or digital)
Date
Amount
Business purpose
Names, if applicable

Pro tip:
Use apps like Dext or Shoeboxed to snap and tag receipts in real-time. Or set up folders in your cloud storage by month. Add a quick note to each file. Done.

This isn’t about perfection. It’s about clarity. It’s what makes your tax professional near you say, “You made this easy.” And when they’re happy? Your deductions get maximized. Your risk? Minimized.

Step 5: Monthly Maintenance = Long-Term Peace

Want to know what really separates the tax-season sprinters from the business marathoners?

They review their books monthly. Not just yearly.

You don’t need to hire an entire accounting department to stay on top of things. Here’s a simple monthly ritual:

Reconcile your accounts (make sure everything adds up)
Categorize new expenses
Upload any outstanding receipts
Review profit and loss
Set aside money for self-employment tax or estimated 1040 ES payments

Set a recurring calendar invite. Pair it with coffee. Make it part of your rhythm.

It’s not just about taxes. It’s about knowing your numbers, owning your growth, and not panicking when your Austin tax accountant asks, “Can you explain this $400 software charge from July?”

Quick Bonus: What About the Weird Stuff?

Not everything fits in a neat box. So here’s a cheat sheet for the “Wait, can I deduct that?” moments:

Online Courses? If they support your business skills, yes.
Branded swag? And that includes the tote bag you gave your top-tier clients.
Business insurance? Cyber, liability, E&O, it all counts.
Sold something? Capital gains tax may apply. Log that.
Foreign bank account? You might need FBAR filing. Talk to your enrolled agent or chartered professional accountant now, not after the IRS sends love notes.

The Bigger Picture (Because This Isn’t Just About Taxes)

This isn’t about becoming an accountant. It’s about becoming a confident business owner.

When your expenses are tracked, categorized, and backed up, you stop playing defense. You walk into your tax appointment with clarity. You make better decisions. You get strategic instead of reactive.

And maybe best of all?
You stop overpaying taxes just because your receipts were hiding in your inbox.

Ready to Track Expenses Like You Run the Place? Because You Do.

Here’s the deal: You don’t need to know every rule. You just need the right system and someone to help you set it up before tax season turns into a four-alarm fire.

At Insogna, we help digital consultants, small business owners, and self-employed visionaries:

Set up tracking tools they actually use
Sort out messy records from 2025
Identify deductions hiding in plain sight
File taxes without the stress spiral
Sleep better knowing their finances are finally handled

Want to make your 2025 taxes smarter, cleaner, and way less painful? Book a session with Insogna today.

We’ll get you a personalized expense strategy, a real checklist, and the confidence to stop Googling “can I deduct this?” at 11:59 p.m.

This year? You’re walking into tax season like a boss.
Because you are one.

What Are 7 Smart Tax Moves Entrepreneurs Should Make Before Year-End?

Summary of What This Blog Covers

Switch to S Corp to lower self-employment taxes.
Fund a SEP IRA for retirement and tax savings.
Prepay expenses and track mileage to boost deductions.
Run a tax projection to avoid surprises in April.

A Clearer Path to a Stronger Financial Future Starts with What You Do Today

There’s something powerful about a clean ending.

It’s not just about wrapping up the books or filing the forms. It’s about closing the year with clarity, intention, and the kind of confidence that says, “I saw what was coming, and I acted.”

For many business owners, especially those juggling growth, payroll, client needs, and personal priorities, tax season can feel like this mysterious fog on the horizon. You know it’s coming. You’re not quite sure how intense it will be. And you hope maybe this time it won’t be so overwhelming.

But what if it didn’t have to be that way?

What if the last quarter of the year wasn’t a mad dash or a guessing game but instead, a strategic window to make smart, meaningful choices?

At Insogna, we don’t just talk about numbers. We talk about people. We talk about legacies. We talk about how decisions made in November and December can echo across the next 12 months and far beyond. And we show you exactly how to take that step forward.

Let’s talk about seven smart tax moves you can make right now, before December 31, that could not only save you money but bring you peace of mind and maybe even a little pride in knowing you’re showing up for your future self, your team, and your business.

1. Elect S Corporation Status If It Aligns with Your Growth

This is a conversation we have often with entrepreneurs who have outgrown their current business entity but haven’t realized it yet.

If you’re operating as an LLC or sole proprietor, and your business is consistently netting over $75,000 annually, you may be overpaying in taxes without even realizing it.

Here’s what’s happening behind the scenes:
As a sole proprietor, all your business profits are subject to self-employment taxes. But by electing S Corporation status, you can divide your income into a reasonable salary and shareholder distributions. Only the salary portion is subject to payroll tax, which can mean significant savings.

But here’s the nuance:
This move isn’t one-size-fits-all. S Corps require formal payroll, additional filings, and responsible oversight. And if not handled well, they can cause more confusion than clarity. But when guided by an experienced Austin CPA, they can be a powerful tool for tax efficiency.

This isn’t about gaming the system. It’s about aligning your business structure with the reality of your revenue and the direction you’re heading. We help you make that call with precision not pressure.

2. Fund a SEP IRA and Build Wealth While Lowering Taxes

If there’s one move that combines long-term value with immediate impact, it’s this.

Too often, small business owners focus entirely on their business’s growth while putting their personal financial future on the back burner. But your retirement strategy doesn’t have to be complex or expensive to be powerful.

Enter the SEP IRA.

This retirement plan was designed specifically for entrepreneurs, freelancers, and self-employed professionals. It allows you to contribute up to 25% of your net compensation, up to a maximum of $69,000 for 2025. And every dollar you contribute is a deduction from your taxable income.

But it’s more than just a deduction. It’s a mindset shift. It’s a signal to yourself that your future matters not someday, but now. That you’re building something worth protecting.

At Insogna, we often ask our clients:
“What if your tax strategy also supported the life you want 10, 20, or 30 years from now?”
This is one way to start answering that question.

3. Prepay Expenses to Bring Tax Relief into This Year

Timing matters.

Especially when your business is on a cash-basis accounting method which most small businesses are. That means you recognize income when it’s received and deduct expenses when they’re paid.

So if you know you’ll have deductible expenses in January or February, paying them before December 31 means you can claim them on this year’s tax return.

Think about:

Office rent
Software subscriptions
Marketing contracts
Insurance premiums
Retainers for consultants or legal services

Why does this matter? Because shifting those expenses into this tax year can bring down your taxable income now when you still have control over it.

We’re not suggesting you rush to spend. But if the expense is already planned and makes sense for your operations, this is a strategic window to optimize your tax outcome.

And when you work with a thoughtful CPA near you, you don’t just reduce numbers. You build intentionality into your financial decisions.

4. Get Your 1099s in Order Before the January Panic

It’s a quiet mistake that creeps up every year.

You work with independent contractors, pay them on time, treat them well, and then…January hits, and you’re scrambling to collect W-9s, track payments, and meet the IRS 1099 deadline.

It’s stressful. It’s avoidable. And the penalties for missing the deadline are real.

So let’s shift the rhythm.

Here’s what we recommend doing now:

Gather W-9s from every contractor you’ve paid more than $600
Review your vendor list for potential 1099 recipients
Start preparing those forms before the holiday slowdown

At Insogna, this isn’t just a line item on our checklist. It’s part of the proactive rhythm we build with our clients. Because no one wants to spend January buried in paperwork when they could be launching new ideas or taking a breath after a long year.

5. Keep a Clean Mileage Log (Future You Will Thank You)

This is one of the most commonly missed deductions simply because it’s hard to retroactively piece together.

If you use a vehicle for business, the IRS lets you deduct either the actual expenses or the standard mileage rate, which is expected to hover around $0.68 per mile in 2025. But to claim it, you need solid records.

That means:

Dates
Starting location and destination
Purpose of the trip
Miles driven

The best approach? Use a mileage tracking app, or get into the habit of logging your miles daily or weekly. If you wait until April to try and remember what you drove in October, you’ll either overestimate (risky) or underclaim (costly).

Mileage may seem minor but over a year, it can translate into thousands in deductions. And we believe in making every mile count.

6. Buy Equipment Now and Leverage Section 179

There’s a principle we teach often: invest intentionally. And if you already plan to buy business equipment in Q1, it may make sense to move that purchase up before year-end.

Why? Section 179 of the IRS code allows you to deduct the full purchase price of qualifying equipment, technology, or vehicles in the year it’s placed into service.

In 2025, the limit is projected at $1.22 million.

This applies to:

Laptops
Office furniture
Machinery
Company vehicles
Software

But there are rules. The equipment must be used at least 50% for business and must be placed in service not just purchased before December 31.

We help our clients assess whether a year-end investment makes tax sense or just adds unnecessary spend. Because strategy isn’t just about saving money, it’s about making every dollar work in alignment with your growth.

7. Schedule a Year-End Tax Projection: Your Most Powerful Move

This is where everything comes together.

A year-end tax projection is not just a spreadsheet. It’s a conversation about who you are as a business owner, where your numbers are trending, and what choices still remain on the table.

At Insogna, our tax projections include:

Your estimated tax liability
Your current year-to-date performance
Actionable strategies that still count before the year closes
A roadmap to help you avoid surprises in April

And perhaps most importantly, it gives you peace of mind.

Imagine walking into January knowing you’re not guessing. You’re prepared. That level of clarity doesn’t just serve your finances. It frees up headspace, decision-making power, and energy for what truly matters: your mission, your people, and your future.

The Bigger Why Behind All of This

Tax planning is technical, yes. But at its heart, it’s deeply personal.

Because every dollar saved is a dollar that can go toward hiring a new employee, upgrading your systems, taking a well-earned vacation, or investing in your next chapter.

And that’s why we show up for you.

We believe that business owners deserve more than vague advice or reactive accountants. You deserve strategic partners who listen deeply, care genuinely, and coach you through not just the numbers but the decisions behind them.

These seven moves? They’re not just tactics. They’re tools. They’re bridges to a stronger, clearer, more empowered version of your business.

And we would be honored to walk that path with you.

Let’s proactively plan so you aren’t surprised at tax time.

If you’re ready to close out this year with clarity, control, and confidence, let’s talk. Our Austin-based team of CPAs, tax advisors, and growth-focused professionals are here to help.

Let’s build the next step together.

What Should You Do If You Mixed Business and Personal Expenses This Year?

Summary of What This Blog Covers

Why mixed business and personal expenses create tax and audit risks.
How to separate and clean up your 2025 records step by step.
Tools and habits to track expenses, receipts, and cash flow clearly.
The long-term benefit: clarity and confidence in your business finances.

There’s a quiet kind of discomfort that shows up during tax season.

It’s not loud. It’s not urgent like a looming deadline or an unexpected bill. It’s softer, and it creeps in when you’re halfway through a spreadsheet or sorting through your bank statement.

It usually sounds like this:

“Was that Target run for the business… or groceries?”
“I think I bought that subscription for client work… but maybe I used my personal card?”
“Does it even matter now?”

If this is you, let’s begin here with honesty:

You are not behind. You are not alone. And you haven’t failed.

Mixing personal and business expenses is incredibly common, especially in your first year as a business owner. You’re moving quickly. You’re making things happen. You’re probably doing more roles than you ever imagined. Finance becomes a layer in a long list of tasks and that line between business and personal gets blurred fast.

At Insogna, we’ve worked with hundreds of clients who came to us at this exact moment. They weren’t reckless. They were overwhelmed, unsure where to start, and above all, trying.

So let’s clear the air, and let’s build a path forward.

This is your guide to separating business from personal expenses, cleaning up your 2025 records, and building a sustainable system that supports the business you’re working so hard to grow.

No judgment. No shame. Just guidance, structure, and the kind of clarity that gives you back control.

Why This Happens (And Why It Matters More Than You Think)

Let’s name the truth: business ownership often begins in the middle of everything else.

It begins when you’re already working full time or managing kids or caregiving for someone. It begins with passion, or necessity, or maybe both. It begins in a notebook, in a domain purchase, or with a client who says, “Can I just pay you directly?”

And from there, you run.

You buy a few things. Use your personal card. Deposit a payment into your personal account because it’s already set up. And before you realize it, your business finances are tangled up with everyday life.

It is deeply human. But it’s also why so many business owners struggle when it’s time to file their taxes.

Here’s what’s at stake:

1. Lost Deductions

Your tax preparer or certified public accountant near you cannot deduct what cannot be verified. When business expenses are mixed in with personal ones and lack clarity or receipts, they may need to be excluded.

2. Increased Audit Risk

The IRS looks for patterns. Messy records raise red flags. If your 1040 Schedule C, 1099 NEC, or other small business tax forms are cluttered with unclear entries, you become a target for review.

3. Unclear Cash Flow

If your profit and loss statement includes birthday gifts, gas for personal travel, and business meals without context, then your numbers lie. And when your numbers lie, you make poor decisions based on incomplete or incorrect data.

You might think, “But I didn’t know!”
And that’s fair. Most people don’t until they’re deep in it.

What matters now is what you do next.

Step 1: Accept What’s True and Start Fresh

The first thing we tell clients in this situation is: pause the self-blame.

There is no audit-proof entrepreneur. There is no perfect first year. And there is no reward for shame.

Your goal now is to stop the mixing and begin the separation.

Start by opening:

A dedicated business checking account
A business-only credit card

Even if you’re still a sole proprietor or not bringing in consistent income, this step creates a visible line. It shows the IRS, your tax professional near you, and yourself that you’re treating your business seriously.

If you’re an LLC owner or planning to file an S Corp election, your CPA in Austin, Texas or small business CPA Austin-based team can also help you set up accounts that support your legal and tax strategy.

Step 2: Go Back and Sort the 2025 Mess

You might be thinking, “Do I really have to go back through the whole year?”

Short answer: yes.

Long answer: this isn’t punishment. It’s protection.

Your financial records are the proof that make your tax return trustworthy. And trust is what keeps the IRS from knocking or keeps you steady if they do.

Start by pulling:

Personal and business bank statements
Credit card statements
Payment app histories (Venmo, PayPal, Zelle, Stripe)
Any spreadsheets or notes you kept

Label each transaction as:

Business (keep it and categorize it)
Personal (exclude it)
Unclear (flag it for review)

Tools like QuickBooks Self-Employed, Wave Accounting, or ZohoBooks can import transactions and help you tag them. If you’re not sure how to get started, our team at Insogna walks clients through this step in guided sessions. You don’t have to do it alone.

Step 3: Rebuild Your Records in a System You’ll Actually Use

A system is only useful if you maintain it.

This is why we always recommend systems that work with how you naturally operate not against it.

Some people love spreadsheets. Others need visual dashboards. Some want everything automated. Others prefer to track it manually.

No one approach is right. The only right answer is consistency.

If you’re using accounting software:

Import your cleaned-up 2025 data
Categorize expenses according to IRS guidelines
Reconcile monthly to your statements
Connect it with your CPA office near you or certified CPA near you to make tax prep seamless

If you’re using a spreadsheet:

Include date, vendor, amount, payment method, category, and notes
Sort monthly or quarterly
Keep it in a cloud folder with your receipts and tax forms

Either way, schedule monthly time to review and update. It takes less than 30 minutes and removes a mountain of stress come tax time.

Step 4: Collect and Label Receipts with Real-World Context

Here’s the secret most people don’t realize: the IRS doesn’t just want the receipt.

They want to know why.

That $43 Uber receipt might be a client meeting or a ride home from a concert. What proves the difference? Notes.

Apps like Dext or Shoeboxed let you snap, upload, and tag your receipts in real time. Or simply save them in monthly folders with short filenames like:

“Client Lunch_March_Rachel_Marketing Review.pdf”
“Printer Ink_Q2_Tax Prep Supplies.jpg”

Why this matters:

If you ever face an audit, context wins.
If your tax accountant near you sees an unclear expense, it won’t be included.
If you’re ever asked, “What was this?”, you’ll know.

This also supports other deductions like:

Home office expenses
Self-employment tax calculations
Education, travel, and meals
Capital gains tax reporting if you sold equipment or assets

And your records feed directly into your 1040, 1099 tax form, or W2 form workflows.

Step 5: Build Monthly Habits That Protect You

The hardest part of all this isn’t fixing what’s broken, it’s maintaining what works.

Here’s a rhythm we recommend to all Insogna clients:

First Monday of the month: Review all transactions
Mid-month: Upload receipts and add notes
End of month: Check reports, pay estimated taxes (Form 1040-ES) if needed, and flag any issues

Add this to your calendar. Pair it with your coffee or your end-of-month wrap-up. Make it a ritual.

And if you can’t or don’t want to do it alone? Hire support.

A certified public accountant, taxation accountant, or licensed CPA can do monthly reviews for you. You don’t have to carry this alone.

Beyond the Deductions: What This Work Really Gives You

Yes, separating personal and business expenses reduces audit risk. Yes, it saves you money. But there’s something else it gives you, something more lasting.

It gives you clarity.

You stop guessing. You stop worrying if you “did it right.” You stop holding your breath when tax season rolls around.

Instead, you walk into meetings with your Austin accounting firm or your tax advisor near you with clean reports and better questions. You start to see what’s working, what’s not, and where you can grow.

Clarity changes how you lead.
And that’s the real point.

You didn’t start your business to be buried in confusion. You started it to build something lasting, sustainable, and honest.

Your numbers should reflect that.

Let’s Clean This Up With Strategy and Support

At Insogna, we don’t just fix books. We build trust.

If your 2025 records are mixed, unclear, or missing key data, we can help you:

Separate and categorize your expenses
Rebuild your ledger using QuickBooks, Wave, or spreadsheets
Prepare documentation for your 1040, 1099s, and business filings
Catch missed deductions
Prevent underpayment and audit risk
And put systems in place that fit your goals and capacity

This work does not need to be perfect. It just needs to be started. And starting with support makes all the difference.

Need help cleaning up your 2025 records? Let’s get your books and taxes back on track. Contact us today.

We’re not here to scold. We’re here to build with you, not for you.

Let’s create financial clarity that supports the business and life you’re building.

What Are 4 Smart Ways Small Business Owners Can Prepare Now for Tax Time?

Summary of What This Blog Covers

Organize receipts and expenses early to avoid tax season chaos.
Reconcile inventory to accurately report COGS and lower taxes.
Review your business structure for possible tax savings.
Schedule your CPA meeting early to plan before deadlines hit.

What if I told you that doing one thing right now could save you more than double what you typically spend on accounting each year?

Not a trick. Just strategy.

If you wait until tax season to gather receipts, guess at inventory, wonder about your business structure, or scramble to meet deadlines, you’re leaving money and sanity on the table. This blog walks you through four powerful moves you can make now, so April feels like a win, not a fire drill.

1. Organize Receipts, Expense Logs, & Financial Documents Year‑Round

Why this matters

Think of your expenses like puzzle pieces. If they’re scattered, missing, or dirty, you can’t see the picture. The IRS doesn’t give you bonus points for guessing. A lost receipt, a mis‑tagged transaction, or mixing business and personal purchases is like handing the IRS a gift.

Use real systems now and you avoid scrambling later.

What you should do this week

Scan and store every receipt immediately using apps like Hubdoc, Dext, or simply your phone camera + cloud folder.
Create expense categories (“Marketing – Facebook,” “Software – Design Tools,” “Client Meals – Project X”) so when you look back, you don’t wonder what even was that charge.
Separate personal and business bank/credit accounts. If your personal meals are in the same account as your business supplies, audits and missed deductions lurk.
Reconcile bank & credit accounts monthly so problems are found early (duplicate charges? forgotten fees? mis‑classified expenses?).

Tactics from IRS & Experts

According to the IRS Small Business and Self‑Employed Tax Center, keeping good records helps you deduct business expenses, maintain accurate financial statements, file required forms correctly, and spot where you’re forking out too much.

Also the Taxpayer Advocate Service says that one of the top recommendations for small businesses is: “keep adequate records.” Not later. Throughout the year.

2. Reconcile Your Inventory & Track Cost of Goods Properly

If you don’t sell stuff, skip ahead. If you do, this is gold.

Imagine you have products in three warehouses or 3PLs. You’ve sold some, you’ve got returns, you’ve got dead stock. If your inventory isn’t reconciled before year‑end, the number you report for Cost of Goods Sold (COGS) will be wrong. That distorts your profit. That increases your taxes. That invites questions.

What to do now

Count physical inventory in all locations. Adjust for damaged/obsolete stock. Write off what you need to.
Sync your sales platforms (Shopify, Amazon, POS) with your accounting tool (QuickBooks, Xero). Automatic feeds reduce errors.
Maintain records: purchase date, cost, shipping, storage fees. These feed into COGS and depreciation.
Identify slow movers. If something hasn’t sold in 90‑120 days, decide whether to discount, bundle, or write it down.

Why small errors multiply

Small mistakes in inventory count can lead to large misstatements in profit. For example: overstate inventory by $5,000 → understate COGS by $5,000 → report $5,000 extra profit → pay taxes on that extra profit. Multiply that across multiple SKUs and months, and you’ve overpaid thousands.

3. Review & Optimize Your Business Structure & Compensation

Here’s one that hits many business owners: your legal structure (sole proprietor, LLC, S‑Corp, etc.) and how you pay yourself can cost or save you thousands every year.

What you should evaluate now

If you’re a single‑member LLC or sole proprietor with rising profits, see whether an S‑Corporation election could reduce self‑employment taxes. (You’ll need to pay yourself a “reasonable salary” then distributions.)
Make sure you’re paying yourself correctly. W‑2 or owner’s draw? What payments are treated as wages, what as profit? Misclassify and the IRS may reclassify for you with penalties.
Max out retirement contributions (Solo 401(k), SEP IRA) to reduce taxable income. Doing this before year‑end can make a difference.
Look for credits or deductions unique to 2025: energy credits, depreciation thresholds, water or sustainability improvements.

What legal & tax experts recommend

The IRS Small Business Tax Highlights emphasize choosing the correct business structure: it determines which taxes you pay and the forms you file.

Moreover, the “Small Business Tax Strategies for 2025” article from Investopedia shows that S‑Corp election, maximizing deductions, using Section 179 for equipment, and planning retirement contributions are among the top ways to reduce liabilities.

4. Build & Follow a Tax Calendar + Schedule Your Year‑End Planning Session

If you think of taxes as only an April problem, you’re already late. The real power comes from knowing what to do before deadlines arrive. Build your schedule now.

What your calendar should include

Quarterly estimated tax deadlines (April, June, September, January) so you’re not hit with penalties.
Deadline to finalize decisions like S‑Corp election or buy‑equipment so you can deduct depreciation.
Reminders for contractor/employee forms (collect W‑9s, issue 1099‑NECs).
Year‑end inventory count date.
Monthly or bi‑monthly check‑ins: review financials, spot overspending, adjust projections.

Why planners matter

When you meet with a tax advisor early, you get options. For example, you might choose to purchase equipment in December instead of January, take a bonus distribution, prepay certain expenses—all of which affect your taxable income. Wait until after December 31, many of those options vanish.

5. Compliance Essentials: Forms, FBAR, State & Federal Permits

If you skip this, it’s the kind of oversight that bites when you least expect.

Key items to ensure

Proper forms for contractors and vendors (W‑9, 1099‑NEC) so you don’t face penalties.
Payroll setup if you have staff or if you pay yourself a salary under an S‑Corp. Employee taxes, withholding, W‑2s.
If you have foreign financial accounts or transactions (PayPal, Wise, bank accounts abroad) and aggregate balances exceed thresholds, you may need to file FBAR (FinCEN Form 114).
State tax registrations, especially if you operate or sell to customers in other states (sales tax permits, foreign LLC registrations).

Real‑world cost of ignoring compliance

Miss one 1099 deadline = penalty. Miss foreign bank reporting = penalty. Owe state sales tax because you crossed nexus thresholds without registering = charges, interest. Suddenly, you’re paying a price far higher than the cost of doing compliance right.

6. Leverage Tools & Automation: Systems That Scale, Not Stress

Manual ≠ special. Manual + late = stress. Use technology so you do less work and make fewer mistakes.

What tools help

Accounting software: QuickBooks Online, Xero. Use bank feeds, auto‑categorization.
Receipt scanning tools: Hubdoc, Dext, or simple apps that let you snap photos of receipts.
Tools for tracking mileage, business travel, subscriptions.
Dashboards or reports that show you profit trends, expense categories, outstanding invoices.

Why tech is your ally

It’s not just convenience. It’s audit protection, clarity, and speed. When you can see real numbers in real time, you make better decisions, avoid waste, and sleep without nightmares about missing deductions.

7. Common Mistakes & How to Avoid Them

Because knowing what not to do can be just as valuable as knowing what to do.

Mixing personal & business finances – That muddy mess ruins deductions and increases audit risk.
Waiting until April – Everything special deductions, strategic structure changes, even retirement contributions are often locked in by calendar year. Miss the cutoff, and you miss the benefit.
Under‑drawing deductions – Many business owners don’t take advantage of ordinary & necessary expense categories, or misclassify, or don’t keep proof.
Ignoring changes in tax law – 2025 has several updates: deductions, reporting requirements, threshold changes. If you don’t update your strategy, you risk paying more than required. (See recent small business tax strategy articles.)

8. Putting All This Into Practice: Hypothetical Case Study

To make this real, let’s imagine:

Jamal runs a custom furniture business. He has a workshop, sells online and locally, uses contractors for finishing, and does occasional international shipping and vendor payments.

This past year, he:

Didn’t track travel expenses well
Borrowed personal credit cards for supplies
Didn’t count damaged inventory properly
Didn’t evaluate whether switching to S‑Corp would help him

In December he meets with a CPA in Austin. They:

Organize all his receipts & see he missed $6,000 in deductions.
Count inventory properly and write off damaged stock, lowering taxable income by another $3,000.
Switch to S‑Corp structure for the following year, so he can pay himself a reasonable salary + distributions.
Set up a mileage tracker, separate bank accounts, quarterly check‑ins, and a tax calendar.
Ensure all 1099s are issued, W‑9s collected, and foreign vendor payments documented.

Result: Year‑end tax liability is lower, cash flow is clearer, audit risk reduced, and Jamal feels in control this year, not fearing April.

9. What’s New in 2025 That Affects All of This

Because tax rules evolve. What worked last year may not work this year.

IRS is tightening documentation for deductions (travel, meals, equipment) to ensure they are “ordinary and necessary.”
Thresholds for third‑party payment reporting (1099‑K etc.) have shifted, meaning platforms might now send you forms even for modest amounts.
Inflation adjustments have increased standard deductions and income thresholds in many tax brackets, good for some, but also meaning you may cross into new brackets if you aren’t planning.
New state tax updates: sales tax laws, local tax credits, etc. Each state may change rates or rules, especially regarding nexus.

Summary: Your Action Plan (What to Do Right This Minute)

Pull up your bank & credit cards. Start mapping every transaction with purpose.
Inventory check: count, write‑off, sync to your accounting tools.
Review whether your business structure (LLC, S‑Corp, etc.) is still optimal for how much you earn.
Book a tax planning meeting with a trusted certified public accountant near you early, don’t wait.
Check for foreign accounts, contractor paperwork, 1099/W9s, state registrations, make sure nothing is hanging.
Put tools & automation in place so you don’t repeat the same pain next year.

Final Word & CTA

You didn’t bust your gut building a business just to end up scrambling every tax season.

If fear, disorganization, and “I’ll fix it later” are becoming familiar, remember: every minute you wait, you pay more whether in taxes, penalties, stress, or missed savings.

Insogna is built for business owners who want strategy, clarity, and results not just tax filing. Whether you need tax help, tax preparation services near you, or you’re searching “CPA in Austin, Texas” who shows up early and knows what they’re doing, we’re ready.

Take the leap now. Schedule your tax strategy session with Insogna. Let’s get your books, structure, and plan in order so you move into tax season not just surviving, but thriving.

What Are 5 Reasons Entrepreneurs Overpay Taxes and How Can You Stop It?

Summary of What This Blog Covers

Top 5 reasons entrepreneurs overpay taxes
How structure, planning, and documentation impact savings
Common tax traps founders miss
Actionable fixes every business owner should know

Let’s start with a question you might not like, but definitely need to hear:

If you’re hustling, growing your business, and staying on top of everything except your taxes… are you accidentally funding the IRS’s next renovation project?

Because here’s the not-so-secret truth: entrepreneurs overpay taxes all the time. Not because they’re reckless. Not because they’re evading anything. But because they’re busy building a business and assume the tax part is either “already handled” or “not that bad.”

And let’s be honest, taxes don’t scream urgency until they do.

As a CPA who’s worked with founders from the idea-on-a-napkin stage to multi-million dollar exits, I can tell you this: the number on your tax bill isn’t just about what you earned. It’s about how well you planned.

And when you don’t plan, the IRS doesn’t just take what they’re owed. They take what you unknowingly offer up.

At Insogna, we work with entrepreneurs who want to keep more of what they earn legally, ethically, and strategically. This blog is the breakdown I wish every founder read before they hit their first six-figure year (or, let’s be honest, their first five-figure April tax surprise).

So let’s talk about the five most common ways entrepreneurs overpay taxes and how you can stop making the IRS your most loyal silent partner.

1. You’re Using the Wrong Entity Structure

You formed an LLC. You felt official. You even posted about it. And at the time, that was a win.

But fast forward a year or five and you’re generating real profit, maybe $100K… maybe $300K… and still taxed like a sole proprietor.

Which means you’re paying self-employment tax on every single dollar of net income. No separation. No savings. No relief.

Aha moment: Your entity structure is like your business’s tax engine. If you’re still running a go-kart engine on a Tesla frame, things will feel slower and more expensive than they need to.

Why This Costs You:

Sole proprietors and partnerships pay self-employment tax on 100% of income
No access to owner distributions like an S Corp provides
You miss out on tax planning tools built into better structures

What We Do at Insogna:

We help you analyze your profit trends, review your growth goals, and recommend the most efficient entity setup. If an S Corporation makes sense, we’ll walk you through the election, set up payroll, and coach you through reasonable compensation.

We’ve helped business owners save $8,000 to $15,000 a year just by changing how they file, not how they operate.

2. You’re Not Using Retirement Plans to Lower Your Taxable Income

Let me guess. Retirement planning is that “someday” task for you, right? You’ll get to it when you’re making more. When things settle down. When the business is more stable.

Here’s the reality: you can reduce your taxes now and still save for later.

That Solo 401(k) or SEP IRA isn’t just a future nest egg. It’s a present-day tax deduction you’re not using.

Aha moment: You’re already setting aside money for marketing, tools, and team members. Why not also set it aside for Future You and write it off in the process?

Why This Costs You:

Missed opportunity to contribute up to $66,000 pre-tax
Less tax-deferred growth in long-term savings
No back-pocket plan for retirement even if you don’t “plan” to retire

What We Do at Insogna:

We help clients set up Solo 401(k)s, SEP IRAs, or defined benefit plans based on entity type and cash flow. Then we factor those contributions into your tax planning projections, so you can see the deduction before the deadline.

3. Your Documentation is a Hot Mess (And the IRS Knows It)

Receipts in shoeboxes. Venmo notes like “Lunch 🍕” (helpful). No mileage logs. Personal and business charges sharing the same debit card.

You know you’re doing business the right way. But the IRS doesn’t know that unless you prove it.

Aha moment: Good documentation isn’t about the audit you’ll probably never get, it’s about capturing every deduction you’re already entitled to.

Why This Costs You:

Lost deductions because you didn’t keep proof
Overstated income because you didn’t categorize properly
You guessed at totals and left money behind

What We Do at Insogna:

We help you implement tools like QuickBooks Online, integrate expense tracking apps like Expensify, and train your team (or just you) on how to document expenses with confidence.

Then, we review your books monthly to catch the things you might forget. Like that Uber receipt that should’ve been logged as a client meeting, not a personal errand.

4. You’re Ignoring State Tax Exposure and Federal Workarounds

Here’s a fun fact: just because your business is based in Texas doesn’t mean the IRS or the 49 other states don’t want a piece of your pie.

If you have remote workers, contractors, or customers in another state? You may have nexus there. And if you ignore that long enough, you’ll get a notice in the mail you can’t ignore.

And here’s the kicker: several states now allow pass-through entity (PTE) tax elections that let you bypass the $10,000 SALT deduction cap on your federal return.

Aha moment: You might not just owe taxes in another state. You might also be missing a deduction that could save you thousands because no one told you it existed.

Why This Costs You:

Missed state filings = penalties and interest
Missed elections = loss of valuable federal deductions
Multi-state complexity snowballing over time

What We Do at Insogna:

We map out your state tax exposure, advise you on pass-through elections where available, and file proactively to make sure your federal return reflects the maximum deductions possible.

5. You Don’t Model Your Tax Scenarios (So You Can’t Optimize Anything)

Imagine running your business without checking profit margins, forecasting cash flow, or testing what happens if you raise your prices. That would be irresponsible, right?

Now imagine you’re doing that with taxes. That’s where most entrepreneurs are. They get a tax bill and shrug, “Well, I guess that’s what I owe.”

No, that’s what happens when you don’t project, model, or plan.

Aha moment: Tax season is not the time to learn what you could have done differently. That moment was six months ago and it’s coming again right now.

Why This Costs You:

No time to implement salary changes or bonuses
Missed timing on deductions or income deferral
No strategy around QBI, capital gains, or entity changes

What We Do at Insogna:

We provide mid-year and year-end tax projections, compare multiple tax scenarios, and let you know what decisions to make and when. Whether it’s delaying income, maximizing your QBI deduction, or adjusting your estimated taxes, we make sure the moves happen in time.

Final Thought: Taxes Should Be Strategic, Not Stressful

Overpaying your taxes doesn’t mean you’re a good citizen. It usually just means you’re under-advised.

No one builds a seven-figure business by winging it. And yet, most entrepreneurs are winging their taxes until the day they can’t.

You don’t need to be a tax expert. You need a partner who brings the insight, the numbers, and the strategy without the jargon or last-minute panic.

Let Insogna Help You Stop Overpaying, Starting Now

We help founders, freelancers, creatives, and high-growth entrepreneurs turn tax confusion into tax confidence. From entity optimization and retirement planning to audit-proof documentation and advanced projections, we bring real strategy to the table.

Here’s what we’ll do:

Review your entity and structure
Run tax savings projections
Set up retirement and tax-sheltered options
Clean up documentation systems
Build a quarterly plan so tax season doesn’t sneak up again

Book your tax strategy session with Insogna today.
You bring the vision, we’ll protect the margins.

What Is the Qualified Business Income (QBI) Deduction and Can Your Business Claim It?

Summary of What This Blog Covers

What the QBI deduction is and how it works
Who qualifies and who phases out
How your entity type affects eligibility
Why strategic planning with a CPA matters

Let’s start with a bold question:
If the IRS walked into your office right now and said, “Hey, we’re giving out a 20% tax break just for being a business owner,” would you take it?

Of course, you would.

But here’s the kicker: that deduction already exists, and most small business owners either don’t know about it, assume they don’t qualify, or miss it completely because their CPA didn’t bother to bring it up.

Welcome to the mysterious, misunderstood world of the Qualified Business Income (QBI) deduction, or as I like to call it: “the 20% off coupon for your business income that no one tells you about.”

At Insogna, we’ve had more conversations about QBI than we can count and still, every tax season, we meet smart founders, freelancers, and LLC owners who say, “Wait, what’s that again?”

If that’s you, stick around. You’re about to get a crash course on what the QBI deduction is, who qualifies, how it works, what gets in the way, and how to claim every dollar you’re entitled to.

Let’s make tax law feel less like fine print and more like strategy.

What Is the QBI Deduction, Really?

The Qualified Business Income deduction, or Section 199A deduction, was introduced under the Tax Cuts and Jobs Act in 2017. The idea was to give small businesses a break to balance out the shiny new lower tax rate C corporations got. If big companies get a 21% corporate tax rate, small business owners should get something too, right?

That “something” turned into this deduction: a 20% reduction on qualified business income, taken before your tax liability is calculated.

And before your eyes glaze over, let’s translate that.

If you run a business that makes, say, $120,000 in net profit, you could qualify to deduct 20% of that $24,000 right off the top of your taxable income.

You don’t have to do anything weird. You don’t need to buy a Tesla, hire your cousin, or start a Delaware trust. You just have to qualify and file it properly.

Aha moment:
This deduction is not a tax credit. It’s not a loophole. It’s not a “maybe someday” benefit. It’s a right-now opportunity for thousands of business owners. But it comes with conditions.

So let’s get to them.

Who Qualifies for the QBI Deduction?

Here’s the headline: Only pass-through entities qualify.

If you’re filing as:

A sole proprietor (including Schedule C filers)
An LLC
A partnership
An S Corporation

Then congratulations, you’re in the QBI eligibility club. Well, at least structurally.

But like all tax benefits, it’s never just about structure. There are income thresholds, industry restrictions, wage limitations, and compliance factors that could block you from claiming all (or even any) of that 20%.

This is why founders who try to DIY their taxes with software often miss out. Because the software doesn’t know how to ask the right questions.

How Much Can QBI Save You?

Let’s get concrete.

Say you run a service-based business and make $100,000 in net income.

If you qualify for QBI, that means:

You get a $20,000 deduction
You only pay tax on $80,000

Assuming a 24% federal tax rate, that saves you $4,800.

Now scale that up. If your net income is $300,000, and you qualify for the full deduction, that’s $60,000 off your taxable income, potentially saving you over $14,000 in taxes.

For doing what? Running a business. That’s it.

Aha moment:
That’s money you can use to hire, save, invest, or maybe just not write a massive check to the IRS for once.

Income Limits and Phase-Outs: The Complicated Middle

Now here’s where it gets sticky.

If your taxable income is below:

$191,950 for single filers
$383,900 for married couples filing jointly

You can generally claim the full 20% deduction with no extra hoops to jump through.

But go over those thresholds, and you’re playing a different game.

Now the IRS wants to know:

Are you in a Specified Service Trade or Business (SSTB)?
How much did your business pay in W-2 wages?
Do you have qualified property in the business?

This is the part where founders’ eyes glaze over and this is also where most of them lose the deduction without realizing it.

That’s why we walk our clients through a QBI analysis every year. Because crossing one of these thresholds can happen faster than you think. One good quarter, one big deal, one investor check and you’re in phase-out territory.

Wait, What’s a Specified Service Trade or Business (SSTB)?

The IRS uses this term to describe businesses that rely primarily on the skill or reputation of the owner. These industries get harsher treatment under QBI rules especially if your income is above the phase-out limits.

Examples include:

Health (doctors, chiropractors, therapists)
Law
Accounting (yep, we’re on the list)
Consulting
Financial services
Performing arts
Athletics

If your business is classified as an SSTB and you’re over the income limit, you could lose the deduction entirely.

But here’s the twist:
If your income is below the threshold, you still qualify even if you’re in one of those industries.

And if you’re near the threshold? A smart CPA can help you plan when and how to recognize income or adjust salary to stay eligible.

Aha insight:
Just because you’re a consultant or a solo practitioner doesn’t mean you’re out. You just need a plan.

How Your Entity Impacts QBI

Let’s break it down.

Sole Proprietor (or Single-Member LLC):

Simplest structure
All income is considered QBI
But no way to separate salary vs. profit
You pay full self-employment tax

Partnership:

Similar to sole prop
Still QBI-eligible
Things get more complex with multiple partners and profit-sharing

S Corporation:

You pay yourself a reasonable salary (W-2 wages)
Take the rest as distributions (which can count as QBI)
This lets you optimize your mix of salary and profit to maximize QBI

C Corporations? You’re not eligible for QBI. The deduction doesn’t apply.

At Insogna, we regularly evaluate whether clients should elect S Corp status to unlock QBI savings especially when profits start climbing past $75K a year.

What Kills QBI (Even If You Think You Qualify)

Here are the most common reasons we’ve seen business owners lose the QBI deduction completely avoidable, by the way:

W-2 wages are too high compared to distributions
Business is misclassified as an SSTB when it could qualify as something else
Income timing pushes them over the phase-out threshold
C Corp structure that automatically disqualifies the deduction
Not tracking or reporting income properly

This is why working with a CPA near you who understands QBI isn’t optional. It’s necessary.

TurboTax won’t warn you. Your cousin who files taxes for fun can’t help you. And your books won’t organize themselves.

So Should You Restructure to Claim QBI?

It depends but in a lot of cases, yes.

We’ve had clients:

Convert from single-member LLCs to S Corps
Adjust their salary to increase QBI-eligible income
Shift income between tax years to stay below thresholds
Split off SSTB activities into separate entities (when legally viable)

And the result? Thousands saved every year. Without changing the core of what they do, just how it’s structured on paper.

Aha moment:
QBI isn’t just a deduction. It’s a reason to rethink your entire tax posture.

Don’t Miss QBI Because of One Oversight

If you’re eligible, QBI can dramatically lower your tax bill. But the rules are full of landmines. One misstep, and the deduction disappears, sometimes permanently.

That’s why our QBI strategy at Insogna goes beyond “do you qualify?”

We help you:

Structure your income to maximize QBI
Choose the right entity
Time income and deductions strategically
Avoid phase-outs
Claim the deduction confidently, year after year

And we do this before tax season, not during the last-minute rush in March when you’ve got 12 browser tabs open and a shoebox full of receipts.

Final Thought: QBI Is a Gift. Don’t Waste It.

The QBI deduction is one of the most generous tax breaks for small business owners and it’s also one of the most underutilized. If you qualify, it can save you thousands. If you’re close, it’s worth planning for.

And if you’re not sure? That’s where we come in.

Let Insogna Help You Claim What You’re Owed

You bring the business. We’ll bring the strategy.

At Insogna, we’ll:

Run a QBI eligibility check based on your current books
Show you exactly how much you could save
Recommend smart moves to qualify or increase your deduction
Align your tax strategy with your growth goals
Give you clear, straight answers. No jargon, no fluff

Let’s find out if your business qualifies for QBI and if not, let’s figure out how to make it happen.

Book your QBI planning session with Insogna today.